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RAILROADS-1975

WEDNESDAY, MAY 14, 1975

U.S. SENATE,

COMMITTEE ON COMMERCE,
Washington, D.C.

The committee met at 9:30 a.m. in room 224 of the Russell Senate Office Building; Hon. Vance Hartke presiding.

OPENING STATEMENT BY SENATOR HARTKE

Senator HARTKE. Good morning, everyone. The committee will come to order.

This is the first in a series of roundtable discussions on the United States Railway Association's preliminary system plan. The use of a relatively informal discussion format is a departure from our usual hearing format, and is intended to help promote discussion among the parties present of the important issues.

Usually, the members of the committee listen to testimony from witnesses and then ask questions on those portions of the testimony they are interested in. Today, we are attempting to try something a little different. I am hopeful that the participants today will feel free to speak up on the topics being discussed, and that everyone will also feel free to bring up other points they think are relevant or important. This format will work only if those present participate freely and openly.

The committee intends these sessions as an aid to help formulate a better definition of the many issues to be faced in the context of implementation of the Regional Rail Reorganization Act. Neither I nor the committee intends to hold any organization represented here to the views expressed during the course of this session. Because of the desire to stimulate as much useful discussion as possible, I have decided to permit the staff to participate in these sessions also. While I intend to suggest some issues that might be useful to explore, I am hopeful that you people will do most of the talking.

I understand that some of you have a shorter opening statement that you might want to read. I would suggest that we simply have those read now, and that we then turn to a discussion of some selected issues. I would suggest that we begin with Mr. Reistrup, the new president of Amtrak.

Staff members assigned to these hearings: Thomas G. Allison and Paul A. Cunningham.

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STATEMENTS OF PAUL H. REISTRUP, PRESIDENT, AMTRAK, WASHINGTON, D.C.; WILLIAM E. LOFTUS, DEPUTY ASSOCIATE ADMINISTRATOR, OFFICE OF POLICY PLANS AND PROGRAMS, FEDERAL RAILROAD ADMINISTRATION, WASHINGTON, D.C.; ORREN BEATY, PRESIDENT, NATIONAL ASSOCIATION OF RAILROAD PASSENGERS, WASHINGTON, D.C.; ROBERT A. NELSON, PROFESSOR OF TRANSPORTATION, AMERICAN UNIVERSITY, WASHINGTON, D.C.; PETER J. METZ, ASSISTANT SECRETARY OF TRANSPORTATION AND CONSTRUCTION, BOSTON, MASS.; JAMES MCCLELLAN, DIRECTOR, OFFICE OF STRATEGIC PLANNING, UNITED STATES RAILWAY ASSOCIATION, WASHINGTON, D.C.; ACCOMPANIED BY GARY COLLINS; AND ROBERT PRINCE, COUNSEL, METROPOLITAN TRANSIT AUTHORITY, NEW YORK, N.Y.

Mr. REISTRUP. Mr. Chairman, thank you very much.

We appreciate this opportunity to appear before you this morning. I would like to comment briefly on the impact I believe the United States Railway Association's preliminary system plan would have on Amtrak's intercity rail passenger service if it were adopted.

In 1970, Congress created Amtrak and assigned to it the enormous task of reversing the decline of intercity rail passenger service in the United States. When I came to Amtrak, I had no delusions as to the difficulty of restoring adequate passenger service in the Nation. Passenger service had been neglected for decades and in many important markets it was nonexistent. The survey I have made in the field in recent weeks has confirmed my assessment of the size of the problems we face in improving Amtrak's existing passenger service and in prudently expanding the system to serve presently unmet needs of many key localities.

Congress has several times reaffirmed its desire to bring about a true revival of rail passenger service. The increased population of the country and the mobility of our population requires a modern, efficient rail passenger system. This is the goal of Amtrak and with the help of Congress we want to do everything we can to achieve this goal.

It is with this in mind that I make the following comments on USRA's preliminary system plan and its impact on Amtrak both inside and outside the Northeast corridor.

Amtrak has filed with the Rail Service Planning Office of the ICC and also with the USRA its evaluation of the preliminary system plan. Our filings have been provided to the committee so I do not intend to make a long presentation here of their contents. I will just mention that in our view the preliminary plan gives inadequate consideration to the goals Congress has set for Amtrak and the importance of balancing freight and passenger requirements in such a way as to have a minimum adverse effect on our passenger service. This is particularly true of the impact of the plan on Amtrak outside the Northeast corridor, although many of the problems we have

found in the preliminary plan could also adversely affect our operations within the corridor.

