Should Amtrak have to Compete with Private companies, new bill?

[john h]

Read an article just now News Story

That suggests Northeast Corridor be opened to private competition.

Any comments, John

 

[printman2000]

The details are scarce, but if a private company has to come in with their own equipment and pay to upkeep the rails, they will never do it. There is no money in moving people.

 

[RobertF]

Read an article just now News StoryThat suggests Northeast Corridor be opened to private competition.

Any comments, John

As I recall the Brits privatized rail travel (they still use the national rail network though). From what I've read, they are not all that happy with it. I think it would have some positives and minuses.

 

[Chris J.]

Read an article just now News StoryThat suggests Northeast Corridor be opened to private competition.

Any comments, John

As I recall the Brits privatized rail travel (they still use the national rail network though). From what I've read, they are not all that happy with it. I think it would have some positives and minuses.

Originally we privatized the network too, then it got brought back into government's hands (tho with the current government that's a dubious 'advantage'). IMHO the whole thing was done for political reasons anyway.

I think New Zealand has recently given up on privatization plans, but I don't know much about what the story is there.

Back to the NEC - I've heard it called a big money-pit for Amtrak before, so if it doesn't make them any money I'm not sure how a private company will do better, unless the private company doesn't have to pay all it's costs of course.

Cheers

Chris

 

[john h]

The details are scarce, but if a private company has to come in with their own equipment and pay to upkeep the rails, they will never do it. There is no money in moving people.

I thought that too, so why even have a bill like this?

 

[Guest]

The details are scarce, but if a private company has to come in with their own equipment and pay to upkeep the rails, they will never do it. There is no money in moving people.

I thought that too, so why even have a bill like this?

Because they sound good to average joe's, thereby winning favor to politicians?

 

[jphjaxfl]

The reason Amtrak was formed in 1971 was because the private railroad companies wanted to discontinue passenger trains and concentrate on profitable freight operations. There was much discussion about how to set up the subsidized passenger operation. No private entities came forward in 1970-71 and I doubt there would be any now. Amtrak needs a consistant year to year funding source that will allow it to build a passenger rail infrastructure that will succeed.

 

[Chessie Hokie]

I was surprised when I read this article this morning. I watched the webcast of the press conference yesterday from the House Transportation and Infrastructure Committee and came away pleased with their proposal.

However, I don't recall any mention of privatizing or opening up for competitive bid the NEC. What was mentioned along those lines was to consider opening up about five underperforming Amtrak routes (not further identified) to competitive bid so as to see if private interests could make a better show of those routes than Amtrak has been able to do. There was also some mention of perhaps adding five newer routes, though possibly as replacements for the underperformers. The main thrust of the entire deal was the infusion of a solid stream of funding for Amtrak to address equipment, infrastructure and maintenance needs.

Some of the statements in the article were apparently made subsequent to the press conference, so maybe that's why it paints a different picture than what I grasped. Or it is a possibility that the reporter doesn't really know squat about Amtrak and just interpreted things as best he could and equated all of Amtrak with the NEC.

Alex Kummant was in attendance and seemed very pleased, almost giddy, with the proceedings, stating that passage of such an act would be economic stimulus for not just Amtrak, but for equipment manufacturers, real estate developers, retailers, etc. Don Phillips was also on the front row of the press gallery, so I imagine we'll here his take in an upcoming TRAINS magazine column.

 

[AlanB]

The details are scarce, but if a private company has to come in with their own equipment and pay to upkeep the rails, they will never do it. There is no money in moving people.

I thought that too, so why even have a bill like this?

Because they sound good to average joe's, thereby winning favor to politicians?

And because IMHO, John Mica wants Amtrak dead. He tried attacking it head on and lost, so now he's trying to come up with creative and attractive looking proposals that will only lead to Amtrak's demise in the long run. They sound good on paper at first read, but it one looks deeply into things and analyzes things, they are designed to kill Amtrak long term.

 

[Chessie Hokie]

...No private entities came forward in 1970-71 and I doubt there would be any now. Amtrak needs a consistant year to year funding source that will allow it to build a passenger rail infrastructure that will succeed.

I'm not so sure...I believe that the year to year funding process has been part of the problem, as Amtrak has never been able to really know what was coming the next year. A multi-year funding cycle would improve things a lot, allowing Amtrak to see over the horizon for planning and funding projects. That is something this bill will do.

