_____________________________________________________________________________________________

COURT CASE TO CONTINUE IN FEDERAL COURT IN MARCH....ALL TICKETS REFUNDED BY IOWA PACIFIC

ALL EQUIPMENT REMOVED FROM UNION STATION DENVER.

Rolling Stock & Locomotives relocated to San Louis & Rio Grande Railway in Alamosa, Colorado.

_________________________________________________________________________________________________________

FEDERAL COURT DECLINES TO REQUIRE AMTRAK TO PROVIDE STAFF FOR OPERATION OF SKI TRAIN
Ski train season indefinite, full refunds available for passengers

DENVER, Dec. 23, 2009 – U.S. Federal District Court Judge Robert Blackburn declined to issue a temporary injunction requiring Amtrak to provide crews to operate the Rio Grande Scenic ski train, which Iowa Pacific Holdings, LLC (IPH) had requested in a motion filed with the Court. The next date that both parties would return to court is Jan. 6, at which time further hearings will be scheduled, which means the start of the ski train’s season is uncertain.

“We appreciate the due-diligence that Judge Blackburn afforded Iowa Pacific Holdings to share our story and provide information given the forced circumstances,” said Dan Marko, vice president of administration for IPH. “We recognize that this leaves the operations of the ski train as indefinite, and will be focused on presenting a comprehensive case in January to clear these obstacles to future operation.”

Due to stated legal matters which are causing delays, the Rio Grande ski train will not run as planned, until the court rules again on the case. All customers holding reservations can receive a full refund. Customers can contact us at skitrainservice@iowapacific.com This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or call 877-726-RAIL to make arrangements. Please have your confirmation number and credit card available. Information is also available at riograndeskitrain.com.

“We remain hopeful that the Rio Grande ski train will operate in 2010,” said Julie White, general manager of the Rio Grande ski train. “We share the disappointment felt by our customers, and our priority now is on helping them with information and refunds.”

Due to a last-minute change in contract liability and insurance requirements imposed by Amtrak, IPH filed a multi-million dollar lawsuit on Dec. 21 against Amtrak, as well as an injunction to operate the train on schedule beginning Dec. 27 from Denver’s Union Station. More than 13,000 passengers have already made reservations for the December-March season.

IPH has met all safety and regulatory requirements set by the Federal Railroad Administration and has adhered to all inspections, training and compliance.

About Iowa Pacific Holdings, LLC

Iowa Pacific operates excursion passenger services on four railroads in the US and two in the UK. Total ridership for 2009 was 132,000 which is up 29% from 2008. Iowa Pacific receives no subsidy for passenger operations, and its passenger business is profitable.
------------------------------------
Ski Train stalls as judge sides with Amtrak
By Jeffrey Leib
The Denver Post

Posted: 12/23/2009 05:00:41 PM MST
Updated: 12/23/2009 07:08:22 PM MST

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Aug 5:
Colorado Ski Train revival gathers steam
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Apr 21:
Ski Train sold, to leave ColoradoA U.S. District Court judge today declined to issue a temporary restraining order that would have forced Amtrak to operate the Rio Grande Scenic Ski Train between Denver and Winter Park.

The excursion train was to begin Sunday and Iowa Pacific Holdings, the company trying to keep the Ski Train tradition going for the 70th consecutive year, said more than 13,000 passengers already had made train reservations for the upcoming season.

Today's ruling means the Ski Train will not start operating this weekend. Iowa Pacific is posting information on refunds on its website, riograndeskitrain.com.

The company requested that District Court Judge Robert Blackburn issue a temporary restraining order and injunction requiring Amtrak to honor what the excursion railroad company claimed was an implicit agreement the parties had reached.

But late this afternoon, Blackburn said in an order that Iowa Pacific had not prevailed on its breach of contract claim and had not demonstrated that it would "suffer irreparable injury" if the court did not issue the restraining order against Amtrak.

