In the article below Ben Wear of Austin American Statesman newspaper talks about the likelihood that almost immediately Capital Metro in Austin Texas will be taking out loans to buy more trains. Oh yeah, where do you think they will get the money to pay back those loans, well from sales tax revenues. Well, those sales tax revenues are significantly down in the first quarter of this fiscal year. This is a terrific example of the 'we got our foot in the door and we can keep on spending'. So as stated below, CMTA plans to go into either 35 or 70 million dollars of debt, while the success of Metro Rail is questionable, and while the economy is in recession. Expect CMTA to come to the public in coming years complaining about being "in the red" and having to cut core services and possibly lay off workers. I do not know about you, but this sounds like a really dumb plan. Then again, it is also possible that many transit agencies like CMTA are salivating at the idea of that cash infusion from the Obama Stimulus Plan. I think we can expect for large amount of federal cash tagged for transit to vanish into the suction of projects that are various kinds of runaway trains.
From Ben Wear:
"I wrote a column in July about a problem Capital Metro's passenger rail service might have when it opens March 30: popularity.
Or, more to the point, capacity. To keep costs down when it put the rail project before voters in 2004, Capital Metro decided to buy just six self-propelled rail cars for initial service on the 32-mile commuter rail line between Leander and downtown Austin. With a ration of spare parts, that purchase from Swiss railcar manufacturer Stadler set Capital Metro back about $38 million. Capital Metro had to borrow the money from Bank of America.
The problem is that the cars have just 108 seats, with room for another 92 people to stand. And it will take close to two hours for a car to leave from Leander during rush hour, get to downtown near the Hilton Austin hotel and return to Leander. In practice, that means that the five cars (one will be held in reserve) might be able to make only seven runs between 6 a.m. and 9 a.m., with 30-minute intervals between departures. That would be 1,400 passengers max, with the last car not getting downtown until close to 10 a.m.
Last summer, when gas was $4 a gallon and new people were flocking to Capital Metro's express commuter buses, it seemed reasonable to assume that some Red Line trains might fill up in the first two or three stops, leaving steamed customers behind at stations closer to downtown. Maybe that will still be the case, even with the current dirt-cheap gas prices. We'll know in April or May.
With that in mind, Capital Metro staff members say they probably will go before the transit agency board in February for approval to buy six more cars, or perhaps 12. But Capital Metro doesn't have $35 million sitting around (its contract lowers the price for further orders), much less $70 million. So it will have to borrow again.
The credit markets, of course, have been less than robust lately. And Bank of America in particular has had troubles, asking Uncle Sam for an additional $20 billion in bailout funds after $25 billion didn't right the ship.
Randy Hume, Capital Metro's vice president for finance, said last week that the agency was talking to Bank of America to try to nail down the additional loan. The current one costs the agency $4.3 million a year for 10 years. Even though the interest rate might be higher this time — up to 5 percent, rather than 3.7 percent as in the initial loan — Hume said the payments could be lower because Capital Metro could choose to get a 15-year term.
Hume said the agency won't order more cars until financing is secure."We're not there yet," he said. And even if Capital Metro makes the order by March 1, Stadler said it would be two years before the first car arrives, with about four weeks more for each car to follow. And the agency has to test each car here for 1,000 hours or more, a process that takes several months.
Bottom line, don't look for extra capacity on the Red Line until late 2011 or early 2012."
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