#FNAA #AAF Acela is NOT profitable. Here is why. Caught In the Act By Tom Monahan The railroaders have had the temerity to accuse Floridanotallaboard of spreading misinformation for saying that the ACELA Express is not profitable. That is not an example of the pot calling the kettle black. That is the pot calling the white dinner ware black. Here are the facts. The ACELA Express is AMTRAK’s Metroliner service on two railroad routes, from Washington, D.C. to New York and from New York to Boston. Any expert will explain that these passenger services, while well-respected and worthwhile, do not make money and rely on voodoo accounting methods to present an acceptable financial report. The Heritage Foundation published an analysis that pinpoints the glaring fault in AMTRAK’s bookkeeping system. Written by Ronald D. Utt, PhD, it says: Even AMTRAK’s contention that its really only assured profits are on its Metroliner service in the Northeast Corridor is true only under AMTRAK’s less-than-complete accounting standards. To declare the Metroliner profitable, AMTRAK must neglect the capital costs associated with roadbed, rolling stock, engines, buildings, and signal systems. Another report critical of AMTRAK accounting was recently published by the Office of the Inspector General of the U. S. Department of Transportation. Although couched in kindly, euphemistic language, the report makes some telling exposures. It said that AMTRAK’s new accounting system, APT, might be an improvement, but “heavy reliance on cost allocation has affected precision.” That apparently means you cannot rely on the financials to be accurate. Deep down in the report, the problem is explained. “. . . its (AMTRAK’S) current business practices do not require the collection of detailed data on costs.” Furthermore, the report states, “the use of statistical estimates to identify avoidable costs is not standard practice in the railroad industry.” According to the Thoreau Institute, another accounting trick of AMTRAK is to count state subsidies as “revenue.” Therefore it says “Brookings Institute doesn’t count a train’s operating loss that is offset by such subsidies against the train’s operating balance.” In June 2013, Don Phillips, who is a train enthusiast, wrote in Trains Magazine: Mass information is spread by confused and shallow politicians, young reporters who have no idea what they are talking about, and by AMTRAK officials who can count on the first two not to understand them. Phillips also accused AMTRAK president Joe Boardman of making it “holy writ calculating ACELA profits by limiting cost items to a small number in calculating ACELA profits, and has thrown every conceivable cost item into long distance “losses.” No comparison is possible on that basis.” The point is that all modes of public transportation require subsidies, and that doesn’t make them bad. Every year, AMTRAK receives more than $400 million if federal subsidies, and Tri-Rail receives nearly $60 million. An honest evaluation of the cost benefit analysis is what serves the public interest. Floridanotallaboard wants to penetrate the wonderland of railroad mythology and convert voodoo accounting into truth. More important is the AMTRAK passenger service that now operates from Miami to Orlando – the same route that All Aboard Florida wants to serve. Called the Silver Star Route, it has operating revenue of $39.2 million and expenses of $85 million resulting in a loss $46.8 million per year. That is by far the best indication of how well All Aboard Florida can expect to achieve with its pie in the sky passenger service – even with the largest railroad loan from taxpayers in history.
Posted on: Thu, 17 Jul 2014 11:23:20 +0000
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