Nevada officials seek answers on maglev funds

By Richard N. Velotta

Friday, May 7, 2010 | 3 a.m.

Nevada political leaders are turning up the heat on the Federal Railroad Administration (FRA) to find out what happened to all the money the state was promised to start building a magnetic levitation transportation system between Las Vegas and Anaheim, Calif.

Both Gov. Jim Gibbons and Attorney General Catherine Cortez Masto, who have been on opposite sides on health care legislation recently, found common ground when it came to maglev funding.

In reality, Gibbons and Cortez Masto know what happened to the money — it got rerouted to a road project at McCarran International Airport at the urging of Sen. Harry Reid, who was frustrated that little had been accomplished by maglev backers for years.

And, as everybody who has followed the recent saga of high-speed transportation knows, Reid switched allegiance from maglev to the predominantly privately financed DesertXpress high-speed rail project between Las Vegas and Victorville, Calif., in June 2009.

Gibbons and Cortez Masto are now focusing their attention on the FRA, a division of the U.S. Department of Transportation, because the state has had communication with the rail agency as recently as last month to get some kind of an explanation about how a congressionally mandated program could be derailed.

Gibbons wrote a letter to Kevin Coates, chairman of the High Speed Rail World USA 2010 conference, which met in Washington last month, to describe the state’s frustration with the bureaucracy.

“… My state has been quite frustrated by what I’ll politely call bureaucratic delays in obtaining the release of federal funding for this most important project — funding that was specifically mandated by Congress in 2005 and again in 2008,” Gibbons’ letter said.

“Just last week, I again asked U.S. Secretary of Transportation Ray LaHood to help me in resolving these delays so that the Federal Railroad Administration will immediately issue a cooperative agreement to the Nevada Department of Transportation so that we can get under way with the final stages of development. And, in fact, the Nevada Attorney General’s Office just last week made a formal legal demand on the Federal Railroad Administration to issue the necessary cooperative agreements to the Nevada Department of Transportation. My understanding is that the states of Pennsylvania, Georgia and Tennessee have experienced similar funding delays,” the letter said.

Cortez Masto’s six-page letter to FRA Administrator Joseph Szabo chronicles the entire history of NDOT’s communications on the maglev project beginning with Congress’ passage of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) on Aug. 10, 2005.

Cortez Masto’s letter, copied to Gibbons, NDOT Director Susan Martinovich and LaHood, lists every delay and every administrative handoff that occurred in the state’s bid to secure $45 million in the 2008 and 2009 fiscal years.

“Because there is presently and continues to be no end in sight for the FRA’s completion of its responsibilities regarding the scope of work and cooperative agreement, NDOT seeks a date certain from you, the FRA administrator, for the FRA’s completion of its responsibilities regarding the scope of work and cooperative agreement,” Cortez Masto said near the close of her letter. “Given the lengthy delay that has occurred, it is fair that the date certain be within two weeks of the date of this letter.”

It was dated April 7.

Nevada officials weren’t the only ones applying pressure to the FRA.

Coates, a maglev supporter, issued a white paper in conjunction with the high-speed rail conference he organized describing how the FRA hasn’t kept up with the technological leaps of the rest of the world and how the rising cost of oil should be a part of the equation when determining what high-speed transportation system is best for the country.

Coates contends that it’s maglev because it runs on electricity and new construction technologies enable the power to be encased in the vehicle guideway, saving money.

The new design, developed by the Max Bogl Group, would make maglev construction costs comparable if not less than existing high-speed rail designs, he said. The Max Bogl Group is a German construction company that has been a part of Germany’s maglev development team.

“The ability to run power lines under and within guideways is a new cost-saving measure,” Coates’ paper says. “It also introduces a higher level of system reliability because the power lines are protected from severe weather events. With (high-speed rail), electrification of the line is accomplished by the installation of catenary (the overhead electrical wiring in an electrical train design), not an inexpensive proposition. In addition, HSR requires the installation of a highly reliable signaling system, something that is completely built into the maglev computerized command and control system.”

Coates concludes that the FRA needs to step up to the 21st century instead of sticking with the existing high-speed rail systems used by Amtrak in the Northeast.

“If maglev is now cheaper to build than HSR, can run in all sorts of inclement weather due to its frictionless operation and has dramatically lower operations and maintenance costs at all speeds, why would a rail operator in the United States pursue anything less?” Coates wrote. “With Amtrak running passenger rail operations in the U.S., we can only expect much less.”

Gibbons concurs.

