BOSTON — Three bidders are vying to take over the Massachusetts Bay Transit Authority’s commuter rail contract, and the winner could create a competitor for Amtrak, a heavily subsidized rail line.
The Associated Press reports that Amtrak has opted not to renew its contract to transport more than 140,000 commuters every day over 402 miles of track.
The winning bidder — three have applied, including two foreign companies — will be announced in December, the MBTA says.
The new contract “is absolutely going to determine Amtrak’s future in this business and how willing other companies are going to be to compete with Amtrak,” Charles D. Chiepo of the Pioneer Institute, a public-policy think tank in Boston, told the Boston Sunday Globe.
The winner faces many challenges. Complaints range from unreliable service to a lack of conductors.
Amtrak has operated the T’s commuter rail since 1986, but faces an uncertain future. Congress has threatened to reduce subsidies, and Amtrak says the terms of the T contract are financially risky.
The loss of the Boston commuter rail leaves open a big opportunity for would-be Amtrak competitors. The T is the nation’s largest contracted rail operation, carrying more passengers than all of Amtrak’s Northeast Corridor combined.
There is a stop in Providence, R.I.
The bidding process could largely determine the future of commuter rail in the nation, said Thomas Till, former executive director of the Amtrak Reform Council, a Congressionally appointed group that studies rail alternatives.
“If (the new contractor) does a good job and demonstrates they can run this thing, then I think it’s
going to give the whole issue of franchising rail operation and maintenance a new look,” Till said.
Amtrak earned $180 million a year to operate the T line. MBTA General Manager Mike Mulhern estimated that the new deal, the value of which has not been released, could pay $1 billion over five years.
Bidders include some railroad giants:
— British rail monolith Stagecoach Group and Herzog Transit Services of St. Joseph, Mo., who formed Bay State Transit Services. Stagecoach operates Britain’s largest rail system. Herzog contracted the commuter rail’s maintenance contract in 1999, only to be embroiled in a political fiasco when it cut its payroll from 550 to 400.
— France’s CGEA Connex, the largest private passenger service in Europe, owned by Paris-based Vivendi International, itself owned by multinational powerhouse Vivendi Universal.
— Guilford Rail Systems of North Billerica, which gave up the T contract in 1986 after labor disputes and complaints by state officials of poor service.
While the Massachusetts Bay Transit Authority owns the commuter trains and tracks, it pays Amtrak $200 million each year for the 1,500 employees who run the trains. The contract ends next summer.
Amtrak was formed in 1971 to relieve freight railroads from the cash-draining responsibility of passenger service and has struggled ever since to meet expectations that it break even or turn a profit.
Amtrak received $826 million last year, including an emergency loan of $100 million over the summer.
The railroad serves more than 500 communities in 46 states over a 22,000-mile route system.