"The record contains little if any evidence that IPH carries a substantial reputation in the market for the ski train's services," Blackburn wrote.

He said the parties can contact him on Jan. 6 to take up Iowa Pacific's request for a preliminary injunction.

On Tuesday, Iowa Pacific said Amtrak reneged at the 11th hour on a tentative deal the parties had for Amtrak to provide train crews to operate the excursion railroad's locomotives and passenger cars for a revived Ski Train.

"We were forced to go to Amtrak because Amtrak controls passenger traffic in the U.S.," Iowa Pacific attorney Robert Smeltzer told Blackburn during a two-hour hearing this morning.

Smeltzer added that Iowa Pacific has spent about $800,000 on its bid to run the Ski Train this season.

Amtrak attorney Edwin Aro argued that the contract never was finalized and Amtrak should not be forced to operate the Ski Train service.

"Standing here two days before Christmas, I feel like the Grinch, trying to take the Ski Train away," Aro said.

But he said Iowa Pacific had not agreed to insurance and indemnification terms required by Amtrak and Iowa Pacific's railcars had not yet passed a safety certification required by the Federal Railroad Administration.

"Going forward, it continues to be Amtrak's position that the train cannot be operated until the various safety issues flagged by the Federal Railroad Administration have been resolved and Amtrak's liability and operating requirements have been met," Amtrak said in a statement released this evening. "It is the right result not to force the ski train into operation with so many unresolved operational, financial, and safety issues."

Testimony before the court focused on several key elements:

* Did Iowa Pacific and Amtrak effectively have most terms of a contract in place for operation of the Ski Train and did Amtrak renege on that agreement?

* Was Amtrak's recent requirement that Iowa Pacific purchase $200 million in insurance coverage a last-minute artifice designed to kill the deal or does it fairly reflect the Ski Train's status as a commuter railroad — as Amtrak contends — and not a scenic or excursion railroad?

In October, Amtrak had led Iowa Pacific to believe its cost for insurance would be $2 million, the cost compatible with a rail charter operation, Smeltzer said. This month, Amtrak's insurance requirement suddenly ballooned to $200 million, he added.

In arguing that no contract was in place, Aro said a number of issues related to operation of the Ski Train still were unresolved, only days before it was scheduled to run. They included the agreement on insurance and the need for Iowa Pacific's trains to meet safety regulations.

Iowa Pacific's railcars were inspected on Monday, six days before Ski Train service was to begin, "and it fails that inspection miserably," Aro told the judge.

On Iowa Pacific's behalf, Smeltzer said Amtrak's arguments on safety were "interposed to alarm the public" and "inflame the situation."

"There is no risk of any train running on that line that has not passed a safety inspection," he said.

Iowa Pacific stepped in to try to run the Ski Train after the Anschutz Co. said earlier this year it would not continue to operate the seasonal service.

The Anschutz firm blamed high liability insurance costs as one of the reasons it was abandoning the Ski Train.

Jeffrey Leib: 303-954-1645 or jleib@denverpost.com

Read more: http://www.denverpost.com/news/ci_14058858?source=rss#ixzz0aaAuoR7x

Edited 1 time(s). Last edit at 12/23/09 21:47 by PirateRail.

Any reason the host freight railroad won't operate this train for the owner??

There go my chances of seeing it run over the mountains in early Jan.

Alex Gillman
Hanford, CA

It's interesting to note that the train's capacity was going to be 2,000 (per Denver Post interview/article http://www.denverpost.com/news/ci_13796183 ) and they were going to run for 43 days... so that is 86,000 seats.

If they had 13,000 reservations on the books that's only 15% of the total. If I was a supplier/vendor I would be concerned about getting paid.

