(The following article by Chris Mondics was posted on the Philadelphia Inquirer website on July 16.)
WASHINGTON — In one of the busiest transportation corridors in the world, Amtrak barely limps along.
Its on-time record remains far below targets – long-distance trains outside the corridor sometimes arrive as much as a day late – while ridership between Washington and Boston is static, and crippling, system-wide shutdowns raise questions about whether years of deferred maintenance are hobbling performance.
And that’s not all. Some long-distance trains lose so much money that just to keep them running, the government pays subsidies of hundreds of dollars per passenger.
“We have failed as a nation to supply additional funding for maintenance of Amtrak for well over the last decade,” New Jersey Gov. Corzine said in frustration after a shutdown May 25 that stranded dozens of rush-hour trains for hours between New York City and Washington. “If you don’t maintain core infrastructure, you have the problems… we are seeing.”
But after years of bureaucratic inertia, there are signs that Congress and the Bush administration may be taking their first tentative steps toward confronting Amtrak’s troubles.
Within a few weeks, the Senate is expected to take up legislation sponsored by Sen. Frank Lautenberg (D., N.J.) that would greatly increase funding for Amtrak to help pay down its staggering $3.5 billion debt and bring track and equipment up to good repair.
At the same time, the Bush administration is considering running local train service through expanded partnerships with state governments in the rapidly growing South and West, while entrepreneurs have come forward with plans to run portions of the system as a for-profit business.
The proposals that Congress and the Bush administration are considering span the ideological spectrum, from vastly increasing the government’s role to opening up opportunities for entrepreneurs to do maintenance on cars and locomotives, provide food service on Amtrak trains, or even run entire lines. Also, Amtrak might do like many private-sector companies and outsource its telephone reservation system to a non-domestic call center, possibly in India.
One sign that longtime opponents may be inching closer to agreement is that even Amtrak’s traditional supporters such as Lautenberg, who believe that rail service is a fundamental obligation of the government, now grant that there may be a role for the private sector to play.
Private companies are already participating in the United Kingdom, Germany and Japan, and on local commuter rail and bus lines around the United States.
Virtually all the players agree that Amtrak’s decades-long drift cannot continue.
“The status quo in effect provides no future for Amtrak,” says David Laney, chairman of the Amtrak board and the transportation commissioner of Texas when Bush was governor there. “We need to make dramatic changes on a number of fronts.”
Robert Puentes, a fellow at the Brookings Institution who focuses on transportation issues, says the tenor of the debate may be changing because voters are complaining about congestion and high gas prices.
“There is a very real and live debate around the nation about the transportation system, and rail is going to play a role in that,” Puentes said. “Amtrak is going to have to play a larger role in that, so you are going to start to see some innovation, probably on the state level first.”
Another reason the Bush administration is more willing to compromise on Amtrak this year, some believe, is that it has been politically weakened by the unpopularity of the war in Iraq and the much criticized response to Hurricane Katrina.
“I think that politically they have figured out that it is not worth the fight and that their goal of getting rid of Amtrak is something they just can’t do,” said Alex Formuzis, spokesman for Lautenberg.
One indication that political support for Amtrak is building on Capitol Hill emerged in November when the Senate passed legislation introduced by Lautenberg and former Senate Majority Leader Trent Lott (R., Miss.) that called for nearly doubling federal subsidies to Amtrak – to $1.9 billion a year. The bill, which passed by a vote of 93-6, was the most dramatic show of support for Amtrak in years.
Although a House-Senate conference committee deleted the amendment from a larger measure a short time later, Lautenberg and Lott are pushing a similar plan that is expected to come up for a vote again toward the end of the month.
The bill would guarantee federal funding for at least six years; currently Amtrak has to lobby and cajole Congress and the White House each year during the budget process. That has greatly complicated planning for multi-year capital improvements. This year is no exception. Amtrak requested $1.6 billion; the White House has included only $900 million in the budget it unveiled this year.
In a nod to free-market advocates, the Lautenberg-Lott bill would permit Amtrak to contract with private rail companies to provide service on its long-distance lines. The measure would also require Amtrak to substantially reduce losses.
The bill gives the Bush administration authority to renegotiate the terms of Amtrak’s $3.5 billion-plus debt and, if it gets favorable terms, assume responsibility to pay it off. It would also permit the executive branch to drop long-distance routes that lose money and fail to meet other performance measures.
