Why Did The Penn Central Railroad Fail?

The Penn Central was born amid great expectations and promises on February 1,1968 by the merger of the New York Central System into the Pennsylvania Railroad on that date.

Neither railroad had been forced through the trauma of bankruptcy and reorganization.

With incompatible computer systems ,signal systems, operating styles, and personalities at the top, the new railroad remained essentially two in operation though it was one in name.

1.) PC was forced to pay $125 million for the bankrupt New Haven, which had a negative cash flow.

2.) PC was required to operate well over one half of all the passenger service in the US, which by that time had a monstrous negative cash flow. Amtrak only partly relieved this in 1971, as PC was still saddled with commuter service in the New York and Philadelphia areas.

3.) Freight rates and abandonments were rigidly regulated, preventing PC and others from adapting to market conditions.

4.) The “red” and “green” teams were more interested in “oneupmanship” than creating a viable enterprise. No thought had been given prior to the merger, for example, on compatibility of computer reporting systems.

The merger between the New York Central RR and the Pennsylvania RR was like a shotgun wedding. Both bride and groom hated each other. Yet, there was no other option but to join hands in unholy matrimony, and if this wasn’t bad enough, the bride and groom had to accept the New Haven RR as an unwelcome boarder in their honeymoon suite.

Read More About The Wreck Of The Penn Central Railroad

https://penneyandkc.wordpress.com/penn-central-a-wreck-of-a-railroad/

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Public-Private Partnerships Will Not Save U.S. Infrastructure

Streetsblog USA via California Rail News

Although the White House has been talking up private infrastructure investment as a replacement for public funding, a panel of experts told Congress that, even with perfectly executed public-private partnerships, the federal government still needs to provide its own support — especially for projects, like transit lines, that aren’t guaranteed to generate toll revenue for profit-seeking investors.

This morning, Transportation Secretary Elaine Chao appeared before the Senate’s Environment and Public Works committee. Chao didn’t reveal much, but she did say that the White House will release a statement of “principles” about infrastructure later this month before handing off an actual infrastructure plan to Congress sometime later this summer.

Whether that’s actually going to happen is anybody’s guess. So far, the administration has given two substantive clues about its infrastructure agenda. One is a budget proposal that guts transit programs. The other is a campaign white paper that recommends using tax cuts to promote private financing of public infrastructure projects.

Featured image: Virginia’s HOT lanes were held up in the U.S. Senate this week as an example of public-private partnerships done right. But is this what you really want out of the transportation system?