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11/16/2005



Rail News: Rail Industry Trends

House subcommittee holds hearing on Amtrak's state of affairs


Yesterday, the House Transportation and Infrastructure Committee’s Subcommittee on Railroads held a hearing entitled “Current Governance Issues at Amtrak.” Representatives from Amtrak, Congress, the U.S. Department of Transportation (USDOT), rail industry associations and the private sector provided testimony on ways Amtrak can improve its current and long-term management strategy.

USDOT Inspector General Kenneth Mead described problems Amtrak must overcome to improve performance.

“A new model is needed that addresses matters such as who decides on the type and amount of service, who provides service, and who selects the providers,” he said. “Refocusing on these issues will promote greater efficiency, reliability and cost-effectiveness in the delivery of passenger-rail transportation.”

National Railroad Construction and Maintenance Association President Ray Chambers said states need more decision-making authority and future rail transportation grants should be given directly to states rather than Amtrak, enabling states to choose their service provider.

Rail Infrastructure Management L.L.C. President Robert Serlin proposed a plan under which Amtrak would continue to manage train operations and a private-sector management organization would oversee infrastructure.

“[The plan] offers a solution to both the funding challenge and the looming requirement to address the ever-increasing deferred maintenance liability,” he said.

Meanwhile, former Amtrak President and chairman elect of Railway Service Corp. (RSC) Paul Reistrup outlined a plan that proposes creating a public-sector joint venture with the national passenger railroad. Amtrak Railroad Operations (ARRO) would be jointly owned by RSC and Amtrak, and to serve as a new operating company responsible only for “above the rail” costs.

The new company would “allow ARRO to focus on developing commercially viable passenger train operations while [Amtrak] continues with its responsibilities for infrastructure, facilities and other assets,” said Reistrup.

Also during the hearing, several congressmen expressed concern over Amtrak’s recent decisions to create a Northeast Corridor subsidiary and fire President and Chief Executive Officer David Gunn.

The administration’s goal is to dismantle Amtrak and the board fired Gunn because he wouldn't agree with “bad decisions the board was making,” said Rep. Jerrold Nadler (D-N.Y.).

Rep. Robert Menendez (D-N.J.), who's concerned about the board’s intentions for the Northeast Corridor, said he fears the board will sell off the corridor to a group of investors that will use it to obtain tax breaks from depreciation.



Contact Progressive Railroading editorial staff.

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