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Rail News: High-Speed Rail

Mica-Shuster privatization proposal would have negative impact on rail service, operating costs and labor, passenger-rail and labor groups say


Yesterday, the House Transportation and Infrastructure Committee held a hearing to listen to testimony regarding a bill proposed by committee chairman John Mica (R-Fla.) and railroad subcommittee chairman Bill Shuster (R-Pa.). Committee ranking Democratic member Nick Rahall (D-W. Va.) and railroad subcommittee ranking member Corrine Brown (D-Fla.) requested the hearing.

Rahall, who opposes the bill, said in a June 22 press release that the Mica/Shuster proposal would invite bids from private firms that wouldn’t be ideally suited to operate rail in the United States.

“There is no criteria contained in the measure as to what qualifications or restrictions might pertain to these entities,” Rahall said. “In fact, under a clear reading of the measure, China could qualify and operate the Northeast Corridor. Now, is that something we want to see happen? I do not think so.”

Stripping Amtrak of its NEC assets also would have a “devastating domino effect on passenger-rail service from coast to coast,” Rahall added.

“Right now, Amtrak serves about 40 percent of the United States’ rural population; all this service would be lost under the draft legislation,” he said.

In a written testimony, National Association of Railroad Passengers President Ross Capon also raised issues with the proposal. Among them: the legislation “raises serious doubts as to whether any competitor to Amtrak could gain access to host railroads’ tracks, and certainly at competitive rates,” he wrote.
“The rail industry has clearly stated its opposition to giving Amtrak’s access rights to other parties. The draft respects the railroads’ concerns, but the likely result would be extraordinarily high costs for a prospective non-Amtrak carrier for either the short corridors or the long-distance routes,” Capon said. “Amtrak has had longstanding agreements with the host railroads that include provisions regarding an allocation of responsibility. Any non-Amtrak operator would have to reach a separate agreement on allocating the responsibility for damages and indemnification with the host freight railroads … assuming the railroad is inclined to enter such an agreement.”

The privatization proposal also would affect union-represented Amtrak employees, Capon said. Three labor-related laws generally apply to all railroads, including Amtrak: the Railroad Retirement Act, Railroad Unemployment Insurance Act and Federal Employers Liability Act.

“If the chairman’s vision of competition for the right to operate intercity routes includes exemption from these laws, then the entire railroad industry should be concerned about the potential impact on the railroad retirement system,” Capon said. “Amtrak accounts for more than 10 percent of railroad industry employees.”

Added Brotherhood of Locomotive Engineers and Trainmen National President Dennis Pierce in a letter to the House:

"Contrary to Representative Mica's assertions, the proposal does not have the support of labor and would be an unmitigated disaster for both railroad workers and the traveling public. It would jeopardize the jobs of 20,000 working men and women currently employed by Amtrak, undermine the Railroad Retirement system that provides pensions for over 525,000 adult annuitants, and imperil rail passenger service nationwide."

Despite assurances from Mica and Shuster that Amtrak employees could transfer to a job with the new private carrier, there’s no guarantee those workers would have a job, said Transportation Trades Department, AFL-CIO President Edward Wytkind.

“The legislation only requires new carriers to provide a hiring preference. It doesn’t afford employees any legal or contractual right to follow their work,” he said. “The only thing the Mica-Shuster proposal guarantees is the chance for Amtrak employees to be considered for employment.”

In addition to jeopardizing jobs, the proposal would “give the green light to Wall Street to cherry-pick those parts of the Amtrak network that can make a profit and let the rest of the system wither,” Wytkind said.

“Our transportation system isn’t just about the wealth it creates for transportation providers — it is about the wealth it creates for the users of our economy, the people and businesses that need transportation to be reliable, safe and efficient,” he said.

Instead of looking at ways to dismantle and privatize Amtrak, the committee should look at ways Amtrak could engage more with the private sector in a way that would benefit both parties. For example, “consideration should be given to a possible connection between the need for redundancy in the power grid and the potential to construct new transmission lines along the Northeast Corridor where local opposition likely would be minimal,” Capon said. “A private-sector consortium could profit from selling power both to the railroad and to utilities along the route.”

As for Amtrak itself? The national intercity passenger railroad still contends it is best suited to operate rail service along the Northeast Corridor, as President and Chief Executive Officer Joseph Boardman said during a June 15 teleconference. He reiterated his point in his testimony yesterday.

“We believe the approach outlined in the Mica/Shuster legislation risks slowing, rather than advancing, the development of high-speed rail on the Northeast Corridor. It will introduce unrealistic time schedules and assumptions; it will fail to provide adequately for transportation safety and security, and it will be more expensive,” he said.

And risky.

“There is no one that understands the facts of the Northeast Corridor better than the women and men of Amtrak — no one,” Boardman said. “The risk associated with applying foreign business models in a different context such as the Northeast Corridor is too high. The potential for service disruptions, safety failures and the failure to understand the environmental protections is too great a risk for us to run.”

The House Transportation and Infrastructure Committee has not yet marked up the bill, but Mica plans to continue moving forward with the legislation, Mica spokesman Justin Harclerode said in an email.

Angela Cotey

Contact Progressive Railroading editorial staff.

More News from 6/23/2011