European and American intercity train planning takes it as a given that every train must have a car dedicated to cafeteria service. This is not the only way to run trains – the Shinkansen doesn’t have cafe cars. Cafe cars waste capacity that could instead be carrying paying passengers. This is the most important on lines with capacity limitations, like the Northeast Corridor, the West Coast Main Line, the LGV Sud-Est, and the ICE spine from the Rhine-Ruhr up to Frankfurt and Mannheim. Future high-speed train procurement should go the Shinkansen route and fill all cars with seats, to maximize passenger space.
How much space do cafe cars take?
Typically, one car in eight is a cafe. The standard European high-speed train is 200 meters long, and then two can couple to form a 400-meter train, with two cafes since the two 200-meter units are separate and passengers can’t walk between them. In France, the cars are shorter than 25 meters, but a TGV has two locomotives and eight coaches in between, so again one eighth of the train’s potential passenger space does not carry passengers but rather a support service. Occasionally, the formula is changed: the ICE4 in Germany is a single 12-car, 300-meter unit, so 1/12 of the train is a cafe, and in the other direction, the Acela has six coaches one of which is a cafe.
A 16-car Shinkansen carries 1,323 passengers; standard class has 5-abreast seating, but even with 4-abreast seating, it would be 1,098. The same length of a bilevel TGV is 1,016, and a single-level TGV is 754. The reasons include the Shinkansen’s EMU configuration compared with the TGV’s use of locomotives, the lack of a cafe car in Japan, somewhat greater efficiency measured in seat rows per car for a fixed train pitch, and a smaller share of the cars used for first class. An intermediate form is the Velaro, which is an EMU but has a cafe and three first-class cars in eight rather than the Shinkansen’s three in 16; the Eurostar version has 902 seats over 16 cars, and the domestic version 920.
The importance of the first- vs. second-class split is that removing the cafe from a European high-speed train means increasing seated capacity by more than just one seventh. The bistro car is an intermediate car rather than an end car with streamlining and a driver’s cab, and if it had seats they’d be second- and not first-class. A German Velaro with the bistro replaced by a second-class car would have around 1,050 seats in 16 cars, almost even with a 4-abreast Shinkansen even with four end cars rather than two and with twice as many first-class cars.
How valuable are cafes to passengers?
The tradeoff is that passengers prefer having a food option on the train. But this preference is not absolute. It’s hard to find a real-world example. The only comparison I am aware of is on Amtrak between the Regional (which has a cafe) and the Keystone (which doesn’t), and Regional fares are higher on the shared New York-Philadelphia segment but those are priced to conserve scarce capacity for profitable New York-Washington passengers, and at any rate the shared segment is about 1:25, and perhaps this matters more on longer trips.
Thankfully, the Gröna Tåget project in Sweden studied passenger preferences in more detail in order to decide how Sweden’s train of the future should look. It recommends using more modern seats to improve comfort, making the seats thinner as airlines do in order to achieve the same legroom even with reduced pitch, and a number of other changes. The question of cafes in the study is presented as unclear, on PDF-p. 32:
|Food and Refreshments||Willingness to Pay|
|Coffee machine (relative to no service at all)||3-6%|
|Free coffee and tea in each car||6%|
|Food and drink trolley||11%|
|Restaurant with hot food||17%|
Put another way, the extra passenger willingness to pay for a cafeteria compared with nothing, 14%, is approximately equal to the increase in capacity on a Velaro coming from getting rid of the bistro and replacing it with a second-class car. The extra over a Shinkansen-style trolley is 3%. Of course, demand curves slope down, so the gain in revenue from increasing passenger capacity by 14% is less than 14%, but fares are usually held down to a maximum regulatory level and where lines are near capacity the increase in revenue is linear.
Instead of a bistro car, railroads should provide passengers with food options at train stations. In Japan this is the ekiben, but analogs exist at major train stations in Europe and the United States. Penn Station has a lot of decent food options, and even if I have to shell out $10 for a pastrami sandwich, I don’t think it’s more expensive than a Tokyo ekiben, and at any rate Amtrak already shorts me $90 to travel to Boston. The same is true if I travel out of Paris or Berlin.
Even better, if the station is well-designed and placed in a central area of the city, then passengers can get from the street to the platform very quickly. At Gare de l’Est, it takes maybe two minutes, including time taken to print the ticket. This means that there is an even broader array of possible food options by buying on the street, as I would when traveling out of Paris. In that case, prices and quality approach what one gets on an ordinary street corner, without the premium charged to travelers when they are a captive market. The options are then far better than what any bistro car could produce, without taking any capacity away from the train at all.
American railfans are full of nostalgia for a past era when American trains were great. So much of the discussion among industry insiders, railfans, and advocates is about how to make American railroads great again, how to return to the mid-20th century era of American domination. This is not correct history: while American railroads were in fact in a pretty good position from the 1920s to the 50s, they were not competitive with mass motorization and air travel, and trying to imitate what they were like then has no chance of competing with cars or planes. The story of American railroads has to be understood not as decline but as stagnation: operations, technology, and management stagnated, and this is what led to ridership decline. Instead of indulging in a MAGA fantasy about past greatness, it is important for the United States to implement all the innovations of the last half century that it has missed out on, innovations coming from East Asia and Western Europe.
American railroads were private until Amtrak took over intercity operations and states took over commuter rail operations, which happened well after the terminal decline in ridership. There was intense competition between rival companies, at times leading to physical violence. There was no coordination of operations between different railroads, no coordination with municipal public transportation systems, no attempt at seamless passenger experience. What was the point? This system evolved in the early 20th century, when there was no competition from other modes, only from other railroads.
Over time, most of the rest of the developed world has learned to coordinate different modes of public transportation better, to compete with cars. This usually occurred under nationalized mainline rail companies, but even when companies remained separate, as with the division between municipal subways (e.g. the Berlin U-Bahn) and national railways (e.g. the S-Bahn), or with the separate BLS system around and south of Bern, there has been integration. There is fare and schedule coordination in German cities across rail and bus operators, and even better coordination in the Netherlands and Switzerland.
The US remains fixated on competition, and thus there is no fare integration, but rather relationships between different operators are adversarial. In Chicago, the mayor opposes integration between the municipal L and the regionally-owned Metra commuter rail system, since the city does not own Metra. Every time Amtrak has to share territory with a commuter railroad, one side is screwing the other out of something, whether it’s Amtrak overcharging on electricity or Metro-North arbitrarily slowing Amtrak down. In Boston, there is no integration between city-focused MBTA service, which includes commuter rail, and buses in outlying cities, called RTAs (regional transit authorities); the MBTA is simply uninterested in matching fares or schedules, and is not even integrating its own buses with its commuter trains.
Switzerland has higher rail usage than every place I know of once one controls for city size. Zurich’s modal split may not be as favorable to public transportation as Paris or London’s, but is a world better than that of any French or British city of similar size. Switzerland got to this point through a stingy political process in which planners had to stretch every franc, substituting organizational capacity for money. Thus, construction in the 1990s used the following principles of value engineering:
- Infrastructure, rolling stock, and the timetable should be planned together (the magic triangle), since decisions on each affect the other two.
