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Thursday, October 16, 2014

A Chat with Amtrak's CEO on the State of U.S. Passenger Rail

Joseph Boardman on federal funding, long-distance routes, and operating "as a business."


By Eric Jaffe, October 16, 2014


The first thing I say over the phone to Amtrak President and CEO Joseph Boardman is that I appreciate him taking the time to talk about Amtrak, because it's one of my favorite subjects, and it's a favorite subject of CityLab readers. To which he responds, without missing a beat: "Sometimes it's not my favorite subject."

It helps to have a sense of humor if you're in charge of America's passenger rail service. Year after year, Amtrak sets ridership records along with the pace of intercity travel in the all-important Northeast Corridor from Washington to Boston via New York, where it reaps big profits. And year after year, Amtrak gets hammered for needing huge amounts of federal taxpayer money to maintain costly (yet mandatory) long-distance operations—even as highways require far, far greater subsidies.


The annual budget crunch makes it difficult for Amtrak to invest in long-term infrastructure projects: higher-speed rail in the Northeast, for instance, or the much-needed Gateway tunnel into Manhattan. Some recent hard luck has added to the headaches. A 2013 court ruling hurt Amtrak's leverage with freight operators whose tracks it shares and led to a dive in on-time performance, especially in and out of Chicago. Damage from Superstorm Sandy will cost a whopping $689 million and will likely disrupt service in and around New York for extended periods of time.

The latest twist is a House funding bill with bipartisan support that has high points and low points alike. The bill more or less maintains recent levels of annual federal support (around $1.4 billion), provides nearly a billion dollars a year to operate long-distance trains, and separates funding for the Northeast Corridor and the "National Network" to allow for cleaner accounting. But capital expenditures (meaning construction and infrastructure) take a cut of roughly 40 percent, making long-term investments in tracks and trains that much harder.

"The problem that you have—and you've had it since 1976 and even before —is that there's never been an investment program that would bring the infrastructure up where it belongs on existing capacity," says Boardman. "There isn't even an understanding about the need to increase capacity in order to continue to increase the GDP in this nation. Not only on the Northeast Corridor but all over the country."

So Boardman pushes on with a strong sense of humor and an even stronger conviction that intercity passenger rail is essential to America's mobility as well as to its economy on both the macro and micro scales. What follows is an account of our conversation, edited modestly for space and very lightly for clarity.

Let's talk about the House Amtrak bill. It's obviously a hit to construction, but it does have bipartisan support.

Certainly one of the things we've been doing is we've been spending the resources we have to get ready to do projects. That was lacking in past planning and past management of Amtrak. The [Federal Railroad Administration], in cooperation with us and the Northeast Corridor commission, have really identified the projects, have looked at what the initial funding would be needed for them, have moved a long way toward both our long-term vision of $151 billion to have a 220- or 300-mile-an-hour rail service on the Northeast. And then also just maximizing the existing capacity we have at a higher speed. That's never happened before.

The frustration is, because of the economic situation we find ourselves in, and the rules that got laid out by House leadership about appropriation levels—they looked at the past to identify what they'd provide in authorizations for the future. I don't blame them. I'm not taking a shot at them. They had rules to follow and they developed a bipartisan solution.

The fact is that we won't be able to move these major projects forward using very much federal support. There's a revenue base we can pull it from. But the improvements on infrastructure are an equity question. The United States has lost its understanding of what that means for highways, for railroads, for transit systems, and they need to regain it.

It sounds like your ideal authorization would have centered a lot more around capital expenditures.

Yes. But listen. I've put more miles on long-distance trains than any other CEO in the history of Amtrak. The network connectivity across this nation by the long-distance trains bring huge benefits economically to the small communities that we operate in, and mobility-wise to the small communities. While the bus systems are pulling out of the small communities, and the aviation system pulled out a long time ago except for some of the essential air services, Amtrak still covers 40 percent of the rural population of this nation. We have over 500 stations.

It certainly brings the benefit to a vast area in the middle of this country that wouldn't occur any other way. So it pleases me, and I think it's very positive, that you see an authorization that specifically identifies long-distance trains for funding.

