Passenger Trains > "Amtrak always pays"

Interesting article about liability regards the Cayce crash and others.

http://www.wmcactionnews5.com/story/37476537/whos-at-fault-in-amtrak-crash-amtrak-will-pay-regardless

Amtrak pays for accidents it didn't cause because of secretive agreements negotiated between the passenger rail company, which receives more than $1 billion annually in federal subsidies, and the private railroads, which own 97 percent of the tracks on which Amtrak travels.

Both Amtrak and freight railroads that own the tracks fight to keep those contracts secret in legal proceedings. But whatever the precise legal language, plaintiffs' lawyers and former Amtrak officials say Amtrak generally bears the full cost of damages to its trains, passengers, employees and other crash victims - even in instances where crashes occurred as the result of a freight rail company's negligence or misconduct.

There may be an exception if there is gross negligence.

And the freight railroad needs to cover its own losses, and presumably also if Amtrak is at fault on the NEC.

In any case, this issue has not seemed to cause Amtrak severe difficulties over the years or they would have gone out of business.

Posted from iPhone

http://www.foxnews.com/politics/2018/02/11/in-secret-deal-tax-backed-amtrak-pays-for-private-railroads-screwups-report.html

Even when the government is in the right, it often pays.

Part of Senator Bob Menendez's (D-NJ) trial was whether he improperly pressured Medicare to overpay his millionaire doctor buddy.

Posted from Android

It came out following the 501 accident that Amtrak only pays medical costs if the injured person signs a contract not to sue later. A little legal arm twisting on broken arms.

radar Wrote:
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> It came out following the 501 accident that Amtrak
> only pays medical costs if the injured person
> signs a contract not to sue later. A little legal
> arm twisting on broken arms.

That technique is often used as a scare tactic. The victim is injured, scared, maybe disoriented. Easier to scare into signing away their rights.

Hospitals have to accept emergency patients, but the long and expensive rehab is another story. If you have a medical plan, it will likely sue, and go after Amtrak.

Posted from Android

radar Wrote:
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> It came out following the 501 accident that Amtrak
> only pays medical costs if the injured person
> signs a contract not to sue later. A little legal
> arm twisting on broken arms.


If you sue you’ll be tied up in court. Amtrak will pay regardless.

Why should this be so shocking to anyone??

The same applies to all trackage rights agreements I am aware of between freight railroads. No matter what the cause of the derailment the tenant picks up all the costs for the derailment because if not for the presence of the tenant train there would not have been a derailment. There is a gross negligence clause in most of these agreements but I have not seen an incident arbitrated or litigated. Doesn't mean it never happens, just that I am not aware of it.

Trackage rights fees are intended to cover the costs of maintenance operation of the host railroad caused by the presence of the tenant trains. Current day agreements are usually based on the weight of the movement of the tenant train. In general, these agreements accomplish what is intended: The host railroad gets compensated but will never be able to call foreign line trackage rights operations a profit center.

Amtrak, on the other hand, does not come close to paying its way because of the superiority over freight operations and obligation of the host company to operate the trains according to schedule. The operating costs of subordinating freight train operations to Amtrak is substantial. As a result, when capacity is added to an Amtrak route the host railroad must add enough capacity to continue running the passenger trains on schedule. The host railroad is, of course, not compensated for this increment of investment. No wonder, then, that freight railroads insist that Amtrak pick up all the tab for derailment casualty, regardless of cause.

Proof of the deep discount Amtrak receives for the maintenance and operation of a main line segment is evident whenever Amtrak is left as the sole user of a significant line segment. Many Amtrak contracts with host railroads assign all of the maintenance and operating costs to Amtrak when a route remains in service solely for the purpose of operating Amtrak trains. Amtrak cannot begin to pay for all of the capital maintenance necessary for operation at passenger train speeds and renewal of signal hardware which, were it not for Amtrak, would not be necessary. example: Southwest Chief between Trinidad and Lamy. It will be interesting to see what happens there over the long run when Amtrak has to commit to fund the investments in track and signal before they are made.

In short, Amtrak is not being mistreated. In many cases it gets more subsidy in the form of capital investment to accommodate its operation from the freight railroads than it pays the freight railroads for operation of the trains.



Edited 1 time(s). Last edit at 02/11/18 10:33 by RollinB.