Lautenberg attributes some of the congressional support to the 9/11 attacks, during which Amtrak continued to run trains while airlines were shut down, and to Katrina, which he says also reinforced the belief that the nation needs multiple transportation systems for protection against catastrophe.
“We saw that [the 9/11 attacks] could immobilize a whole transportation system in a very short order,” Lautenberg said. “It makes the argument more clear to those who have to vote these appropriations.”
The Bush administration, meantime, is moving forward, however haltingly, with its plan to privatize some Amtrak services. Its latest long-range plan calls for eventually contracting with private operators to provide food service throughout the system. In addition, Laney says Amtrak will likely release a proposal for reconfiguring long-distance national routes this fall that could reduce or eliminate routes that don’t make economic sense.
One route being studied is the Sunset Limited, which runs from Los Angeles to Houston, and often is criticized for heavy per-passenger subsidies. The route might be redirected or shortened, Laney said.
Amtrak management is also moving forward with a plan to divide the bookkeeping of its Northeast Corridor operations into separate departments, one responsible for tracks, bridges, electric power and other infrastructure, and another that would oversee operation of the trains between Washington and Boston. Laney said the division would help Amtrak managers get a better picture of what various departments are spending.
But it might just as easily serve as a prelude to implementing plans first unveiled several years ago to turn the corridor over to the states, which would then solicit bids from private operators to provide service.
Whatever happens, costs for both state governments and local transit agencies, such as SEPTA and NJ Transit, that use Amtrak’s Northeast Corridor system are likely to go up, Laney says. Only a few years ago, the idea of asking strapped state governments to contribute more was deemed a non-starter. But now, Laney points out, many states have fat surpluses.
“States are much more flush with cash than they have been in the past five years,” he said. New Jersey is an exception, as its recent budget battle showed.
Taking a different tack is a group of equity investors who have been trying to convince Laney and members of Congress that they can do a better job providing train service than Amtrak.
The group is headed by a Bala Cynwyd-based financier named Robert Serlin, who has obtained Wall Street backing for a plan to take control of the Northeast Corridor and pour billions into upgrading the infrastructure and increasing its capacity. Under Serlin’s plan, Amtrak would lease the corridor to his group, while still retaining the right to run trains on it. His group, which calls itself Rail Infrastructure Management (RIM), would in turn seek new operators to provide service on the corridor and compete with Amtrak. Serlin says the corridor is underused and that entrepreneurs could turn a profit by running more and better train service.
By greatly improving track and other infrastructure, Serlin claims, travel times on the corridor would be dramatically reduced; average times from Washington to New York would drop from three to two hours, he said. To pull it off, RIM would borrow billions from the federal government, money that would in turn be used to upgrade the infrastructure.
“If you look at [the Northeast Corridor], there is a tremendous market that has yet to be tapped,” Serlin said.
The free-market approach of Serlin and others has generated excitement among some members of Congress. Rep. John Mica (R., Fla.) believes the private sector would invest tens of billions of dollars into the corridor, given the opportunity.
He points to the United Kingdom, which privatized its rail system in the mid-1990s, and where private operators have begun to turn profits on some lines. The system got off to a shaky start, but lately ridership has been soaring, and Mica says the same could happen in the United States.
Yet Serlin’s idea has not been met warmly by Amtrak board members or key Democrats on the hill. Laney says he’s intrigued by the idea – but that Amtrak might be able to do the same thing on its own.
Amtrak’s Busiest Stations in 2005
Station Passengers*
1. New York… 8.5 million
2. Philadelphia… 3.7 million
3. Washington… 3.7 million
4. Chicago … 2.5 million
5. Los Angeles… 1.4 million
6. Newark, N.J… . 1.2 million
7. Baltimore… 980,000
8. Boston… 971,000
9. Sacramento, Calif… . 933,000
10. Trenton… 901,000
11. San Diego… 839,000
12. Wilmington… 779,000
13. Princeton Junction,
N.J… . 765,000
14. Albany-Rensselaer,
N.Y… . 734,000
15. New Haven, Conn… . 654,000
16. Seattle… 605,000
17. BWI Airport… 579,000
18. Irvine, Calif… . 565,000
19. Emeryville, Calif… 500,000
20. Providence, R.I… . 490,000
*Boarding and alightings; Northeast Corridor stations in bold