- Trains should run as fast as necessary for transfer windows, overtakes, meets on single track, etc. Infrastructure should likewise be only as expansive as necessary – if the timetable does not have trains on a given single track meeting, this segment does not need to be doubled.
- Trains should have timed transfers at major cities, to enable everywhere-to-everywhere travel. Connecting buses should be timed with the regional trains at major suburban nodes.
- Electronics before concrete: it’s cheaper to resignal a line to have short headways and high speeds than to add tracks and tunnels.
These principles do not exist in the United States. Worse, too many American activists, even ones who are pretty good on related issues, do not believe it’s even possible to implement them. “This isn’t Switzerland or Japan” is a common refrain. There’s growing understanding among American cycling advocates that 50 years ago the Netherlands wasn’t as bike-friendly as it is today; there sadly isn’t such understanding regarding the state of rail coordination in Switzerland until about the 1990s.
While Switzerland manages to build its Knot System at low cost, leading to sharp increases in rail usage in the 2000s and 2010s, Americans are unable to do the same. Activists propose massive spending, which the political system is unwilling to fund. Nor is the political system interested in adapting low-cost solutions for infrastructure coordination, since the sort of apparatchiks who governors like appointing to head state agencies can’t implement them; we all know what happened last time a foreigner got appointed to a major position and succeeded too much. The way forward is right there, and the entire American political system, from every governor down to most activists, either is ignorant of it or explicitly rejects it.
Amtrak runs slower than it used to on most lines. Trip times on the Northeast Corridor south of New York are if anything slightly slower than they were in the 1970s in the early days of the Metroliner. The corridor and long-distance service outside the Northeast are considerably slower. For example, the Super Chief took 39:45 between Chicago and Los Angeles, whereas its current Amtrak version, the Southwest Chief, takes 43:10. At shorter range, the Chicago-St. Louis trains take 5:20 today, compared with 4:55 in the 1930s. This has led too many Americans to assume that there has been technological regression and that the main focus should be on restoring midcentury service levels rather than on moving forward.
In reality, high speeds in the middle of the 20th century came from the facts that express passenger trains were highly profitable and used by important people and so had priority over all other traffic, and that superelevation was set high for these trains; both of these aspects collapsed as riders and high-value shippers decided driving and flying were better than taking 5-hour train rides, so the profit center shifted to low-value freight. Today, getting high passenger ridership is plausible at high-speed rail speeds, but that requires getting Chicago-St. Louis down to 2 hours, not 5 hours, and having excellent connections to local and regional public transportation at both ends.
Nor was midcentury rolling stock good by current standards. Electric locomotives in Europe weigh around 90 tons. American ones weigh a little more, still in compliance with superseded FRA regulations enacted just after WW2. But the locomotives from just before these regulations weighed far more: the Pennsylvania Railroad’s GG1 weighed 215 metric tons. Europe has achieved weight reductions over generations of innovation since, and Japan has achieved even more impressive reductions; 215 tons would get you 2/3 of the way to a 10-car EMU set in Tokyo.
Worse, even in the middle of the 20th century, the US was no longer at the technological forefront of rail service. The civil service formation following the German Revolution brought forth a new railway law and new technology, such as the tangential switch, since adopted throughout Continental Europe; the US mostly sticks with secant switches built to late-19th century specs. In the 1950s the differences between German and American rail technology weren’t huge, but they were there. Since then they’ve gradually widened – in the 1960s Germany came up with LZB signaling, while the US was at best stuck on 1930s signaling, federal regulations on the matter leading to lower top speeds than to the adoption of automatic train protection.
There seems to be general ignorance of the advances that the US has not been part of. Rail managers ask questions like “does Europe have positive train control?” (yes, ETCS is already a second-generation system, we just call this automatic train protection instead of positive train control) or say “Europe doesn’t have the ADA” (accessibility laws here are comparable to American ones and overall the public transportation networks here are on average more accessible). In technology as in organization, the MAGA mentality for trains refuses to admit that there are innovations abroad to learn from.
The way forward: imitate, don’t innovate
The United States can innovate in public transportation, but only if it imitates better countries first. It needs to learn what works in Japan, France, Germany, Switzerland, Sweden, the Netherlands, Denmark, South Korea, Spain, Italy, Singapore, Belgium, Norway, Taiwan, Finland, Austria. It needs to learn how to plan around cooperation between different agencies and operators, how to integrate infrastructure and technology, how to use 21st-century engineering.
There are great places where such imitation could work. I work a lot on Boston-related issues at TransitMatters; New England has high population density, a wealthy and growing urban core in Boston, ample legacy rail infrastructure, and town centers that work more like Central European suburban sprawl (albeit at lower density) than like structureless Californian or Texan sprawl. But it can’t move forward without rejecting MAGA fantasies and replacing them with a program of learning from what works here and in Japan. There are so many projects under discussion of limited or no value, and some even with negative value, like anything that interacts with the hobby freight railroad Pan Am.
Instead, the tendency in the United States is to do anything to avoid learning from outside North America. Plans for intercity rail improvement outside the Northeast and California are steeped with MAGA language about restoring midcentury rail. Plans in New York spend far too much time on midcentury expansion plans and far too little on understanding cost explosion factors dating to the 1920s. Regional rail plans vaguely nod to European S-Bahns, but are generally filtered through several layers, mainly Philadelphia’s implementation. Anything that touches freight invites kludges that European planners no longer use for cost or maintenance reasons.
This tendency has to end. Meiji Japan didn’t join the first world by closing itself to foreign inventions – quite the opposite. The US needs to understand that the path to a future with better American transportation lies not in America’s past, but in Europe and East Asia’s present. The history isn’t one of American decline and renaissance through rediscovery of ancient learning, but one of American insularity and stagnation, to which the solution is to adapt technologies that work elsewhere.
Public transportation companies may have the ability to raise fares arbitrarily based on market demands, for examples British buses outside London and American freight railroads. Or they may be subject to regulations capping the fare, for example Japanese railroads. Mixed systems exist as well, such as British rail fares. In Britain, the privatized, mostly deregulated approach is so commonly accepted that a Conservative recently called Labour dangerous socialists for proposing municipalizing bus systems, as in such socialist states as the US, Japan, Germany, etc. In reality, in the case of rail specifically (and perhaps buses as well), there’s a theoretical case with some empirical backing for why reasonable fare caps as in Japan can lead to more investment and more capacity, whereas wholly unregulated fares lead to hoarding and capacity cuts to create shortages.
I’m stealing the economic model for this post from Paul Krugman, who used it to explain the California blackouts of 2000-1. The demand curve is inelastic: the demand is 1,000 units at $20/unit, decreasing to 900 units at $1,000/unit, at which point the curve goes flat. The supply curve is a constant $20/unit, but the market is oligopolistic (say, there are very high barriers to entry because building your own power plant is hard), and there are 5 producers, each with 200 units. If the price is regulated at $20/unit, each producer will supply 200 units. If the price is unregulated, then each producer alone gets an incentive to hold back production, since 100*1000 > 200*20, and then production will be curtailed to 900 units.
