Re: (erielack) Re: Meadville Line news!

[Kevin DeGroff <"kdegroff_@_starpower.net">]

The biggest problem with open access would be the level of
maintnenance and investment performed, which would no doubt
be at a 'government standard'.  Thats not necessarily a plus.

Its true that the government pays for airports and waterways and roads,
But some of these facilities are truly dumps, and, well, the condition of the
interstates is about equal with the Meadville line in its current state.  I bet
if you took the level of maintenance and investment you see at Penn Station
or LaGuardia, and translated that to a degree of investment and maintenance
on most trunk lines, you end up with mainlines that wouldn't be as well
maintained as they are today in private hands.

NY Penn Station IS an outright dump, so are the majority of airports.
I'd hate to see that translated to the mainlines.

The biggest thing the government could do would be to relax or outright
eliminate ROW taxes, even on hi-density trunks of profitible carriers.
It would be a financial gesture that moves alot closer towards the rate
of support for other modes, and it would let the business in private hands
do the job of bringing in the capital dollars.  Eliminating the tax expense
means more dollars for capital projects, used as the railroad sees fit.
Combine this effort with a program of subsidizing long-haul startups like
Susquehanna and WC and ? , a process which produces a public benefit
by increasing competition, and stop further mergers until some
competitive balance returns.  The STB failed big-time in this.  Perhaps
merger application process should have been shifted to DOJ when the
ICC was abolished, where they would have applied greater anti-trust
scrutiny, instead of the paltry analysis on shipper impact that occurs with
the STB now.  The failure to shift jurisdiction to the DOJ, and instead
giving it to the STB, is why the last round of mergers was rubber
stamped and is why we are in the predicament now.

Insiders on Wall Street seem to feel the latest round of mergers was
a coordinated effort by the roads to finally gain the upper hand with
pricing.  Back in 1990 when there was the 'Super 7', the competition
that existed placed downward pressure on carload pricing, to the
disadvantage of the carriers.  By merging, and thus eliminating the
pricing fights, the income of the carriers can finally rise.  It was a
classic case of whats good on Main Street sucks on Wall Street.
The carriers, behind the false rhetoric of 'single line haul' and
'merger economies', really have no intention of passing savings
on to shippers or to reduce prices.  Its all to recover the lost
income and eliinate future income setbacks that were incurred
as a result of the carrier's version of price wars.

Rather than merge and create all the problems, perhaps if other
expneses (like property taxes) are eliminated, the carriers existing
in such a capital-intensive industry could weather the effects of
competition better, whithout having to resort to eliminating it.


Ken wrote:

> If the government owns the track, who determines the standards to which it
> is maintained?  What if one rail operator desires and is willing to pay for
> a higher standard, but another operator cannot afford it?  Who
> decides?  Who pays?  If the track is maintained at a lower standard,
> mandating slower speeds, an operator might choose another, faster route,
> depriving the rail line of needed revenue.
>
> There are a lot of issues to be worked out.  And then there are signalling
> systems, rules, etc.
>
> Ken B.


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