Note to RolllinB,

The whining about how much Amtrak costs its landlords is bookkeeping moonshine. The logic involved, if followed consistently, would mean that on a line like the UP, one train a year makes money; all the others (by reason of generating less revenue) "lose" money. Since there are many more freight movements than passenger movements (apart from the NEC, understood), Amtrak more frequently suffers from freight interference than vice-versa. Indeed, the landlords own movements "cost" them far more in lost time etc. than accommodating Amtrak. Hosting Amtrak, if you have any pride in the quality of your operation, is virtually free money, thanks to incentive payments. Some years ago I heard a BNSF rep say that Amtrak incentive payments came to about four cents a share, which he said was significant. I can't imagine they've made that much in recent years, though.

Whether one agrees with the public policy or not, RollinB is correct for more reasons than logic. None of this is about secret contracts.

Your Congress and mine--in very public laws--imposed the basic terms under which Amtrak compensates the railroads, including for liability. The original "deal," adopted in 1971, was that Amtrak would pay freight railroads "reasonable costs," which included its share of investment costs. When the Interstate Commerce Commission started issuing decisions setting reasonable costs, Congress, to put it gently, freaked out. The reasonable costs of a passenger train on a freight railroad, when it shares capital costs, were much higher than Amtrak could afford or Congress wanted to spend. So, being Congress, it reneged on its own deal. In 1973, Congress changed the law to limit Amtrak to paying "incremental" costs--the extra costs that a freight railroad must pay because the Amtrak train is there. Now apply that to an accident, and let's assume the freight railroad was negligent. All of the costs of that accident are "incremental" costs for the freight railroad. Had the freight railroad not been compelled against its wishes by the U.S. Government to accept that train, there would have been no expensive accident and no liability costs.

To summarize quickly, then, Amtrak pays for accident costs because Congress rewrote the law in 1973 to give Amtrak a big discount on using freight rail lines and to require Amtrak to pay all incremental costs. Amtrak is enjoying its 37th year of that Congressional decision that has saved our government (Amtrak) billions. As is so often the case, talk to your representative if you dislike it. But expect the freight railroads to ask for better compensation next time around, including all the costs Amtrak will have to pay over time in northern New Mexico.

Note that you will see much written about a separate issue, which is a limit on damages that Amtrak can pay in any accident. Plaintiffs's lawyers, of course, hate this. Again, though, this has nothing to do with secret contracts. Congress set that limit, again in a public law that we can go read online.

badgerexpat Wrote:
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> Note to RolllinB,
>
> The whining about how much Amtrak costs its
> landlords is bookkeeping moonshine.

Here we go with pejorative terms which accomplish little more than name-calling.

The logic
> involved, if followed consistently, would mean
> that on a line like the UP, one train a year makes
> money; all the others (by reason of generating
> less revenue) "lose" money.

I do not understand the logic of this statement. Please explain how you got there. Even within a train different cars generate different profit margins. Trains that do not contribute generally do not operate for long. Except Amtrak.



Since there are many
> more freight movements than passenger movements
> (apart from the NEC, understood), Amtrak more
> frequently suffers from freight interference than
> vice-versa.

This is not a factual statement. If it were, the host railroad would be in violation of its Amtrak agreement. In fact, at my most recent employer, the only trains whose delays are itemized when the train fails to arrive on time are the Amtrak trains. Dispatchers do not take liberties with them. They can still be subject to delays but those delays do not have as their root cause prioritization of freight operations.


Indeed, the landlords own movements
> "cost" them far more in lost time etc. than
> accommodating Amtrak. Hosting Amtrak, if you have
> any pride in the quality of your operation, is
> virtually free money, thanks to incentive
> payments.

It is free money so long as the impact on the freight operation is not counted and until the host railroad has to plan capital expansion that will not only accommodate additional freight trains but also continue to support a consistent Amtrak on time performance.


Some years ago I heard a BNSF rep say
> that Amtrak incentive payments came to about four
> cents a share, which he said was significant. I
> can't imagine they've made that much in recent
> years, though.

I don't know who made such a statement but would certainly like to find out.

In sum, I will not get into a debate about cost accounting. I am simply trying to explain why freight railroads cannot afford to take on indemnification of Amtrak's tenant operation any more than they can afford to take on indemnification of other railroads' trackage rights operation. This will not change.

That does not mean that I think Amtrak is in any way accountable for 91's collision except, possibly, for its lack of involvement in CSX's safety and operating practices. If there were ever an exception to Amtrak's accepting all of the casualty costs this might be it. Please see my comments on other threads.

Badgerexpat would do well to be careful who he picks a fight with. Especially when his own "facts" are nonsense.

4 cents a share? What a joke!

Mr. B knows whereof he speaks

Didn't Congress increase the damage per incident cap for the Philly Amtrak 188 situation?

Posted from Android

Congress could change that limit anytime. Keep in mind, though, that the money would come from Amtrak, to which Congress has not been generous of late.

