Amtrak would lose ownership of tracks and stations under panel plans

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Posted 9:16AM on Friday, January 11, 2002

WASHINGTON - A panel studying Amtrak's future favors stripping the railroad of the tracks and stations it owns, but still must decide whether and how to open train operations to competition. The Amtrak Reform Council, which will deliver its recommendations to Congress on Feb. 7, gathers Friday for what could be its last meeting. On the agenda: scenarios for how to break Amtrak's 30-year monopoly on intercity train travel. The panel has drawn praise from free-market reformers who say Amtrak is responsible for its financial problems. Amtrak supporters say the real problem is a paucity of federal funding for an overlooked mode of transportation. The council's recommendations hold no legal weight but will help frame the debate in Congress on Amtrak's future. Under one scenario, private companies would submit bids for certain train routes. Government subsidies would be available as long as they are lower than those Amtrak is receiving. Every scenario under consideration envisions transferring ownership of Amtrak's tracks, bridges, tunnels and stations, said Tom Till, the council's executive director. The new owner would likely be one or more new subsidiaries of the National Rail Passenger Corporation -- an existing federal entity that, until now, has been synonymous with Amtrak. Under the council's plans, Amtrak would function only as an operating company under the federal corporation. Eventually, ownership of the stations and track could be transferred to states or cities. Amtrak owns 730 miles of track, mostly in the Northeast Corridor between Boston and Washington, plus in Michigan. It owns stations along the Northeast Corridor, plus Union Station in Chicago. Amtrak serves 500 stations over 22,000 route miles. Most of the tracks are owned by freight railroads, which receive usage fees from Amtrak. The railroad uses its assets to raise revenue. It plans to build a hotel inside Baltimore's Penn Station and an office tower or hotel near 30th Street Station in Philadelphia. But the assets also impose substantial costs. The reform council estimates that it takes $800 million to $1 billion each year to keep the Northeast Corridor in a state of good repair. It says Amtrak has spent just $71 million on Northeast Corridor maintenance each of the past two years. The National Association of Railroad Passengers said Thursday that recommendations to separate Amtrak from its non-rail assets "bear a disturbing similarity to the early steps in the process that led to Britain's current railway crisis." A 1997 law gave Amtrak until Dec. 2, 2002, to begin operating without federal subsidies. It created the reform council to monitor the railroad's progress. A majority of council members concluded last month that Amtrak will not achieve that goal. That finding meant the council had 90 days to draw up a plan for a restructured national rail system. Amtrak posted a cash loss of $405 million in the first eight months of 2001 and has consumed more than $25 billion in subsidies since its inception in 1971.