Amtrak Pays More Than Double for High-Speed Trains

Update 2016/8/16: the deal is on, per sources at Amtrak; the cost is $2.5 billion, as reported originally.

Update 9/24: as Alex Block notes in comments, sources at Amtrak deny the story, saying that Schumer spoke too soon, and there are still two bidders and Amtrak has not yet made its choice. If the cost turns out to be $1-1.25 billion rather than $2.5 billion, I will withdraw any and all criticism of the procurement process.

A press release from Senator Charles Schumer’s office is abuzz: Amtrak chose Alstom’s bid for its next order of high-speed trainsets, the Next-Generation Acelas. The press release mentions the size of the contract, $2.5 billion, and the number of jobs it would create, 750; it did not include any information relevant to passengers, such as the number of trains, the expected schedule of delivery, the expected frequency, and the expected travel time. Various media outlets have reprinted Schumer’s press release without such additional information, or indeed any analysis. Let me rectify this and provide some background as to why this order is a fleece.

The order is for 28 trainsets with 425 seats each. This can be seen here and here. Of those 28 sets, 25 should be available for maximum service, well below the 98% peak availability achieved by the TGV, but an improvement over the Acela’s current 16 trains available out of 20. There is no mention of the number of cars, which is how orders are usually priced. However, on page 30 of the technical specs, it is mentioned that the maximum length is 200 meters, equivalent to 8 cars. The capacity is equivalent to about six cars’ worth of seating at the normal seat density of economy-class HSR (including the Amtrak Regional coach), or about seven cars’ worth averaged over all occupied Acela cars. The RFP mentions half a bistro car with an option for a full car (page 21 of instructions to offerors), so eight cars per train is a reasonable assumption. I have seen references to ten cars per set, which I believe come from the option for two additional cars per train (the instructions phrase this as “an extra 33.33% capacity”). From Schumer’s press release it’s difficult to know whether the $2.5 billion figure is the base order or also the option.

Eight cars per train times 28 trains equals 224 cars. $2.5 billion divided by 224 equals $11.2 million per car; if I am wrong and these are ten-car trains, then it is $8.9 million per car. In China, a very high-speed train, capable of 350-380 km/h, costs $4 million per car; this is $900 million at the size of Amtrak’s order. In Europe, the new Eurostar order cost a total of €600-700 million for ten 16-car Velaro trainsets, about $4.7-5.5 million per car in PPP terms (see here and here); the uncertainty comes from euro:pound conversion rates and from the fact that a portion of the order is for refurbishment of the older trainsets. Siemens also sold 8-car Velaros to Deutsche Bahn for $5.2 million per car, again in PPP terms. Japanese trains are even cheaper, about $3 million per car in a recent N700 order, but only last 20 years, whereas European HSR trainsets last 40 and Amtrak specified a 30-year shelf life. The only non-US trainset order that I’ve seen that approaches the $10 million per car mark is the Velaro RUS, which is €600 million for eight 10-car trains, and this includes substantial modifications, such as winterization.

There is no excuse for such high costs. The technical specs are not particularly innovative: on page 22 of the document linked above, it is mentioned that cant deficiency should be 127 mm if the trains don’t tilt and 229 if they do, both of which figures are unimpressive by the respective standards of non-tilting and tilting trains. There is no explicit requirement for tilt. There is a requirement that trains be capable of traveling between New York and Washington in 2:21 (current trip time is 2:48) and between New Haven and Boston in 1:51 (current trip time is about 2 hours, skipping New London, which the specs require trains to stop at); there is no mention of which track upgrades are forthcoming, but given Amtrak’s heavy schedule padding, it is not difficult for a good train to meet the requirements. I do not bring these specs up to attack Amtrak for not demanding more of the trains, but to note that what Amtrak is asking is standard, so there is no reason for trains to be unusually expensive.

I will note that due to Buy America provisions, the trains will be manufactured in the US, at Alstom’s factory in Hornell. This has not caused cost blowouts for the large orders made by the New York subway, the LIRR, and Metro-North, but perhaps this order is small enough that requiring Alstom to build it at a new factory leads to major cost increases. It is also possible that due to difficulties in the bidding process, there are fewer bidders than is normal – Bombardier dropped out of the process last year, and in general, some US contracts have just one bid, with correspondingly elevated prices. But regardless of the reason, Amtrak’s order comes at a factor-of-two cost premium, and Schumer just expressed pride at the few hundred jobs that this waste would create.