I doubt the Ski Train has historically done much in the way of long term reservations, so that number would not be particularly concerning to me. Having ridden it a few times, every time it was a last minute decision and I bought tickets no more than 48 hours in advance. I would suspect that many of the regular patrons that use it as transportation to Winter Park to avoid the awful traffic on I-70 heading for the slopes do the same. Ask them what weekend in February they're going to go skiing, and they will probably say "I'll tell you in February." This is not like a long distance train where people know they're going on vacation in March and are already buying tickets, but rather a service of convenience for local residents, for the most part.

Mike Derrick
http://www.shortlinesusa.com

That's an interesting summary of the issues in front of the court.

If the FRA hasn't approved the cars presented for the service, the Ski Train wouldn't be able to begin anyway. But, the insurance issue looks like a huge hurdle to overcome.

Bottom line...

If it is a commuter train, FRA CFR 49 Section 238 applies, the cars don't comply, and $200m liability is required.

If it is an excursion train, FRA CFR 49 Section 238 does not apply, cars are good to go, $2m liability required.

History repeats itself: from the stillborn C&O Chessie, all dressed up and ready to go - and nowhere to go -
except the cars were then scattered all over North America and Australia.

Interesting to note that Ansco was quoted as citing the high cost of liability insurance as a main reason for exiting the business. Also, IIRC, IP was touting that they had $100M insurance available. So I don't know where this thing about $200M vs $2M is coming from... Seems like the real issue might be $200M vs $100M, which would mean they might be a lot closer to agreement...

The FRA requirements on the cars are a different matter. If they don't comply in material ways it's unlikely that they'll be fixed in time.

"Iowa Pacific's railcars were inspected on Monday, six days before Ski Train service was to begin, "and it fails that inspection miserably," Aro told the judge. "

Interesting discussion, about commuter train vs. excursion train, and the different standards. Commuter cars are high occupancy, do they require more emergency exits?

What kind of cars are on this train? If former long-distance cars, why would commuter standards apply if they can't hold the volume of commuters?

B&OB

CS890 Wrote:
-------------------------------------------------------
> Bottom line...
>
> If it is a commuter train, FRA CFR 49 Section 238
> applies, the cars don't comply, and $200m
> liability is required.
>
> If it is an excursion train, FRA CFR 49 Section
> 238 does not apply, cars are good to go, $2m
> liability required.

Building on what CS890 posted:

This is all a case of semantics. Is this fish or fowl? The link I have included below is for the Code of Federal Regulations 49, Section 238.

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=8b38698abfb91b0b06a0d398312f495d&rgn=div5&view=text&node=49:4.1.1.1.31&idno=49#49:4.1.1.1.31.1.125.3

Check out "Applicability" 238.3. Read c(3) under exceptions.

Then go to "Definitions" 238.5. The definition of the private car is:

"Private car means rail rolling equipment that is used only for excursion, recreational, or private transportation purposes. A private car is not a passenger car."

Private cars are relieved of many of the requirements that passenger cars are required to meet. Their historic nature and different safety requirements deemed necessary in the teens, 20's, 30's, 40's, 50's, etc., make them impossible to meet the current standards or would require extension modifications, in some cases. They are not used in daily service so obviously a lot of thought was given (or owners did extensive lobbying) to allow their operation on the national rail system without the expense of making the car current with "modern" standards. Or to destroy the historical design and/or configuration of the car.

SL&RG full dome "Nenana" was sent to Chicago and fully inspected by Amtrak to certify it as a compliant "private car". This happened 5 or 6 weeks ago. Even though the five cars cars sent from Minneapolis which are to be used in the actual train (Dome 53, lounge 3101 and three former Clocker coaches) were already Amtrak compliant, a certified Amtrak inspector traveled to Minneapolis to inspect the cars. They passed the inspection with flying colors. All of the cars have also operated without any exception on Amtrak scheduled trains within the last six weeks. So why did the Amtrak lawyer state (according to one media source) that the cars failed their inspection "miserably"? It apparently is based on what type of train the Ski Train is consided to be.

