Passenger rail startup says it wants to take over Amtrak’s Northeast Corridor service


Scott R. Spencer is used to doing hard things.

As work was wrapping up on the downtown commuter tunnel in 1984, Spencer was senior planner for SEPTA. His small team was tasked with networking the separate maintenance crews, electrification engines and control bases of two decrepit commuter railroads whose authority inherited from the Pennsylvania and Reading railroads.

The mess had to quickly become “a system, a seamless operation,” he said. The tunnel meant that SEPTA’s commuter rail system would be the first in North America to run trains through a city’s downtown, creating faster trips to work and helping to develop the side east of downtown.

Now Spencer is COO of AmeriStarRail, a Wilmington startup that wants to take over and run Amtrak’s Northeast Corridor, which connects eight states between Washington and Boston. It is the last major project in Spencer’s 40-year rail career.

The company promises more frequent trains, 30 new stops and a fleet of high-speed trains with seats for three classes of service, instead of the current approach: fast, expensive Acelas for business travelers and slower, cheaper regional trains for coach travellers.

“Airlines wouldn’t fly jets for business and first class customers and propeller planes for coach passengers,” Spencer, 62, said, calling Amtrak’s practice “unfair” discrimination at towards low-income people, given taxpayer support for the quasi-governmental corporation.

It’s also inefficient to run two trains at different speeds, Spencer said: Acelas are capable of 160 mph, while Northeast Regionals top out at 125 mph.. “Instead of one Acela train per hour to New York, or one regional train per hour, you can have a [fast] practice every 30 minutes,” Spencer said.

AmeriStarRail met with Amtrak several years ago, but so far company executives aren’t buying what Spencer and his team are offering. Amtrak has its own growth plans, including potential new medium-range service between city pairs such as Reading and Philadelphia or Scranton and New York.

A senior Amtrak executive strongly disputed AmeriStarRail’s claims and called its plans impractical and costly in a July 19 letter to Spencer, adding that the railroad had no plans to continue discussions. with society.

“Your proposal is not financially viable and would not achieve the unprecedented levels of ridership and revenue needed to attract and sustain the necessary investments,” wrote Bruno Maestri, vice president of government affairs and communications at company. He was responding on behalf of the CEO of Amtrak to Spencer’s last meeting request.

Still, some transportation experts say now is the time to consider reforms as the 2021 Infrastructure Act injects $66 billion over five years into Amtrak, the biggest capital investment since its founding more than five decades.

According to R. Richard Geddes, a professor of economics and public policy at Cornell University, who specializes in infrastructure, companies could compete for the rights to manage certain aspects of Amtrak’s Northeast Corridor business, such as the train operations, ticketing, catering and marketing.

The concept is known as “unbundling,” separating the competitive parts of a business from those where it has a “natural monopoly,” Geddes said. For example, utility regulators allow power producers to compete to sell electricity to the grid.

“It’s not a revolutionary idea in economics,” Geddes said.

In the context of the Northeast Corridor, he said, it might make sense for private contractors to pay fees to Amtrak for the rights to operate some of its operations while the railroad continues to own and to maintain assets such as tracks, electric gantries and stations – with ongoing taxpayer money for infrastructure improvements.

The dense Northeast Corridor, with relatively short distances between cities and millions of potential customers, has been by far Amtrak’s biggest revenue generator. It is also Amtrak’s busiest service and includes curves, bridges and tunnels that prevent Acela from reaching the speeds common on high-speed trains in Europe and Asia.

Amtrak also owns nearly all of the 457 miles of track and electrical equipment from Washington to Boston.

Congress created Amtrak in 1970 as a private corporation, with the government holding the controlling shares, in an effort to preserve passenger rail service. The legislation required Amtrak to earn enough to limit the subsidies.

“America’s Railroad” has needed about $40 billion in government grants over the years, in part because Amtrak was not tied to a permanent funding source like the federal trust funds that fund highway infrastructure, public transport and airports.

He currently has a backlog of repair needs that will cost estimated at $42 billion.

In a sense, AmeriStarRail began with the 2015 derailment of the Amtrak 188 train in Philadelphia, which killed eight passengers and injured dozens more. Spencer and one of his mentors, Paul Reistrup, second president of Amtrak, believed the 40-year-old Northeast Regional cars, many of which had been run over, were contributing to the toll.

The new wagons are tightly connected to each other and share a set of wheels so they are more stable and less likely to derail. More recent cars are stronger. The two men met with Amtrak executives and followed up with phone calls and memos, urging the railroad to replace the oldest cars first.

READ MORE: Amtrak Should Upgrade Cars, Ground Poles | Opinion

The following year, Amtrak announced that it was purchasing new Acelas.

Since then, Spencer has been thinking of ways to reinvent the rails. In 2017, after decades of working as an operations consultant for railways around the world, including Cairo Metro and Taiwan High Speed ​​Rail, Spencer and attorney Neil Glassman incorporated AmeriStarRail.. They recruited as advisers Reistrup and Bill Vigrass, consultant and retired traffic and planning supervisor for PATCO.

French manufacturer Alstrom is assembling 28 new nine-car Acela trains at an upstate New York plant for a $2.5 billion order from Amtrak; they will be able to travel up to 165 mph (on part of the route) and should start serving the corridor next year.

AmeriStarRail would like to broker a deal to lease or buy the Alstrom Acela trains that are underway — taking the federal loan Amtrak used to pay for them — then order 76 more that it would fund, backed by investors, Spencer said.

READ MORE: New Acela trains are built for luxury and speed, but the Northeast Corridor needs a lot of work.

In addition to a standardized high-speed fleet with ‘stretched’ trains of 12 cars each, the company’s plan for the Northeast Corridor would use the ‘route’, ending train downtime at terminals. waiting for their next trips and keeping them going. It would open up new routes such as service to Long Island and new stations, Spencer said.

In general, something like AmeriStarRail’s operating plan would help increase train frequency and reduce travel times, said Rick Harnish, executive director of the Chicago-based High-Speed ​​Rail Alliance. He said he couldn’t assess the company’s financial plan because he didn’t know the details.

“Frequency is key to knowing if someone is taking the train,” Harnish said.

He added that having a standard Northeast Corridor fleet and running longer trains, as Spencer wants, also makes sense.

“Amtrak has always had a strategy of restricting capacity and charging high ticket prices” for the fastest trains. “Because the cost of running a train doesn’t vary whether it has 200 seats or 500 seats or more, they don’t carry as many people as they should.”

For months, Spencer has presented AmeriStarRail’s case to business and government leaders and won support from civil rights organizations, government watchdog groups and consumer advocates.

“Fundamentally, Amtrak’s response always boils down to saying they’re a business, not a public entity,” said John Flaherty, a longtime activist who leads the Delaware Transportation Equity Coalition. “But that’s silly… when you get billions of taxpayers’ money.”

William Ritzler, director of the Delaware Valley Association of Rail Passengers, said the organization heard a presentation on the AmeriStarRail plan and it sounded solid.

“We certainly think Amtrak, as it’s currently structured in the Northeast Corridor, could do a lot better at moving people,” said Ritzler, who lives in Pitman.

Retired from a telephone company, he also thinks that Amtrak ticket prices are high. As the corridor is busy and a major source of revenue, “we are at a place where Amtrak will charge what the market bears.”

For Spencer, it all comes back to merging two former commuter rail systems for SEPTA a long time ago. “The efficiencies I’ve learned to develop are the backbone of our plan for the Northeast Corridor.”


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