I believe Ted Rose of BNSF and former NS Chairman David Goode have at times allowed some speculation into the possibility of passenger operations in the future, but with federal subsidies that would insure it wouldn't be a losing operation for them. Such federal subsidies could really open up the possibilities of passenger rail.

Imagine if freight railroads really had a stake in passenger trains again, with their corporate name emblazoned on the side of streamliners and their public image dependent on the service they provided...fast, efficient, clean and friendly are words that could all be reintroduced into the railroad lexicon!

 

[WICT106]

Proposals like this come up from time to time, and are usually made by those who are ignorant enough to not recognise differences between privately owned infrastructure (railroads) and publicly owned infrastructure (highways). Part of the reason that Amtrak has suffered the performance it has is because there is no dedicated capital funding source like there is for highways. No funding = Band-Aid approach for trains, and no money to upgrade and maintain track to a higher standard, limited funds for those who wish to improve trains and rail service, no funding to improve trains over more than once per day each way service. No amount of privatization will get around that, and no private RR owners want any other operators operating trains over their tracks. they have not wanted Amtrak, and they certainly do not want Amtrak statutory right of access being transferred to other operators.

Edit: Chessie Hokie has it mostly correct regarding multi-year funding cycles.

 

[jis]

The devil as usual is in the details, which of course people mostly like to gloss over during these rah rah sessions. Private train operation can work as long as there is a regulatory framework to do such. Such a regulatory framework is non-existent in the US at present and will need to be set up.

Germany has a pretty good regulatory framework wherein the government actually contracts with private operators for a well specified set of service on a given route for a well specified amount of money that the government will contribute. Beyond that it is upto the private outfit to make it work. Since the tracks are owned by a government chartered company in Germany track access is relatively easy to build into the overall framework.

There is a bidding framework that makes all this work in Germany, and oh yes, there is this notion of "equal access" to the railroad on which the trains operate. That would be in interesting trick to pull off in the US where the railroad tracks are mostly owned by private companies who guard their franchises carefully and try to maintain as much vendor locking as possible by hook or by crook. However, with an appropriate market driven access charge such access may be possible. Indemnification from liabilities is going to be another interesting jousting point that will have to be dealt with.

In this specific case it would be good to get a better feel for where Mr. Oberstar is coming from. From all reports that I have read he understands railroads and is also positive about passenger transport. Mr. Mica on the other hand, one has to be rather wary of what his real motives are.

 

[saxman]

A lot of people applaud how Amtrak and/or the NEC should be privatized, and talk about the "success" of the British privatization. I guess its that American capitalism viewpoint (which I like) Thats what was done with the airlines in 1978, and its been good and bad. Ticket prices dropped because airlines were allowed to compete. On the other hand lots of small cities lost service, and lots of airlines went bankrupt (Braniff, Eastern) A lot say the airline industry should be re-regulated.

Now back to trains....I guess I don't really know what privatization means. Does it mean the operator pay for all track and infrastructure like any business? What about highways? They aren't privatized. Some tax goes to that. Some argue the gas tax pays for it all, therefore the users pay it. Then I saw that toll roads are being built more than freeways are, run by private companies. NARP says British privatization was a disaster. URPA's Bruce Richardson says it was a huge success, because the private sector "competes" to make money and service their passengers, and if they fail they go down. But, the other side argues private companies just want to make their managers and stock holders rich, and serving the general public comes second. Then the other guys retort back saying a government run system is on the verge of socialism and we can't have that.......well just makes my head spin as you can see

I get into debates in a local forum here in the DFW area about DART. A couple guys argue how DART is a huge boondoggle and how the highways in Texas are fully paid for by the gas tax and other registrations. In fact a surplus of that goes toward education because there is so much extra. I will admit, Texas does have a very well built road system.

 

[George Harris]

I get into debates in a local forum here in the DFW area about DART. A couple guys argue how DART is a huge boondoggle and how the highways in Texas are fully paid for by the gas tax and other registrations. In fact a surplus of that goes toward education because there is so much extra. I will admit, Texas does have a very well built road system.

Texas also has a huge income from taxes on the oil and gas industry. Much of Texas is fairly easy territory and climate for road building and maintenance. Distances are fairly long between cities, so there is a lot of long distance driving generating gas tax money on low cost to maintain rural highways. Urban road construction is so expensive that it is heavily subsidized by rural driving. An urban freeway would not pay for itself with the gas tax generated if the traffic was bumper to bumper two layers high 24/7. That is why rural residents should support urban rail transit with greater enthusiasm than anyone in the cities themselves.