66 comments

  1. snogglethorpe

    It’s confusing… a highly inflated price generally makes one think that there wasn’t much competition in the bidding process—but at the same time, if Amtrak is such an easy target, you’d think more companies would be tempted to bid. It’s not like there’s a shortage of competent manufacturers….

  2. Adirondacker12800

    It’s not a new factory. They’ve owned it since they snatched it up from Morrison-Knudsen’s. Who snatched up from Conrail who got it from the Erie.

  3. Joseph

    Alon, do you think the FRA standards are a significant part of the high cost, or a lack of competition in the bidding process? I have read this was an issue with the original Acela cars. The only good excuse for higher costs would be that all of these cars are “business class”, rather than the mix of economy and business/first class cars on other train orders, though I doubt this should increase costs significantly.
    Will the new cars reduce the trip times by about 40 minutes (4:12 with an extra stop instead of 4:28) in those segments? Or is that simply the current trip time without schedule padding? Would the New York to New Haven section be somewhat faster?

    • Alon Levy

      I don’t know what the FRA standards even are. Tier III requirements are not public. It’s entirely possible this is where the cost comes from – the regulations are still nebulous, so the bids are higher to compensate for that. But then again, the FRA was supposed to come out with its new rules around this time, so it’s possible the bidders already know what the new rules are going to be.

      The business class issue is pure branding. The Acela has cars with the same seat density as Regional coach, which are called and priced as business class, and cars with the same seat density as Regional first class except they’re 4-abreast and not 3-abreast, and those are called and priced as first class. The cars themselves aren’t any different. The seats are a bit fancier, but seats don’t cost millions of dollars.

      The new cars are supposed to reduce trip time, but it’s not made clear how. I presume that a combination of faster acceleration and higher reliability is going to do the trick (the higher top speed has very little impact given how short the segments it’s achievable on are). The RFP’s said nothing about New York-New Haven, which I presume is because the schedules there are set by Metro-North.

      • Nathanael

        I’d bet on two problems:

        First, I suspect the FRA regulations still aren’t finalized, and that the bids are jacked up to compensate for that.’

        Second, I know there are going to be relatively few bidders. The “Buy America” requirement means that production is limited by the US assembly plants….

        Bombardier, which is a huge manufacturer, basically can’t bid on anything right now since it’s far behind on its existing orders and is capital-stripping the rail business to prop up its CSeries airplane.
        CAF is mired in delays on the Viewliner order and behind on the Houston order and wouldn’t want to bid.
        Sumitomo and Nippon Sharyo are busy trying to figure out why their bilevel design, which they’re selling to the states for Amtrak service, failed the crush test — they wouldn’t want to bid either.
        Talgo doesn’t make fast enough trains yet.
        Kinki Sharyo doesn’t like to do high speed as far as I can tell.
        Hyundai Rotem is being blacklisted by India for delivery delays on metro cars, so would have been rejected.
        Fiat Ferroviaria seem uninterested in the US market.
        Obviously, if AnsaldoBreda bid, any sane person would reject it without even looking.
        Siemens might have bid — or it might not have. They’re busy producing electric locomotives for Amtrak and diesel locomotives for the states and trainsets for AAF and may have decided that they couldn’t meet the schedule.
        I suppose Kawasaski might have bid. Mitsubishi is now working with Kawasaki on trains so not an independent bidder.
        Or Hitachi might have, but they usually work with Kawasaki.
        Or the Chinese companies might have bid, but they might not have, and probably wouldn’t be accepted unless the bids were extra cheap.

        So we’re down to really, three or four likely bidders (Alstom, Siemens, Kawasaki, maybe Hitachi).

        It’s perfectly possible Alstom submitted the only responsive bid.

        • Max Wyss

          A few comments:

          • Bombardier has at least one viable product, but I am not sure about a suitable manufacturing plant in the US. However, Amtrak has, as far as I understand, gotten a waiver for two pre-series trains to be manufactured elsewhere.

          • CAF has a product, but it is quite new.

          • Sumitomo, Nippon Sharyo, Kinki Sharyo have no suitable product.

          • Talgo has a high-speed product, so, they could bid. They may even have a factory, or they build factories for way smaller orders.

          • Hyunday Rotem has a product in prototype phase.