The model is simplified in a number of ways: real supply curves slope up; the part about demand going flat at 900 units is unrealistic and exists purely to avoid dealing with optimizing where at 800-something units each producer has an incentive to go back to producing more; capacity constraints involve escalating production costs rather than a God-given restriction on the number of suppliers and their capacity. But with all these caveats, it fits markets that have the following characteristics:
- There are steep barriers to entry, for example if large amounts of capital are required to enter (to build a power plant, set up a rail operating company, etc.).
- Demand is highly inelastic.
- Adding new capacity is expensive.
The issue of capacity
In rail, we can start plugging real numbers for both demand elasticity and the cost of new capacity.
In the above model the price elasticity is -0.0244 in the 900-1,000 units range, which is ridiculously inelastic, on purpose so as to highlight how the model works. TCRP Report 95 says the elasticity in a number of large cities studied is about -0.18, and a VTPI review in a mixture of cities and circumstances (peak vs. off-peak, bus vs. rail, etc.) asserts a short-term average of about -0.3. Unregulated fares will lead to supply reductions if the elasticity times the number of producers is more than -1 (or less than 1 if you flip signs); if no producer has <18% of the market, there will be supply restrictions under unregulated fares, just as a monopolist will hold back supply and raise fares if demand is inelastic.
The cost of new capacity of course depends on the line and the characteristics of competition between different railroads. It’s higher in Japan, where separate railroads run their own lines and trains, than in Britain, where different companies franchise to run trains on the same tracks. But even in Britain, getting a franchise requires a commitment to running service for many years. The significance of this is that the long-run public transport ridership elasticity with respect to fare is more elastic (VTPI recommends a range of -0.6 to -0.9), with a few estimates even going below -1.
For the purposes of this section, we do not distinguish capital from operating costs. Thus, the cost of new capacity is not given in units of capital costs, but in units of operating costs: if increasing service by 1% raises operating expenses by 2% counting the extra investment required, then we say the supply elasticity is 2. Note that supply curves slope up so the elasticity is always positive, but the elasticity can be below 1, for example if economies of scale are more important than the need to invest in new capacity.
Set the following variables: u is quantity of service, r is total revenue (thus, fare is r/u), c is total costs. The railroad is assumed profitable, so r > c. We are interested in the change in profit based on quantity of service, i.e.
The important thing to note is that price controls keep dr/du higher in an oligopoly (but not in a competitive environment, like housing – a single landlord can’t meaningfully create a housing shortage). With price controls, we get
whereas without price controls, with elasticity , we get
And likewise, with supply elasticity , we get
Note, moreover, that price controls as construed in Japan let operating companies recover profits, letting them raise prices if they invest in more capacity, so that dr/du is actually higher than r/u.
The real world
I do not know to what extent the lack of fare regulation on many British trains contributes to capacity shortages. However, there is some evidence that the same situation is holding back investment in the United States, on Amtrak. Amtrak is a monopolist facing some fare regulations, for example congressional rules limiting the spread between the lowest and highest fares on a given train, but within its ability to set its own capacity in the medium run, it has relatively free hand, and in fact a strong incentive to maximize fares, in order to subsidize money-losing trains outside the Northeast Corridor.
Amtrak generally runs the trains it has on the Northeast Corridor, without explicitly holding back on capacity. However, this is in an environment with very low utilization rates. There are 20 Acela trainsets, but only 16 run in service at a given time, giving them the moniker “hangar queens.” There is no real interest within Amtrak at raising speed just enough to be able to run consistent service intervals, for example hourly with two trainsets coupled to form a 16-car train south of New York. Nor is there any interest in making small investments to permit such long trainsets to run – most Acela stops from New York to the south have platforms long or almost long enough for such trains, but the rest need to be lengthened, within right-of-way so that the cost is positive but low.
In the future, capacity cliffs may prove serious enough to stymie American passenger rail development. Right now the main obstacle are Amtrak itself and obstructive commuter railroads such as Metro-North, but assuming competent, profit-maximizing investment plans, it is not so expensive to invest in capacity and speed so as to permit around 4 long high-speed trains per hour north of New York (or even New Haven) and 6 south of it. But then the next few trains per hour require further bypasses, for example four-tracking most of the Providence Line. High supply elasticity – let’s say around 2 – is plausible. Then eventually a dedicated pathway to intercity trains through New York becomes necessary, raising supply elasticity even higher. In an environment with uncapped, profit-maximizing fares, a rational Amtrak management may well just keep what it has and jack up prices rather than build more capacity.
Governor Ned Lamont’s plan for speeding up trains between New York, New Haven, and Hartford seems to have fallen by the wayside, but Metro-North and the Connecticut Department of Transportation are still planning for future investments. Several high-level officials met with the advocates from the Connecticut Commuter Rail Council, and the results are unimpressive – they have made false statements out of ignorance of not just best practices outside North America but also current federal regulations, including the recent FRA reform.
The meeting link is a video and does not have a searchable transcript, so I’m going to give approximate timestamps and ask that people bear with me. At several points, highly-paid officials make statements that are behind the times, unimaginative, or just plain incorrect. The offenders are Richard Andreski, the bureau chief of public transportation for CDOT, who according to Transparency.CT earns a total of $192,000 a year including fringe benefits, and Glen Hayden, Metro-North’s vice president of engineering, who according to See Through NY earns an annual base salary of $219,000.
20-25 minutes: there’s a discussion, starting a few minutes before this timestamp, about Metro-North’s future rolling stock procurement. In addition to 66 M8 electric multiple units (EMUs), the railroad is planning to buy 60 unpowered railcars. Grilled about why buy unpowered railcars rather than multiple units, such as diesel multiple units (DMUs), Andreski said a few questionable things. He acknowledged that multiple units accelerate faster than locomotive-hauled trains, but said that this was not needed on the lines in question, that is the unpowered Metro-North branch lines, Shore Line East, and the New Haven-Hartford line. In reality, the difference, on the order of 45 seconds per stop at a top speed of 120 km/h (55 seconds if the top speed is 144 km/h), and electrification both massively increases reliability and saves an additional 10 seconds per stop (or 30 if the top speed is 144).
More worryingly, Andreski talks about the need for flexibility and the installed base of diesel locomotives. He suggests unpowered cars are more compatible with what he calls the train of the future, which runs dual-mode. Dual-mode trains today are of low quality, and the innovation in the world focuses on single-mode electric trains, with a growing number of railroads electrifying as well as transitioning to multiple units. Metro-North itself is a predominantly EMU-based railroad – running more EMUs, especially on the already-wired Shore Line East, is more compatible with its existing infrastructure and maintenance regime than keeping low-performing diesel branches and running diesel under catenary on the trunk line.
1:14-1:17: Andreski states that the 60 unpowered single-level cars should cost about $250 million, slightly more than $4 million per car. When a reader of this blog noted that in the rest of the world, a 25-meter multiple-unit costs $2.5 million, Andreski responded, “this is not accurate.” The only trouble is, it is in fact accurate; follow links to contracts reported in Railway Gazette in the rolling stock cost section of this post. It is not clear whether Andreski is lying, ignorant, or in a way both, that is making a statement with reckless disregard for whether it is true.