Was the "status" of the former CN Tempo equipment operated by the Ski Train over the last 15-20 years going to change to make it necessary to be Part 238 compliant? Did it meet 238 standards? Is this one of the reasons that the cars were sold and departed Colorado? More importantly, what was the line-time of the knowledge/requirements of the 238 requirements by IPH, Amtrak, UP and the FRA? The wholesale trashing of Amtrak in the recently links by certain participants on this board is premature. There are a number of questions that need to be answered before any "blame" is place on any of the parties involved. The commuter train or excursion train definition and when and who is imposing the definition should indicate when and where the impasse started. If the status changed well into the negotiations, then it would appear that some party doesn't want the train to operate. If the 238 status as a commuter train was discuss from the beginning and someone thought that the rules could be changed or did not investigate the implications, then IPH failed in their due diligence. In any case, the whole situation only hurts everyone involved.

This will be interesting and hopefully it will have a happy ending.

Silver Sky

I THINK they negotiated in good faith and had an understanding and then someone at Amtrak got a hold of it and said - no. Like I commented before I think Amtrak could make it work but now they have dug in opposed to it.

As far as Denver area is concerned I think Amtrak and UP will look bad unless something really comes out to shift the blame.

Maybe the Federal government should examine this whole liability issue and look for some solutions(Liability limits, national insurance pool). Might get a lot more people on the rails than some pie in the sky HSR projects.

Bob

If they put all that work into getting everything ready and didn't have a set contract with Amtrak.... Well I thinks its there own fault.. I am by no means a lawyer but I am a small business owner. I would never act on any job before a contact was done. I want the Ski Train to work. I was even thinking about riding it on my trip to Denver next month. I hate to ski.. But I would go just to ride the train..lol I just find it crazy they would do all this work before there was something set in stone. I guess they must have been in a time crunch to get it all done.

James..

robj Wrote:
-------------------------------------------------------
> I THINK they negotiated in good faith and had an
> understanding and then someone at Amtrak got a
> hold of it and said - no. Like I commented before
> I think Amtrak could make it work but now they
> have dug in opposed to it.
>
> As far as Denver area is concerned I think Amtrak
> and UP will look bad unless something really comes
> out to shift the blame.
>
> Maybe the Federal government should examine this
> whole liability issue and look for some
> solutions(Liability limits, national insurance
> pool). Might get a lot more people on the rails
> than some pie in the sky HSR projects.
>
> Bob

Bob,

What makes you "THINK" that is the way it happened? Do you have inside information that you would like to share? Thinking and knowing are two different things. Your bias towards Amtrak is way too obvious. Let the facts come out, if they ever do, and then assess blame, if you have to.

Silver Sky

car 53 was sold by NC DOT because of the lack of egress on the lower level among some other factors probably. 53 is Amtrak compliant for excursions, but a scheduled ski train, maybe viewed different. Don't know if the other cars have any issue like that, I am not aware of any. The skytops were sidelined in Canada over this issue, and cedar rapids? would probably have issues for this service.

getting to Winter Park....it is usually quite easy in contrast heading UP I70 on the weekends, so the hard core WP skiers, know this and don't really ride the train. The train really shines to those people on the Eisenhower tunnel approach, stuck in traffic. Skiers to Winter park just deal with bad I70 traffic from Demount to the twin tunnels, and Floyd Hill usually not that bad (till it snows) and even on sat in Jan usually you can go from Mary Jane to Denver under 90 minutes.

From the CFR citation above ...

"Tourist, scenic, historic, or excursion operations means railroad operations that carry passengers, often using antiquated equipment, <b>with the conveyance of the passengers to a particular destination not being the principal purpose</b>. Train movements of new passenger equipment for demonstration purposes are not tourist, scenic, historic, or excursion operations."

IMHO the ski train is toast, at least with the equipment at hand. It amounts to a scheduled service to a specific location and I have a hard time seeing how it fits the "... historic or excursion" exemption. Its not like Amtrak is being a bunch of jerks -- they're just doing what the CFR tells them they have to do.

