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3/20/2001



Rail News: Amtrak

Amtrak has 'fundamental institutional flaws' — Amtrak Reform Council report


Amtrak Reform Council (ARC) March 20 issued its second annual report on the national passenger railroad’s progress toward operational self-sufficiency. While the details of National Railroad Passenger Corp.’s (Amtrak) financial state likely won’t surprise anyone; the solutions ARC poses might raise some eyebrows, though. Among them: splitting government and commercial functions, separating train operations from infrastructure management and possibly privatizing operations and/or infrastructure.


Last year, the railroad recorded some successes — beginning Acela Express service on the Northeast Corridor and a service guarantee program, and logging ridership and revenue increases. But delays in Acela’s introduction, higher-than-expected operating costs and slower-than-expected Mail and Express growth contributed to Amtrak ending fiscal-year 2000 $100 million shy of its Strategic Business Plan goal.


Nevertheless, ARC asserts there is a groundswell of support for passenger rail. Commuter-, heavy- and light-rail systems throughout the country are attracting passengers — in some cases, faster than they can order additional rail cars in which to accommodate them. And an increasing number of state departments of transportation are discussing or actively planning high-speed rail routes.


Clearly, Amtrak today does not have — and certainly isn’t guaranteed to get — enough capital funding to maintain its current network, let alone build more corridors. But that isn’t Amtrak’s fault, says ARC.


"The council has concluded that Amtrak’s poor performance is due to fundamental institutional flaws, and not to Amtrak’s board of directors, managers or employees," according to the report.


And, because Amtrak in many ways operates like a government entity dependent on federal appropriations, most major management decisions are heavily influenced by political considerations.


ARC therefore proposes separating Amtrak’s commercial and governmental functions. Further, it recommends separating its train operations from infrastructure ownership and maintenance — including the Northeast Corridor. Governmental functions should be carried out by a single entity, comprising Federal Railroad Administration, Department of Transportation Inspector General, and General Accounting Office — and in the process, "insulate train operations and infrastructure maintenance from direct political pressures," according to the report.


To accomplish these goals, the council recommends several possible new business models — creating a "customer-focused commercial enterprise shielded from political interference" and establishing a "government-owned corporation responsible for ownership and maintenance of the Northeast Corridor and other Amtrak-owned infrastructure" — and structural options ranging from transferring NEC infrastructure responsibility to NEC states to separately privatizing operations and infrastructure.


Finally, the report states that Amtrak requires $80 billion to $100 billion over the next 20 to 25 years to create high-speed corridors and maintain the current network. But that "funding of this magnitude should not be under the control of Amtrak as it exists today."


The council plans to hold formal hearings regarding its recommendations and, subject to available funding, would initiate further studies on options for restructuring Amtrak.


Contact Progressive Railroading editorial staff.

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