Hayden then chimes in, talking about FRA regulations, saying that they’re different from American ones, so European and Asian prices differ from American ones, seemingly indifferent to the fact that he just threw Andreski under the bus – Andreski said that multiple-units do not cost $2.5 million per car and if a public contract says they do then it’s omitting some extra costs. The only problem is, FRA regulations were recently revised to be in line with European ones, with specific eye toward permitting European trains to run on American tracks with minimal modifications, measured in tens of thousands of dollars of extra cost per car. In a followup conversation off-video, Hayden reiterated that position to longtime reader Roger Senserrich – he had no idea FRA regulations had been revised.
Hayden’s response also includes accessibility requirements. Those, too, are an excuse, albeit a slightly defensible one: European intercity trains, which are what American tourists are most likely to have experience with, are generally inaccessible without the aid of conductors and manual boarding plates. However, regional trains are increasingly fully accessible, at a variety of floor heights, and it’s always easier to raise the floor height to match the high platforms of the Northeast Corridor than to lower it to match those of low-platform networks like Switzerland’s.
1:45: asked about why Metro-North does not run EMUs on the wired Shore Line East, a third official passes the buck to Amtrak, saying that Amtrak is demanding additional tests and the line is Amtrak’s rather than Metro-North’s property. This is puzzling, as 1990s’ Amtrak planned around electrification of commuter rail service east of New Haven, to the point of constructing its substations with room for expansion if the MBTA were ever interested in running electric service on the Providence Line. It’s possible that Amtrak today is stalling for the sake of stalling, never mind that commuter rail electrification would reduce the speed difference with its intercity trains and thus make them easier to schedule and thus more reliable. But it’s equally possible that CDOT is being unreasonable; at this point I would not trust either side of any Amtrak-commuter rail dispute.
Ten years ago, Amtrak began putting out its outrageously expensive proposals for high-speed rail on the Northeast Corridor. Already then, when it asked for $10 billion to barely speed up trains, there was a glaring problem with coordination: Amtrak wanted hundreds of millions of dollars to three-track the Providence Line so that its trains could overtake the MBTA’s commuter trains between Providence and Boston, even though the same benefit could be obtained for cheaper by building strategic overtakes and electrifying the MBTA so that its trains would run faster. Unfortunately, Amtrak has not only displayed no interest in coordinating better service with the MBTA this way, but has just actively blocked the MBTA.
The issue at hand is MBTA electrification: the MBTA runs an exclusively diesel fleet. These trains are slow, polluting, and unreliable. Lately they have had breakdowns every few thousand kilometers, whereas electric trains routinely last multiple hundreds of thousands of kilometers between breakdowns. The current scheduled trip time between Boston and Providence is about 1:10 on the MBTA with a total of nine stops, whereas Amtrak’s southbound trains do the same trip in 35 minutes with three stops, leading to a large schedule difference between the trains, requiring overtaking. Fortunately, modern electric multiple units, or EMUs, could make the same stops as the MBTA in about 45 minutes, close enough to Amtrak that Amtrak could speed up its trains without conflict.
The MBTA would benefit from electrification without any reference to Amtrak. Connecting Boston and Providence in 45 minutes rather than 70 has large benefits for suburban and regional travelers, and the improved reliability means trains can follow the schedule with fewer unexpected surprises. The line is already wired thanks to Amtrak’s investment in the 1990s, and all that is required is wiring a few siding and yard tracks that Amtrak did not electrify as it does not itself use them. With the diesel locomotives falling apart, the MBTA has begun to seriously consider electrifying.
Unfortunately, the MBTA has made some questionable decisions, chief of which is its attempt to procure electric locomotives rather than self-propelled EMUs. The MBTA’s reasoning is that EMUs require high platforms, which cost about $10 million per station, which is a small but nonzero amount of money on the Providence Line. As a result, it neglected any solution involving buying new EMUs or even leasing them from other railroads for a pilot project. It’s only looking at electric locomotives, whose travel time benefits are about half as large as those of EMUs.
And yet, Amtrak is blocking even the half-measures. The MBTA sought to lease electric locomotives from Amtrak, which uses them on its own trains; Amtrak quoted an unreasonably high monthly price designed to get the MBTA to lose interest. As of last week, the MBTA put the plan to lease electric locomotives for its electrification pilot on hold. No plans for purchase of rolling stock are currently active, as the MBTA is worried about lead time (read: having to actually write down and execute a contract) and does not know how to buy lightly-modified European products on the open market.
As far as Amtrak is concerned, speeding up the MBTA is not really relevant. Yes, such a speedup would improve Amtrak’s own scheduling, removing a few minutes from the Northeast Corridor’s travel time that would otherwise cost hundreds of millions of dollars. But Amtrak has time and time again displayed little interest in running fast trains. All it wants is money, and if it can ask for money without having to show anything for it, then all the better. Coordinating schedules with other railroads is hard, and only improves the experience of the passengers and not Amtrak’s managers.
The MBTA’s decisionmaking is understandable, in contrast, but still questionable. It was worth asking; the MBTA is no worse for having received an unreasonable offer. However, it is imperative that the MBTA understand that it must be more proactive and less hesitant. It must electrify, and commit a real budget to it rather than a pilot. This means immediately raising the platforms on the stations of the Providence Line that do not yet have level boarding and buying (not leasing) modern EMUs, capable of running fast schedules.
Even with some infill, there are only seven low-platform stations on the mainline and two on the branch to Stoughton, none in a constrained location where construction is difficult. This is at most a $100 million project, excluding the trains themselves. The MBTA could operate the Providence Line with seven to eight trainsets providing service every 15 minutes and the Stoughton Line with another four providing the same. Procuring trains for such service would cost another $250 million or so, but the MBTA needs to buy new rolling stock anyway as its diesel locomotives are past the end of their useful lives, and buying EMUs would pay for itself through higher ridership and lower operating expenses coming from much faster trips.
The MBTA is fortunately salvageable. It has a serious problem in that the state leadership is indecisive and noncommittal and prefers a solution that can be aborted cheaply to one that provides the best long-term financial and social return on investment. However, it is seriously looking in the right direction, consisting of better equipment providing higher-quality service to all passengers.
Amtrak is unfortunately not salvageable. An intercity railroad whose reaction to a commuter railroad’s attempt to improve service for both systems is to overcharge it on rolling stock proves that it is ignorant of, indifferent to, and incurious about modern rail operations. A chain of managers from the person who made the decision to offer the MBTA bad lease terms upward must be removed from their positions if there is any hope for improved intercity rail in the Northeastern United States.
When the Gateway tunnel project began at the start of this decade, it was justified on the same grounds as the older ARC project: more capacity for trains across the Hudson. This justification continued even after the existing tunnels suffered damage in Hurricane Sandy. As costs mounted and it became clear there was no political will to round up $25 billion of federal and state money for capacity, the arguments changed. An engineering report softly recommended long-term tunnel closure for maintenance, without comparing the cost of new tunnels to that of continuing to close the tunnels one tube at a time on weekends, and subsequently both the funding requests and the press releases shifted in tone to “we must close the tunnels or else they’ll collapse.” Unfortunately, this racket is now spreading to other parts of the American mainline rail network – namely, Amtrak and its high-speed rail program.
