I'm fairly certain that should Amtrak be broken up, there will be corporations fighting each other for the Northeast corridor section.
rresor Member # 128
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This piece of testimony has been dated by events. Railtrack in the UK was placed in "administration" (bankruptcy) and its shareholders lost nearly their entire investment. Network Rail, a not for profit "public benefit corporation", has replaced Railtrack. The government is still grappling with the capital requirements of the railroad network.
Many of the freight railroad privatizations have been marginally successful. Argentina is one example. It has a rail network about the size of CSX Transportation; CSXT has $5 billion in annual revenues, the Argentinian network less than $500 million, and concessionaires have been unable to make required investments in the fixed plant.
On the other hand, privatization in Mexico has been much more successful. The three large railroads are all posting respectable (if not wonderful) earnings, and investment in new track and equipment continues at fairly high levels.
Now we come to the U.S. No part of Amtrak, not even the Northeast Corridor, makes money if needed capital spending is included. Privatization on the British model might be possible; i.e., concessionaires would be charged track access fees that bring in less money than needed for maintenance and capital renewal, leaving the government to fund the shortfall. This might produce an improvement in service levels, but wouldn't reduce government spending much, if at all.
THe rest of Amtrak's trains operate, with very minor exceptions, on track owned by private railroads. Amtrak already gets track access at discount prices, and still loses money. It's not clear how privatization would improve this situation, and certainly the private freight railroads wouldn't be willing to accept *lower* track access fees, since they're already too low.
I do see a certain logic in giving more decisionmaking authority and funding responsibility to the states -- that's the way public transportation funding is handled -- but then there's the matter of trying to put together multi-state compacts to fund, say, Chicago-Los Angeles service. Past experience suggests that this will be difficult.
The US situation is unique in the world in that the rail system is *already* private, and has been for 175 years. Public involvement is a relatively recent phenomenon here, and came about chiefly because over-regulation almost destroyed the private industry. Some pieces were determined to be worth continuing with public subsidy, and so we have Amtrak and commuter railroads. Given that the private sector could not provide these services profitably 35 years ago, it's worth asking whether anything has changed such that we should revisit the decisions of the 1970s.
Geoff Mayo Member # 153
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Question: Just how much is the Amtrak network subsidised? Say for example, a CHI-LAX fare ($122 on Saturday) - roughly what proportion of that would be paid for by government, ie taxpayer, ie you? I know it's not an exact science, far from it, but just an approximation would do.
I'm just curious to see how much fares would have to rise in order to make Amtrak self-sufficient.
Can Amtrak really make any serious savings any other way? They seem to have bare bones staff as it is, equipment is not in the best of nick, rresor says the track access charges are cheap, so where else could they save money? Less incentive payments to BNSF for running their trains on time would save a few million a year - but at what cost to the service?
Geoff M.
TBlack Member # 181
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I wasn't very impressed with Mr. Poole's grasp of the subject nor his supposed solutions. He spends most of his time detailing the mechanics of how to dismantle AMTRAK and not much time on what would replace it. The costs of running the system are still going to be there regardless of who owns the system and the government is still going to get to pay that bill; and therefore, will still be in the picture. Poole's only suggestion on cost savings is to get out from under existing labor contracts and essentially pay railroad employees less money for the same job. I don't see the congress, especially in an election year, endorsing that plan.
I was also disappointed in his citing of experience at other countries around the world. Most of those don't really apply to the situation in the US; and therefore, are hardly relevant. He doesn't seem to understand the relevance of the long distance trains either politically or economically. In sum, he's not very well informed.
So, at the end of the day, I guess I'm really disappointed that the congress listens to junior varsity players pitch advice when, with a little effort, they could be very well informed.
nekoteku Member # 3089
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I still think the Northeast corrider (Boston to DC) could be made (very) profitable. TBlack does make a good point. Canada understands that the cross-country trains will not make money, but are politically significant, and has allowed VIA to move the cost of those trains to a separate balance sheet.
George Harris Member # 2077
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Notice the date at the top of Poole's paper: March 24, 1998. This thing is almost 5 years old. It contained a lot of poorly reasearched data and even more poorly extrapolated conclusions then, and it has not improved with age.
I love the name choices people make when they have an agenda. "REASON Foundation" (the all caps are theirs) when it is in reality the "Idealogically Driven Foundation" Reason has no home there except to be used to develop a rationale for predetermined conclusions. These are the people that give being politically conservative a bad name.
"Airlines are by-and-large not subsidized by American taxpayers" If you believe that nonsense, then you are open to believe almost anything. Without huge subsidies, the airlines would stop flying today. (No air traffic control system, etc.) What would the New York property takes be on JFK?
Most of the glowing wonders achieved by "privatization" overseas have been accomplished by implementing economies in those systems that have been in place for a long time in the US. Conrail's success was acheved primarily by applying major changes in the laws by which the railroad operated, and the changes were implemented while the railroad was under govenment control. The CN was not a very good example, as the distance traveled from loss to profit was not very far.
There are so many bad results derived from splitting tracks and trains that I do not know where to begin. Just let us say that is one of the main sources of Amtraks unreliability now, is lack of control over the track.
Read the things tha Mr. Gunn has said about Amtrak. He at least has the guts to stnad before congress and say the Emperor has no clothes. Everyone else before him has tended to tell the congress critters the things they wanted to hear based on the understanding that messengers bearing bad news will be shot. Gunn's main point is: The Northeast Corridor is not profitable. No other segment is either. (Although there are studies that indicate the long distance service more than cover their direct costs.)
The relationship between Amtrak and the railroad corporations is unique and will not be duplicated easily, if at all.
If congress is unwilling to appropriate $2 billion for a nationwide rail system, who can rationally believe that they would appropriate the $10 to 20 billion it would take to turn the northeast corridor into a modern high speed infrastructure that serves only 8 states?
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