RUTLAND, Vt. — In a chilly corner of Rutland, Vermont, America’s passenger rail network is suffering its latest blow, according to FT.com.
The town’s three-year-old station is unlocked by a caretaker for just two hours a day. The one-man ticket office has closed to save costs. Although Americans may be fearful of air travel, the number of passengers using Rutland station has fallen by 10 per cent. Amtrak is wondering whether the declining passenger numbers justify installing an electronic ticket machine.
The cuts at Rutland, like those at many small train stations across the US, point to the wider problems facing Amtrak, the country’s government-owned intercity passenger rail operator.
The most immediate question facing Amtrak is whether it will have enough money to operate next year or be forced to drop its nationwide services. The broader issue is whether passenger rail travel, a romantic feature of America’s past, has a future in the US.
Amtrak was kept alive with $200m of emergency federal funding this year as it struggled through a financial crisis that almost closed America’s passenger rail system. This came after the company had mortgaged assets such as New York’s Penn station to keep going.
“In one sense the last six months have been therapeutic. The truth is out,” says David Gunn, Amtrak president since May. “The emperor has no clothes. The emperor is not going to be self-sufficient.”
Amtrak has requested $1.2bn for its annual subsidy from the federal government to keep its service going over the next year, more than double what it received last year and what the Bush administration proposed.
Congress was unable to make up its mind on the subsidy before the mid-term elections. The decision over Amtrak’s funding is due to be settled after Congress convenes in January but the signals that have come from Washington in recent months are not good.
The administration is opposed to substantial handouts to the company. It wants Amtrak to reform and this year proposed ending the company’s national monopoly.
Amtrak’s critics say passenger rail, particularly long distance travel, does not work in its current form in a country the size of the US.
It is “still the most expensive way” of moving people says Ronald Utt, a senior research fellow at conservative think-tank The Heritage Foundation. “The US just does not have the densities [of population] that you have in Europe or Japan where you have an enormous number of people in a relatively confined space.”
He believes Amtrak’s services should be put out to tender.
“Amtrak only carries six-tenths of 1 per cent of intercity passengers but gets about 1 per cent of federal transport money, so it has more than its fair share. It pays nothing in to the government but what it receives is in excess of its market share. We are still trying to operate it as a socialist monopoly on the cheap,” says Mr Utt.
But supporters of Amtrak, which was designed to be a for-profit corporation, say it has to operate in an unrealistic funding framework. Five years ago Congress demanded the company, which has never made a profit, become self-sufficient by this month. Supporters say a lack of capital investment has dogged Amtrak since it was set up in 1971.
They say the company has been unfairly treated in the federal budget compared with the tens of billions of dollars given to highway and airline travel and the $5bn government bailout of the airline industry after September 11.
Mr Gunn says no passenger rail service in the world runs without some government subsidies. And he questions whether introducing competition is feasible.
“If they are serious [about competition] would somebody give me the plan? How are they going to do it?”
He says the company has stabilised, and seeking more state support for train services and phasing out unprofitable parts are among his priorities.
The National Association of Railroad Passengers says rail travel is a vital part of a balanced transport network. It reduces US reliance on foreign oil, serves as an environmentally friendly form of transport and eases road congestion.
Ross Capon, its executive director, says: “If Amtrak shuts down there are a lot of people . . . who would think the government had lost its mind because the nation’s need for balanced transportation is greater now than it was two years ago and it is going to continue to increase over the coming years.”
For Rutland’s rail passengers, Amtrak and its supporters and opponents, clarity on the future of the company and passenger rail needs to come soon.
“The issues have never been so stark,” says Mr Gunn. “The alternatives have never been as clearly drawn as they are now.”