Case in point: in an internal report, leaked to the press via a belated public records request, Amtrak fearmongers about the impact of rising sea levels on its infrastructure. Bloomberg helpfully includes maps of rising sea levels inundating part of the Northeast Corridor’s infrastructure in low-lying parts of Connecticut, Delaware, and Maryland.
What Bloomberg does not say is that the Northeast Corridor is slightly elevated over the parts shown as inundated, due to river crossings. There’s even an attached photo of the station in Wilmington, clearly showing the train running above ground on a viaduct, at what looks like about five meters above sea level. There are no photos from other areas along the corridor, but regular riders as well as people looking closely at satellite photos will know that through the flood-prone parts of Secaucus, the Northeast Corridor is already on a berm, crossing over intersecting roads, and the same is true in most of Connecticut. On Google Earth, the lowest-lying parts of the route, passing through southeastern Connecticut and parts of Maryland, are 3-4 meters above sea level.
The rub is that a sea level rise of 3-4 meters is globally catastrophic to an extent that doesn’t make Amtrak any of the top thousand priorities. Cities would be flooded, as helpfully shown by photos and images depicting the railroad running above street level. Entire countries would be wiped off the map, like the Maldives. Low-lying coastal floodplains, so crucial for high-intensity agriculture, would disappear. In Bangladesh alone, a sea level rise of a single meter would flood 17.5% of the country, which with today’s demographics would displace about 25 million people; the sea level rise required to threaten the Northeast Corridor is likely to produce a nine-figure global refugee crisis.
To Amtrak’s credit, it’s somewhat pushing back against the apocalyptic language – for now. The Bloomberg article tries to demagogue about how unconcerned Amtrak is with climate change-related flooding, but at least the quotes given in the piece suggest Amtrak views this as a concern, just not one it’s going to talk about while the president openly says climate change is a Chinese conspiracy. Once the political winds will shift, Amtrak as portrayed by a close reading of the article will presumably shift its rhetoric.
However, the credit Amtrak gets for not pushing this line right now is limited. Sarah Feinberg, a former FRA administrator who was also on the panel for Governor Cuomo’s MTA genius grant competition, is described as saying talking about climate change won’t fly in Congress. In other words, in Feinberg and Amtrak’s view, “we need money to flood-proof the Northeast Corridor” is not a preposterous proposition, but a demand to be reserved until the Democrats are in charge of the federal government.
In the 2000s, Amtrak fired David Gunn from his position as CEO, since he wouldn’t succumb to political pressure to skimp on maintenance in order to achieve on-paper profitability so that Amtrak could be privatized. In his stead, the Amtrak board installed the more pliable Joe Boardman. Then Obama replaced Bush and economic stimulus replaced domestic spending cuts, and suddenly Amtrak discovered a backlog of maintenance, demanding billions of dollars that could have built 350 km/h high-speed rail between Boston and Washington already for state of good repair instead. The backlog has increased ever since, as it became clear Amtrak could just ask for more money without having to show any work for it as long as it was couched in language about maintenance.
The same mentality is still in place today. The required response of the American transportation complex to climate change: an immediate end to any public spending on roads and airports and massive spending on public transportation, intercity rail, and electric car charging stations, in that order. Amtrak has a role to play in advocating for more rail use as mitigation of transportation emissions, which are currently the largest single source of greenhouse gas emissions in the United States.
However, responding this way would require Amtrak to run better service. It would require it to stop playing agency turf games with other railroad agencies – after all, the planet does not care who owns which piece of track on the Northeast Corridor. It would require it to show visible improvements in speed, capacity, coverage, and reliability. It is not capable of producing these improvements and neither do other federal organs dealing with passenger rail, such as the FRA-led NEC Future effort. Thus, it is preparing the way to argue for a massive increase in spending that is explicitly not designed to produce any tangible benefit.
There is a way forward, but not with any of the people in charge today. They are incapable of managing large projects or even smoothly running a railroad in regular service, and should be replaced by people who have the required experience. Feinberg is a political operative who before her appointment as FRA head in 2015 had no background in transportation; evidently, together with the other judges of the genius grant she greenlit manifestly impossible projects.
Evidently, when New York City Transit hired a chair with a strong transportation background, namely Andy Byford, suddenly plans became more than just the state of good repair black hole plus court-mandated accessibility retrofits. Byford insists on specific positive improvements, which lay riders can judge in the coming decade as they see more elevator access and higher train frequency, provided his plan’s very high cost is funded.
With Amtrak, in contrast, there is only a black hole. There is an extremely expensive high-speed rail plan out there, but the first segment Amtrak wants to build, Gateway, wouldn’t provide any tangible benefit in speed or even capacity (the current state of Gateway is a $11 billion tunnel without additional surface tracks, so the two-track bottleneck would remain). A project that was once a critical capacity increase has since been downgraded into the state of good repair black hole, in which many tens of billions of dollars can disappear without showing anything. As the NEC Future process evolves, any calls for high-speed rail in the Northeast are likely to evolve in the same direction: no improvement, just endless money poured on the same service quality as today, justified in terms of adaptation or resilience.
Six and a half years ago, the Federal Railroad Administration announced that it was going to revise its passenger train regulations. The old regulations required trains to be unusually heavy, wrecking the performance of nearly every piece of passenger rolling stock running in the United States. Even Canada was affected, as Transport Canada’s regulations mirrored those south of the border. The revision process came about for two reasons: first, the attempt to apply the old rules to the Acela trains created trains widely acknowledged to be lemons and hangar queens (only 16 out of 20 can operate at any given time; on the TGV the maximum uptime is 98%), and second, Caltrain commissioned studies that got it an FRA waiver, which showed that FRA regulations had practically no justification in terms of safety.
The new rules were supposed to be out in 2015, then 2016, then 2017. Then they got stuck in presidential administration turnover, in which, according to multiple second-hand sources, the incoming Republican administration did not know what to do with a new set of regulations that was judged to have negative cost to the industry as it would allow more and lower-cost equipment to run on US tracks. After this limbo, the new rules have finally been published.
What’s in the new regulations?
The document spells out the main point on pp. 13-20. The new rules are similar to the relevant Euronorm. There are still small changes to the seats, glazing, and emergency lighting, but not to the structure of the equipment. This means that unmodified European products will remain illegal on American tracks, unlike the situation in Canada, where the O-Train runs unmodified German trains using strict time separation from freight. However, trains manufactured for the needs of the American market using the same construction techniques already employed at the factories in France, Germany, Switzerland, and Sweden should not be a problem.
In contrast, the new rules are ignoring Japan. The FRA’s excuse is that high-speed trains in Japan run on completely dedicated tracks, without sharing them with slower trains. This is not completely true – the Mini-Shinkansen trains are built to the same standards as the Shinkansen, just slightly narrower to comply with the narrower clearances on the legacy lines, and then run through to legacy lines at lower speed. Moreover, the mainline legacy network in Japan is extremely safe, more so than the Western European mainline network.
