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Passenger service bright spot for railroad

Alaska Railroad in Anchorage

The Alaska Railroad is a significant contributor to the state’s economy, supporting 2,000 jobs.

When asked “How’s business?” at the semi-weekly Resource Development Council breakfast forum, Alaska Railroad President and CEO Bill O’Leary answered, “It depends.”

While freight revenues are down significantly due to the loss of coal exports and the closure of the Flint Hill Refinery, passenger revenues have rebounded from the 2008-2009 slump caused by the taxes imposed by the cruise ship initiative and a national economic downturn.

Ridership rebounded once the head tax was adjusted, and began to increase in 2013, he said. There was moderate growth in 2016. Each passenger train takes 7,000 coach trips off the road system.

O’Leary called Positive Train Control (PTC) the “mother of all unfunded federal mandates.” PTC is a system designed to prevent train-to-train collisions, derailments caused by excessive speeds, unauthorized train movements in work zones and the movement of trains through switches left in the wrong position.

The price tag for the Alaska Railroad’s PTC is $165 million, more than the railroad’s annual gross revenues. It will take another $8 million/year to maintain and operate it. O’Leary said the railroad will meet the 2018 deadline through funding from two state appropriations and the issuance of railroad bonds.

In Seward, the railroad is using a federal grant to write a new master plan for the railroad’s extensive marine and land-based infrastructure.

View a video about the railroad.

Watch O’Leary’s presentation.

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