Amtrak Bullying Now Targets SEPTA

Written by Frank N. Wilner, Capitol Hill Contributing Editor
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WATCHING WASHINGTON, JUNE 2019 - Here we go again with Amtrak. While complaining that host freight railroads unreasonably impair its legal right to passenger-train priority handling, Amtrak is employing thug-like tactics to escape federal law and extract greater rents and other concessions from commuter-train operators utilizing Amtrak infrastructure including track and stations.

Amtrak is tightening the screws on three commuter operators using its infrastructure—Virginia Railway Express (VRE), Chicago’s Metra and now the Southeastern Pennsylvania Transportation Authority (SEPTA).

In 2015, Amtrak lobbyists buried in a 1,030-page highway bill language to redefine its Northeast Corridor (NEC) to include track owned by Amtrak’s Washington Terminal Company. VRE’s contract operator, Keolis Transportation—which won a competitive bid to replace Amtrak years earlier—uses that track to reach Washington Union Station.

Had the provision—which no member of Congress admitted to sponsoring—not been excised after this column exposed the maneuver, it would have undermined VRE’s ability to seek Surface Transportation Board (STB) relief from Amtrak abuse.

In 2017, Amtrak sought to purge the common carrier status of Chicago Union Station (CUS) by merging it into Amtrak. The intent, says Metra, which carries 100,000 passengers weekly and accounts for 83% of CUS arrivals and departures, is to block Metra’s ability to seek STB relief were Amtrak to impose discriminatory access fees. A Metra challenge is pending before the STB.

Amtrak just can’t stop emulating 19th century railroad tycoons—termed “robber barons” in 1859 by The New York Times. Amtrak’s latest assault on the public interest is directed at SEPTA, which operates over Amtrak’s NEC some 200 daily commuter trains serving 40 stations and carrying 12 million passengers annually. Amtrak has sued SEPTA in federal court to end SEPTA’s rights to operate over the NEC. Success would allow Amtrak unilaterally to impose hefty station-rent increases, or sell or lease the stations for commercial development.

SEPTA’s opposition relies on a congressional mandate laid out in at least three statutes—the 1973 Regional Rail Reorganization (3-R) Act, the 1976 Railroad Revitalization and Regulatory Reform (4-R) Act, and the 1981 Northeast Railroad Service Act (NERSA). They created and transferred to SEPTA and other NEC commuter railroads permanent rights to operate over the NEC and use the
passenger stations.

In exchange, SEPTA bears all station costs directly, and pays Amtrak for use of its tracks under congressionally established cost allocations. SEPTA says it invested more than $228 million over the past 15 years in station capital improvements. Amtrak pays nothing toward six stations SEPTA and Amtrak share.

If the federal regime that has governed NEC commuter operations for the past 40 years is overturned, SEPTA will be at Amtrak’s mercy, as Amtrak has attempted with VRE and Metra. Absent Amtrak’s consent, SEPTA would lose the right to operate commuter services over the NEC and, crucially, be unable to secure STB oversight of Amtrak terms affecting access.

Notable is that SEPTA’s lead counsel in this matter, Paul A. Cunningham, spent much of his career representing Class I railroads. He has lived with these statutes since working as a staff attorney for the Senate Commerce Committee where he helped draft the 3-R and 4-R acts. He later was counsel to Conrail when it was given the mandate to operate, and then transfer to SEPTA, commuter services once operated by the fallen flags consolidated into Conrail.

Cunningham declined to comment on the pending cases.

Unlike squabbles over substituting jelly sandwiches for hot meals, and adjusting routes and schedules to reflect budgetary realities and changing demographics, Amtrak, in dealings with commuter railroads, is engaging in incomprehensible pretensions to avoid its public interest obligations, shield itself from regulatory oversight and threaten, unchecked, commuter operators with service disruptions and even eviction unless they pony-up more cash.

Thuggish behavior intended to weaken other financially strapped public transportation entities so as to make Amtrak stronger is a reprehensible affront to public trust. Amtrak should be better than that. But with no sign of Amtrak remorse or abatement, Amtrak’s actions are overripe for congressional oversight and correction.

Editor’s Note

Amtrak Senior Executive Vice President and Chief Operating and Commercial Officer Stephen Gardner had this response, which was emailed by Gardner to Wilner:
 
“I can assure you we are not seeking to emulate our Robber Baron ancestors over here, and frankly, only someone with your knowledge and background could even come up with some of the theories you’ve postulated. 
 
“[Regarding Virginia Railway Express], defining the NEC to the Virginia Avenue interlocking was a way of trying to clarify that the newly contemplated Federal Railroad Administration Northeast Corridor grant program would apply just to the publicly owned portions of the Corridor. Since, as you know, the NEC is defined in statute in the most general geographic terms, there was no statutory distinction between our ownership, ending at the interlocking and where the CSX portion began in D.C. A very simple and boring answer.  
 
“Our Chicago Union Station action was simply about removing the extra general and administrative (G&A) expenses associated with a redundant corporate entity, nothing more sinister. Metra’s actions are all about trying to obfuscate the incredible deal they have been getting as the majority users and minimal funder of their most important station location, and deferring the soon-to-come day where they, like their NEC brethren, need to pay their fairly allocated share of operating and capital costs.   
 
“And, as for SEPTA, you’ll see our filing …”

Frank N. Wilner is author of six books, including Amtrak: Past, Present, FutureUnderstanding the Railway Labor Act; and Railroad Mergers: History, Analysis, Insight, all published by Simmons-Boardman Books. Wilner earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Leadership (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.

Categories: Commuter/Regional, High Performance, Intercity, Passenger, Regulatory Tags: , ,