Amtrak, for three decades the nation's monopoly provider of long-distance trains, would be given an opportunity to compete with private companies to operate the trains.
But Amtrak-owned tracks and stations, as well as its operations and policy-making authority, would be distributed among state, federal and private entities.
The plan, approved 8-1 by the Amtrak Reform Council, is only a recommendation. Congress will make a decision on Amtrak's future after it receives a final version of the council plan on Feb. 7.
The council opted for the most radical and free-market friendly option among three plans it was considering. The only member to vote against the plan was Charles Moneypenny, who represents labor interests on the panel.
The panel, established by Congress in 1997, has drawn praise from critics of Amtrak who say mismanagement is responsible for its financial problems. Amtrak supporters say the real problem is a paucity of federal funding for an overlooked mode of transportation.
"What we're trying to do is produce a new national rail passenger system that works and is modern and meets the needs of this country and this century," Gil Carmichael, the council's chairman, said prior to the vote.
Once the dominant means of long-distance transportation, U.S. rail service declined in the 20th century as automobiles, then air service, flourished. By the 1960s, railroads wanted out of their passenger-service obligations so they could concentrate on freight delivery.
Congress and President Nixon responded in 1970 by creating the part-public, part-private National Rail Passenger Corp. It took the nickname Railpax but quickly changed to Amtrak.
At an inaugural service in New York on May 1, 1971, then-Transportation Secretary John Volpe predicted a new era in rail service and said Amtrak would break even financially in about three years.
That never happened. Amtrak posted a cash loss of $405 million in the first eight months of 2001 and has consumed more than $25 billion in government subsidies since its inception in 1971.
When it created the council, Congress gave Amtrak until Dec. 2, 2002, to begin operating without subsidies. 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.
All three plans the council considered at its meeting Friday envisioned continuing subsidies to intercity trains, either by the federal government or states. Private companies that take over train routes would be eligible for government subsidies as long as they are lower than those Amtrak is receiving.
The plan approved by the council would have Amtrak transfer ownership of tracks, bridges, tunnels and stations, possibly to states or cities.
Amtrak owns 730 miles of track, mostly between Boston and Washington, plus in Michigan. It also owns stations along the Northeast Corridor and Union Station in Chicago.
The railroad uses its assets to raise revenue, but the assets also impose substantial costs. The council estimates that it takes $800 million to $1 billion each year to keep the Northeast Corridor properly maintained. It says Amtrak has spent just $71 million on Northeast Corridor maintenance each of the past two years.
http://accesswdun.com/article/2002/1/200318