Passenger Trains > Herzog: AMTRAK unfair

(The St. Joseph News-Press posted the following article by Ken Newton on its website on May 1.)

ST. JOSEPH, Ill. -- A St. Joseph man testified before a U.S. Senate committee Tuesday, insisting unfair Amtrak practices stand in the way of any restructuring of intercity rail passenger service.

"If Amtrak refuses to cooperate," Alan Landes, senior vice president of Herzog Transit Services, told the senators, "they should be compelled to do so through the next item of intercity passenger legislation to clear Congress. "

Mr. Landes testified before the Senate Committee on Commerce, Science and Transportation, chaired by U.S. Sen. John McCain, R-Arizona. The hearing focused on the future of intercity passenger rail service and Amtrak s budget request for the 2004 fiscal year.

The Herzog executive contended that private companies have trouble winning competitive bids against Amtrak, which he called a de facto monopoly. He cited Herzog s proposal to operate one of the trains in the company s home state.

"In the case of Missouri, Amtrak’s refusal to negotiate access to facilities and services essential to operating the route made it impossible to prepare a compliant bid, " Mr. Landes said in his testimony.

In addition, Amtrak lowered its subsidy requirement, from $8.9 million to $6.4 million, once the company learned of Herzog s interest in the route, from Kansas City to St. Louis.

"Amtrak succeeded in keeping competitors out of the bid process in Missouri, " said the Herzog executive.

Mr. Landes advocated a "Fair Competitive Bid Procedure," to be directed by the states with U.S. Department of Transportation oversight.

In order for this procedure to work, the witness said, Amtrak must make taxpayer-subsided assets (locomotives, passenger cars, stations and maintenance facilities) available to private bidders.

Further, bidders must have access to tracks owned by private freight railroads, establishment of a pool insurance policy for accident liability, and an end to Amtrak’s ability to raise or lower its bids by using its federal subsidy.

Mr. Landes told senators that Herzog remains optimistic about the passenger train business and plans to be an aggressive bidder if Congress establishes competitive fairness rules.

Herzog, headquartered in St. Joseph, operates 88 passenger trains a day in the United States. The company transports 2.5 million passengers a year in southern Florida, 1.4 million a year in Dallas and 922,000 a year in California.

Wow I am shocked that they would be so heartless. Imagine not turning over the equipment to another bidder?

Under Herzog\'s logic I should be able to go up to a police officer and demand he let me use his car (it is paid for by taxes after all).


puckeringswine wrote:

> Wow I am shocked that they would be so heartless. Imagine
> not turning over the equipment to another bidder?

Mr. Landes advocated a "Fair Competitive Bid Procedure," to be directed by the states with U.S. Department of Transportation oversight.

In order for this procedure to work, the witness said, Amtrak must make taxpayer-subsided assets (locomotives, passenger cars, stations and maintenance facilities) available to private bidders.

Further, bidders must have access to tracks owned by private freight railroads, establishment of a pool insurance policy for accident liability, and an end to Amtrak’s ability to raise or lower its bids by using its federal subsidy.

Is there anything else Mr. Landes would like on his silver platter? Between his "logic" and Senator McCain I fear for Amtrak!

Herzog also has a reputation as not being a very good organization to work for. Few benefits, questionable safety practices, money laundering and pilfering (employee retirement funds), and low employee morale. Ask anyone who has ever worked for them and you will realize why, early on they left quick. What would you expect from a highway subcontractor? They take over Amtrak we\'re screwed! Both passengers and employees.

I totally agree - Taxpayers have invested money (not much, but some) into equipment and facilites for a national rail system. IF privatization were to occur, it would seem logical that the private company in question would have to reimburse the taxpayers for any amtrak equipment they acquire.

I suppose comparisons will be made to the ATT breakup, and how the Bells were made to let private competitors use the common exchanges and wires, but there is no comparison here. ATT was a private for profit company that had a vested interest in a break-up.

updrumcorps wrote:

> I totally agree - Taxpayers have invested money (not much,
> but some) into equipment and facilites for a national rail
> system. IF privatization were to occur, it would seem logical
> that the private company in question would have to reimburse
> the taxpayers for any amtrak equipment they acquire.

