CATS Long Term Transit Plan - Silver, Red Lines

[ah59396]

I for one would love to revisit the plan and have a new referendum. No rail to the north means I'd like to vote against paying a transit tax (half-cent). Let the city impose that tax within the city limits if it chooses...or raise property taxes. I'd also like to lobby for a rebate of all the money that the other towns in Meck Co. have paid due to the half-cent transit tax over the MANY years.

 

Promises were made and expectations were formed. If you want to start changing those then lets change everything. And before someone starts talking buses, don't. The original promise was for a train...and frankly that's all I'm interested in.

 

You make it sound like the city made the decision to not use the NS line.  The fact is the plan was already dead and not funded, and now they need an extra $200m.  But honestly, I'd be perfectly fine with just the city proper paying the tax to support the lines and just keep all the transit within the city limits.  Let the satellite cities come up with their own solutions for the ever increasing transpo problems the metro will face.

[dubone]

Well, with such pitiful ridership projections, it is not really a massive loss to region wide transportation problems.  

 

Multiple express buses pooling from different centers in north Meck and then leveraging the new HOT lanes of 77 will be the best transit outcome in that region for a decade or more.   Maybe the tone for NS will be different in a decade, but regardless the corridor will still be there the same as now and potentially the towns can still pursue TOD in advance of it and continue to widdle away at the funding and coordination issues with NS.

 

I am personally completely neutral on it.  

 

 

I do think the long pause in planning has been to allow the current building program to settle down and see where ridership and the new normal for transit tax proceeds come in. 

 

More online retailers now collecting sales, especially Amazon, will mean that the coffers may not stay as empty as they were for a while. 

 

The abandonment of the Independence corridor for anything but buses on HOT lanes, (just like North Meck without the Red Line), and the virtual abandonment of the streetcar corridors around the center city means the transit plan is already dead.    So it will take a future leader with foresight to come in and re-energizing by re-doing it.    

 

Really, as long as they keep pursuing grants for the streetcar Phase II, we have a lot to be thankful for with a successful first line being doubled in length and the starter streetcar.   Reassessing the next steps in 2017 when they are done will be pretty reasonable.

[ah59396]

Well, with such pitiful ridership projections, it is not really a massive loss to region wide transportation problems.  

 

Multiple express buses pooling from different centers in north Meck and then leveraging the new HOT lanes of 77 will be the best transit outcome in that region for a decade or more.   Maybe the tone for NS will be different in a decade, but regardless the corridor will still be there the same as now and potentially the towns can still pursue TOD in advance of it and continue to widdle away at the funding and coordination issues with NS.

 

I am personally completely neutral on it.  

 

 

I do think the long pause in planning has been to allow the current building program to settle down and see where ridership and the new normal for transit tax proceeds come in. 

 

More online retailers now collecting sales, especially Amazon, will mean that the coffers may not stay as empty as they were for a while. 

 

The abandonment of the Independence corridor for anything but buses on HOT lanes, (just like North Meck without the Red Line), and the virtual abandonment of the streetcar corridors around the center city means the transit plan is already dead.    So it will take a future leader with foresight to come in and re-energizing by re-doing it.    

 

Really, as long as they keep pursuing grants for the streetcar Phase II, we have a lot to be thankful for with a successful first line being doubled in length and the starter streetcar.   Reassessing the next steps in 2017 when they are done will be pretty reasonable.

 

I agree with a lot of what you said, but I do think we should be planning now, not waiting until 2017.  We need to be proactive in our transit planning, not reactive.

[mallguy]

People are missing the whole problem.

 

The North Carolina Railroad between Charlotte and Raleigh is Norfolk Southern's main line, but the government owns it.  NS wants to keep the line along I-77 for its sole use in case the NCRR is taken away from it.

 

Solution?  Privatize the NCRR and let Norfolk Southern buy it.  The NCRR is just the infrastructure (it doesn't run its own trains).  (Throughout the US, lines like that are owned by private railroads, and passenger trains run on them with no problem.) If NS owned the NCRR, then it would be satisfied that it would not be losing its main line, and it wouldn't have as much of a problem letting the Red Line commuter trains run on its tracks along I-77.

