Instead of criticizing the Pine County Board for attempting to deliver a high speed train which won’t require an ongoing subsidy, (Pine City Pioneer, 3/28) you should have praised them for their foresight. The fact is that, the faster a train travels, the less chance there is for any ongoing subsidies. Fortunately, a majority of both Pine County Commissioners and NLX Board members continue to insist on delivering the fastest train possible. For the hardworking taxpayers of Pine County, this is a good thing.
The key point in the discussion of NLX ridership and revenue is train speed. The NLX 2007 feasibility study proposal is for a train that would go at speeds of up to 110 mph for a good part of its length with a two hour schedule from Twin Cities to Duluth. Such a train would cover its operating costs eliminating the need for an operating subsidy. In general passenger trains cover their operating costs once they go over 100 mph. This fact is not only agreed by Transportation Economics & Management Systems, Inc. (TEMS) but more importantly by USDOT Federal Railroad Administration (FRA).
So first, despite what the academics which you interviewed said, there are trains in the U.S. that do go over 100 mph, and that service is in the Northeast corridor (NEC.) It makes a very substantial operating profit. Professors Levinson and Richard Brown should check this fact. Furthermore, while Amtrak does consider state revenues as income, it is now forced under Passenger Rail Investment and Improvement Act of 2008 (PRIIA) to collect the operating subsidy from the states and the level of subsidy is clear. It will not collect a subsidy from the states for NEC services as they make an operating profit.
The Downeaster in Maine that you unfairly equate to NLX is not a 110 mph train, but is a 79 mph train so it still requires an operating subsidy. TEMS performed the planning for this corridor as well, and we forecast it would need this subsidy from day one and for likely the rest of its life unless it is upgraded to over 100 mph. The Downeaster was forecast to carry 320,000 riders. Today it well exceeds that target (525,000 riders in 2012) even as a 79 mph system. The Northstar Commuter train (apparently you are not aware that commuter trains are substantially different than inter-city trains?) is also at best a 79 mph train which will always require subsidy. In the 2007 study TEMS made it clear that a 79-mph NLX train would likely always also require an operating subsidy.
A train speed up to 110 mph is not only vital to secure the ridership, revenue and an operating profit for the project, but it is critical to securing the funding of the project. As suggested, the USDOT FRA should contribute 80 percent to the project, and the state 20 percent. However, the government contribution can be reduced if the train goes 110 mph because the economic benefits generated allow the private sector to contribute to the project in a Public-Private Partnership. The aim would be to have a franchised operation, and for the private sector to at least contribute to station joint development along the corridor, and perhaps provide the equipment. This might reduce the role of the public sector in providing capital to the project by five to 20 percent.
As a result, the answer is clear: the closer a train comes to reaching 110 mph speeds, the greater the chance of ensuring it makes an operating profit, attracts private sector investment to the project, and competes successfully with other corridors for Federal capital funding. It is only if the train does not come close to 110 mph on much of the route that some of the dire predictions of Professor Levinson and Professor Richard Brown could come about.
I hope this helps the residents of Pine County to make a good decision for their future and not be confused by misleading comments, false comparisons, and the kind of one-sided, absolute worst case scenarios only, that has currently been presented. If the train goes up to 110 mph as suggested in the 2007 Feasibility Study it will not need an operating subsidy after the initial three year ramp up period. I applaud the NLX and the Pine County Board for having the courage of their convictions and for reaching their goal of building a modern, convenient and true 21st Century Inter-City Passenger Rail Operation for the communities from Twin Cities to Duluth.
Editor’s note: The story Metcalf is referring to in this letter ran in both the Hinckley News (Vision for the future: Legacy of debt) and the Pine City Pioneer (A legacy of debt: Does NLX rail make sense for Pine County?). Ailene Croup and Mike Gainor did not interview a Professor Richard Brown for that story.