(The following story by Bruce Edwards appeared on the Rutland Herald website on December 8.)
RUTLAND, Vt. — Vermont has backed out of a $17.5 million deal to purchase state-of-the-art rail cars that would replace cars on Amtrak’s Vermonter route on the eastern side of the state.
The state Agency of Transportation on Friday decided not to buy the rail cars from Colorado Railcar Manufacturing because the company and Amtrak could not provide sufficient guarantees to buy back the cars or resell them at 90 percent of the purchase price after three years of service.
The state required the guarantee in the event the rail cars failed to provide the promised savings.
The five rail cars — known as diesel multiple units — were seen by the state Agency of Transportation as a way to cut costs because the new cars would be less expensive to operate than the much older equipment used by Amtrak.
The diesel multiple units, or DMUs, would have been deployed on Amtrak’s Vermonter — the state subsidized route — that runs from St. Albans to Springfield, Mass., and to New York City and Washington D.C.
“An investment of $17.5 million is substantial, and everyone had to be comfortable that the state’s investment would be protected,” Transportation Secretary Neale Lunderville said in a statement.
The state Legislature approved the purchase this year on the condition that there was a guaranteed buyback and that the purchase pass muster with the state Treasurer’s Office and Attorney General’s office.
AOT spokesman John Zicconi said Friday all the parties agreed that a three-year buyback was a good idea. The problem, Zicconi said, was that neither Colorado Railcar nor Amtrak had the financial resources to make it happen.
“Colorado Railcar could not put a financial instrument together,” he said. “They could make verbal guarantees.”
Zicconi said Amtrak was willing to help but was also limited financially as well.
“The treasurer and the attorney general couldn’t get comfortable with the guarantee’s limitations that were on the table,” he said.
Zicconi said given the amount of money at stake the state needed assurances the cars would function properly and the advertised cost savings would materialize.
The purchase would have included three self-propelled engines and two passenger cars. Each diesel-powered car and coach has a capacity of 60 passengers. The plan called for the new cars to begin service in January 2009.
Norman Forde of Colorado Railcar Manufacturing declined comment when contacted Friday.
“I’m not in a position to comment right now,” Forde said from the company’s headquarters in Fort Lupton, Colo. “Until I have that in writing and confirmed, I’d rather not comment at this stage.”
In a subsequent e-mail, Forde thanked the AOT and Amtrak for their efforts in attempting to negotiate a guarantee.
Lunderville added that the diesel multiple units are the future of passenger rail service and the equipment is more affordable and has reduced environmental impacts.
The purchase of the railcars would have allowed the state to run two round trips a day — one from St. Albans and a second originating in White River Junction. But unlike the current Vermonter, which runs one round trip a day from St. Albans to Washington, D.C., the new route would have the Vermonter terminate in New Haven, Conn., where passengers would change for New York, Boston and other destinations along the Northeast Corridor.
The AOT said it will continue to work with the Legislature to pursue improvements to both the availability and affordability of public transportation. The agency added that it has also been in contact with the state’s congressional delegation to secure federal aid to improve rail service in the state.
During the last fiscal year, Vermont paid Amtrak $3.3 million to operate the Vermonter and the Ethan Allen Express. The Ethan Allen operates one round trip a day from Rutland to New York.