 

People need to realize that Norfolk Southern is a private company.  It owns its own tracks and is under a legal obligation to use its assets to maximize returns to its stockholders (many of which are things such as pension funds for middle-income seniors).   Freight railroads haul 40% of US freight, taking millions of trucks off of taxpayer-funded roads, and messing with them by impeding their ability to run freight trains would have significant adverse consequences, from higher traffic and congestion to decreased economic growth.

 

I have experience working in the railroad and transit businesses.  Freight trains and passenger trains don't mix.  I'm all for building commuter rail, as I love trains, but passenger trains should run on their own tracks.  (Mixing passenger and freight trains is like mixing Ferraris and tractor-trailers on 2-lane roads; it just doesn't work.)

Edited June 28, 2014 by mallguy

[cltbwimob]

People are missing the whole problem.

 

The North Carolina Railroad between Charlotte and Raleigh is Norfolk Southern's main line, but the government owns it.  NS wants to keep the line along I-77 for its sole use in case the NCRR is taken away from it.

 

Solution?  Privatize the NCRR and let Norfolk Southern buy it.  The NCRR is just the infrastructure (it doesn't run its own trains).  (Throughout the US, lines like that are owned by private railroads, and passenger trains run on them with no problem.) If NS owned the NCRR, then it would be satisfied that it would not be losing its main line, and it wouldn't have as much of a problem letting the Red Line commuter trains run on its tracks along I-77.

 

People need to realize that Norfolk Southern is a private company.  It owns its own tracks and is under a legal obligation to use its assets to maximize returns to its stockholders (many of which are things such as pension funds for middle-income seniors).   Freight railroads haul 40% of US freight, taking millions of trucks off of taxpayer-funded roads, and messing with them by impeding their ability to run freight trains would have significant adverse consequences, from higher traffic and congestion to decreased economic growth.

 

I have experience working in the railroad and transit businesses.  Freight trains and passenger trains don't mix.  I'm all for building commuter rail, as I love trains, but passenger trains should run on their own tracks.  (Mixing passenger and freight trains is like mixing Ferraris and tractor-trailers on 2-lane roads; it just doesn't work.)

The whole "NS is a private company therefore it should be able to do whatever it wants" argument would be spot on, except for the tiny little fact that they have benefited massively from public expenditures, specifically the ~20% of their new railyard that was publicly funded by the city and state. Furthermore public expenditures (hundreds of millions of dollars, I might add) from the state and Feds for NS's current mainline, the NCRR, will have a profound effect on their ability to move freight safely and quickly along the corridor. Hell, the city and state were trying to invest hundreds of millions of dollars in the O-line specifically, which would have served to make it a more viable freight line. Right now, one train per day uses that line, and its top speed is limited to 10 mph. From what I understand, it doesn't even travel at peak times, so there would be virtually no conflict with the current freight usage.

It is not that the Red Line is fatally flawed, it's that NS is playing hardball, and being a bad corporate citizen in a city and state that has spent hundreds of millions of dollars (and willing to spend hundreds of millions more) improving NS's competitive position. They are using this as a negotiating tool for future leases on the NCRR. They are holding the line in "strategic reserve" (read: hostage) until something "more permanent" can be done about NCRR. The vindictive side of me would love to see the state make NS use their "strategic reserve" by allowing CSX on the NCRR. That would cause NS to have to rebuild about 70 miles of track between Charlotte and Winston Salem, plus it might force them to build a new classification yard to replace the Linwood Yard. All-in-all, the state could make this a $1+ billion dollar mistake for NS if they would call NS's bluff.

The less vindictive side of me hopes that something reasonable gets worked out, and that NS realizes that they make a lot of money on a line that is owned by the taxpayers. The least they could do is compromise with the governments that have given them such an advantage.

[mallguy]

Sorry, but none of your arguments are valid.

 

First, NS's new railyard received $16 million in grants from state and local governments (most of which is from the taxes that NS will pay on the new railyard, so governments are granting money that they wouldn't have but for NS' investment in the railyard), but NS will pay those governments back in full, with $1 million paid per year.  Those governments will get their $16 million back, plus a profit from NS.  NS also spent $76 million of its own money on the railyard.

 

If those governments wanted to use that $16 million as leverage to get the O-line used for commuter trains, those governments should have, but they didn't, so shame on them.