          • Fiat Ferroviaria has been Alstom for several years now; the Fiat legacy are tilting trains and high-end bogies

          • AnsaldoBreda is now Hitachi

          • Siemens definitely has the most mature product, and most likely did bid. They also have a factory which can be relatively easily expanded.

          • The other Japanese manufacturers have a prototype

          • CRRC has a product which would pretty well fit to the specs

          • Stadler has a product under development, so, this RFP is a bit too early

          • AName

            The Velaro platform might be mature but as far as I know Siemens does not own any patents that relate to tilting trains. The ICE-Ts were built with licensed tech and seeing as Amtrak probably wants a tilting EMU for the NEC I would be interested to see what they proposed in their bid.

          • Max Wyss

            If tilting trains are wanted, the choice gets small very rapidly.

            For passive tilting, Talgo would be a possibility; for active tilting, it is either Kawasaki (I think) or Alstom (or Alstom would at least provide components, as from Fiat, they have both base tilting mechanisms (hydraulic and electromechanical).

            The ICE-TD is from Siemens, but the bogies are from Alstom (or according precursor).

          • AName

            Bombardier also has the patents for the tilting system that was developed for the LRC program.

            If Hitachi has any facilities in the US (or at least can find a manufacturing partner) then they might be able to bid too since their A-train platform can be made into a tilting train.

          • Max Wyss

            Patents are one thing; a working product is another. But, yes they could dig that out. They could also reuse the tilting mechanism from the Swedish X2 (aka X2000), which they acquired from Adtranz, which acquired it from ABB, which got it from ASEA…).

          • Nathanael

            Thanks for the comments.

            As I say, anyone in their right mind would reject an AnsaldoBreda / now Hitachi bid without looking, given that Breda has *decades* of substandard, defective rolling stock construction behind it.
            Bombardier is about to go bankrupt and really can’t bid until that is straightened out.
            CAF is far enough behind on other orders that I don’t think it could submit a viable bid.

            At this point the only plausible bidders with half a chance are Alstom, Siemens, Kawasaki. Wait a couple of years, that might change.

      • AName

        If these things do end up being Pendolinos then wouldn’t they be faster than the current Acela sets simply by virtue of having a tilting mechanism that isn’t half-baked?

        • Alon Levy

          Yes! If they’re capable of full Pendolino tilting, which is about 270 mm of cant deficiency (sometimes 300, but that’s a maintenance nightmare), then the trip time is going to be well below the specified maximum, especially east of New Haven.

  4. tm611

    Are these EMU’s or locomotive hauled sets? Are they based off an existing model?

    • Alon Levy

      Unclear, but my understanding is that they are EMUs. Amtrak’s supposed to come out with a press release today, with more details. On Railroad.net people are following the developments (start here). People on the forum are talking explicitly about the Pendolino designs, which cost about $5 million per car in the UK fifteen years ago – after adjusting for inflation – but which I don’t have good recent cost figures for. There’s a Polish order for about $5.5 million per car, but that’s the non-tilting version (link).

      EDIT: I finally found cost figures for the Cisalpino ETR 610 New Pendolino trains. It’s actually a hair less than $5 million per car.

      • Adirondacker12800

        They love to foam over on railroad.net. IIRC the floor height and width of Pendolinos would make getting on and off the train very difficult. The NEC needs something nominally 10’6″ wide with 51 inch high floors and around 85 feet long.

        • Joey

          They can adjust the floor height and width, and routinely do. It’s not like the car bodies are pre-manufactured.

          • Adirondacker12800

            Which one is the narrowest? Which one is the widest? which one has the lowest floor height? which one has the highest floor height? What’s the shortest car and the longest car? Kawasaki, Bombardier and Alstom probably have the most detailed databases on how things 10’6″ wide with 51 inch floors that are 85 feet long, behave.

          • Joey

            The existing Pendolinos have been built to European specs because only Europeans have ordered them. There was no Kiss built to Russian standards until Russia ordered one. There was no EuroSprinter built to NEC standards until Amtrak ordered one.

          • Alon Levy

            There exist Pendolino trains with boarding height close enough to the NEC standard for government work (link. It’s actually harder to put them up in low-floor countries because of wheelchair accessibility: Switzerland walked away from an 800 million CHF offer (for 29 trainsets) because the trains could not be made accessible (link).

          • Adirondacker12800

            Vectrons aren’t Pendolinos and passengers don’t have to get on and off them at stations.

