Amtrak Pledges to Upgrade the Hoosier State

In a bid to retain operation of the Hoosier State, Amtrak announced Wednesday that it would  upgrade the Chicago-Indianapolis train by offering Wi-Fi service, light food and beverages, and business class seating.

The announcement came during a whistle-stop tour of the route by Amtrak President Joe Boardman, who said that the service upgrades were part of a strategy for Amtrak to “demonstrate its capabilities.”

Last June, the Indiana Department of Transportation reached an agreement with Chicago-based Corridor Capital to operate the Hoosier State beginning Oct. 1.

However, Corridor Capital asked for more time to make the transition and Amtrak agreed to continue operating the Hoosier State through Jan. 31, 2015. Boardman predicted that Corridor Capital will not be ready to take over the Hoosier State on Jan. 31, either.

He said Corridor Capital has never run an intercity passenger route and didn’t anticipate all the regulatory hurdles it must cross with agencies as diverse as the Federal Railroad Administration and the Food and Drug Administration.

“They did not understand what they did not understand,” Boardman said.

Corridor Capital bid $2.9 million a year to operate the Hoosier State and blamed Amtrak intransigence for the delays in Corridor Capital taking over the train.

The firm had planned all along to use Amtrak employees to operate the Hoosier State. Chairman Jim Coston said Amtrak has been uncooperative in setting up the transition.

“That’s what the whole delay is about,” Coston said. “They didn’t participate in the (bidding) and were caught flat-footed. Now they are acting surprised about something that was approved months ago.”

Corridor Capital would replace the Amtrak coaches with refurbished cars, increase the number of frequencies to three daily roundtrips and cut the travel time and rearrange the schedule.

“Since the procurement-award announcement in June, INDOT has been requesting a meeting with Amtrak to formalize and price the INDOT/Corridor plan,” Coston said in an email to the Indianapolis Business Journal. “A conference call finally took place Friday morning.”

Amtrak spokesman Marc Magliari said Amtrak will only sign a contract with INDOT regarding operating the Hoosier State, not with a third-party such as Corridor Capital.

Boardman said Amtrak isn’t willing to work as a subcontractor to Corridor, as the firm contemplated in its bid. “On what basis would they propose that without talking to Amtrak?” he said.

Amtrak will work with the state of Indiana, Boardman said. “The state has standing. They don’t.”

Coston said a letter of intent between INDOT and Corridor is being drafted. “It is a great line, but Amtrak has ignored it,” Coston said. “I rode it, and the seats were so uncomfortable you had to squirm and keep moving the whole ride. Plus, there wasn’t a bottle of water on board.”

The Hoosier State operates four days a week on the days that the tri-weekly Chicago-New York Cardinal does not operate. Both trains have intermediate stops in Crawfordsville, Lafayette, Rensselaer and Dyer. The trip takes about five hours and ridership averages about 80 passengers per trip.

INDOT along with Indianapolis, Crawfordsville, Rensselaer, Lafayette, West Lafayette, Tippecanoe County and Beach Grove collectively pay Amtrak $244,916 per month to operate the Hoosier State.

Whether Amtrak or Corridor Capital operate the train after next January may be a moot point because the City of Indianapolis earlier indicated that it would no longer participate in funding the train after then. If the state and other communities do not increase their share of the funding, the Hoosier State might be discontinued.

Amtrak has more than 550 employees in Indianapolis and Beech Grove who maintain and overhaul rail equipment, and more than 225 other Amtrak employees also live in Indiana.

During the stop at Lafayette, Boardman took another shot at Corridor Capital.

“We’re here the day they were supposed to start operating the service, and they’re not,” he said said. “I decided to go out and start talking to people … to say it’s important we continue this service.”

A small firm founded by attorney and rail advocate Coston, Corridor calls itself a rail “developer” that coordinates the service components and rolling stock in exchange for a management fee. Corridor has experience in equipment financing, but has yet to operate a rail line. It also sought to entice the Michigan Department of Transportation to select it to oversee Amtrak trains in that state. Corridor’s bid to INDOT was to have Amtrak continue providing crews to operate the Hoosier State while Corridor arranged to lease refurbished rolling stock. Corridor would subcontract with other firms for equipment maintenance, ticketing and marketing.

Amtrak didn’t participate in INDOT’s bidding process in the spring, but submitted a document expressing interest in renewing the service for another year. Amtrak spokesman Magliari said the renewal would be subject to negotiations over price and service details. He declined to release a copy of Amtrak’s proposal to INDOT. Corridor’s bid of $2.8 million bested the base bid of $2.3 million made by Iowa Pacific Holdings. INDOT described the procurement process to hiring a consultant, so it wasn’t required to choose the lowest-cost bidder. Iowa Pacific also proposed using Amtrak crews although it said it could provide its own crews if needed.

Both Capital Corridor and Iowa Pacific saw the potential for increased patronage if operating delays in the Chicago metropolitan area could be eliminated and more frequent service added. Iowa Pacific’s bid projected that the state’s subsidy would drop to $1.4 million, or $10.06 per passenger, if the Hoosier State provided daily service. Iowa Pacific anticipated that Amtrak would not cooperate. “It would be best if INDOT, [Iowa Pacific], and Amtrak can all agree on an innovative agreement that utilizes the best of what Amtrak brings to the service, as well as the best of what IPH brings to the service,” Iowa Pacific wrote in its bid. “Admittedly, this is challenging, because Amtrak has worked hard to continue providing all the same services it provides today,” while setting costs as provided under the federal Passenger Rail Investment and Improvement Act. “The question is whether Amtrak can step from the past to the future and work collaboratively with third parties such as IPH.” Aside from the wrangling over who would operate the Hoosier State another battle over who will fund it will also play out.

State Rep. Randy Truitt, R-West Lafayette, said he will introduce a bill in the 2015 Indiana General Assembly that would shift the local funding requirement back to the state.

“It is not fair for the locals, in order to save something that is a state asset, to have to pay,” Truitt said. “I’ve not seen any local road project done this way.”

Truitt said he will meet before the session with Gov. Mike Pence to discuss the Hoosier State and the proposed legislation.

When asked whether state leaders and INDOT are receptive to taking on the entire cost of operating the Hoosier State, Truitt said he is making progress.

“Why wouldn’t we support all different types of modalities?” Truitt said. “We can support bikes, cars, trains, buses and airports. We need all of them.”

Last October through February, 12,328 people got on and off the Hoosier State in Chicago; Indianapolis saw 6,321 riders, and Lafayette saw 5,152, according to data INDOT supplied to the bidders.

Ridership was down throughout the line, which also passes through Crawfordsville, Rensselaer and Dyer. The harsh winter could have been a factor.

During the stop in Crawfordsville, Amtrak’s Boardman expressed optimism about Amtrak’s future in Indiana.

“No matter what it looks like, Amtrak will continue to serve Indiana on the Cardinal,” he said. “But, we would like to do it on the Hoosier State, too.”



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