 

[JxGx78]

I think rail transportation could compete if roads, and airlines were not subsidized (directly and indirectly). But if governments (local, state, and federal) prevent market forces from working then rail transport shouldn't be expected to compete. I would love to see a true free market system, but since I don't see that ever happening rail transportation should be supported similarly to highways and airlines.

 

[Green Maned Lion]

*clears throat*

Democracy is premised on the concept that more than half of the people are more than half right more than half of the time.

The concept is so flawed, I couldn't even know where to begin. If they want to sub-contract Amtrak out, they are rejecting the very concept that it was based on!

 

[Chessie Hokie]

I can particularly appreciate the year to year funding challenge for Amtrak, which makes budgeting long term very problematic. I work for the Department of the Army, which has a similar limitation on funding, though in our case it is a two year cycle mandated by the Constitution (Section 8 - Powers of Congress: "To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years"...meanwhile the Navy has no such funding restriction, as the Constitution simply gives Congress the power "To provide and maintain a Navy"). This puts the Army at a distinct disadvantage for program budgeting compared to the other services...and it would take an amendment to the Constitution to change it! Anyway, I digress...

I think we are on the leading edge of a major paradigm shift in public, political and corporate perspectives on a comprehensive approach toward transportation. Highway, railroad and air congestion, high fuel prices and a finite supply of oil, environmental issues, population growth, and crumbling infrastructure, among a host of other issues, all point to a need for new and innovative policies, methods and attitudes toward how to meet our future transportation needs. Business as usual just can't address these issues adequately.

I believe that there is a growing number of those in Congress and industry that are coming around toward considering transportation in terms of a complimentary system of systems, rather than the previous perspective on individual transportation modes. While in the past competitive friction between modes was a principal reason for trying to rationalize policies, the future calls for a holistic effort toward transportation to draw the maximum effectiveness from the various modes based on their inherent efficiencies. Those on this board will certainly recognize the inherent efficiencies of steel wheels on steel rails, particularly as part of an integrated transportation policy.

Thus, despite the private ownership of the freight railroads, and based on the murmurings from BNSF and NS leadership that I previously mentioned, I can neither see the railroads burying their heads in the sand nor crying that the sky is falling as the world changes around them. Isolating themselves from the process of rationalizing our national transportations system is not in their best interest. I think the pragmatic thing for them to do is to participate in the process as much as possible...only in this way are they going to insure a seat at the table and maintain some control over the direction of their future. There are already significant examples of previously unthinkable public-private partnerships...the Norfolk Southern Heartland Corridor Project is an obvious example, and now CSX has proposed a similar scheme. With government now increasingly open to the idea of assisting in the funding of private railroad infrastructure with the recognition of the beneficial effects for the public, I can only expect an expansion of this new perspective on public-private partnerships.

So I think public funding of private transport modes, through subsidies for both infrastructure and operations, is likely something we will see more of in the future...so why not passenger rail? Don't get me wrong, I don't want to see Amtrak go away...but neither am I married to the notion that Amtrak is the best and only way to run passenger trains in this country. If BNSF decided that they wanted to run the Empire Builder on their own (with government subsidies and a required service level, of course), I would have trouble seeing that as a bad thing...in fact I think BNSF would do a first class job and I would expect service and on-time performance to ratchet up a notch or two! I also think that such a scenario would be preferable (particularly to the railroads) to having a third-party contractor operating trains over freight railroad tracks...to an extent I wonder if maybe the House proposal is partially intended to bait the railroads into reaching this conclusion on their own. It could give the railroads more control over their own destinies and give them the potential for some valuable PR if they could run the trains well (this was always an important aspect of passenger trains for the railroads in the past, even as money losers...good will can be a valuable coroporate asset). And who knows, maybe it would give railroads the leverage to have the ridiculous taxation of railroad rights of way ended. If the railroads were subsidized to the point of insuring no losses on the service, I would have trouble seeing it as anything but a win-win situation for both them and the public.

 

[Sealink]

Privitising the rail network has, for the whole, been an unmitigated disaster in Britain. The fact that the network still works is thanks to the massive subsidies now paid to private companies. There are some notable exceptions, South West Trains is exceptional, but then, so would British Rail if it had access to the eye watering sums of money now changing hands.

Mind you, we do have lots of pretty colours on the trains.

 

[ThayerATM]

*clears throat*
Democracy is premised on the concept that more than half of the people are more than half right more than half of the time.

The concept is so flawed, I couldn't even know where to begin. If they want to sub-contract Amtrak out, they are rejecting the very concept that it was based on!

