FRA Sets Passenger Route Bidding Standards

The Federal Railroad Administration has announced a pilot program to allow independent contractors to bid on operating long-distance passenger trains.

The program was mandated by the Fixing America’s Surface Transportation Act of 2015, which called for bidding to be taken on up to three routes.

FRAThe law calls for the FRA to oversee a program “for selection of eligible petitioners in lieu of Amtrak to operate not more than three long-distance routes.”
Among the key elements of the proposal are:
• The winning bidder would assume the “right and obligation” to operate intercity passenger service over a specific route, and receive an operating fundig not to exceed 90 percent of that provided to Amtrak for that route during the preceding year. The initial contract for each route would extend for four years, with extension subject to transportation department approval.
• Amtrak would be obligated to provide the new operator with access to its own reservation system, stations, and facilities.
• Employees of a new operator would be subject to laws and regulations governing current similar Amtrak employees, and winning bidders must provide hiring preference to displaced, qualified Amtrak workers.
• If an alternate operator fails to provide service, the transportation department, in collaboration with the Surface Transportation Board, would “take any necessary action consistent with the FAST Act to enforce the contract and to ensure the continued provision of service.”

Amtrak will be permitted to bid on continuing to operate certain trains. Bidders could range from Class I railroads to short lines to state-sponsored consortia.

In their proposals, the bidders must explain how they will provide the service (including their on-board services), provide an operating plan and financial plan, give details of agreements for using tracks they do not own and include “ancillary” activities not directly tied to operating the trains.

The U.S. secretary of transportation will review the bids and select the winning operators, a process that could take more than a year to complete.

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