          • Joey

            No, but adjusting the floor height, particularly raising it, is simpler than the structural redesign that had to go into the ACS-64

          • Alon Levy

            But there do not need to be any special adjustments to the floor height in the first place! Unless raising the floor height from 1,270 mm to 1,300 is a huge undertaking…

          • Adirondacker12800

            Track gauge would be more of a problem.
            I don’t understand why it is so simple for one manufacturer to alter things but impossible for anyone else to do it.

          • Adirondacker12800

            Foamer love to whine about how awful buff strength requirements are. It’s reasonable to expect that more powerful locomotives will weigh more than less powerful ones. 5,000 kW locomotive is going to weigh less than a 6,400 kw locomotive. Keep in mind that compromise transformers are going to weigh more than single frequency transformers. Lower frequency transformers will weigh more than higher frequency transformers.

          • johndmuller

            Adirondacker128000 wrote:
            . . . Lower frequency transformers will weigh more than higher frequency transformers.

            I thought that transformers were about changing the voltage, not the frequency. No doubt some (other) components are responsible for dealing with frequency changes if they are necessary; these would likely not be as heavy as transformers.

            As far as I know, while both AC and DC are being used, there seems to be a trend towards AC motors at the moment. I wonder if DC would be more appropriate in an environment where there are multiple AC input frequencies as (I would think that) they could perhaps each (the different frequencies) be rectified by the very same equipment. Quite likely the (electrical) engineers know something that argues in other directions, but I wonder if it is only that the traction motors of the far more numerous diesel electric locomotives are being used as starting points for the designs and that as those are generating their own electricity, they do not need to worry about multiple frequencies and therefore could have different factors influencing their choice of AC/DC.

          • Alon Levy

            The mass of a transformer is inversely proportional to the frequency. A 50 Hz transformer is one third the weight of a 16.7 Hz transformer, which is why when the same train is produced for the 15 kV 16.7 Hz world (e.g. Germany) and the 25 kV 50 Hz world (e.g. most of France), the 15 kV version weighs more. See, for example, the Pendolino variants.

          • Adirondacker12800

            Low frequency transformers are bigger than high frequency transformers, they weigh more.

          • Richard Mlynarik

            John, you’re confused about electrical engineering technology and you’re confused about the value of engaging with “Adirondacker12800”. No need to speculate; no need to wonder out loud; no need to report what you believe there might seem to be; just do some reading, and learn to recognize and ignore unreliable sources.

            FYI transformers and rectifiers are designed around particular optimum voltages and frequencies, but good engineering can make various ranges work at an acceptable cost in terms of money, cooling, efficiency, weight, etc. Note however that best engineering can’t make a locomotive transformer the size of a USB wall power wart.

            Every contemporary train’s power train design has an internal DC stage (whether coming directly from an external DC feed; indirectly from an AC feed via a transformer and rectifier; from an AC generator driven by a diesel engine; or even from batteries) because DC is the simplest thing to put into the next stage of the power train, uncoupling the frequency at which it operates from that of the supply network.

            The present-day “best” (for some combinations of cost, efficient, weight, etc …) present-day motor technology are “permanent magnet synchronous motors”, which are fed AC power produced by fancy control and power electronics chopping and shaping the internal DC into something quite complicated and precise, but other motor and control technologies are still used for various reasons. And it all works in reverse for regenerative braking! The technologies aren’t unrelated to that used by modern windmills.

            The AC frequency and voltage from power lines is very different from the AC frequency and voltage fed to (some) traction motors because the physics and economics of the two types of electrical engineering are radically different.

          • Max Wyss

            Multisystem units have the transformer optimized for the mostly used frequency (and voltage). The transformers do work well with the other frequency (and voltage anyway), but are less efficient, and less powerful.

            For example, the TGV Euroduplex has a continuous power rating of 3680 kW under 1500 VDC, 6800 kW under 15 kV/16.7 Hz, and 9280 kW under 25 kV/50 Hz. That means that the transformer(s) is optimized for 25 kV/50 Hz … obvious, because the high speed lines they are operating on are electrified with that system.

            There are some developments for solid state transformers, which would be lighter, but they have not yet evolved beyond the research prototype stage.

