In an attempt to maintain Amtrak services while mitigating the cost increases, VTrans has proposed purchasing 3 self-propelled passenger rail vehicles (called “DMUs” short for “diesel multiple units”) and 2 coaches to be manufactured by Colorado Railcar Manufacturing, LLC (“CRC”).
The annual cost of maintaining the state’s two Amtrak services, the Vermonter and the Ethan Allen, is going to increase significantly absent Congressional action, and the state’s options are limited. Under current federal policy, Amtrak is requiring the state to absorb all of the direct and indirect costs of the services. By FY13, when the phase-in of these costs is completed, the annual state cost of the existing services is projected to be $6.62 million.
This compares to $2.65 million in FY06 and represents an average annual growth rate of 14% over the 7 year period.
The equipment would form two train sets each consisting of a DMU and a coach car with the third DMU as a back up. The new equipment would be delivered approximately 12-14 months after the order is placed and used on a reconfigured Vermonter service. A contract for maintenance of the equipment would be put out to bid. The Ethan Allen service would continue as is.
Instead of the Vermonter running from St. Albans to Washington, D.C. the new Vermonter would terminate at New Haven, Connecticut, where a “cross platform connection” would enable southbound passengers to continue on to New York and Washington on other trains and Vermont bound Amtrak passengers to proceed north on the Vermonter.
A key advantage of the proposed reconfiguration is that it allows the passenger capacity of the Vermonter to be appropriately sized to the market demand between St. Albans and New Haven with consequent cost savings and avoids a time consuming switching maneuver at Palmer, Massachusetts eliminated with bi-directional equipment.
The reconfigured Vermonter service would consist of two daily trains. One would run from St. Albans to White River Junction to New Haven and then from New Haven back to White River Junction where the train set would overnight. The second train would run from White River Junction to New Haven and then from New Haven to White River Junction to St. Albans where the train set would overnight. The two train sets would thus flip-flop their starting points each day and while each day there would be, as now, one train running from St. Albans to White River Junction and one train running from White River Junction to St. Albans, under the new schedule there would be two trains as opposed to one under the existing service running from White River Junction to New Haven and also two trains running from New Haven to White River Junction.
The new DMU equipment would cost $18.5 million and be financed by a loan from the Federal Railroad Administration’s Railroad Rehabilitation and Improvement Financing (“RRIF”) program. The term of the loan would be 25 years and bear a very adventagious interest rate equal to the federal government’s cost of borrowing (i.e., the yield on 25 year Treasuries). Principal payments on the loan would be deferred while the equipment is being manufactured and for the 3 years of the Vermonter demonstration project and then repaid in equal annual payments.
The total cost of running the Vermonter service with dmu's AND paying for them would be LESS than continuing with the existing service configuration.
The state’s financial exposure would be somewhat limited by a right to sell the equipment back to Colorado Railcar at the end of the 3 year demonstration program at a minimum guaranteed price equal to 90% of the original price. If the state exercised the option and the equipment sold at the 90% level, including interim interest payments on the loan, the total equipment-only related cost of the demonstration project would come to $5.1 million.
Amtrak also will provide a $2 million grant for transition and marketing costs on the new service including the cost of a new equipment maintenance facility estimated a cost of $500,000. $675,000 of the grant is intended to cushion the impact of the state having to pay 100% of the direct allocated costs of the Vermonter using the existing equipment while the new equipment is being manufactured.
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-- excerpted then paraphrased from a 32 page Legislative Joint Fiscal Office Analysis dated January 11, 2007, authored by Neil Schnicker. Mr. Schickner’s work product examines the complexities of preserving Amtrak service with keen attention to both the environment for change and projections of fiscal scenarios incident to a variety of approaches for cooperation between Congress, federal agencies, state government and the railroads that host the Vermonter and Ethan Allen Amtrak services.
