(The Omaha World-Herald posted the following story by Steve Jordan on its website on April 19.)
SALT LAKE CITY, Utah — Dick Davidson, Union Pacific’s chief executive, criticized Amtrak this week as a “government-subsidized transportation system that nobody wants to use.”
Davidson said government subsidies for passengers amount to $250 to $300 each. “You could buy them a plane ticket and save money,” Davidson said. “Long-distance passenger trains make no sense.”
But Ross Capon, head of a group that supports passenger trains, said Davidson’s railroad benefits from such subsidies.
Amtrak’s use of U.P. tracks costs Union Pacific $60 million to $70 million a year, Davidson said, because Amtrak pays lower rates than regular commercial customers.
“It’s purely a political decision,” Davidson said of Amtrak subsidies, in an interview the day before the company’s annual meeting Friday in Salt Lake City.
Amtrak is needed in some parts of the country, especially in the Northeast where rail ridership is high, he said. But there’s not enough demand for long-distance rail travel in the western United States, where Union Pacific has its tracks.
Among other routes, Amtrak’s long-distance trains use U.P. tracks between Chicago and San Antonio and between Los Angeles and New Orleans.
Amtrak runs on Burlington Northern and Santa Fe Railway Co. tracks through Nebraska and Iowa. It offers once-a-day service in each direction in the two states. Among the cities served: Omaha, Lincoln, Hastings, Holdrege and McCook in Nebraska; and Creston, Ottumwa and Burlington in Iowa.
Capon, of the National Association of Railroad Passengers in Washington, D.C., said among Amtrak’s benefits to Union Pacific is that the State of California, which subsidizes Amtrak’s local passenger trains, is paying $60 million to upgrade a stretch of line near Sacramento, Calif., from single-track to double-track. Amtrak trains go between the San Francisco Bay area and Sacramento on Union Pacific lines.
“You can bet the majority of hours that capacity is used will be a godsend to Union Pacific’s freight operations,” Capon said.
He also challenged Davidson’s statement that government subsidies amount to $250 to $300 for each Amtrak passenger. While those figures may refer to the cost on some routes, Capon said, “you look at the system as a whole, and it’s more like $35.30.”
Davidson should remember, Capon said, that while he complains about Amtrak paying lower rates than other U.P. customers, the railroads agreed to lower rates as a condition of the federal government taking over the money-losing passenger train business from them in 1970.
Davidson said he was especially upset when Amtrak began hauling freight on its trains to make money. In some cases, there were more freight cars than passenger cars, putting Amtrak in direct competition with the railroads.
Even though David Gunn, Amtrak’s top executive, has agreed to stop such commercial competition, Davidson said, “it was a sore point with me.”
“He’s just trying to milk an old issue,” Capon said of Davidson.Amtrak spokeswoman Karina VanVeen said the Amtrak freight-hauling that
Davidson referred to is an express service that includes cargo such as perishable fruit. Most of the express service will end by Sept. 30, she said. Amtrak has contracts with the U.S. Postal Service and will continue to carry mail, she said.
As for Davidson’s other remarks, “we have no comment,” she said. “Certainly he’s entitled to his opinion.”