<_<

*Stepping up on my soapbox*

We don't live in a Democracy. We live in a Republic. We (the unwashed masses) are Constitutionally allowed to vote in order to "elect" the people who then "elect" the presumably educated people who make our laws for us.

Amtrak does the best it can do with the money its been given to work with. It's had MY money since last October to play with, interest free, and I'm looking forward to a pleasant trip to CA in a few weeks even if I get detoured, on the Zephyr, up through Wyoming.

Those train people do good work.

 

[Sealink]

Privitisation at Work in the UK

We need new trains for the West Coast Mainline, which is almost full to capacity.

This is how the government intends to buy them (well you didn't expect the train operator to buy them did you? )

 

[Crescent ATN & TCL]

I think Amtrak should have been created as a management company for the passenger end of the freight railroads rather than a railroad itself. It could have worked on the premises of setting routes and performance goals for the freight railroads and giving them subsidies based on how they do with these goals. Amtrak should still be the one selling the tickets but sell them at the freight railroads price. For example, Amtrak sell you a ticket on the "Norfolk Southern Crescent" and a ticket on the "CSX Silver Star" to get from NOL to MIA. It seems like something along these lines would have worked better than dumping old rundown equipment on Amtrak and expecting them to do the impossible (make a profit).

 

[Dutchrailnut]

I think Amtrak should have been created as a management company for the passenger end of the freight railroads rather than a railroad itself. It could have worked on the premises of setting routes and performance goals for the freight railroads and giving them subsidies based on how they do with these goals. Amtrak should still be the one selling the tickets but sell them at the freight railroads price. For example, Amtrak sell you a ticket on the "Norfolk Southern Crescent" and a ticket on the "CSX Silver Star" to get from NOL to MIA. It seems like something along these lines would have worked better than dumping old rundown equipment on Amtrak and expecting them to do the impossible (make a profit).

The freight railroads did no longer want passenger trains and did not want to maintain passenger fleets.

In Europe several countries went from government run railroads and privatized, ask any citizen in Europe how well that (not) went.

Most people would love to see Europe go back to the Government railroads.

 

[Chessie Hokie]

The freight railroads did no longer want passenger trains and did not want to maintain passenger fleets.
In Europe several countries went from government run railroads and privatized, ask any citizen in Europe how well that (not) went.

Most people would love to see Europe go back to the Government railroads.

Odd that we rarely hear nostalgic pining (at least that I have noticed on this side of the pond) for the days long ago before most European railroads were nationalized, which I suppose I equate to our own pre-merger era. American railfans still look at their favorite fallen flag railroads in the same light that most people consider their favorite sports teams.

Anyway, it is really difficult to compare railroad systems here and overseas. Their systems were nationalized long ago, with recent trends toward re-privatization. Our system has always been private, with only Amtrak and a brief flirtation with nationalization during the USRA period of WWI as the exception. Their passenger service is incredibly impressive, while our railroads move awe inspiring amounts of freight. Their nationalized systems are heavily subsidized, while our private systems, relieved of the burden of passenger service, are the most profitable in the world.

 

[abqdave]

Those who think private industry always runs railroads better and that Amtrak should be self-sufficient should remember...Conrail, which was formed by and massively subsidized by the government because all private northeastern US freight railroads went bankrupt by the 1970s.

 

[Mark]

Well, this bill has a LONG way to go before it becomes any kind of an option but opening the NEC for private competition is rediculous if Oberstar and Mica look at the facts: Who? Who is going to bid on these so-called contracts? CSX? NS? Some later to be named private RR contractor or commuter service? Where will the equipment come from? Amtrak simply only has to say, "Fine come on but bring your own Acela train sets." Who will provide the training to qualify, then operate at such high speeds? I seriously doubt any major RR will even blink at this proposal, there's NO money in it, (What hire MORE crews so we can run trains on the NEC for AMTRAK? No way, were trying to cut OUR crews down to one guy!), and the Union headaches alone aren't worth it for them. The BLE, UTU and all the rest will go a screaming to their legislative representatives if a non-union private contractor tries to operate in Amtrak territory ON Amtrak equipment, I know I would.... but its big money for Amtrak in the short run and that is exactly how Amtrak runs: From one short term crisis to another, in other words: Business as usual. Many things can change in the time frame proposed by this bill so take the money Amtrak and run! Its a small risk with a good payoff, (for Amtrak), designed to appease the other learned Representatives who know little to nothing about how railroads run, let alone the extra complexities of Amtrak.