On pp. 33-35, the document describes a commenter who most likely has read either my writings on FRA regulations or those of other people who made the same points in 2011-2, who asked for rules making it possible to import off-the-shelf equipment. The FRA response – that there is no true off-the-shelf equipment because trains are always made for a specific buyer – worries me. The response is strictly speaking true: with a handful of exceptions for piggybacks, including the O-Train, orders are always tailored to the buyer. However, in reality, this tailoring involves changes within certain parameters, such as train width, that differ greatly within Europe. Changes to parts that are uniform within Europe, such as the roofing, may lead to unforeseen complications. I don’t think the cost will be significant, but I can’t rule it out either, and I think the FRA should have been warier about this possibility.
The final worry is that the FRA states the cost of a high-speed train is $50 million, in the context of modification costs; these are stated to be $300,000 for a $50 million European high-speed trainset and $4.7 million for a Japanese one. The problem: European high-speed trainsets do not cost $50 million. They cost about $40 million. Japanese sets cost around $50 million, but that’s for a 16-car 400-meter trainsets, whereas European high-speed trainsets are almost always about 200 meters long, no matter how many cars they’re divided into. If the FRA is baking in cost premiums due to protectionism or bespoke orders, this is going to swamp the benefits of Euronorm-like regulations.
But cost concerns aside, the changes in the buff strength rules are an unmitigated good. The old rules require trainsets to resist 360-945 metric tons of force without deformation (360 for trains going up to 200 km/h, 945 beyond 200 km/h), which raises their mass by several tons per cars – and lightweight frames require even more extra mass. The new ones are based on crumple zones using a system called crash energy management (CEM), in which the train is allowed to deform as long as the deformation does not compromise the driver’s cab or the passenger-occupied interior, and this should not require extra train mass.
How does it affect procurement?
So far, the new rules, though telegraphed years in advance, have not affected procurement. With the exception of Caltrain, commuter railroads all over the country have kept ordering rolling stock compliant with the old rules. Even reformers have not paid much attention. In correspondence with Boston-area North-South Rail Link advocates I’ve had to keep insisting that schedules for an electrified MBTA must be done with modern single-level EMUs in mind rather than with Metro-North’s existing fleet, which weighs about 65 metric tons per car, more than 50% more than a FLIRT per unit of train length.
It’s too late for the LIRR to redo the M9, demanding it be as lightweight as it can be. However, New Jersey Transit’s MultiLevel III is still in the early stages, and the railroad should scrap everything and require alternate compliance in order to keep train mass (and procurement cost) under control.
Moreover, the MBTA needs new trains. If electrification happens, it will be because the existing fleet is so unreliable that it becomes attractive to buy a few EMUs to cover the Providence Line so that at least the worst-performing diesels can be retired. Under no circumstance should these trains be anything like Metro-North’s behemoths. The trains must be high-performance and as close as possible to unmodified 160 km/h single-level regional rail rolling stock, such as the DBAG Class 423, the Coradia Continental, the Talent II, or, yes, the FLIRT.
Metra is already finding itself in a bind. It enjoys its antediluvian gallery cars, splitting the difference between one and two decks in a way that combines the worst of both worlds; first-world manufacturers have moved on, and now Metra reportedly has difficulty finding anyone that will make new gallery cars. Instead, it too should aim at buying lightly modified European trains. These should be single-level and not bilevel, because bilevels take longer to unload, and Chicago’s CBD-dominant system is such that nearly all passengers would get off at one station, Millennium Station at the eastern edge of the Loop, where there are seven terminating tracks and (I believe) four approach tracks.
Ultimately, on electrified lines, the new rules permit trains that are around two thirds as heavy as the existing EMUs and have about the same power output. Substantial improvements in train speed are possible just from getting new equipment, even without taking into account procurement costs, maintenance costs, and electricity consumption. Despite its flaws, the new FRA regulation is positive for the industry and it’s imperative that passenger railroads adapt and buy better rolling stock.
Amtrak’s Gateway project, spending $30 billion on new tunnels from New Jersey to Penn Station, just got its federal funding yanked. Previously the agreement was to split funding as 25% New York, 25% New Jersey, 50% federal; the states had committed to $5.5 billion, which with a federal match would build the bare tunnels but not some of the ancillary infrastructure (some useful, some not).
When Chris Christie canceled ARC in 2010, then estimated at $10-13 billion, I cheered. I linked to a YouTube video of the song Celebration in Aaron Renn‘s comments. ARC was a bad project, and at the beginning Gateway seemed better, in the sense that it connected the new tunnels to the existing station tracks and not to a deep cavern. But some elements (namely, Penn Station South) were questionable from the start, and the cost estimate was even then higher than that of ARC, which I attributed to both Amtrak’s incompetence and likely cost overruns on ARC independent of who managed it.
But I’m of two minds about to what extent good transit advocates should cheer Gateway’s impending demise. The argument for cheering is a straightforward cost-benefit calculation. The extra ridership coming from Gateway absent regional rail modernization is probably around 170,000 per weekday, a first-order estimate based on doubling current New Jersey Transit ridership into Penn Station. At $40,000 per weekday rider, this justifies $7 billion in construction costs, maybe a little more if Gateway makes it cheaper to do maintenance on the old tunnels. Gateway is $30 billion, so the cost is too high and the tunnel should not be built.
Moreover, it’s difficult to raise the benefits of Gateway using regional rail modernization. On the New Jersey side, population density thins fast, so the benefits of regional rail that do not rely on through-running (high frequency, fare integration, etc.) are limited. The main benefits require through-running, to improve access on Newark-Queens and other through-Manhattan origin-destination pairs. Gateway doesn’t include provisions for through-running – Penn Station South involves demolishing a Manhattan block to add terminal tracks. Even within the existing Penn Station footprint, constructing a new tunnel eastward to allow through-running becomes much harder if the New Jersey Transit tracks have heavy terminating traffic, which means Gateway would make future through-running tunnels more expensive.
But on the other hand, the bare tunnels are not a bad project in the sense of building along the wrong alignment or using the wrong techniques. They’re just extremely expensive: counting minor shoring up on the old tunnels, they cost $13 billion for 5 km of tunnel. Moreover, sequencing Gateway to start with the tunnels alone allows dropping Penn South, and might make it possible to add a new tunnel for through-running mid-project. So it’s really a question of how to reduce costs.
The underground tunneling portion of Second Avenue Subway is $150 million per km, and that of East Side Access is $200 million (link, PDF-p. 7). Both figures exclude systems, which add $110 million per km on Second Avenue Subway, and overheads, which add 37%. These are all high figures – in Paris tunneling is $90 million per km, systems $35 million, and overhead a premium of 18% – but added up they remain affordable. A station-free tunnel should cost $350 million per km, which has implications to the cost of connecting Penn Station with Grand Central. Gateway is instead around $2 billion per km.
Is Gateway expensive because it’s underwater? The answer is probably negative. Gateway is only one third underwater. If its underwater character alone justifies a factor of six cost premium over Second Avenue Subway, then other underwater tunnels should also exhibit very high costs by local standards. There aren’t a lot of examples of urban rail tunnels going under a body of water as wide as the Hudson, but there are enough to know that there is not such a large cost premium.
