Rail

Amtrak Reform Council presents breakup plan to Congress

Posted on March 1, 2002

The Amtrak Corporation should be broken up and competition should be introduced to passenger rail, announced the Amtrak Reform Council (ARC) on Feb. 7 in its official recommendations to Congress for the restructuring of the rail system. The council’s action plan calls for the current corporation to be divided into three entities: a federal oversight agency; a government-owned and operated corporation to control passenger rail in the busy, high-maintenance Northeast Corridor stretching from Boston to Washington, D.C.; and an Amtrak train operating company. Additionally, private companies should eventually be allowed to bid on train routes. “The council believes that, as is the case throughout our free-market economy, competition would drive down costs and improve service quality,” the report read. With this restructuring, Amtrak would be able to focus on its core business of running trains without having to maintain the Northeast Corridor and fulfill other government functions. “Amtrak has too much to do, and does little of it well,” said Gil Carmichael, ARC chairman. Amtrak has not turned a profit in its 30-year history. In 1997, Congress gave Amtrak five years to end its dependence on government funding. Under the Amtrak Reform and Accountability Act, Amtrak had to be operationally self-sufficient by December 2002, and the ARC was set up to monitor its progress. A U.S. Department of Transportation inspection found that much of Amtrak’s government funds went to promising new projects like the high-speed Acela Express, while basic maintenance needs went unmet. In response to the ARC report, Amtrak said the council has sidestepped the underlying policy and funding issues that must be determined for national passenger rail, and that these issues must be addressed and defined before further decisions are made. The House Transportation Committee scheduled three hearings on the report, the first of which took place on Feb. 14. Chairman Don Young agreed with the council’s recommendations. “Amtrak’s costs are too high and it runs a system that is designed to win funding support in Congress rather than a system based on sound financial and economic decisions,” he said. However, many Democrats on the committee said they support the Amtrak system. They said the government has failed to invest as much in passenger rail as it does in other modes of transportation.

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