 

Second, yes, the NCRR has been upgraded with government money, but remember, Norfolk Southern didn't ask for or want those upgrades.  Those upgrades benefit passenger trains only, not freight trains, by (1) allowing trains to travel at speeds above 79 mph (which are irrelevant for freight trains, which are slower) and (2) building passing tracks for faster passenger trains to pass freight trains.  Those upgrades are of no benefit for Norfolk Southern.  Norfolk Southern and its predecessor, the Southern Railway, paid hundreds of millions of dollars for years to use NCRR tracks before those upgrades, and the rail lines as they were worked fine for NS' trains. 

 

NS's current lease for NCRR tracks requires it to pay $15 million of base rent per year to use the NCRR, and millions more in extra payments; the NCRR is a cash cow for the state, thanks to extraction of millions of dollars per year from NS.

 

Third, commuter trains and freight trains do not mix.  I've worked in railroads and transit, and passenger trains and freight trains are two different animals.  Just as Ferraris and Mack trucks wouldn't work well on 2-lane roads, fast commuter and slow freight trains don't work together.  Many commuter agencies prohibit freight trains on their lines except late at night, if at all, for good reason.

 

Fourth, the state and NS already have a clear lease that specifies the amounts that NS pays for the NCRR, and its rights to use the tracks.  That lease runs until 2044.  Are you saying that the state should just tear up its contract with NS?  That would make a great precedent for anyone who wants to do business with the state.  CSX has no use for the NCRR anyhow.  CSX has its own lines from Raleigh to Atlanta.

 

Fifth, governments have NOT given NS an advantage.  NS pays far, far more to governments every year in property and income taxes, plus millions more for leasing the NCRR, than it receives in benefits.  Governments have also imposed money-draining and inefficient work rules on NS and its predecessors for years; forced NS predecessors to operate money-losing trains for decades; and taxed them much more than trucking companies and other transportation companies were taxed.  NS and its predecessors have been screwed for decades by government, and it's no wonder, given that track record, that NS isn't keen to let governments take its own property for their use.

 

 

. 

Edited June 28, 2014 by mallguy

[DEnd]

People are missing the whole problem.

 

Solution?  Privatize the NCRR and let Norfolk Southern buy it.  The NCRR is just the infrastructure (it doesn't run its own trains).  (Throughout the US, lines like that are owned by private railroads, and passenger trains run on them with no problem.) If NS owned the NCRR, then it would be satisfied that it would not be losing its main line, and it wouldn't have as much of a problem letting the Red Line commuter trains run on its tracks along I-77.

There is a fatal flaw with that. N/S might not be the buyer, unless the state didn't allow any other bids, which would be illegal. I don't necessarily have a problem privatizing the line, I do have a bit of a problem with selling the entire right-of-way. The question I have is could we finance the projects like the SEHSR and Red Line by selling the freight lanes (within the ROW)?

[dubone]

lol.  Selling N/S the NCRR would mean they would block the passenger rail that is part of the SEHSR.

 

I'd far rather the Red Line die and N/S use their O line than to kill off intercity rail travel between real cities and not just bedroom suburbs.  

[mallguy]

dubone, your assertion about NS is completely contradicted by railroad history, current operations and more.

 

First, NS has bought plenty of rail lines that hosted passenger trains, and NS not only kept passenger trains but even allowed more of them. In 1999, it bought a large portion of Conrail, whose tracks host hundreds of commuter and intercity passenger trains per day.  Those lines, now under NS ownership, host MORE passenger trains now than when NS bought them.

 

Second, NS has allowed the government to mess with its tracks and put more passenger trains on them in many instances, even outside of the acquisition context.  Virginia has spent a lot of money to expand Amtrak and VRE passenger trains as far south as Lynchburg and Norfolk and is planning to extend them to Roanoke, mostly on NS tracks. 

 

Third, you can sell a piece of real property, such as a railroad, subject to conditions.  For example, if you sell a house and a telecom company has wiring across your property, or if a neighbor has rights to go through your property, those rights are called an "easement", and selling a property subject to an "easement", or other restrictions, is pretty common.  NC could certainly sell the NCRR subject to its rights to run passenger trains on it.  As you know, there were no passenger trains between Charlotte and Raleigh before the mid-1980s, and NC had to have NS agree to have them, as NS already leased the NCRR then.