In the 1960s, one source, giving construction costs per track-foot, finds that the Transbay Tube cost 40% more than the bored segments of BART; including systems and overheads, which the source excludes, BART’s history gives a cost of $180 million, equivalent to $1.38 billion today, or $230 million per km. The Transbay Tube is an immersed tube and not a bored tunnel, and immersed tubes are overall cheaper, but a report by Transport Scotland says on p. 12 that immersed tubes actually cost more per linear meter and are only overall cheaper because they require shorter approaches, which suggests their overall cost advantage is small.
Today, Stockholm is extending the T-bana outward in three direction. A cost breakdown per line extension is available: excluding the depot and rolling stock, the suburban tunnel to Barkarby is $100 million per km, the outer-urban tunnel to Arenastaden in Solna is $138 million per km, and the part-inner urban, part-suburban tunnel to Nacka is $150 million per km. The tunnel to Nacka is a total of 11.5 km, of which about 1 is underwater, broken down into chunks using Skeppsholmen, with the longest continuous underwater segment about 650 meters long. A 9% underwater line with 9% cost premium over an underground line is not by itself proof of much, but it does indicate that the underwater premium is most likely low.
Based on the suggestive evidence of BART and the T-bana, proposing that bare Hudson tunnels should cost about $2-2.5 billion is not preposterous. With an onward connection to Grand Central, the total cost should be $2.5-3 billion. Note that this cost figure does not assume that New York can build anything as cheaply as Stockholm, only that it can build Gateway for the same unit cost as Second Avenue Subway. The project management does not have to be good – it merely has to be as bad as that of Second Avenue Subway, rather than far worse, most likely due to the influence of Amtrak.
The best scenario coming out of canceling Gateway is to attempt a third tunnel project, this time under a government agency that is not poisoned by the existing problems of either Amtrak or Port Authority. The MTA could potentially do it; among the agencies building things in the New York area it seems by far the least incompetent.
If Gateway stays as is, just without federal funding, then the solution is for Amtrak to invest in its own project management capacity. The cost of the Green Line Extension in Boston was reduced from $3 billion to $2.3 billion, of which only $1.1 billion is actual construction and the rest is a combination of equipment and sunk cost on the botched start of the project; MBTA insiders attribute this to the hiring of a new, more experienced project manager. If Gateway can be built for even the same unit cost as Second Avenue Subway, then the existing state commitments are enough to build it to Grand Central and still have about half the budget left for additional tunnels.
Alex Armlovich asked me whether it’s possible to design a public-private partnership on the Northeast Corridor (NEC) to build high-speed rail. I took it to a Patreon poll, in which it prevailed over three other options (why land value taxation is overrated, why community groups oppose upzoning, and what examples of transit success there are in autocracies). On social media I gave a brief explanation for why such a privatization scheme would fail: the NEC has many users sharing tracks, requiring coordination of schedules and infrastructure, and privatizing one component would create incentives for rent-seeking rather than good work. In this post I am going to explain this more carefully.
Conceptually, the impetus for privatization is that the public sector cannot provide certain things successfully because it is politically controlled. For example, political control of infrastructure tends to lead to spreading investment around across a number of regions rather than where it is most needed; when Japan National Railways was broken up and privatized, the new companies let go of many lightly-used rural lines and focused on the urban commuter rail networks and the Shinkansen. Political control may also make it harder to keep down headcounts or wages. A competent government that recognizes that it will always be subject to political decisionmaking about services that should not be political will aim to devolve control of these services to the private sector.
The problem with this story is that privatization itself is a public program. This means that the government needs to be in good enough shape to write a PPP that encourages good service and discourages rent-seeking. Such a government entity does not exist in the realm of American public transportation. This doesn’t mean that all privatization deals are bad, but it means that only the simplest deals have any chance of success, and those deals in turn have the least impact.
When it comes to HSR, private operations work provided there is no or almost no need to coordinate schedules and fares with anyone else. One example is Texas, which has no commuter rail between Dallas and Houston nor any good reason to ever run such service. In California, this is also more or less the case: Caltrain-HSR compatibility is needed, but that’s a small portion of the line and could be resolved relatively easily.
In the Northeast, where there is extensive commuter rail, such coordination is indispensable. Without it, any operator has an incentive to make life miserable for the commuter rail operators and then demand state subsidies to allow regional trains on the track. Amtrak is already screwing other NEC users by charging high rates for electricity (which is supposedly the reason Conrail deelectrified, having previously run freight service on the NEC with electric locomotives) and by coming up with infrastructure plans that make regional rail modernization harder and demanding state money for them. If anything, the political control makes things less bad, because congressional representatives can yell at Amtrak; they will have less leverage over a private operator. In the other direction, Metro-North is slowing down Amtrak between New Rochelle and New Haven for the convenience of its own dispatching, and is likely to keep doing so under any PPP deal.
I have written many posts about what it would take to institute HSR on the NEC at the lowest possible cost. All of these make the same point, from many angles: organization – that is, improving timetabling – is vastly cheaper than pouring concrete and building bypass tracks. In chronological order, I’ve written,
- A post about MBTA-HSR compatibility
- A post about Metro-North-HSR compatibility between New York and New Rochelle
- A compendium of cost saving measures I called NEC, 90% Cheaper, back when Amtrak’s budget for it was only $150 billion
- A followup about capacity in the New York commuter belt
- A look at track-sharing around Washington Union Station
- A criticism of Amtrak’s lack of integration between rolling stock and infrastructure plans
- Another look at planning coordination
- A criticism of NEC Future’s overpriced plan ($300 billion for full-fat HSR!)
- A very long and detailed look at New Rochelle-Greens Farms
Privatization is supposed to solve the problems of an incompetent public sector. But Amtrak’s incompetence is not really about wages or staffing; NEC trains are overstaffed relative to Shinkansen trains, but not relative to TGVs. Nor is it about unprofitable branch lines, not when the proposal is to privatize the NEC alone, rather than the entirety of Amtrak so that the private operator could shut down the long-distance trains. Some of the incompetence involves politicized procurement, but this is not the dominant source of high NEC costs. No: the incompetence manifests itself first of all in poor coordination between the various users of the NEC. Given better coordination, Amtrak could shave a substantial portion of its New York-New Haven runtime, perhaps by 10-20 minutes without any bridge replacements, and reduce schedule padding elsewhere.
To fix this situation, some organization would need to determine the timetables up and down the line and handle dispatching and train priority. In the presence of such an organization (which could well be Amtrak itself given top-to-bottom changes in management), a PPP is of limited benefit, because the private operator would be running on a schedule set publicly. Absent such an organization, privatization would make the agency turf battles that plague the entire NEC even worse than they are today.
In 2009, SNCF proposed to develop HSR in four places in the US: California, Texas, Florida, and the Midwest. The NEC, with its existing public intercity and regional rail operations, was not on its map. More recently, Texas Central is a private Japanese initiative to build HSR between Dallas and Houston. On the NEC the only Japanese initiative involved maglev between Washington and Baltimore, a mode of transportation that doesn’t fit the NEC’s context but is guaranteed to not share tracks with any state-owned commuter rail operation.
