Sunday, July 10, 2011

The Real Stats - From The Horse's Mouth

If you are concerned that I've gone all barnyard with my last two titles, think again.  Animals have always been a good analogy for railroading of all kinds.  After all, it is an iron horse.

Anyway, I thought I'd pass along the real cost of operating my state's commuter railroad, Railrunner Express.  My source is an Op-Ed piece submitted by Larry Abraham and published by the Albuquerque Journal.  Mr. Abraham is the Vice-Chairman of the Rio Metro Regional Transit District board, and also happens to be the mayor of Los Ranchos de Albuquerque.  Mr. Abraham is concerned that NM taxpayers will be paying for the train for a long, long time and there will be new and still-hidden costs to keeping it in operation.

The most disturbing part of all this is that the capitalization of Railrunner appears to have been done in the darkness of political subterfuge.  It is easy for any of my readers to say that it is impossible that the public didn't know what was going on.  All I can tell you is that the details were kept so complicated and changed so often that eventually everybody just accepted Gov. Bill Richardson's mantra.  "Don't worry.  Be happy.  We're getting a train!"

So to the details - and I am paraphrasing Mr. Abraham.  The state spent a half billion on RailRunner.  NM issued highway revenue bonds to pay for it.  This mean that with principal and interest the state will have to pay $850 million over the next 16 years or $18 million a year with two balloon payments (in 2025 and 2027) of $230 million each.  On the revenue side, the train will take in about $60 million, and it is unclear whether that is all farebox or some creative accounting is adding federal grant money, etc.

More recently than the date of publication of Mr. Abraham's editorial, we have learned that the track needs $25 million in maintenance that is not budgeted, and there is an undetermined cost over the next decade to meet federal requirments for Positive Train Control.

If you want to make ugly comparisons, this money could have purchased every current rider a new car for every year until the bonds are paid off, or could have paid for a leased car and hired a chauffer for the trip.  That's efficiency in the use of tax dollers!

I don't think shutting down the train is an option.  We pay for it anyway, whether it is running or not.  What I do think needs to be done is for it to be stopped in the short term until we can develop a business plan where fares come far closer to covering fixed costs.  It's not so unreasonable, for example, to note that a round trip to Santa Fe from Albuquerque in you car is going to use about half a tank of gas.  That's going to be near $30 at today's gas prices.  So why not bring fares closer to this?  Will we lose riders?  Maybe some.  But as long as the attraction is "not driving" and the cost is somewhat less, the riders will be there.  We can lower the fares when the volume of riders goes up. 

Some wags have said we should do it the other way around.  Lower fares almost to nothing and watch the volume soar.  Then adjust the fares upward when people get used to using the train.  I don't think we can afford to spend the extra money in this economy when we are already spending more than enough for this little train.

I love trains.  I love passenger trains.  But bad examples of bad planning using somebody else's money aren't going to make people any more train-friendly than they already are. 

©2011 - C. A. Turek - mistertrains@gmail.com
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