Not at all. The taxpayers would merely hire Herzog to operate
and maintain the equipment. In other words, the taxpayers still own the
equipment, but have contracted with Herzog to operate it.

It would be good for everyone if Amtrak had some competition.

Never heard of em.
TR
El Centro CA

There\'s gotta be a reason that Herzog can undercut Amtrak\'s bid and it\'s probably in the labor department. Remember: you get what you pay for. Yep, go with Herzog, and replace those decent paying union jobs with a lowest bidder company. Maybe Herzog uses temps to staff their trians?

OK, I\'m joking. I\'m still interested to know how they intend to operate with that significantly lower bid.

Yeah we would all be better off with several differant providers all playing by a differant set of rules, It sounds like Herzog is a little bitter because they wanted to play ball but forgot they dont own a ball and a bat and can\'t get on the field, because the big boys are there. If anyone believes that farming out these trains to private enterprise will be cheaper then Amtrak in long run, their dreaming.

Oh, boo-frickin\'-hoo. Everyone get out your crying towels because big, bad Amtrak won\'t play fair with little bitty Herzog. This coming from a company that pays Burger King wages, sparce (if any) benefits, and provides little to no protection for it\'s track workers, while it\'s bigshots reap in millions from suckers who were saps enough to allow them to be awarded a contract. The crews on the little Griffith Park train ride are treated better.

Surf, good point, and that\'s really bad. But Amtrak needing competition? HA HA HA HA! You guys must be joking here! Once they find out they can\'t turn a profit and lose money on the routes they operate, they\'ll get out of it in the 1ST Place, and ever wonder why Herzog only contraced with a few commuter agencies?

By all means, let\'s put Herzog on equal footing with Amtrak. Let\'s have Congress pass a law requiring Herzog (and other contractual operators presently skirting the rail road retirement system) to pay all railroad retirement taxes for their employees. A fair portion of Herzog\'s "cost" advantage would disappear, as Amtrak is legally required to include such costs in any bids it makes for services. BNSF and UP (and any other railroad retirement participants) also have to pay these costs in any contracts that they bid for, also putting them at a cost disadvantage. Is it any wonder that these freight carriers aren\'t jumping up and down to try to compete for commuter and other operating contracts?

Good luck in Congress Herzog, maybe they\'ll treat you better than they have treated Amtrak over the years....

hey wasnt Herzog or a Herzog employee involved in some sort of accident in California recently? I seem to remember the name from somewhere, but cant remember when but it was just in the past couple of months.

Luke

Anyone who wants to see how great a company Herzog isn\'t, just stop by the Caltrain line and watch their three ring circus construction division try and rebuild the RR.

They have alot of hard working men in their track gangs, it\'s the inept management that makes them look bad.

Ain\'t that the truth, ever wonder why a lot of the Amtrak Crews who worked the trains and all that were jumping for joy when Warrington and all that ton of managment left when Gunn took over? Bad managment means bad service with companies, and that\'s why SP nearly became like the Rock Island in the 1ST Place is because of bad managment!

Willard1969 has the right idea. If Herzog wants to be treated equally, they should be required to pay into Railroad Retirement. They should also be required to offer comparable pay and benefits that Amtrak employees get, by entering into collective bargaining agreements with the various labor organizations who represent Amtrak employees. If they want to even the playing field, let\'s even it for everyone.

All you need do is talk to any Brit about how their rail passenger service has fared under "open bidding" for "franchises." The private outfits can\'t keep staff because of their wage and benefit practices, maintenance of equipment that came over from British Rail has gone to s**t, and with few exceptions, service reliability has gone down the toilet as well.

There\'s lots of $$ involved in major rail service contracting like this, and when the private sector sees those dollars, there\'s too much temptation for greed and a little skimming here and there and, well, after all, its only the government\'s money, right?

da timecruncher