I really appreciated the fine coverage by Kit Miniclier. I’d like to add a couple of points. Please note in his article, the single quotation marks around the phrase "obscene profits" indicating the tongue-in-cheek nature of this remark. I explained to Kit that the previous three operators AND the RGRPC labored hard under a lease arrangement that was NOT financially viable. I told him that historically the operator had been responsible for a number of cost areas that, although termed as “maintenance”, were actually capital expenses, which realistically couldn’t be borne by the operator.
I further explained that under the lease agreements, previous operators, including the RGRPC, had to cover all these expenses and shoulder 100% of the risk, all for the privilege of being able to sit back and reap obscene profits. I added that I was obviously being facetious about the profits. We both laughed. I stated that no operator under that arrangement has ever likely gotten a decent return on its investment and that probably some have gone nearly broke.
I said that the current management contract model offers a more rational approach to contracted operations and financing.
A second point I wish to make is that my remark in the article about 50,000 - 60,000 riders/year achieving self-sufficiency is accurate as far as it goes. What was left out was that I had explained that these volumes could probably generate enough revenue for covering OPERATIONAL expenses, though not capital expenses. In fact, this is the prime directive coming from the NM Legislative Finance Committee (LFC). It wants to provide temporary operating subsidies to get us quickly to a point where the railroad can generate sufficient income to cover its own operating expenses. The LFC wants to then limit its support to covering capital items, e.g. major trackwork, locomotive rebuilds, etc. LFC members stated this clearly in Chama last August and the LFC staff is following this policy. The matter of operational self-sufficiency is simply not debatable. The C&TS has been told that it must become self-sufficient from an operating standpoint.
Kit and I spoke for almost an hour covering many complex issues, each one having the potential for missing a fact here or a comment there that that might alter the meaning slightly or give rise to inferences other than what was intended. He wrote an excellent article that was remarkably on target, given the volume of information he heard from me and later from Richard Gomez. If I were in his shoes I don't think I could have gotten it nearly as accurate as he did. Kit Miniclier is a good reporter and a solid supporter of the RR. I look forward to reading more of his work on the railroad.
Brian Shoup