 

I'd be happy to recommend some books about railroads, if helpful to you. 

[cltbwimob]

dubone, your assertion about NS is completely contradicted by railroad history, current operations and more.

First, NS has bought plenty of rail lines that hosted passenger trains, and NS not only kept passenger trains but even allowed more of them. In 1999, it bought a large portion of Conrail, whose tracks host hundreds of commuter and intercity passenger trains per day. Those lines, now under NS ownership, host MORE passenger trains now than when NS bought them.

Second, NS has allowed the government to mess with its tracks and put more passenger trains on them in many instances, even outside of the acquisition context. Virginia has spent a lot of money to expand Amtrak and VRE passenger trains as far south as Lynchburg and Norfolk and is planning to extend them to Roanoke, mostly on NS tracks.

Third, you can sell a piece of real property, such as a railroad, subject to conditions. For example, if you sell a house and a telecom company has wiring across your property, or if a neighbor has rights to go through your property, those rights are called an "easement", and selling a property subject to an "easement", or other restrictions, is pretty common. NC could certainly sell the NCRR subject to its rights to run passenger trains on it. As you know, there were no passenger trains between Charlotte and Raleigh before the mid-1980s, and NC had to have NS agree to have them, as NS already leased the NCRR then.

I'd be happy to recommend some books about railroads, if helpful to you.

So passenger trains and freight trains don't mix according to your reply to me, but yet they host hundreds of passenger trains in some instances according to your post in reply to Dubone. I was going to mention VRE and the shared Union Pacific/ Northstar commuter rail; it appears you have already made that point for me. Please tell me how your posts do not contradict each other. Edited June 28, 2014 by cltbwimob

[dubone]

Taking a train currently to DC is a potential disaster.  The reason I have always heard for 2-4h delays is "the freight companies own the tracks and do not give the passenger trains right of way".  It is part of the reason that the SEHSR is expensive connecting Raleigh to Richmond because they need to build all new right of way.

 

 

Of course it happens, but it isn't the priority for a private business and the Red Line/ O line is case in point that is fresh on everyone's minds here.   

[mallguy]

cltbwimob, you can (and should) do your own research before posting.

 

Former Conrail tracks bought by NS include many routes used by commuter trains, mostly New Jersey Transit/Metro-North lines around New York City.  Freight trains usually use those tracks only at night, usually from midnight until 5am or so.  NS is OK with that because there isn't nearly the density of freight traffic around New York City that the railroad has in the Carolinas.  (No way could NS tolerate being able to run trains only 5 hours a day outside of the Northeast.)

 

Freight trains and passenger trains don't mix, but freight railroads are willing to let passenger services grow on their lines when freight railroads are fairly compensated and won't be run out of business.  NS bought lines that had extensive commuter trains, and limited freight trains, running on them, and NS has gone along with those arrangements and done its best to accommodate more passenger trains. 

 

You can read The Economist about mixing freight and passenger trains if you don't agree with me: http://www.economist.com/node/16636101/

 

You can also see BNSF CEO Matt Rose's speech on the topic: http://www.bnsf.com/media/speeches/pdf/passenger_freight.pdf

 

dubone, most of the delays for the Charlotte-Raleigh-Washington trains are on CSX.  CSX ("Can't Stand EXcellence") is well-known for not caring about passenger trains, and its Raleigh-Washington line is at capacity; even if it wanted to have passenger trains on time, its rail lines there are like I-77 at rush hour. 

 

Norfolk Southern has a much better reputation and will prioritize Amtrak trains to the best of its ability.  Check amtrakdelays.onlineschedulingsoftware.com and other online sites for train statuses run in NS vs. CSX lines.  For example, trains 19 and 20, the Crescent, are on almost exclusively Norfolk Southern lines south of Washington and are generally very timely.  For example, in the last week, the Crescent approaching Greenville, SC on Norfolk Southern had an average delay of only 5 minutes.  That's amazing.  The Carolinian approaching Raleigh, on CSX, had an average delay of about an hour.

Edited June 29, 2014 by mallguy

[orulz]

Norfolk Southern is reportedly one of the more reasonable Class 1 freight lines when it comes to passenger trains. BNSF is fairly reasonable, too. CSX and UP are much more hostile.

