a very good concept. It is an energy saver and a fuel saver, and it brings people to Florida with their cars, which is helpful to a lot of people who would like to have their cars down there. How can you be as optimistic as you are about expecting to make money? AUTO-TRAIN ESTIMATED PROFITS Mr. CLAYTOR. Frankly, I think we have been fairly conservative in our estimates. We have estimated a profit per passenger-mile of 2 cents, estimated passengers will be 140,000. We had a great deal of data to work on here because we had available to us the old Auto-Train Co.'s statistics. I was personally very, very familiar with the operation. I used it myself half a dozen times. I was acquainted with the management and I thought they were making some serious mistakes, primarily in squandering all their rather inadequate capital on a lot of other things besides the Virginia to central Florida Auto-Train, other operations which I did not think had a chance to make it and which did not make it. Amtrak, you see, has other advantages. We are in the railroad business. There will be no incremental cost for reservations and ticketing. It can be handled without adding a person. We have an existing equipment pool which is particularly available in the wintertime when the service is highest, as most of our equipment is more used in the summer. We can operate under an existing standard Amtrak contract with the Seaboard Coast Line Railroad which is far more favorable than they are willing to give to any outside or new company. So, inherently, because of the nature of things, we have basic advantages, and I think we can do this for modest incremental costs, and the market is clearly there. It has been demonstrated to be there and I think we can make a profit. Now, the profit will serve to reduce our overhead and reduce our reliance on Government. So I think it is a plus. Actually, a relatively small amount of capital that is required, only about $4.5 million, basically for lease or acquisition of terminals and for the car carriers. These are the only things we have to actually invest in, we can produce that capital from our own generated funds, not appropriated funds, from real estate development and the like. So we can go into this, I think, and make a profit. We certainly are going to make the old college try, and my experience is I think we can do it. Senator CHILES. Well, as you explain, the fact that you have no cost for your reservations, those items had to be costly to the Auto-Train Corp. Mr. CLAYTOR. They were very costly. They had a big management overhead. The entire overhead had to be allocated just to the one train. We are not going to have to add anybody, essentially, to our overhead in order to do this, including our ticketing, which is a big item, our computer system, our reservation system, and the like. We will have some direct expenses in advertising in that train and not much else, and of course the cost of running the train. TIMING FOR AUTO-TRAIN RESUMPTION Senator CHILES. Well, we look forward to the startup. And when will you start it up now? Mr. CLAYTOR. I think the earliest we could possibly start is close to the end of this year. Senator CHILES. For next season? Mr. CLAYTOR. We should have it in operation for the winter season. Now, our proposal would be to operate daily in the peak season and triweekly in the offseason, which I think was another mistake the old company did make. They tried to run daily all the time, and there are some very slack seasons for this operation. The slack seasons usually are in the late spring and in the early fall. But three-times-a-week service would maintain the service and reduce the cost by something better than 50 percent of the operating costs. So that is the way we plan to run it. Senator CHILES. Good. FEASIBILITY OF FLORIDA BULLET TRAIN SERVICE Last May the Japanese-funded study of the feasibility of the Bullet train service in Florida was begun. For this train to be economically feasible, one of the major assumptions has been it would be built along the interstate right of way and that the use of that right of way would be obtained without cost. What discussions have gone on to date with the Federal Highway Administration with regard to the use of the Interstate right-of-way? We heard recently that senior officials at the Federal Highway Administration are having some second thoughts on that. Do you know whether they are willing in fact to permit the use of the Bullet train, to use that right of way? Mr. CLAYTOR. No, sir, because that is not a project in which we are involved. We are watching it, but it is not our project. And I did not even know there were such negotiations going on. The high-speed rail operations-we have discussed possible highspeed rail operations with a half a dozen proposers, and in each case I have said, Amtrak is delighted, will be delighted to work with you, to give you such information as we have, and if you can get a project off the ground, which means complete a marketing study and obtain some financing, we will be prepared to sit down with you and work out a licensing contract along the lines of the one we have already signed with American High Speed Rail in California, and we would be prepared to contract with you on a for-profit basis for Amtrak for whatever you would like, such as constructing the railroad, operating the railroad, conducting ticketing or the like. But we are not prepared to really do much until a project gets off the ground, and we are not trying to get any off the ground as such. We are not sponsoring any projects anywhere. Senator CHILES. Mr. Blanchette, are you familiar