Amtrak contribution to 'Southwest Chief' grant comes with conditions

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Aging ties are evident on tracks near Lamy, N.M., as two Southwest Chiefs pass on May 17, 2012, before route rehabilitation started.
Bob Johnston

WASHINGTON — Amtrak’s promised matching funds toward a grant to maintain the Southwest Chief route comes with conditions that can be determined by the company alone, according to a letter obtained by Trains News Wire. This is a change from Amtrak’s previous approach to the grant process, former Amtrak president Joe Boardman confirms in an interview.

The letter was submitted with the Colfax County, N.M., application for a Transportation Infrastructure Generating Economic Recovery (TIGER) grant last year. In it, Amtrak Executive Vice President and Chief Financial Officer William N. Feidt says the company “strongly supports” the application as a continuation of improvements funded under previous TIGER grants. It also says Amtrak “will offer a $3 million match towards the project costs” if the application is successful.

But the letter then sets out conditions before Amtrak will make its contribution (emphasis added):

— “Before Amtrak will fulfill this contribution, a comprehensive financial plan and accompanying commitments by relevant states and BNSF for the remainder of the infrastructure investments and associated maintenance costs for this route in New Mexico must be completed.”

— “Subject to the development of such project-specific agreements as USDOT and Amtrak may require, we strongly support this application as a potential candidate for funding.”

— “It is Amtrak’s expectation that, prior to the obligation of grant funds for this project, the County of Colfax, N.M., BNSF, and Amtrak will enter into appropriate agreements setting forth our roles and responsibilities with respect to the project, with terms acceptable to Amtrak.”

These qualifiers could allow Amtrak to withhold its $3 million pledge if its conditions are not met.  

Two previously approved Southwest Chief TIGER grants, sponsored by Garden City, Kan., and La Junta, Colo., were accompanied by railroad, state, and community matching pledges. Those grants came with the understanding that those investments would not completely rehabilitate the route, used solely by the Chief, between Hutchinson, Kan., and a junction west of Lamy, N.M. Similarly, the latest grant would not provide all funding to complete work on the route.

Boardman, in a telephone interview with Trains News Wire, said he and Matt Rose, then chairman and CEO of BNSF Railway, agreed that moving forward wasn’t contingent on knowing where all the money would eventually come from.

“It was logical that we would do this in pieces,” Boardman says. “Yes, we couldn’t complete everything with the piece of money [from the first grant], but we couldn’t spend that money on construction right away anyway. We had strong commitments from all of the cities along the way. For me, that was enough to just keep going [with subsequent grants] and now the communities have an expectation that the project will continue.”

Boardman adds, “One of the things I learned working on these kinds of things, is that if you fail to move when you have an opportunity to move, you’re probably going to fail to get this done.”

Colfax County requested more than $17.5 million on its “Southwest Chief Route Stabilization Project” application, and said the non-federal match would be about $9.19 million. That included $3 million each from Amtrak and BNSF Railway, $1 million each from Kansas, Colorado, and New Mexico, pledges from 17 communities in the three states, as well as $10,000 from the American Association of Private Railcar Owners and $1,000 from the Colorado Rail Passengers Association.

The amount and nature of local and corporate support for the match was a significant reason the project was chosen over other applicants competing for $500 million available in 2017 grants.

But the federal award is $16 million, leaving the $26.7 million project more than $1.5 million short [see Southwest Chief wins federal grant,” March 8, 2018, News Wire]. The scope of the project could be proportionally reduced, or it could stay the same with larger matching contributions.

A BNSF Railway source said the company has “asked for a final Federal Railway Administration-approved budget in order to determine how much scope we need to reduce.” The railroad’s most significant contribution is a pledge to maintain the rehabilitated track at 79-mph standards for 20 years.

The project includes tie and rail replacement in all three states, shoring up the roadbed at the Devils Throne fill area west of Lamy, N.M., and signal system improvements in New Mexico. It is structured so that the Kansas, Colorado, and New Mexico matches are contingent on the work being done in their states.

The proposal calculates that Amtrak would save $7.4 million in improved labor efficiency over the next 20 years, part of the $68.5 million of benefits generated by the $26.7 million investment.

NEWSWIRETrains News Wire

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