The T profitable?

Discussion relating to commuter rail, light rail, and subway operations of the MBTA.

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The T profitable?

Postby JayMan » Thu Mar 31, 2005 1:23 pm

I have question. Is this true?

http://www.nationalcorridors.org/df/df03282005.shtml

The 72-year-old Mineta pointed out, “Massachusetts has shown us that this approach works. The Commonwealth owns the tracks and stations on the Northeast Corridor, and they have operated them successfully.

“Massachusetts also provides us with an example of how competition can revitalize and reenergize rail service. Three years ago, the Commonwealth shopped around for its commuter train service. A private company won that competition, and despite predictions of doom and gloom, the T’s commuter trains have been a reliable and profitable system ever since.”


That sounds very interesting. I'd like to see what the dynamics is like for a profitable passenger railroad these days, especially a commuter railroad.
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Postby TomNelligan » Thu Mar 31, 2005 2:57 pm

That's just political spin at its finest. It is quite possible that the privately owned Massachusetts Bay Commuter Railroad is making a profit, but that's only because of the big subsidy they're getting from the MBTA. The commuter trains themselves are NOT self-sustaining from fare revenue, which Mineta clearly seems to overlook. Take away the state subsidy and MBCR shuts down in five minutes.
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Postby octr202 » Thu Mar 31, 2005 3:09 pm

Yes, its total spin. The only profit being made is the owners of MBCR. THink of MBCR as any other company that has a contract to provide a service to government. They submit a bid price that includes all their expenses, plus a profit margin, and then get paid by the MBTA when their bid is accepted and a contract signed. Thus, the MBTA is paying for the cost of operating commuter rail, PLUS the corporate profit margin.

The only reason this is needed is because the MBTA has decided that they do not wish to directly operate the railroad themselves. In a perfect world, where the T could match the operating costs of a private company, then the T could always operate the railroad itself at a lower cost (subtracting the profits going to the corporate owners). But we all know where we actually live...
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