Rail Runner Faces Hidden Costs (NM - Richardson's Railroad fast running to a fiscal red light)

The Albuquerque Journal ^ | July 9, 2011 | Colleen Heild / Journal Investigative Reporter

[CedarDave]

Add it to the bill.

Just as weekend Rail Runner service to Santa Fe is set to end due to financial woes, it turns out the state needs to shell out an additional $16 million for track and system maintenance.

That’s on top of the projected $25 million in yearly maintenance and operational costs – before the weekend service cuts – that have already created a budget crunch for the Belen-to-Santa Fe operation.

The train has about 4,500 weekday boardings going one way and is expected to generate about $3.2 million in fares.

Records reviewed by the Journal show an estimated $8 million is needed to replace rail ties and another $8 million for a federally mandated train control system that must be installed by December 2015.

“The question today isn’t whether it was prudent to make a half-billion dollar investment, but what use of the half-billion dollar investment is prudent,” said LFC director David Abbey.

That “rolling stock” cost $34 million. The initial investment that included purchase of the track, insurance, escrow costs and construction of train stations was close to $500 million.

With financing through the life of transportation bonds to be paid off in 2027, principal and interest will be about $834 million. That includes two balloon payments of $235 million.

Records show the LFC has for years criticized a pay-now, plan-later approach to operating the Rail Runner.

Federal funding was minimal, in part because applying for special appropriations would have taken too much time, officials said back then.

“Detailed analyses to determine viability, operational requirements, and future revenue sources were not performed prior to funding and implementation,” said an LFC analysis in January 2005. “Future operational revenues are uncertain.”

[CedarDave]

A couple of comments:

The train has about 4,500 weekday boardings going one way ...
That means only about 2,250 riders per day take the train (unless they hitchhike back home!). A fleet of 60-seat buses could service many more stops than the dozen along the RR route and use 75 mph interstate north and south of ABQ. And as I've stated many times, the ridiculously low fares contribute to only a 13% or less farebox recovery.

Federal funding was minimal, in part because applying for special appropriations would have taken too much time, officials said back then.
That was part of the reason and the excuse given. The rest of the story was that Richardson wanted the railroad up and running (at least from Belen to Bernalillo) by 2006 and 2007 so that it would be a star in his environmental resume as he pursued his abortive run for president in the 2008 election. Probably the most important reason federal funding was not sought was that the money was subject to a positive cost/benefit analysis of the operation. The administration most certainly knew back then that such a shoe-string operation would never pass federal scrutiny and therefore used the too-much time excuse.

[CedarDave]

“The question today isn’t whether it was prudent to make a half-billion dollar investment, but what use of the half-billion dollar investment is prudent,” said LFC director David Abbey.

Good question and one that will need answering soon as two federal air quality grants expire in the next 12 months - one in December and one next summer making an even deeper run into the red.

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[GeronL]

Tens of millions in costs and a few million in fares.

They will make a profit on the volume I am sure.

idiots.

[Army Air Corps]

How many fares were created or saved?

[rockvillem]

You mean a new short-haul passenger rail line (better still is it “high speed”?) might be a money losing proposition? Who could have seen THAT coming??

[SquarePants]

Just a little off-the-top-of-my-head math makes me wonder if the could have gotten the numbers right- $3.2Mil in fares with 4500 one-way passengers means they’re charging about $2.50 a trip one way.

Here in NYC we have hundreds of thousands of LIRR riders paying $250-$350 a MONTH to operate the system in an area where mass transit actually has some real benefits (traffic and parking here is insane)... and the LIRR still can’t seem to make any money. I just can’t see how on earth this New Mexico rail line can make any money.

[CedarDave]

And, guess what? The total cost is not one-half billion but $500 million PLUS $834 principal and interest on the road bonds (yes road bonds) sold to finance the construction. Total cost: $1.33 billion to be paid by 2027.

[GeronL]

I do not see how the people of New Mexico look at this as anything but a rip-off of everyone for the benefit of a few.

[GeronL]

Yep.

Hugely expensive train for the benefit of a few.

The voters of New Mexico must be as stupid as nails.

[Army Air Corps]

You can bet that Billy Boy and some of his associates made some money from it.

[GeronL]

There are always kickbacks

Do you think it really cost $300,000 a home to hook up broadband internet to the Montana countryside in Obama’s program?? Or any other program the government does.

Where does it really go?

[JaguarXKE]

I can see it now - Railrunner diners all over New Mexico has they try to find a use for all the cars when this albatross finally comes to a halt.

[choctaw man]

...a model for Obama’s ‘light rail’ system...lol

[CedarDave]

Fares start at $2 one-way with an all day pass $3. Max fares from ABQ to Santa Fe (about 60 miles) are $7 one-way, $8 round trip. Discounts of course to seniors, students, handicapped, etc. A monthly pass is $100 ($90 if purchased on line). That averages out to $4 per day for a monthly commuter. Adding to the problem is that they are adding stations (including for the Indian pueblos) which has added about 30 minutes to the 60-mile ride. Obviously much faster on the adjacent interstate.

One bright spot (soon to be eliminated) is the weekend tourist traffic is booming as driving and parking in downtown Santa Fe is horrible. And the scenery on the train is spectacular (though photos of Indian pueblos through the train windows are prohibited). It is estimated that about 25% of the many tens of thousands who attended last summer’s Santa Fe Folk Art festival arrived by train. So this is the service to be cut. As one commenter in ABQ put it, they are eliminating the only reason most people in ABQ have to ride it.

[LRoggy]

Anyone hear from Willie Green lately?

[okie01]

“How do we lose less money is the question.”

Baldonado asks the only question worth asking at this juncture.

Does Bill Richardson still live in the state? If so, why hasn't he been strung up? Or, at least, tarred and feathered?

[CedarDave]

Does Bill Richardson still live in the state? If so, why hasn't he been strung up? Or, at least, tarred and feathered?

I believe he's fled. From Wikipedia:

In 2011, Richardson joined the boards of APCO Worldwide company Global Political Strategies as chairman, the World Resources Institute, the National Institute for Civil Discourse at the University of Arizona,[61] and Abengoa (international advisory board). He was also appointed as a special envoy for the Organization of American States.

[CedarDave]

Does Bill Richardson still live in the state? If so, why hasn't he been strung up? Or, at least, tarred and feathered?

I believe he's fled. From Wikipedia:

In 2011, Richardson joined the boards of APCO Worldwide company Global Political Strategies as chairman, the World Resources Institute, the National Institute for Civil Discourse at the University of Arizona, and Abengoa (international advisory board). He was also appointed as a special envoy for the Organization of American States.

[CedarDave]

Anyone hear from Willie Green lately?

Banned by JimRob himself, a couple of months ago now.

[PGalt]

DEFUND socialist collectives, foreign and domestic.