          • johndmuller

            Thank you all for your attempts to enlighten me. I must concede that I have achieved that ‘little bit of knowledge (which) is a dangerous thing’ in the field of electrical engineering where I feel like I understand it much better than it seems that I actually do. I find it odd, in that my otherwise finely tuned scientific/analytical mind rarely gets this mismatch where I apparently do not understand something which I think I understand. I of course knew that I had such a glitch w/r EE from when I was obliged to switch out of that major at college, but I can’t help thinking that I know at least something about it – it was really the tensor equations which convinced me I needed a new major, not transformers and rectifiers (although they were apparently waiting in the wings to ambush me off if necessary).

            Unfortunately, most of the examples you’alls cited were changing both the voltage and the frequency if not also between AC & DC, so I’m still not sure why a transformer would need to be heavier for lower frequencies. Isn’t it all about the relative number of windings in the primary and secondary? Extra weight sounds like either heavier gauge wires or a heavier core, but why would that be necessary unless some other variable is also being changed, for example the current and it that is being changed aren’t we adding a new element to the problem than just converting voltages?

            BTW, w/r Adirondacker12800, he is often (unfortunately) armed with a considerable breadth and depth of information and somehow knows how to zero in on not quite perfect dotting of i’s and crossing of t’s or if one’s own argument involves more wishes and desires than cold hearted logic, and that can of course become a little annoying if it hits home.

        • Gag Ha;frunt

          The Chinese CRH5 is a non-tilting version of the ETR 600/610. According to Wikipedia, CRH5 trains are 3.2 m (10 ft 6 in) wide, compared to 2.83 m (9 ft 3 in) for the original Italian trains.

      • Max Wyss

        Note that the price of those 4 additional RABe 503 trains comes from exercising options. Those prices are therefore at the level of 2008 (or so).

  5. Ed

    I skimmed through the blog post. Is the gist that Amtrak has adopted the Pentagon procurement process?

      • Nathanael

        By Pentagon standards, if you can actually figure out how much it cost after the fact, you’re doing well. Remember the Pentagon has never passed an audit.

  6. AName

    Does the cost of the contract account for the maintenance contract and the money necessary to upgrade the current maintenance facilities or is that going to be paid for separately?

    • Alon Levy

      The current rolling stock is impossible to upgrade; it’s a dead end. There were rumblings that Amtrak would buy extra cars for those trains, but this is not in this contract.

      The way I understand the RFP docs, they do not include maintenance (which Amtrak does in-house), but do include training both train crew and maintenance staff.

      • AName

        Amtrak does maintenance in-house? I thought the Acela sets were maintained by a private consortium.

        • Alon Levy

          The Acelas are maintained at Amtrak’s usual yards – I thought it was all in-house. At the very least, this source suggests maintenance is currently carried by Amtrak, which took over from a private consortium in 2006. (Wikipedia says the private maintenance was part of a settlement for delivery delays, but the source for that claim is a dead link.)

          • AName

            Interesting. The price tag in China and Japan may not only be lower because of the bigger manufacturing base but maybe the fact that they already have shops and crews ready to maintain and operate the new vehicles without additional training or outside assistance may also play a factor in the price gap.

            Of course that’s all speculation but I would be interested in reading on Amtrak’s maintenance policy. I would be very surprised to find out that their ‘odd stock’ is maintained in-house considering Talgo employees work on the Cascades and that the Wisconsin Talgos would have been maintained in a Talgo owned facility.

          • F-Line to Dudley

            Bombardier had a facility lease on Amtrak property for the first 5 years of Acela service for their techs to do maintenance. That was the agreement that expired in ’06 with all maint reverting in-house upon departure of BBD staff.

            BBD is still the lease holder of the retired HHP-8 locomotives, so that onsite maint agreement also covered the ever-problematic Hippos.

          • Saltgrass

            The fact that Amtrak maintains the Acela fleet is only partially correct. It has also signed exclusive parts and component maintenance (i.e. overhaul of major systems and equipment) agreement with Alstom. Based on the attachments Alstom has taken advantage of Amtrak’s poor management and oversight of this agreement to overcharge and in some cases defraud their customer with overcharges of over 1000%

            http://www.eenews.net/stories/1060015926
            https://www.amtrakoig.gov/sites/default/files/reports/oig-a-2015-008.pdf

      • F-Line to Dudley

        The proposal–dropped years ago–was to take the displaced HHP-8 locos, install tilt and tart them up into Acela power cars, and buy a supplemental order of passenger cars to lengthen the existing Acela sets to 8 cars and fashion 6-car sets in the “Hippo sandwich” extras. Quite predictably that didn’t get very far once they crunched the numbers on the locomotive mods. The Hippos laterally sway like they’re doing a drunk walk, and the Frankenstein mods it would’ve taken to get them to behave themselves in an Acela configuration wasn’t anywhere close to worth it.

