Privatization of Northeast Corridor proposed

Posted on May 31, 2011

House Transportation Committee leaders outlined a dramatic change in direction to develop true high-speed passenger rail service in the Northeast Corridor (NEC). Their proposal would transfer development of the nation's most congested corridor from Amtrak to private sector competition.

Committee Chairman John L. Mica (R-FL) and Rail Subcommittee Chairman Bill Shuster (R-PA) announced at a Congressional hearing that they are preparing legislation to significantly speed up development of high-speed rail and reduce high taxpayer subsidization of the project.

"We plan introduce legislation to separate the Northeast Corridor from Amtrak; transfer it to a separate entity; and begin a competitive bidding process that would allow for a public-private partnership to design, build, operate, maintain and finance high-speed service. Our plan would do so in a dramatically shorter time, in closer to 10 rather than 30 years, and at a fraction of the $117 billion cost proposed by Amtrak, while creating new jobs," Mica said.

Last week's hearing revealed that despite the tremendous potential of the corridor, Amtrak's ridership in the NEC has actually decreased since 1977. In fact, Amtrak had 10.5 million NEC riders in 2010, down from 10.6 million in 1977.

The 437-mile Northeast Corridor is the only rail corridor owned, almost in its entirety, by Amtrak. The NEC is one of the most valuable transportation assets in the nation and its population density and other existing transportation connections make it the most viable location for successful U.S. high-speed rail.

At the hearing, Mica highlighted an example of profitable private sector rail operations in Great Britain's Virgin Rail, which doubled its ridership in six years, saw employment increase from 2,800 to 3,500, and has returned to the government an annual payment of $244 million in addition to $81 million in company profit. Witnesses provided additional examples of successful public-private partnerships in other countries.

Witnesses also discussed how to tap the vast potential for development in and around high-speed rail stations.


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