“Please help me send a message to the U.S. Department of Transportation and the Federal Railroad Administration that it’s time our bureaucracy began moving as fast as these trains,” Gibbons concluded in his letter to the conference.

“After all, President Obama, when running for election in 2008, said he wanted to build the fastest train in the world right here in the United States, not just watch it go by in Shanghai. My state is ready to oblige him. What better place to demonstrate this proven new technology than Las Vegas, where 40 million visitors come each year from all over the world.”

McCarran stats

Passenger traffic for McCarran International Airport showed more of the same for March as it’s had for the first two months of 2010. The end result: Traffic was down 3.5 percent for the first quarter to 9.4 million passengers compared with the first quarter of 2009.

For March, which has been the strongest month of the year for Las Vegas for the past three years, traffic was off 4 percent to 3.5 million people for 2010 compared with March 2009.

Compared with March 2008, this year’s traffic in March was off 15.4 percent.

The story for McCarran continues to be the massive capacity pull-back by US Airways, whose traffic fell 54.5 percent to 208,769 passengers in March. For the quarter, US Airways is down 50.2 percent to 630,326 passengers. The airline has cut about half of its Las Vegas flights to focus more on its hubs in Phoenix, Philadelphia and Charlotte, N.C.

But the airport did get a boost from Delta Air Lines, thanks in part to its merger with Northwest Airlines. The two carriers’ combined efforts showed a 9.7 percent increase in traffic to 373,235 passengers, making Delta the second-busiest operator at McCarran, which is still calculating the two separately to make year-to-year comparisons easier.

No. 4 American Airlines had a 2.8 percent boost in traffic for March to 191,020 passengers. No. 1 Southwest and No. 3 United had moderate declines, 1.9 percent to 1.4 million passengers and 1.8 percent to 247,153, respectively.

Las Vegas-based Allegiant Air pushed past Continental Airlines to take the No. 6 position by passenger volume at the airport.

On the international side, Terminal 2 scheduled arrivals (which include passenger counts from Hawaiian Airlines) had a 2.1 percent increase in March over March 2009 to 169,007 passengers. For the quarter, Terminal 2 passenger arrivals and departures were up 3.6 percent to 462,477.

Take Hawaiian Airlines’ March declines out of the equation and international traffic at Terminal 2 was up 4 percent for the month and 2.6 percent for the quarter.

Strong gains were registered by Canada-based WestJet Airlines (up 9.6 percent to 82,441 passengers), Philippine Airlines (up 10.8 percent to 16,828 passengers) and Virgin Atlantic (up 4.9 percent to 24,856 passengers). British Airways, which hasn’t flown its London-Las Vegas route long enough to have a percentage comparison to last year, flew 15,380 passengers to and from here in March.

US Airways earnings

US Airways is predicting a second-quarter profit after its first-quarter loss shrank to $45 million, the airline announced last week.

In first-quarter earnings for the quarter that ended March 31, the company reported revenue of $2.66 billion and a loss of $45 million, 28 cents a share, compared with revenue of $2.46 billion and a loss of $103 million, 90 cents a share, for the same period a year earlier.

The airline attributes the improvement to increased demand, particularly in business travel, and capacity cuts. US Airways reported corporate travel up 34 percent compared with a year earlier.

The airline estimated that it lost $30 million as a result of cancellations due to East Coast snowstorms in February, but it doesn’t expect a huge loss from airspace closures resulting from the volcanic eruption in Iceland because its trans-Atlantic flights account for only 14 percent of capacity.

Ancillary revenue from baggage fees and the sale of onboard food increased $25 million to $118 million.

US Airways CEO Doug Parker also issued his annual commentary on his compensation package in a letter to employees last week ahead of the company’s filing of its annual proxy statement. Parker told employees that he made $2.6 million — a major expense for the airline, but less than what he was paid last year and below the industry average for airline CEOs.

“Since 2009 was a difficult year for us, my compensation decreased,” Parker said in a letter e-mailed to employees on April 30. “As detailed in the proxy statement, my total compensation for 2009 was 31 percent lower than 2008 and 39 percent lower than 2007 (the last year the company was profitable). It also is much lower than the CEOs of the other network airlines. Of the Big Five carriers that have filed proxy statements so far (all but Delta), my total compensation is by far the lowest of the CEOs. On average, their 2009 compensation was 74 percent higher than mine.”

He added, “While my 2009 compensation was lower than the last two years and well below the CEOs of our peer airlines, it is still a significant expense for our company. With this level of compensation comes significant responsibility and I take that responsibility very seriously.”