Lackawanna484 Wrote:
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> Didn't Congress increase the damage per incident
> cap for the Philly Amtrak 188 situation?
>
> Posted from Android

Yes. The cap now includes an escalation clause that tracks the Consumer Price Index. The secretary of transportation issues a revised figure every five years.

Paul Wilson
Arlington, VA

RollinB Wrote:
-------------------------------------------------------

> The logic
> > involved, if followed consistently, would mean
> > that on a line like the UP, one train a year
> makes
> > money; all the others (by reason of generating
> > less revenue) "lose" money.
>
> I do not understand the logic of this statement.
> Please explain how you got there. Even within a
> train different cars generate different profit
> margins. Trains that do not contribute generally
> do not operate for long. Except Amtrak.

Well, I have heard many times from people apparently speaking for Amtrak's landlords with the claim that the landlord "loses money" running Amtrak trains, because if the track occupancy (or whatever it's called) in question were a revenue freight, the railroad would make more money, ergo, the mere presence of an Amtrak train is an opportunity cost, and deprives the landlord of money it would/could/might have made. It's not a realistic argument, or an honest one, and as I say followed to the bitter end it obviously makes no sense even on its own terms. I have no doubt that sometimes "making less money" really is the same as "losing money", but mostly they're not different ways of saying the same thing.

It would be interesting to get a knowledgeable rundown of what "avoidable costs" Amtrak operations create for its landlords. Surely no extra employees are needed, the additional wear and tear on track signals must be too tiny to measure, and the same should go for wear and tear on the infrastructure, given, on the one hand, a couple of short Amtrak trainsets a day, lighter than many kinds of freights and much better sprung than any. The generally higher operating speed must have some effect on wear, but I'd think that whatever it comes to would be impossible to disaggregate from the wear caused by the brutal pounding of coal, oil, and sand trains.

It doesn't take a rocket scientist to blow holes in your weak arguments.

Apparently you have been speaking to low-level people, but they are nonetheless correct. Amtrak costs it's host railroads more than it pays them, especially on already-crowded corridors.

Just compare what Amtrak charges NS, CSX, and others to operate freights on the NEC to what the same railroads get for operating Amtrak trains on their systems, then try to explain the difference away.

badgerexpat, Amtrak eats capacity. If both freight and passenger trains moved along at the same speed, it wouldn't be as much of a problem, but that isn't the case. Go out to Arizona or New Mexico and watch as Amtrak's Southwest Chief is threaded through the heavy BNSF Transcon freight traffic. As example, the dispatcher will cross eastbound Amtrak #4 over to track 1 to overtake several slower eastbound freights on track 2. But those freight trains will start to bunch up and stop as the dispatcher lines Amtrak to cross back over to track 2 at a control point in front of them. And what about westbound freight trains on track 1? Well, they're held or slowed until Amtrak is crossed over so they can proceed. Variations on this theme occur all the way across the desert. Most passengers are unaware of the delays the freight trains are taking, but should Amtrak be slowed or stopped, they'll blame it on the freight trains.

These delays to freight traffic run up the railroads' costs for labor, fuel and car hire. And BNSF, for example, has spent large amounts of capital on capacity-related projects not only to accommodate increased freight traffic but to keep Amtrak running on schedule in spite of those increases. Amtrak generally does not share in those expenses. The exceptions are some of the excellent state intercity rail programs where public investment has made it possible to run more and faster Amtrak service without disruption to existing freight traffic.

Rich Tower

Mr. Tower's comments are most relevant. For those who may not be aware or do not remember, as long as Amtrak remains a national system, BNSF is likely to support continuation of the current route of the Southwest Chief instead of routing over the Transcon east of Belen. Though that route is more fluid these days with elimination of bottlenecks at Vaughn and the Pecos River bridge, there is still a need for tracks to be taken out of service for MOW activities which cause delay irrespective of Amtrak's absence. Kudos to western BNSF dispatchers who are able to juggle freights, passenger and MOW activities on the Transcon west of Dalies, NM. I expect they heave a sigh of relief when an Amtrak engine fails and with a BNSF freight engine on the point, the train becomes only a fast Z-freight.

jmhemmer Wrote:
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> Congress could change that limit anytime. Keep in
> mind, though, that the money would come from
> Amtrak, to which Congress has not been generous of
> late.


Absolutely. Congress changed it when it became clear that the limit would be blown apart in the 188 settlements.

Many companies which self-insure, as Amtrak does for many exposures, will also buy catastrophic, surplus, or excess liability coverage. In general, these plans pay out after the first 50 or 100 or 500 million of self-insured exposure has been exhausted.