By Kenric Ward | Watchdog.org Virginia Bureau
FREDERICKSBURG — A privatized commuter-rail line in Northern Virginia is a model for getting Amtrak off the commuter train tracks and saving taxpayers millions of dollars, a House Transportation Committee report says.
Keolis took over VRE operations in July 2010 after beating Amtrak in a competitive bid. And House Transportation Committee Chairman John Mica said more rail lines should follow Virginia’s example.
“Amtrak is a highly subsidized, Soviet-style rail system, but despite every ticket being underwritten nearly $50 by the taxpayers, Amtrak is an absolute failure in competing with the cost-effectiveness and level of service provided by the private sector,” said Mica, R-Fla.
Since the Rockville, Md.-based Keolis took over the 80-mile VRE, the line’s on-time performance jumped more than 10 percentage points to 98 percent this year, while ridership tops 22,000 most days.
The House report ripped Amtrak’s previous service record on the Northern Virginia routes, saying the quasi-governmental system “failed to win the (VRE) competition despite a complete understanding of the facilities, customers, agency’s desires and costs of operations.”
The House report also accused Amtrak of punitive and retaliatory actions against Keolis.
“After Amtrak’s failed bid to operate VRE, it reportedly interfered with the transition to the winning bidder, Keolis, so much so that VRE officials began exploring legal action that could be taken against Amtrak,” the report says.
“Amtrak’s union allegedly told its workers they would be fired by Amtrak and blacklisted if they took a job with Keolis to operate Keolis’ trains on the line. Amtrak refused to allow VRE engineers to ride with Amtrak crews to learn the route,” the report concluded.
Gregg Baxter, general manager for Keolis in Manassas, confirmed those allegations with Watchdog.org Virginia Bureau and said the company has a “good relationship” with the state and local entities that control the busy commuter line.
The company is planning a 2.3-mile southern extension to Spotsylvania County and exploring a 15-mile western extension to Gainesville and Haymarket.
Northern Virginia wasn’t the only commuter market Amtrak lost.
Since 2005, “Amtrak prepared offers for seven separate competitions, withdrawing from two prior to the final decision award, and losing the others,” the House committee report recounted. ”This includes contracts for which Amtrak was the existing operator, which should have given it an advantage in prior understanding of the service and the commuter rail agencies’ needs.”
Nationally, the report calculated that the seven commuter rail agencies have saved $107.8 million — or 11.5 percent — by awarding contracts to private operators.
By going with Keolis, VRE saved $24.5 million on a $263.5 million contract.
Amtrak declined to address the House allegations, but, in a statement, said its bids “are often more expensive because, by law, we must maintain $200 million in liability insurance, something that private operators are not required to do.
“In addition, private operators can underbid to win a contract which Amtrak cannot do because we are forbidden to use federal funds to cross-subsidize commuter rail agencies.”
Amtrak spokesman Steve Kulm said no decision has been made about re-competing for VRE.
VRE, whose new CEO, Doug Allen, began work Thursday, did not respond to Watchdog.org Virginia Bureau’s request for comment.
Thelma Drake, director of the Virginia Rail and Public Transportation Department, said her agency has had good experience with Amtrak, which continues to run state-supported passenger lines from Richmond, Lynchburg and, soon, Norfolk.
She said her department has “never spent a dime” on Amtrak operations, though the state does help to fund capital projects.
Drake said the state lines could be opened to competitive bids when their contracts expire, but added that Amtrak provides the unique convenience of “same seat” ticketing all the way to Boston.
Mica said a shift to private operators should accelerate next year when a key federal subsidy stops.
Beginning in October 2013, states will be responsible for covering 100 percent of the operating and capital costs for their state-supported routes at an estimated added expense of $120 million per year. Drake calculated Virginia’s additional tab at $25 million to $35 million annually.
To contain those costs and to get the best service, Mica declares, “Amtrak needs to get out of the commuter rail business.”
“We already know that Amtrak’s losses in food and beverage service are a staggering $833 million over the last decade,” the congressman said.
“Now we know that Amtrak wastes the taxpayers’ money bidding on commuter rail contracts that it cannot win, and that hundreds of millions of dollars in savings can be realized if the private sector is given a chance to compete with Amtrak in commuter rail and passenger rail service.”
Contact Kenric Ward at email@example.com or at (571) 319-9824.