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1/7/2002



Rail News: Passenger Rail

Reform Council to weed nine reorganization options to three at week's end


Amtrak Reform Council continues to be busy following its November declaration that members didn’t believe Amtrak could reach operational self-sufficiency by its Congressionally mandated December 2002 deadline. ARC plans to meet Jan. 11 to narrow to three the number of options it will consider presenting to Congress by Feb. 7.



When it met Dec. 14, ARC members identified and developed nine possible scenarios. One would include consolidating all governmental authorities into the successor corporation of National Railroad Passenger Corp. (NRPC), a wholly owned government corporation responsible for administration, planning and funding. An operating company and infrastructure company would be created as subsidiaries. Another subsidiary would be created to own and ultimately devolve real property assets other than the Northeast Corridor.



A second scenario would be to allow Amtrak to continue operating all corridor trains. Long-distance trains would be franchised to Amtrak or another entity through competitive bid. A separate government entity would develop, maintain and manage all passenger rail infrastructure. The three entities would be overseen by a United States Railway Association (USRA) similar to the entity that created, monitored and funded Conrail.



Another option would be to restructure the existing NRPC into a role similar to Conrail’s USRA; staff would be about 50 employees. Northeast Corridor infrastructure and operations would be pulled out into a separate corporation with the intent of spinning off the infrastructure component into a separate subsidiary. States or regional authorities would take over operations and assets of other developed corridors. A "New Amtrak," created from existing Amtrak’s residuals, would own residual properties unless transferred to states assuming corridor operating control.



In a fourth scenario, train operations would be conducted by regionally organized operating companies. Long-haul operations could be integrated into those companies or organized separately. A separate NRPC subsidiary would own NEC property infrastructure.



Similarly, a fifth option would have NRPC provide oversight for corridor-based operations governed by state or regional authorities, and long-haul operations operated under competitive contracts issued by NRPC. A separate federal corporation or regional interstate compact would own NEC infrastructure.



A five-year transition plan would create a USRA-type entity to take the place of Amtrak’s governance. Existing national train operations would continue in the existing structure during a transitional period. At the period’s conclusion, NRPC would configure which corridors or routes would go out to bid. NRPC subsidiaries would act as fall-back operators if no competitive bids were proffered. NRPC would establish a separate subsidiary to hold NEC infrastructure title as well as other real property ownership. Following the transition period, that company and NRPC would sell or transfer unneeded NEC assets or acquire needed assets from states, or sell or transfer all assets outside NEC to states, localities or other entities. NRPC also would have the authority to contract out NEC management and/or ownership to private companies, states or a regional authority.



A similar plan would privatize Amtrak over a five-year period in three phases.



Under another scenario, ARC would state its intent for privatization from the start, separating operations and infrastructure. Amtrak’s federal governmental authorities would be consolidated into NRPC; a separate private sector train operating company would be created exclusive of Amtrak’s governmental functions and real property infrastructure. A separate company would own NEC. Corridors and regional authorities would have the option of managing their own services or contracting out for them.



A final option would be to privatize through bids Amtrak’s rights and NEC services. A new regulatory body would be set up to oversee privatized NEC operations. Outside NEC, states would contract for services directly or though interstate compacts. Long-haul service — which would be defined as a leisure market — would be operated only to the extent that the private sector could do so profitably. Priority over freight trains would be repealed; passenger trains would pay their track access costs and access would be negotiable with no statutory compulsion. In the interim, a liquidation corporation would be set up and managed by a trustee in the same manner as if Amtrak had filed for bankruptcy.


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