Port of Oakland

Northern California’s ‘Capitol Corridor’ on Union Pacific Railroad

The busiest intercity passenger route in the country outside the NEC – 32 trains on weekdays, 22 trains on weekend days

• Nearly 1,700,000 annual passengers (average trip: +/- 70 mi

• Railway Age called it a 10-year case-study of ‘How the CCJPA won the Heart of the Union Pacific Railroad’

• What works and why

• What components may be applicable elsewhere

Happy customers are advocates!

Union Pacific Railroad’sCentral Corridor

Capitol Corridor

Port of Oakland

Roseville Yard

Union Pacific Central CorridorCapitol Corridor Intercity Rail

The Capitol Corridor – Part of the National Intercity Passenger Rail Network

Components of the Business Partnership with a Freight Railroad

• Involvement in planning

• Capital funding

• Access fees

• Maintenance

The Railroad is not in the business of running trains… They are in the business of making money.Running trains is HOW they do it

How Did the Capitol Corridor Do It?

• Defined and shared their ‘Vision Plan’

• Addressed what is important to the Railroad

• Negotiated ‘Master Agreements’ (C&M)

• Funded a dedicated MOW gang

• Funded a capitalized maintenance program (partnership with Caltrans $)

• Renegotiated Amtrak-calculated incentive payment earnings for stand-alone performance

Discern What is Important to the Railroad

• Compensation is adequate to keep them interested

• You have a capital program and at least initial funding to start work

• Reliability and existing freight capacity is protected

• They retain their ability to expand freight business

• You are prepared to build adequate ‘fixed plant’ to operate your service, and these facilities are adequate for them to run it reliably

Let’s Talk Real Dollars into Railroad…Capitol Corridor operates 1,200,000 train miles annually on 170 UPRR route-miles and about 280 track miles, so.

or an average of $49,374 per track mile per year

Track Use (Amtrak fees paid to UPRR) $ 2,225,000/year (CC Cost)

Plus Direct CCJPA-UPRR paymentsDedicated MOW gang (CC direct):Capitalized maintenance (CC direct):

$ 600,000/year (FRA Class V)$ 1,000,000/year

Approximate annual paid to UPRR for MOW: $13,660 per track mile

Plus Direct Capital Funding for Capacity ExpansionApproximately $100M over 10 years $ 10,000,000/year

Approximate annual capital $35,714 per track mile

…and that’s not all, folks.PLUSThe Capitol Corridor pays UPRR a ‘stand alone’ incentive for superior on-time performance:

UPRR potential annual incentive earnings: approx. $2,400,000 or $8,570 per track mile

(100% was earned in 2008-09, 100% was earned in 2009-10, and 100% so far in 2010-2011)

$22,230/ track mile (w/o capital) to

$57,900/ track mile (w/ capital)

AND the Capitol Corridor enjoys the best On-Time Performance of ANY Amtrak Route

Summary of some ‘hot buttons’ for the freight railroads?

Protection of the freight franchise & stockholders• Protect existing freight capacity/reliability• Allow freight capacity expansion• Build/buy more capacity than just what you need for passenger service• Joint capacity modeling for expanded services to determine additional needed

facilities• No liability for passenger service

Publicly recognizing the freight railroad when they do a good job in service delivery

Adequate compensation for public use of private facilities• Full compensation for capital improvements required for reliable operation of

passenger operations• Funding assistance for annual maintenance costs of added facilities• Annual capitalized maintenance contribution• No added tax liability from provision of additional fixed plant to support

passenger services• Ability to earn stand-alone incentives for good on-time performance

You want the Business Deal to be good for the freight railroad!

$11.74 $15.91 $18.80 $21.35 $20.77 $20.86 $21.87 $18.07 $22.38 $25.70$20.15

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State Allocation CurrentYTD

FY 1999-00 FY 2000-01 FY 2001-02 FY 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08FY 1998-99

Train Frequency 4 RT 6 RT 7 RT 9 RT 12 RT 16 RT

FY 2008-09

9/11

Start of Annual CCJPA-Amtrak Fixed Price Contracts

Train Frequency Increases – Travel Time Reductions (20 minutes)

463,000

1,700,000On 9/30/08

Annual State Operating Cost

31.3% 35.7% 40.7% 35.3% 38.3% 38.6% 43.1% 45.8% 48.0% 55.0% 50.1%

Annual Farebox Recovery Ratio

Riders have paid for service frequency increases

EFFICIENT MANAGEMENT

October 1

1998

4RT 6RT 7RT 9RT 10RT 11RT 12RT 16RT

September 30

2008

10-Year Snapshot

Wrap Up

• It will take understanding what is important to the host railroad - work in partnership with them

• It will take political will – understand funding sources and the leadership to secure it

• It will take trust between the parties

Bottom Line:

It can be done, because it already is being done and you have heard the reports from Maine, North Carolina and California on HOW it is being done. Go ye and do likewise….!