I get the feeling that keeping it as a backup in case freight on the NCRR becomes untenable is more of a negotiating point rather than an actual backup plan. The amount of money that it would cost to upgrade from Greensboro through Winston-Salem, Mocksville, Barber Junction, Mooresville, and Charlotte would be absurd. Supposedly there is some bridge on the line west of Clemmons that is not even passable right now. They also have to consider the cost of replacing facilities that would be bypassed along the way like Linwood (which cost nearly $50 million to build - in 1979 dollars.) NS could probably pay out of pocket to add a third track to the NCRR for less than the cost of upgrading the O and K lines.

But honestly, CATS just paying to double track the O line (or add more sidings at least) would seem to be the more reasonable way forward.

--

The benefit to the state of owning the NCRR is that we get to take the freight lease revenue and direct it to improvements that benefit the state of NC the most, rather than the improvements that benefit the shareholders of Norfolk Southern the most. I certainly don't resent or disagree with NS or its obligation and desire to provide a service for a profit. Their profit motive is certainly a huge reason they are able to operate as efficiently as they do even with strict union work rules. Nevertheless I don't feel bad for NS for their current arrangement leasing the NCRR; they wouldn't have agreed to it if it hurt their bottom line.

Another reason I support continued state ownership of the NCRR is that it allows greater flexibility for use of its massive 200 foot wide right-of-way. 200 feet is way more than NS needs. Railroads are immune to eminent domain, so with state ownership of the property, the state gains greater leverage (through renegotiation of the lease when it expires.)

I am completely certan that Norfolk Southern would even consider selling the O line outright - it's just a matter of price. The price would be fairly high, but whatever price they do come up with would naturally be significantly higher than the lowest price they would actually accept.

[ChessieCat]

Observer article from yesterday that pertains to CLT:

Sleek buses seek Amtrak's cargo

http://www.charlotteobserver.com/2014/06/30/5015994/sleek-buses-seek-amtraks-cargo.html#.U7K-VfldWBZ

[elrodvt]

Amtrak is so damn slow I just can't take it. Having worked in Japan I love train travel and would like to support Amtrak but they're simply not competitive right now. And the schedule from Charlotte stinks!

[kermit]

^ we are kinda off topic but....

lots of Amtrak routes are slower than driving or a bus. Most of the long distance network is simply an offering to the political gods to keep public support for the system. However, there are quite a few short-distance Amtrak routes which are faster than driving or flying when comparing downtown to downtown trip times. Some of these routes include:

CLT to Greensboro, Durham or Raleigh: (the train is faster than driving in most traffic conditions)

Wasington-New York (via Baltimore, Philadelphia and Wilmington)

Los Angeles-San Diego

Los Angeles-Santa Barbara

Oakland-Sacramento

Portland-Seattle

Milwaukee-Chicago

Chicago-Detroit

Chicago-St. Louis (well, this is waiting on some track work to be completed)

Richmond-DC

Boston-Portland ME (in most traffic conditions)

Philadelphia-Harrisburg

New York-Albany

There are probably a few other corridors as well.

Amtrak certainly isn't competitive in every market (especially Denver), but in specific corridors (all less than 300 miles) it is the fastest option.

Edited July 4, 2014 by kermit

[Matthew.Brendan]

Coast to coast maglevs. Too bad we only have endless money for war.

[mallguy]

orulz, your post is very well-thought and I respect your position.

 

Re: supporting continued state ownership of NCRR, please consider reading "American Railroads" by Robert Gallamore and John Meyer (Harvard University Press, 2014).  Both authors are Democrats (sadly, Meyer has passed away) and are economists. 

 

In the last chapter of the book, they show that private ownership of railroads is undoubtedly most societally-beneficial structure there is for railroads, and it's not just railroad stockholders who benefit; shippers, consumers, employees and a host of other participants benefit tremendously through the increased efficiency, innovation, taxpaying, safety and more than private railroads, but not state-owned railroads, have shown.

Edited July 4, 2014 by mallguy

[kermit]

^ the counterpoint is the Swiss Federal Railways offer a very compelling example of the benefits that can result from state ownership of passeneger and freight rail. Swiss rail has an almost identical ownership structure as the NCRR and operate in a similar urban and industrial environment (but a much more challenging landscape) and no one could ever rationally say that the system is inefficient or underutilized. I am not convinced that private ownership of the NCRR offers significant benefits to North Carolinians.