        The carriages themselves are based on Bombardier’s LRC design used by VIA Rail, which was an experimental tilt design way back in 1980 that never stopped being experimental when it was evolved for the Acela. VIA cocked up its 2007-09 rebuild program of its (now-tiltless) LRC fleet so badly that it helped dissuade Amtrak from ever keeping the Acelas long enough where they would have to go through a midlife overhaul for 10-year lifespan extension. That would’ve been a necessary move had they done the deal to expand the fleet. Experimental BBD design apparently responds quite very poorly to component upgrades that are non- original spec, like the ones you’d typically see in a midlife overhaul. So they also can’t be mechanically improved in any overhaul given the design limitations.

        Became obvious to them very quickly that starting fresh was the only plausible solution.

        • AName

          How did VIA screw up the LRC rebuilds? They simply disabled the tilting mechanism because the system was useless thanks to the lack of upgrades on the Windsor-Quebec corridor. The system works just fine in the Super Voyager units used in Britain.

          If anything would have deterred Amtrak from rebuilding the Acela sets it would have been the craptastic performance they’ve offered so far. The damn things couldn’t tilt properly from day one.

          • F-Line to Dudley

            VIA’s rebuild vendor Industrial Rail Services, Inc. was driven into bankruptcy by the program. They uncovered structural flaws with the floors of the cars, and choked on the demands of the (poorly documented by VIA) custom metal fabrication needed to produce replacement components. IRSI had to take out extra loans once it became apparent that they were plowing under, and they quickly defaulted on them all when things went splat. Contract was pulled with only a sixth of the cars complete, huge lawsuit ensued, government had to write off all the loans, and the company liquidation recouped so little value that VIA had to cancel its planned interior livery wholesale upgrades to the fleet. Program was done in-house at VIA and finished years late. And then VIA’s CEO and upper layer of management were all dismissed in the fallout of the ensuing investigations.

            Tilt was already disabled for years on the cars before the equipment was removed because it was unreliable, and aged particularly poorly with wear. Removing it all helped save weight, which was necessary because the thin aluminum Bombardier originally fabricated to keep the overall car weight down was behind the structural flaws with floors and general flimsiness of some components…necessitating heavier replacement materials in the rebuild.

            The Acela carriages don’t have anywhere near as many design hacks as the 1970’s LRC lab experiment now in its 4th decade of beta testing in Canada. The materials fabrication and general fit/finish was the stuff that got substantially evolved from the LRC’s trial-and-error lineage, so an Acela rebuild program wouldn’t turn nearly as many nasty surprises that made the LRC rebuild such a bloodbath. But that’s still half the DNA of the trainsets: too much in the way of custom parts and fabrication, lots of potential to age poorly once certain components near replacement age. Amtrak crunched the numbers when they were evaluating the supplemental car order, HHP-8 conversion, and refresh of the existing sets to sync up their extended lifespan with the primary lifespan of the supplementals. Risk assessment turned up way, way too many sources of potential unbounded cost overruns and schedule delays in attempting to re-engage that design. The design never stopped being experimental at heart, so it’s a dead-end lineage.

  7. Pingback: Amtrak pays high for new trains
  8. Patrice

    Prediction: Amtrak takes a week instead of a day to confirm/deny the order.
    IIRC this order was supposed to be awarded almost a year ago! Boardman is letting things slip after a promising start.

  9. Alex B.

    Sounds like Chuck Schumer was putting the cart before the horse here…

    http://www.railwayage.com/index.php/blogs/william-vantuono/schumer-shoots-his-mouth-off%E2%80%94again.html

    My source at Amtrak says the trainset contract is still an “open procurement” and that the board is “furious” that Mr. Give Me the Microphone and Take My Picture (my description, for the record) took liberties to declare a winner when in fact Amtrak management has been given the go-ahead to negotiate with not one, but two pre-qualified builders, one of which is Alstom.

    This makes sense. Why would Schumer lead the announcement, and not Amtrak? Why would Alstom have such qualified language if there isn’t a done deal?