The long-distance routes are often such a focal point when you talk about the difficulties of funding Amtrak, because they lose money. What would it really take to improve the way long-distance routes are funded?

The [House] bill kind of adopts the fact that we've tried to get a focus on our business in a different way: by talking about long-distance state-supported services and the Northeast Corridor sets of services. So the bill identifies that by calling that—I think—a "national network." So they at least understand and recognize that it is a national network.

Let's take the [Southwest] Chief for a minute. The Chief received a TIGER grant … to support the local share of making infrastructure improvements. I want to emphasize that for a minute. It was about the infrastructure. It wasn't about supporting the operation—the subsidy of Amtrak.

What it boiled down to was they really didn't want us to move. But they did want to figure out how they were going to pay for this infrastructure. So we began a discussion with them and with the states that were involved, and then the TIGER grant became available. We began to work out a solution to fixing the infrastructure, because it benefitted their economy, from passenger rail but also freight rail, and those communities. And it also began to explain to relatively conservative states, hey, I better be interested in making these infrastructure investments now, which is less expensive than waiting for it to be degraded.

Amtrak's Southwest Chief service rolls through Missouri.
I want to talk about on-time performance, and especially the role of freight prioritization. How has that played out?

The big problem I see right now is the on-time performance in and out of Chicago. Chicago is the hub for the long-distance system. All freights today are having a fluidity problem in and out of Chicago.

One of the things I've just done recently is every senior manager of this company had to adopt a train that operates in and out of Chicago. The reason for that is to get them really paying attention and focusing on a major part of what we do as a business. To make sure that our employees know that senior management's paying attention to this. Communities know that senior management is out there looking at this. So that they understand our business better than they have in the past. That they can see what might be hurting us. Where can we improve ourselves? So that we can continue to hold a higher ground on the need for the freights to move our trains.

You mention running things "as a business." Critics like to say that they want Amtrak to run more like a business. What's your reaction when you hear that challenge?

They took that out of my testimony and our strategic plan. I have been saying that: We are gong to run this company like a business.

Running this company like a business means the United States of America is a customer. They are paying the cost of maintaining the mobility. Making that mobility available. They're making an availability payment. They're not subsidizing this railroad, they're paying the cost of providing it.

The thing I see here is not only an imbalance in what the funding is, but a lack of understanding of what they're paying for. They're paying for this mobility and this connectivity and making this available to the residents of every one of the states of this union, except for two in the lower 48. Forty-six states, over 500 stations, get Amtrak service. And when you ride those long-distance trains, you will see sometimes a seven-passenger minivan that's in business to provide that last mile of service from some of those sparsely populated areas where we have stations.

We bring business. I don't get it that people don't understand that.

It feels like the approach to passenger rail right now has become much more regional. Especially since the national high-speed rail plan never really took off. Do you feel like there's a unified federal program to be had?

We connect major metropolitan areas in this nation together. That's what we do. We're intercity rail. When we're connecting those major metropolitan areas, we go through rural areas, which connects this nation together. So we understand that connectivity. There needs to be, and there always has been in the United States, since 1971, an understanding that the federal government had the vision for that connectivity.

We have an administration that understood it and established the fact that we ought to be having 100-mile-an-hour service across the nation. That was a good proposal. It got picked up by the high-high-high-speed rail advocates and got twisted. That's too bad. … The fact is that this nation can provide that 90- and 110-mile-an-hour service. You're going to see that and do see it now in Michigan. That's really going to prove it.

How urgent is the need to get a funding authorization and to get moving on some of these longer-term projects?

The important issue is to have a program that funds a surface transportation program in this nation for highways, for transit, for railroads, so that we can have a chance to compete globally with all the rest of the countries in the world that are making these kinds of investments. In some cases, what I think is frustrating is we're helping them make these investments, or have helped, and yet we're not willing to do it for our own people here in the United States. That's outrageous. That should be fixed. We need to find a solution for that. Rapidly.