SBB. NCRR

Mileage. 1972 mi. 317mi

Freight tons. 48 million tons 9.7 mill tons

Passengers. 366 million. .3 million

Freight per mile. .024 million tons / mile. .030 mill tons / mile

Passengers per mile. 185,598 pax per year per mile 946 pax per year per mile

(Sorry about the formatting, my ipad is not cooperating)

Edited July 5, 2014 by kermit

[mallguy]

Not sure if I follow the prior post.

 

Swiss Railways- both the infrastructure and the trains running on it- are government owned (with a few small private operators in various parts of the country).  NCRR just owns infrastructure; it doesn't run its own trains.

 

NCRR and the railroads running on it show large profits (even when you consider losses by passenger trains).  Swiss Railways lose money, have many more employees per ton-mile of freight moved (showing that they aren't as efficiently run), have higher costs and have a much lower market share for freight than NCRR (with NS running on it) has.

Edited July 5, 2014 by mallguy

[kermit]

yea sorry about the presentation of that post, it was a long day yesterday.

 

The core point of the data was that Swiss Federal Railways (SBB) does offer a viable alternative to the reflexive "private ownership is best" point of view. SBB carries nearly the same amount of freight as NS on the NCRR (on a per mile of track basis) while they carry nearly 200 times more passengers per mile of track. They did all this while essentially breaking even ($8 billion+ in revenue with a loss of less than $300 million in 2013 -- this is less than $1 per passenger trip). Clearly the SBB model offers an example of an incredibly efficient railroad (the higher employee count is a product of both operating trains as well as moving 300 million passengers per year, not low efficiency).

 

I am under no illusions that the NCRR can become the SBB -- there are far too many cultural differences in play. However, I do believe that the SBB model suggests that the NCRR could be operated under public ownership in a way that is both profitable and much more benifical to the development of the state than private ownership would be. As you and I have discussed here before, privatizing the NCRR at the dawn of passenger rail resurgence in the US would (in my opinion) be hugely detrimental to the development of the state. I see the NCRR as the single most valuable asset the state owns for the modernization of the Piedmont and Coastal regions of the state.

 

Since NS is not a landowner along the NCRR it has very little interest in spurring industrial growth in the state (marginal growth in freight revenue comes at the cost of slowing down the racetrack mainline). NS has even less interest in increasing inter and intra city passenger traffic -- something that is critical to the state's sustainable urban growth (I do recognize that NS has been relatively receptive to pax rail, but it is clearly not seen as a revenue stream to them). The only entity that is capable of capturing (and thus maximizing) the benefits associated with urban growth as well as rural industrialization is the state. This process worked incredibly well in the late 19th century (when no private company was willing to build a railroad running E-W in NC), there is no reason to think it will not also work well in the 21st century.

 

Having said that, I am not opposed to the idea of selling one or two track's worth of ROW from Greensboro to Charlotte to NS provided that: 1) the sale price is sufficient to build two dedicated passenger tracks (preferably electrified) adjacent to the NS freight tracks in the existing ROW (which is 8 tracks wide); 2) NS allows lease terms on the NCRR east of Greensboro to change so a temporal separation of freight and pax is easily achieved; 3) NS and NCDOT agree to share costs of adding additional trackage from the Tryon st crossing to Gateway and the pax rail service center at Summit; 4) NS allows for temporal separation of pax and freight on their Greensboro-Winston line; and 5) NS allows for temporal separation of pax and freight on the O line  (anyone who has seen the O-line tracks knows that NS is simply using it as leverage, reactivating the O line to mainline standards is cost prohibitive -- it runs through the Haines mall parking lot in Winston!)

[mallguy]

The North Carolina Railroad was built by the state of NC, but private companies were certainly willing to build a railroad on its route.  In the 1800s, when the NCRR was built, the US had far more route-miles of railroads than it does today.  The NCRR was leased to a Norfolk Southern predecessor starting in 1871- 143 years ago- and surely Norfolk Southern would have preferred to buy it than pay rent for 143 years and counting.