The rest of the CFR means that only modern, fully compliant cars can be used. Some of the cars may be compliant but the superdomes are not. For example, they don't have two doors, one on each side of the car. (They have no passenger doors at all, relying on adjacent cars for boarding and deboarding). They are completely compliant for excursion service. But the Ski train is not an excursion.

We'll never know where the fly-by happened, but seems like the ski train has been thinking 'excursion' and Amtrak has been thinking 'scheduled service'.

Folks at work get annoyed with me when I "over-communicate", but that's how you avoid meltdowns like this.

Edited 1 time(s). Last edit at 12/24/09 12:33 by dcautley.

I don't believe the CFR requires passenger side doors or a vestibule. It does stipulate emergency escape windows, and rescue access windows, which may be one and the same, or different. Amtrak 10031 does not have passenger side doors, and never did. Passengers enter through an adjacent car.

dcautley Wrote:
-------------------------------------------------------

> IMHO the ski train is toast, at least with the
> equipment at hand. It amounts to a scheduled
> service to a specific location and I have a hard
> time seeing how it fits the "... historic or
> excursion" exemption...

Strasburg, Durango & Silverton, Royal Gorge... They don't provide scheduled service to a specific location?

dcautley Wrote:
-------------------------------------------------------
> From the CFR citation above ...
>
> "Tourist, scenic, historic, or excursion
> operations means railroad operations that carry
> passengers, often using antiquated equipment, with
> the conveyance of the passengers to a particular
> destination not being the principal purpose. Train
> movements of new passenger equipment for
> demonstration purposes are not tourist, scenic,
> historic, or excursion operations."
>
> IMHO the ski train is toast, at least with the
> equipment at hand. It amounts to a scheduled
> service to a specific location and I have a hard
> time seeing how it fits the "... historic or
> excursion" exemption. Its not like Amtrak is being
> a bunch of jerks -- they're just doing what the
> CFR tells them they have to do.
>
> The rest of the CFR means that only modern, fully
> compliant cars can be used. Some of the cars may
> be compliant but the superdomes are not. For
> example, they don't have two doors, one on each
> side of the car. (They have no passenger doors at
> all, relying on adjacent cars for boarding and
> deboarding). They are completely compliant for
> excursion service. But the Ski train is not an
> excursion.
>
> We'll never know where the fly-by happened, but
> seems like the ski train has been thinking
> 'excursion' and Amtrak has been thinking
> 'scheduled service'.
>
> Folks at work get annoyed with me when I
> "over-communicate", but that's how you avoid
> meltdowns like this.

Show me an Amtrak Heritage diner that has vestibule doors. They are no different from the domes and they continue to run in service everyday.

Silver Sky

Derecho Wrote:
-------------------------------------------------------
> dcautley Wrote:
> --------------------------------------------------
> -----
>
> > IMHO the ski train is toast, at least with the
> > equipment at hand. It amounts to a scheduled
> > service to a specific location and I have a
> hard
> > time seeing how it fits the "... historic or
> > excursion" exemption...
>
> Strasburg, Durango & Silverton, Royal Gorge...
> They don't provide scheduled service to a specific
> location?

The Royal Gorge doesn't. It simply runs from Canon City up to Parkdale and back. Nobody takes it just one way so it's a sightseeing and a dinner train. Strasburg and Durango & Silverton would come under the historic heading.

What it all amounts to is "intent". What is the intent of the operation? Is the operation's primary intent to provide a choo-choo train ride or to move people from one place to another? Since the operation's name is "Ski Train", that plainly indicates that the intent is to deliver people to a ski area and return them at a later time. The fact that some will ride the train purely for scenery or the chance to experience "historic" equipment doesn't alter the operation's primary purpose which is all the government cares about. And it's not just the FRA regulations either. FAA regulations use the concept of intent when determining if a flight is being flown under private, charter or common carrier rules.