Saturday, June 14, 2008

Great interview with Amtrak CEO Alex Kummant from Reuters

One of the reasons why passenger rail is on the upswing is that the freight railroads and Amtrak are coming together as one political alliance. For too long we passenger rail advocates have had a confrontational approach with the host railroads (who, after all, own the tracks that Amtrak uses and control when and how quickly Amtrak trains roll over their property). And the freight railroads have been, for too long, unhappy with the existence of Amtrak and at best, tepidly accepting of their role in the partnership.

I think that's changing.

Here's the fairly substantive interview with Kummant. My favorite part as it relates to the above point:

Let me also make a statement. The freight railroads themselves are beginning to recognize that they are going to need public money to flow into capacity dollars for their network. Otherwise they are never going to be able to really meet demand. And I think they are beginning to realize that they can do that in partnership with passenger rail: that we really should become - or are in the early stages - of really becoming one political alliance.

The freight railroads have done amazing things in the last 10 years in terms of the freight they are moving. They are moving about twice the density of freight they did in 1990 if you look at ton miles moved per mile of class 1 railroad. They are really pushing the capacity. And yet even though they are highly profitable these days they are at the lowest rungs in industry of return on capital. They cannot continue spending 17 percent of revenue on capital and build out the capacity. Therefore there is going to have to be public money that flows into the freight network, and certainly passenger rail is an avenue to do that. Sure we would love to have dedicated rail across the country. I don't think that is going to happen. But I do think it's possible for passenger and freight rail to co-exist if public money is spent in the freight rail infrastructure."


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