Railroad and Transportation, Distribution & Logistics

Amtrak upgrades would boost ridership, cost millions

September 26, 2013

Improvements to Amtrak’s Hoosier State service between Indianapolis and Chicago would boost ridership and revenue, but there’s no scenario under which the line would pay for itself, according to an analysis commissioned by the Indiana Department of Transportation.

That doesn’t mean the upfront investment and ongoing subsidies couldn’t be justified, though, consultant CDM Smith Inc. concluded. The cost-benefit analysis will figure into INDOT’s negotiations with Amtrak over continuation of the Hoosier State line, and it will help cities served by the line decide whether they want to pitch in on upgrades.

Indianapolis resident Doug Yerkeson, part of a grassroots group lobbying to keep the Hoosier State, said the study’s conclusion was no surprise.

“I don’t think there’s a passenger train in the world that makes money,” Yerkeson said. “It’s a service.”

The Hoosier State is in question because the federal government will no longer support passenger rail lines shorter than 750 miles, and Amtrak says it needs $3 million a year from Indiana to keep it going. The service runs four days a week, alternating with the long-distance Cardinal line, which will continue.

INDOT says that giving Amtrak $3 million a year for the Hoosier State would amount to $80 per round trip, based on the rail line’s fiscal year 2012 statistics. The Hoosier State had 36,670 riders and generated $883,000 in revenue that year.

Amtrak offered four improvement options in terms of scheduling, number of round trips and reducing all trip times by 30 minutes. All four options would boost ridership and revenue, but they would also require track improvements at an annualized cost of $18 million.

Here is a rundown on the possible improvements and expected results:

Option 1: change schedule to tie into long-distance connections, 88,270 riders a year, $2.3 million in revenue.

Option 2: change schedule to favor local ridership, 86,000 riders a year, $2.2 million in revenue.

Option 3: add second daily round trip with departures from Chicago and Indianapolis around noon, requiring three train sets, 164,000 riders and $4 million in revenue.

Option 4: add second daily round trip, departing Chicago early morning and evening and Indianapolis morning and afternoon, requiring two train sets, 153,000 riders and $3.8 million in revenue.

The improvements would cut the per-rider subsidy significantly, to $32 under the first option, or to $42 under the third option, CDM Smith noted. The subsidy doesn’t take into account the cost of capital improvements, estimated at $231.5 million, or $18 million a year.

Beech Grove is watching closely what happens with the Hoosier State because losing the service could mean Amtrak will send less work to its major repair facility there. Mayor Dennis Buckley said he’s in no position at the moment to promise financial support, but he said, “I support Amtrak, and let’s hope this all works out.”

INDOT started negotiating with Amtrak in time for the Hoosier State to continue past the mid-October termination date set by Amtrak, INDOT spokesman Will Wingfield said. 

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