at all with that? Mr. TILL. As is the case with Mr. Claytor, Senator Chiles, we do not at the Department have any direct involvement. The studies going on in ce Florida are being carried out, I think, as a cooperative venture between But we have had no direct involvement in those studies and do not GRANTS-IN-AID FOR RAILROAD SAFETY Senator CHILES. Mr. Blanchette, I noticed that you are proposing So again, as you did last year, to eliminate the grants-in-aid for the railroad safety program. This program was authorized by section 206 of the Federal Railroad Safety Act and relies on a State and Federal partnership in which participating States implement federally established rail safety standards. This program has been well received. Florida is a participating State and it has been very effective. In Florida, following three serious rail accidents in 1977 and 1978, the State initiated its railway safety program with six inspectors and derailments in the State of Florida have declined 70 percent, compared to the nationwide average which has declined only 18 percent since that time. In view of the effectiveness of that program, why is the Federal Railroad Administration proposing to eliminate the program? Mr. BLANCHETTE. The proposal which has been put forth unsuccessfully for this, now the third consecutive effort, is in no way related to the efficiency or worth of the program. Prior attempts were based on strictly financial grounds. They, I will admit, have not met with any Success. I am in somewhat of a dilemma because, while we are driven by that fiscal constraint, I have to confess to you that you are right in the efficacy of the State safety program, particularly in Florida. The program is working exceedingly well there and, regardless of the outcome of this financial debate, we would hope that Florida's participation would continue. Indeed, we promulgated regulations this year which expand the role of the safety inspectors on the State level into other than merely track work. So I cannot say as a manager that there is anything wrong with the program. I concur 100 percent with your analysis of the program in Florida The request that is made by the administration and that has been made for the last 2 years is strictly a financial one. It has nothing to do with the worth of the program. Senator CHILES. I thank you for that forthright answer, because all of our facts show that the program has been successful and one of those in which the Federal Government is urging State cooperation and the States have responded. I thank you, Mr. Chairman. Senator ANDREWS. Thank you, Senator. COAL SLURRY PIPELINES Mr. Blanchette, in the past you have stated your position on coal slurry pipelines, and the position was that the Federal power of eminent domain should not be available for construction of coal slurry pipelines. Is this still your view? Mr. BLANCHETTE. This continues to be, as of my last hearing, the view of this administration. I rely on a memorandum written by the President of the United States in November 1981, in which he stated that the Federal powers of condemnation ought not to be preemptive of the States. We do know, all of us, that that matter is being revisited by the administration and in the Cabinet Council on, I think, environment. So you may never hear from me in my capacity again, depending on the outcome of that. But so long as my leader adheres to the November memorandum, I say that I subscribe to it not only professionally but personally. Senator ANDREWS. Well, that is what I was getting at, because I think that what we need are professional evaluations of these particular things, rather than political evaluations that occasionally can be changed as winds flow from different directions from time to time. And I assume that you had made your earlier evaluation on the basis of your professional background and expertise. That is why I wanted to bring it up to date in these hearings today. SUBMITTED QUESTIONS Actually, I think what I will do with the rest of these questions is submit them to you, to be answered in the record. I have a letter from our colleague from Maryland, Senator Sarbanes, and he has some questions for Amtrak officials. Mr. Claytor, that I will submit for the record so that you can answer them there. Senator Weicker has also submitted questions. Senator Chiles, Senator Byrd, and other members of the subcommittee may well also have questions for the record. Mr. CLAYTOR. Thank you, Mr. Chairman. [The following questions were not asked at the hearing but were submitted for response for the record:] FEDERAL RAILROAD ADMINISTRATION QUESTIONS SUBMITTED BY SENATOR ANDREWS STAFFING LEVELS Senator Andrews: Provide for the record a table that breaks down the 255 positions that make up the Administration, Research and Special Projects portion of your FY 1984 budget by activity. Also provide an explanation of how you intend to achieve the PY 1984 reduction of 37 positions, including attrition level expectations, and plans for a reduction-in-force. Response: As of April 3 we had 274 employees on board which is within 19 of the FY 84 request. It appears that attrition may be sufficient to avoid major reduction-in-force. However, certain changes in program areas such as narrowing the focus of research and development activities to railroad safety matters may result in job actions. I cannot make a final distribution of the positions within this appropriation until after the FRA reorganization is completely implemented throughout all elements of the agency. I expect this will be completed soon and I will provide you a table in the near future. |