Thursday, July 26, 2012

Is Amtrak under budgeting track maintenance?

Update July 27: In the comments, John Stolberg corrects me, pointing out: "Paul, you are only looking at the operating budget. Most MOW work is capitalized and shows up in the capital budget. Rail surfacing, tie replacement, undercutting, replacing signal wire, etc. are all capital expenses in the Engineering budget."
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When I was pulling up the numbers for Amtrak's engine reliability, there was another set of numbers that I saw that looked odd. Going through the March 2011-February 2012 monthly reports, Amtrak budgeted a total of 35.8 million for maintenance of way services. According to Amtrak, they own and maintain 1,555 track-miles in the Northeast and Keystone Corridors as well as an additional 95 route-miles of track in Michigan. Assuming the latter is all double-tracked, Amtrak's budgeting only $20,515 per track-mile, an insanely low figure. This study estimates 37.5-58.1 thousand dollars per track-mile for Class 6 track while another estimates $45,354 for Class 6 in a specific example. The matrix it gives starting on page 8 shows, depending on the level of freight and the curviness, a range of $37,543-$97,482 per track-mile for class 6 track predominately used by passenger trains. For a comparative example, Metrolink, which only has a few miles of 110mph track (and that for Amtrak's benefit rather than their own), budgets $27,687,000 for the ordinary maintenance of 363 track-miles, or about $76,000 per mile.

Given that these are listed as maintenance of way services, I thought it possible that this actually represents payments to host railroads for incidental MOW expenses attributable to Amtrak, but this  doesn't appear to be the case: Amtrak states that they paid $124 million for maintenance of way, dispatching, on-time incentives, and the like in Fiscal Year 2011. Although, technically, that could still include the maintenance figure.

It's possible that I'm looking at the wrong thing, that the figures are weirdly divided up (material expenses being itemized elsewhere for instance), or that there's some other perfectly good explanation. If not, however, this is a major failing on Amtrak's part that doesn't even approach "penny wise, pound foolish." It would be especially egregious in light of being such a small fraction of their total expenses and Amtrak's trumpeting of requesting a lower federal operating subsidy. In fact, I'm left curious as to how Amtrak managed to let the NEC get out of a state of good repair in the first place. Given how little the maintenance costs appear to amount to and how badly it affects the rest of the operations, it seems like it would be the absolute last place to make cuts in.

3 comments:

  1. Paul, I am not positive on this, but I think "Maintenance of Way Services" might refer to the portion of MOW work that is contracted out to private firms.

    At least on the transit side of the fence (the cost data reported by agencies to the National Transit Database), "services" refers to expenses for work that has been contracted out. Usually you see this for basics jobs like station cleaning, or specialized work that has to be outsourced by a smaller agency without the right staff in-house.

    I think the actual in-house MOW expenses are wrapped up in the main salary and materials line items. It doesn't look like any other major functions are broken out like that. If Amtrak were providing a detailed budget in their monthly reports, MOW would be in a main section I would think, and not thrown in with "Other Expenses".

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  2. Paul, you are only looking at the operating budget. Most MOW work is capitalized and shows up in the capital budget. Rail surfacing, tie replacement, undercutting, replacing signal wire, etc. are all capital expenses in the Engineering budget.

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    1. Thanks for that. I didn't realize the difference in how it was reported. I take it then that that would be just the budget for salaries, MOW vehicle fuel, and the like?

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