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7/29/2003



Rail News: Rail Industry Trends

U.S. DOT proposes national passenger-rail system reform bill


On July 28, the Bush Administration submitted to Congress the Passenger Rail Investment Reform Act of 2003 — a bill designed to reform the nation’s passenger-rail system, effectively eliminating Amtrak, and giving more responsibility to states and multi-state authorities.

"Our nation’s current system of intercity passenger rail has failed to deliver on its promise for American travelers," said U.S. Transportation Secretary Norman Mineta in a prepared statement. "Business as usual is a recipe for failure. Our proposed legislation will yield a more financially stable and effective network of intercity passenger rail."

The bill would require states and multi-state compacts to submit capital investment proposals to the U.S. Department of Transportation, which would provide federal matches directly to states. After a transition period, the matches would replace subsidy payments to Amtrak. States could choose their passenger-rail operator.

Over time, Amtrak would transition into three entities: a private passenger-rail company that would operate trains under contract to states and multi-state compacts; a private rail-infrastructure company that would maintain and operate infrastructure on the Northeast Corridor under contract with the federal government; and a government corporation that would retain Amtrak’s current freight-trackage rights, which would be provided to states and multi-state compacts under contract.

Amtrak’s Northeast Corridor property would be transferred to the federal government, which would fund capital backlog and lease the corridor to a Northeast Corridor Compact comprising corridor states.

During the multi-year transition, Amtrak (and later, the newly created passenger-rail service provider company) would be contracted to operate corridor trains, and maintain and upgrade the corridor. At the end of the transition period, the Northeast Corridor Compact would bid to private sector companies and public sector agencies for corridor operation and maintenance contracts.

The legislation is based on other state-run services in the country, U.S. DOT officials said. For example, the Portland-to Seattle Cascades service was developed by the states of Washington and Oregon, which invested more than $170 million to improve track, purchase trains and upgrade stations. The states hired Amtrak to run the service.

Former Amtrak board member Tom Carper (D-Del.) is opposed to the bill, which he said fails to guarantee Amtrak a predictable capital funding source.

"The administration would shift much of the cost of providing intercity passenger service to the states, which are already experiencing record deficits and are in no position to assume additional responsibilities such as this," said Carper in a prepared statement. "Such a proposal could spell the end of Amtrak’s national network, a reduction of passenger train service across our country and a loss of mobility at a time when we need more travel options to protect our national and economic security and help mitigate congestion and reduce pollution."



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