In particular, the USRA plan contemplates the abandonment or downgrading of several lines Amtrak is currently using outside the Northeast corridor. We do not believe that USRA should be permitted to abandon or downgrade lines needed for the passenger services as required by Congress, unless substitutes are provided that would not have a harmful effect on Amtrak's operations, costs, communities served, and the quality of that service.

Of even greater concern to Amtrak is the suggestion in the plan that Amtrak might be required to pay more than the incremental costs of operating its trains even on lines to be retained for freight. service. Amtrak was established and from its very beginning has been operated as an incremental user of the existing facilities of the Nation's freight railroads. I believe that Amtrak must continue to be treated as an incremental user if it is to be able to operate its trains without an enormous increase in costs.

As this committee is aware, we are required to reimburse the railroads for the incremental cost to them of running our trains-plus performance incentives where the quality of the service merits them. While the total cost of running and maintaining a railroad is substantial, the incremental cost of running a relatively small number of passenger trains over freight tracks is comparatively modest, because it does not and should not include any of the cost of maintaining the facilities or any portion of the capital cost of retaining them. This is the proper cost basis because the railroad would have maintained and retained the facilities anyway for its freight service.

On the other hand, if Amtrak should be required to maintain lines and facilities not needed for freight service at all, or if it is saddled with the capital cost of such facilities because it has displaced some of the freight service, the financial burden on Amtrak would rise enormously.

We do not believe that the Regional Rail Reorganization Act requires a change in Amtrak's fundamental cost base outside the Northeast corridor. Instead, we believe Amtrak should continue as an incremental user of excess freight capacity, paying only the incremental costs attributed to the operation of its trains. Only in this way can the cost of intercity passenger service be kept at an acceptable level.

Amtrak can continue to operate the trains it runs today as an incremental user only if the lines and facilities used for those trains are also retained and used for freight service. USRA's decisions with respect to freight line retention and improvements should be made with this in mind. In particular, where USRA intends to abandon one of two freight lines, one of which is used by Amtrak and one that is not, the Amtrak line should be the one retained for freight service, unless for marketing reasons Amtrak chooses to propose rerouting over an alternate line.

What I have said thus far has related primarily to existing Amtrak operations in the region dealt with in the preliminary plan. I should perhaps comment briefly on the impact that the proposed freight railroad reorganization could well have on any future expansion of

Amtrak services. The preliminary system plan recommended inauguration of improved high-frequency passenger service over some 16 new corridors in the region.

As I have indicated in previous testimony, we endorse the concept of expanded and improved service where the demand for such service can be demonstrated to meet valid public needs in a fiscally sound manner. My staff has been analyzing the specific corridor recommendations contained in the preliminary plan, as well as other possible candidate routes for high-frequency service.

As the preliminary plan recognizes, implementation of any such recommendations must await completion of the track improvement program that USRA proposes to be accomplished over the next 3 to 7 years. When we have a better idea of how quickly and in what order such track improvements will actually be made, we will be in a better position to analyze the cost and feasibility of each potential route for new corridor service, including but not necessarily limited to those in the plan. In the meantime, we are trying to develop a better idea of the real demand that may be developed for such service in each area-that is, the likely responsiveness of passenger demand to increase in speed, comfort, and frequency of rail service over the lines in question.

We have been discussing these concerns with members of the USRA staff. We believe that satisfactory solutions of most if not all of the abandonment and downgrading problems may be reached. We are also hopeful that the final system plan will expressly recognize the standard established by Congress for determining the level of compensation Amtrak pays to the railroads that run its trains.

In essence, this would mean that ConRail would be directed to negotiate a contract with Amtrak substantially identical to the contract Amtrak has with Penn Central, since that contract embodies the congressional compensation requirements. As we discussed at length in our submission to the Rail Service Planning Office, we believe the law as it presently exists authorizes and indeed requires Con Rail to negotiate such a contract.

Amtrak faces special problems in the Northeast corridor. Both the Regional Rail Reorganization Act and the preliminary system plan contemplate substantial changes for Amtrak in the corridor between Washington and Boston. Amtrak's present operation in the corridor is basically the same as it is elsewhere in the country. Its trains are run by Penn Central over Penn Central's facilities and the incremental cost is charged to Amtrak.

The act requires the upgrading of the Northeast corridor properties and the inauguration of high-speed, high-frequency passenger services by Amtrak between Washington and Boston. To achieve this the plan would reroute almost all freight service off these corridor lines, devoting them to passenger service alone. Amtrak is in full agreement with the preliminary plan in this respect. Significant questions remain to be answered, however, about the precise form that passenger operations in the corridor will take after this part of the plan is implemented.

I believe that any format for a successful operation of improved passenger service in the corridor by Amtrak and by the commuter

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