French Firm Beats Amtrak in VRE Bid

Price, Service Weighed in Agreement

Virginia Railway Express plans to abandon its 17-year relationship with Amtrak and give an international company its first chance to dabble in the U.S. transportation industry.

On Friday, the VRE Operations Board unanimously voted to award a five-year, $85.7 million contract to Keolis Rail Services America, the U.S. subsidiary of a France-based company. The contract, which has two five-year renewal options, would begin July 1, when Amtrak's contract ends.

Although the board voted for the change, the Northern Virginia and Potomac and Rappahannock Transportation commissions must give final approval Nov. 5.

"The board exercised its prerogative, and I don't agree with the choice, but we will work to make this a smooth transition," said Herbert Harris Jr., chairman of the Brotherhood of Locomotive Engineers and Trainmen, noting that he represents Amtrak and VRE workers.

In an e-mailed statement, Steve Kulm, Amtrak's director of media relations, said: "Amtrak and VRE have had a long and positive working relationship since before the commuter railroad began operations. Amtrak is saddened and disappointed in the recommendation, as our employees have invested a great deal of heart, energy, and effort in providing excellent service to VRE passengers since 1992."

If approved by the commissions next month, it would be Keolis's first U.S. operation. The company runs bus service in Montreal and rail service in Europe.

"We are very flattered that the staff and the board see fit to vote on our behalf and we hope the commissions will select us," said Steve Townsend, executive vice president of the U.S. subsdidiary of Keolis. "We are a team player and we are going to be on VRE's team to make this the best service available."

Mark Roeber, a spokesman for VRE, said that the system's managers have come to believe that a more hands-on approach by senior Amtrak management was warranted. That, however, was not the basis for Friday's decision. The board looked at the four applications submitted, and Keolis's was the strongest, particularly in customer service and its management and operations plan, Roeber said.

Another consideration was price. Amtrak requested a $19.6 million contract for next year and an additional $2.2 million mobilization fee. Keolis sought an $18.5 million contract for next year, which included a $1.7 million mobilization fee.

"This company was willing to accept a little less profit to make this partnership work," Roeber said. "And . . . the plan they have proposed didn't leave anyone with any concerns or doubts. We are confident they will be able to bring to the table every aspect of the customer service experience we expect it to be."

The roughly 80 Amtrak employees operating and maintaining VRE's fleet will be given the chance to stay with VRE and keep their benefits, salaries and retirement plans, Townsend said, adding that if employees choose to leave, vacant spots will probably be filled by local applicants.

According to Amtrak's Web site, an average of 850,000 people a day nationwide rely on commuter rail services connected to Amtrak.

VRE officials said the new operating and maintenance agreement will not change fares, and riders will still be able to pay a $10 "step-up" fee if they want to ride an Amtrak train. If riders experience any change, they said, it will be better customer service.

The only uncertainty, Roeber said, concerns operations in and out of Union Station. Amtrak controls the trains running through the station as well as about a mile of track leading to it.

"The critical question will be how things change at Union Station," Roeber said. "We expect the same level of service, but whether there is any animosity there, you never can tell. We hope it will be a smooth transition and have no impact on our current level of service or our ability to operate."