Germany and Italy retained the quasi-national operators, DB and FS. Britain privatized operators totally.
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Well, the paper ignored Brightline, and the only comment on Brightline West was they were seeking funding for construction, not operation.
Also, concerning the Hoosier train experiment, how is Amtrak doing with it now? Oh, thatâs rightâŚ
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Amtrak offered to open up the NEC but only got a nibble from a Chinese consortium who wanted to build HSR along the NEC if the feds provided most of the funding. It doesnât sound like anyone would even bid on any Amtrak operation that seemed to follow the DB access model.
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When did Amtrak offer to open the NEC to other operators? It appears the Chinese were interested in building a new railway as opposed to running trains on the existing railway.
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It was in the white paper toward the end they had at least two dates ATK asked for proposals.
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How long is it estimated to take before Amtrak becomes its own company?
I know Canadian National did something similar since they were a Canadian government-created railway
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This has been very successful in Europe. Keeps the legacy government owned railways on their toes. I always competed better when I had someone better to compete against.
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The British rail privatization had one huge flaw they never fixed. Donât know if it was enshrined in law or they just didnât want to change it.
Basically when someone wanted to bid on a franchise the government discounted the payments streams to net present value using the British government discount rate. That is a risk free discount rate. Silly!
So what the savvy and somewhat dishonest successful bidders did was to accept subsidies in the early years with âcommitmentsâ to pay the government Substantial premiums in the last couple years. Oh! And put in very little % equity into the venture. Instead fund it with debt.
Doesnât take a genius to predict what happened just before the premiums were coming due. Oops. Sorry gov. Weâre not doing well and we fold.
Easy solution. Use a discount rate that matches the equity that the bidder put up. British government rate is about 4%.
If bidder only puts up 10% equity then 4% / 10% is 40%. Use that to discount those rosy premiums in years 9 to 10. At 40% to the 9th and 10th power theyâd be discounted to nothing. Theyâd lose the bid.
Simple math any private business investor would use. Too bad no one in the British railway government must not have learned in school.
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How did you determine what discount rate was used to evaluate the bids to privatize some or all of British rail?
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CN was a viable freight RR. I donât know that anyone considers Amtrak as viable without government support.
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As per EYâs latest financial audit report, " the Company has a history of operating losses and is dependent upon substantial Federal Government subsidies to sustain its operations and maintain its underlying infrastructure"
I have read the annual reports for the last 20 years. This or a similar statement appears in everyone of them.
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