 

Norfolk Southern is also very interested in industrial development along its lines, including the NCRR.  It has a large industrial development department focused on North Carolina counties along the NCRR: http://www.nscorp.com/content/nscorp/en/real-estate/contact-norfolk-southern-real-estate/contacts-by-territory/north-carolina.html

Also, Swiss Federal Railways are less efficient than Norfolk Southern in pretty much all respects. Let's compare:

Employees:

SBB: 30,000; NS: 30,000

Annual Revenues:

SBB: $9B; NS: $11B

Route-Miles:

SBB: 1,949; NS: 21,000

So Swiss Federal Railways has the same size labor force for a network that's less than 10% as long as Norfolk Southern's, and the Swiss Federal Railways' revenues per employee are about 18% less than Norfolk Southern's. Swiss Federal Railways have more traffic per mile, but Norfolk Southern produces a lot more with the same number employees, and Norfolk Southern makes money. You could say that SBB has a lot of passenger trains, which lose money, but if you subtracted all of the losses of the even denser Northeast passenger network plus Amtrak's losses (all in NS territory) from Norfolk Southern's profits, NS would still make money.

[kermit]

You and I dealt with the issue of market failures and 19th century North Carolina railroading back in August of 2011. Since you said “Thanks. Your post is one of the best thought-out and best-researched ones that I've seen on this board” I would rather not reopen that debate about century-old events. You can find the posts here:

I didn’t say that NS wasn’t interested in industrial development along the NCRR, I said that they don’t have as much to gain from it as landowners (the NCRR) or the taxcollectors (NCDOR) or local workers have in the process. I want economic development to be handled by the state, not a corporation (NS) which is likely playing multiple states against each other and less interested in workforce development and long-term asset building than the state.
 
I also was not comparing the SBB to NS, I was making the comparison between SBB and the NCRR. The SBB serves a similarly sized area as the NCRR. It carries nearly as much freight as the NCRR plus about 300 million annual passengers. By ignoring the social value of this mobility you have made the efficiency question into a bit of a strawman.  What is the societal value of that mobility? Wouldn’t North Carolina significantly benefit from an NCRR which moved 100 million (hell, just 10 million) people per year along side more freight than the NCRR moves today? The SBB example shows us that it is possible to do that without privatization.  I think its really reckless to make decisions about the privatization of the state's most valuable asset by simply focusing on financial profit and loss. There are huge positive externalities which could be generated from an efficiently run railroad, I don't believe that a private corporation (NS) is the best option to maximize those opportunities.
 

[mallguy]

Kermit, yes your posts are well thought out and I have a lot of respect for you, and for them.

However, read "American Railroads" by Gallamore and Meyer, as I post above (or basically any railroad business analysis or business history). The only instance in which a government should own or run a railroad is in cases of market failure, such as the private sector's failure to provide rail passenger service (and even that doesn't need to be provided via public ownership; European countries have plenty of private operators). Otherwise, by every single measurement (wages, taxes paid, fuel efficiency, return on investment, low shipping costs, better track), private railroads better serve nearly all stakeholders, from shippers to taxpayers to railroad employees, better than a government-owned railroad does in practice. Study after study after study after study shows this.

If there are specific things that the public wants from a private railroad, then those things can be accomplished through regulation, or through conditions imposed when property is sold to the private railroad. There is no need for public ownership (and resulting inefficiencies) to accomplish specific things that the public might want.

Edited July 5, 2014 by mallguy

[kermit]

Sigh.

Norfolk Southern is a fine railroad. SBB is also a fine railroad. One does freight, the other does passengers and a great deal of freight. One is privately held, one is publicly held. One has a mission of returning wealth to shareholders, one has a mission to support and develop a nation's economy.

It is impossible to say which is a 'better' railroad -- there are too many different metrics which can be used. My intent was to present the publicly held SBB as an example of a very efficient railroad which may offer a useful ownership model for the NCRR.

There is more than one way to run a railroad and I know first hand that Gallimore and Meyer are certainly not the definitive, only, or even most authoritative word on the 'right' way to do it.

As I said before, my opinion is that North Carolinians (the primary steakholders of the NCRR) will be much worse off if the NCRR is privatized. A private freight hauler will not (and can not) efficiently invest in the economic development of our state.

Edited July 6, 2014 by kermit