    • johndmuller

      Perhaps the Senator said something vague enough that it only strongly implied that Alstom was the one and only winner and did not specifically rule out the business of still having to beat out Siemens for the final award. People can usually be counted on to jump to conclusions when given vague or partial information (that’s one of the things our brains evolved for), and politicians are good at exploiting people. OTOH, perhaps one of his staffers, knowing that Chuck was feeling the need for a bigger than usual story, fed him a vague, carefully worded story which strongly implied, etc… and Chuck’s evolved brain jumped the gun and filled in too many intentionally left out details and took it too far into definite-ville.

  10. Joe

    The order is small for a high speed rail program and certainly too small to set up an separate production line. Closest Pendolino is probably the Finnish/Russian ones. This was a even smaller order but cost 30 million for 7-car-trains (2010). The inflation on technical product has been high in the last 5 years in Europe so if you would order the same trains today with production in Europe the would probably cost 6 million per coach. The extensive winterization will be necessary and the body work dimensions have to be changed, so this will cost extra (expensive European/Italian engineering hours) and add to that the buy America crap. Stadler’s trains a roughly twice as expensive in the USA as in Europe, so the mentioned price for the Pendolino’s won’t be too far off.

    BTW the price for the Velaro RUS you mentioned includes maintenance for 30 years; i.e it’s apples and oranges.

    • Alon Levy

      Fair.

      I did not bring up the Stadler cost premium because the recent orders have involved either an arduous regulatory process (Denton) or a one-bid contract (eBART). But if it proves to be a general issue – if all small US orders are twice as expensive as the European originals – then it certainly points at the separate production line as the problem.

        • Alon Levy

          Doesn’t Buy America also restrict imports from Canada, despite NAFTA? Although, I guess the Bombardier R62A order predates NAFTA…

          • AName

            Yep. There are certain exceptions in order to keep the WTO happy but for the most part the rolling stock can’t be built in Canada.
            As a result of the Buy America policy The Bombardier plant at La Pocatière in Québec and the old Can Car plant in Thunder Bay are being starved of orders. Woo, protectionism.

          • Joe

            But the EU isn’t Canada & Mexico. It won’t agree with a free trade agrement that excludes trains. Some kind of “Buy America” exclusion for defense product could be included, because of strategic reasons. For rail this won’t fly.

            The real earthquak in America will be off course that European railway standards will be introduced and all those FRA-waiver nonsense will stop.

      • Adirondacker12800

        The regulations are not an unlimited pot of money. No more than 25% premium if I remember correctly.

        • Brendan Dawe

          That’s true, but if I recall correctly the bureaucratic pain of seeking a waiver and the political liability of having to actively and extendedly argue for imports tends to dissuade

      • Richard Mlynarik

        I did not bring up the Stadler cost premium because… either an arduous regulatory process … or a one-bid contract (eBART)

        I’m not sure you ought to be failing to consider these, especially the latter.

        Stadler is well-known for producing exotic, almost one-off vehicles for odd-ball niches (narrow gauge, rack propulsion, etc) with costs quite close to their production-line types. They seem to have the engineering expertise and sales/managerial flexibility to do so repeatedly; it doesn’t appear to be a matter of taking losses as a sales/marketing tool (though naturally I have no way to know this.)

        In the eBART case, these are GTWs, of which Stadler has built squillions, with all sorts of body dimension/floor height/propulsion system/signalling/… variations, for all sorts of customers, and these are being built at the Stadler main factory in Bussnang. Other than the crippling exchange rate of the CHF, there is no open-market reason that these vehicles should cost any more than anybody else in the world has paid and continues to pay for for them.

  11. Saltgrass

    Alstom should be excluded from bidding based on its history of corruption and fraud on a global scale.
    http://www.justice.gov/opa/pr/alstom-pleads-guilty-and-agrees-pay-772-million-criminal-penalty-resolve-foreign-bribery

    As a vendor Alstom has deliberately overcharged Amtrak in some instances by over 1000% by taking advantage of their customer’s weak vendor oversight.
    http://www.eenews.net/stories/1060015926
    https://www.amtrakoig.gov/sites/default/files/reports/oig-a-2015-008.pdf

  12. Pingback: The customer is always right | Systemic Failure
  13. Pingback: Amtrak’s Rolling Stock Order: Followup | Pedestrian Observations

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