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9/3/2008



Rail News: Passenger Rail

VRE proposes to hike fares to offset surging fuel, labor costs


This month, Virginia Railway Express (VRE) will hold a series of public hearings to obtain feedback on a proposed fare increase.

The agency plans to raise fares up to 15 percent in January 2009 and an additional 10 percent in June 2009. The reason: Fuel costs have skyrocketed 78 percent during the past fiscal year and are on track to exceed the FY2009 and FY2010 budgets by about $4 million. In addition, VRE is responsible for paying salary increases and back pay under new labor contracts for Amtrak workers who operate the commuter-rail agency's trains. The additional labor expenses are projected to total about $3 million. VRE also has spent about $1 million more annually to maintain its aging locomotive fleet.

The agency has made efforts to reduce its budget deficit, such as by installing auxiliary power at yards to decrease fuel consumption and reducing administrative costs.

The board will vote on the January fare increase in October and the June 2009 increase in December. Until then, VRE officials will work to reduce the FY2010 budget deficit to minimize the fare hike, such as by negotiating reduced access costs at Washington Union Terminal, installing air compressors at yards to reduce locomotive idling, cutting marketing expenses and pursuing alternative revenue sources, the agency said.

If the combination of cost reductions and fare hikes doesn't cover the deficit, VRE officials plan to recommend service cuts.


Contact Progressive Railroading editorial staff.

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