Sunset Limited or Full Speed Ahead? Amtrak Talks to Congress

John D. Macomber

Case | HBS Case Collection | January 2020

Sunset Limited or Full Speed Ahead? Amtrak Talks to Congress

Abstract

Richard Anderson took the helm of Amtrak in 2017 after leading a successful turnaround at Delta Airlines. Amtrak is a US state owned enterprise with about $3.5 bn in annual revenue (and a large operating loss) that is responsible for substantial segments of passenger rail travel across the United States. In 2019, Anderson has been called before Congress to explain and justify his capital spending plans for the rail carrier. He has to consider, among other topics: Rural services that are important but lose money; historically important long distance routes liked by Congress and which also lose money; new routes between growing city to city pairs; climate change and the impact of floods, washouts, and extreme heat; and the possibility of Amtrak participating in attractive new Transit-Oriented Development opportunities. Congress will be presented with options ranging from halving the annual subsidy to doubling it; and whether to focus on maintaining the money losing constituent serving routes or focus on the geographies that have the most opportunity to ease road congestion and stimulate economic growth. Amtrak leadership must also evaluate whether to rebuild lines washed out by hurricanes, how to anticipate future natural events that threaten physical infrastructure, and where to build for tnext decades of service. Where should Anderson invest and where should he divest?

Keywords: railroad; passenger transportation; urbanization; cities; U.S. Congress; Infrastructure; Transition; Transportation; Rail Transportation; Climate Change; Urban Scope; Strategic Planning; Rail Industry; United States;

Language: English

Format: Print

23 pages

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Citation:

Macomber, John D. "Sunset Limited or Full Speed Ahead? Amtrak Talks to Congress." Harvard Business School Case 220-052, January 2020.

Healthy buildings and superior air quality are increasingly important since people now spend so much time indoors. Indoor spaces drive performance and productivity. Commercial real estate landords and investors are responding to the demands of sophisticated tenants and end users by making investment choices around indoor air quality and certification, and related expectations for increased rent or increased occupancy. It's anticipated that these learnings will extend to other situations including offices, schools, hospitals, factories, and homes. This case investigates the tradeoffs in several engineering, marketing, and finance decisions. The setting is a billion dollar premier new office building on Park Avenue in New York City, designed by the eminent architecture firm Foster + Partners. The decision factors in the case include health information from CogFX and 9 Foundations of Healthy Buildings research from the TH Chan Harvard School of Public Health.

Private companies were being turned to for potable water in the world’s megacities due to impacts of climate change including droughts and flooding. Mexico City had endured several water-related crises, with its population suffering from floods, droughts, water shutoffs and disease. Although some access to piped water services was practically universal for Mexico City residents, services were limited or discontinuous. An accommodation that most households had made was in purchasing and installing a water holding tank on the roof or in the ground, with Rotoplás, a Mexican based water product and services provider, enjoying more than 55% of tank market share in Mexico.
Rotoplás had ventured into wastewater treatment and recycling in 2016 with the acquisition of Sytesa, a design, construction, financing, operation, and maintenance business for wastewater management for industry and businesses. Market segments included lighter corporate users like shopping malls and heavy users like food processors or mining companies, and maybe “water as a service” would also end up as the place to be to supplement and assist homeowner associations and even municipal governments. However, services revenue was today a tiny fraction of overall cash flow at Rotoplás. The presence of larger competitors like Suez and Veolia and as well as unfavorable pricing and regulations could potentially slow down future growth. Could Rotoplás services be part of the solution to the water crisis in the nation’s capital? Or was the situation too intractable for even this local champion company to tackle? What pricing and regulatory changes might lead to financial and technical solutions for Mexico City’s water crisis?

Case | HBS Case Collection | January 2019 (Revised December 2019)

CrossBoundary Energy

John Macomber

Almost 500 million people are without electricity in sub-Saharan Africa. Governments and public utilities are challenged to bring generation and distribution to most of them. Considerable promise exists in “off-grid” or “mini-grid” technologies, notably using renewable energy from wind and photovoltaics in areas that have plentiful supplies of both yet limited access to traditional fuels due to other infrastructure constraints. CrossBoundary is an experienced consulting firm and transaction facilitator run by several Harvard and Stanford MBAs, some with recent military experience. In the case, the company needs to analyze and select which of two nations in Africa to enter next (Tanzania or Ghana) based on many aspects of each nation, has to decide which kinds of customers to serve who will compensate it directly for electricity, and whether to partner with developers and contractors or build that capability in-house. Critically, the company has to evaluate as it matures whether it should be a) an aggregator of capital from multiple investing and lending sources, investing in a vendor agnostic manner into multiple energy developers and projects that it identifies from afar; or b) primarily a large scale multi-national competitive energy developer and project delivery company needing to attract capital from many sources, all of whom are selecting between several other developers and investment opportunities. What is their key value added and where can they build a defensible strategy? Which one best accomplishes the goal of matching up money and projects to help illuminate Africa?

Keywords: energy investing; economic development; Renewable Energy; Business Growth and Maturation; Developing Countries and Economies; Project Finance; Emerging Markets; Industry Structures; Infrastructure; Segmentation; Private Equity; Decision Choices and Conditions; Energy Industry; Utilities Industry; Africa; Tanzania; Ghana;

Citation:

Macomber, John. "CrossBoundary Energy." Harvard Business School Case 219-089, January 2019. (Revised December 2019.) View Details

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Sunset Limited or Full Speed Ahead? Amtrak Talks to Congress

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