The invention of HSR itself was not privatized, and the European privatization paradigm involves public control of track infrastructure. Competing operators (some public, some private) can access tracks by paying a track charge, set equally across all operators. But even then, the track infrastructure owner has some decisions to make about design speed – mixing slower and faster trains reduces capacity, so if there’s a mixture of both, does the infrastructure owner assume the design speed is high and charge slower trains extra for taking high-speed slots or does it assume the design speed is low and charge faster trains extra? So far the public rail infrastructure operators have swept this question under the rug, relying on the fact that on high-speed tracks all trains go fast and on low-speed ones few HSR services go faster than an express regional train.
Unfortunately, the NEC requires large speed differences on the same route to avoid excessive tunneling. This complicates the EU’s attempts at a relatively hands-off approach to rail competition in two ways. First, it’s no longer possible to ignore the design speed question, not when regional trains should be connecting Boston and Providence in 51 minutes and high-speed trains in 20 minutes, on shared tracks with strategic overtakes. And second, the overtakes must be timed more precisely, which means whoever controls the tracks needs to also take an active hand in planning the schedules.
Handwaving the problems of the public sector using privatization works in some circumstances, such as those of Japan National Railways, but could never work on the NEC. The problems a PPP could fix, including labor and rolling stock procurement, are peripheral; the problems it would exacerbate, i.e. integrating infrastructure and schedule planning, are the central issues facing the NEC. There is no alternative to a better-run, better-managed state-owned rail planning apparatus.
A stenographer at Bloomberg is reporting an Amtrak study that says the social benefit-cost ratio of the Gateway program is about 4. Gateway, the project to quadruple the double-track line from New York to Newark, including most important the tunnel across the Hudson, is now estimated to cost $25 billion. Cost overruns have been constant and severe: it was $3 billion in the ARC era in 2003, $9 billion when Governor Chris Christie canceled it in 2010, and $13.5 billion when Amtrak took over in 2011 and renamed it Gateway. And now Amtrak is claiming that the net present value of Gateway approaches $100 billion; in a presentation from late 2016, it claims that at a 3% discount rate the benefit-cost ratio is 3.87, and compares it positively with Crossrail and California HSR. This is incorrect, and almost certainly deliberate fraud. Let me explain why.
First, the comparison with Crossrail should give everyone pause. Crossrail costs around the same as the current projection for Gateway: about $21 billion in purchasing power parity terms, but future inflation means that the $25 billion for Gateway is very close to $21 billion for Crossrail, built between 2009 and 2018. Per Amtrak, the benefit-cost ratio of Crossrail as 3.64 at the upper end – in other words, the benefits of Crossrail and Gateway should be similar. They are clearly not.
The projection for Crossrail is that it will fill as soon as it opens, with 200 million annual passengers. There is no chance Gateway as currently planned can reach that ridership level. New Jersey Transit has about 90 million annual rail riders, and NJT considers itself at capacity. This number could be raised significantly if NJT were run in such a way as to encourage off-peak ridership (see my writeup on Metro-North and the LIRR, for which I have time-of-day data), but Gateway includes none of the required operational modernization. Even doubling NJT’s ridership out of Gateway is unlikely, since a lot of ridership is Hoboken-bound today because of capacity limits on the way to New York, and Gateway would cannibalize it; only about 60 million NJT riders are taking a train to or from New York, so a more realistic projection is 60 million and not 90 million. Some additional ridership coming out of Amtrak is likely, but is unlikely to be high given Amtrak’s short trains, hauled by a locomotive so that only 5-7 cars have seats. Amtrak has an asterisk in its comparison saying the benefit-cost ratios for Crossrail and Gateway were computed by different methodologies, and apparently the methodologies differ by a factor of 3 on the value of a single rider.
That, by itself, does not suggest fraud. What does suggest fraud is the history of cost overruns. The benefits of Gateway have not materially increased in the last decade and a half. If Gateway is worth $100 billion today, it was worth $100 billion in 2011, and in 2003.
One change since 2011 is Hurricane Sandy, which filled the existing North River Tunnels with corrosive saltwater. A study on repairs recommended long-term closure, one tube at a time. But the difference is still small compared to how much Amtrak thinks Gateway is worth. The study does not claim long-term closure is necessary. Right now, crews repair the tunnels over weekends, with weekend closures, since weekend frequency is so poor it can fit on single track. The study does not say how much money could be saved with long-term closures, but the cost it cites for repairs with long-term closures is $350 million, and the cost under the current regime of weekend closures cannot be several billion dollars more expensive. The extra benefit of Gateway coming from Sandy is perhaps $1 billion, a far cry from the almost $100 billion projected by Amtrak for Gateway’s worth.
What this means is that, if Gateway really has a benefit-cost ratio approaching 4 today, then it had a benefit-cost ratio of about 7 in 2011. Amtrak did not cite any such figure at the time. In 2003 it would have have had a benefit-cost ratio approaching 25, even taking into account inflation artifacts. None of the studies claimed such a high figure. Nor did any of the elected or appointed officials in charge of the project act like it was so valuable. Construction was not rushed as it would have if the benefit-cost ratio was so high that a few years’ acceleration would have noticeable long-term consequences.
The scope of the project did not suggest an extreme benefit-cost ratio, either. ARC, then Gateway, was always just two tracks. If a two-track tunnel has a benefit-cost ratio higher than 20, then it’s very likely the next two-track tunnel has a high benefit-cost ratio as well. Even a benefit-cost ratio of 4 would lead to further plans: evidently, Transport for London is planning Crossrail 2, a northeast-southwest tunnel complementing the east-west Crossrail and north-south Thameslink. Perhaps in 2003 Port Authority thought it could not get money for two tunnels, but it still could have planned some as future phases, just as Second Avenue Subway was planned as a full line even when there was only enough money for Phase 1.
The plans for ARC included the awkward Secaucus loop bringing in trains from the Erie lines into Penn Station, with dual-mode diesel/electric locomotives. This is a kludge that makes sense for a marginal project that needs to save every penny, not for one where benefits exceed costs by more than an order of magnitude. For such a strong project, it’s better to spend more money to get it right, for example by electrifying everything. It would also have been better to avoid the loop kludge and send Erie trains to Lower Manhattan and Brooklyn, as I have proposed in various iterations of my regional rail plan.
All of this together suggests that in 2003, nobody in charge of ARC thought it was worth $70 billion in 2003 dollars, or around $100 billion in 2017 dollars. Even in 2011, Amtrak did not think the project was worth $85 billion in 2011 dollars. It’s theoretically possible that some new analysis proves that old estimates of the project’s benefits were too low, but it’s unlikely. If such revisions were common, we would see upward and downward revisions independent of cost overruns. Some rail projects with stable costs would see their benefit-cost ratios shoot up to well more than 10. Others might be revised down below 1.
What we actually see is different. Megaprojects have official estimates on their benefit-cost ratios in a narrow band: never less than 1 or else they wouldn’t be built, never more than 4 or 5 or else people might disbelieve the numbers. In an environment of stable costs, this would make a lot of sense: all the 10+ projects have been built a long time ago, so the rail extensions on the table today are more marginal. But in an environment of rapid cost escalation, the fact that benefits seem to grow with the costs is not consistent with any honest explanation. The best explanation for this is that, desperate for money for its scheme to build Gateway, Amtrak is defrauding the public about the project’s benefits.