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With a new administration in D.C., it's time to think outside of the box because passenger rail's survival just may depend on it

Monday, June 6, 2011

The Future of the Northeast Corridor

Recently, the rail community has gone nuts over whether privatizing the Northeast Corridor is a good idea. On one side, unions and politicians representing the Mid-Atlantic states are opposed to it and scream bloody murder. On the other side, Representatives John Mica and
Bill Shuster want the 457-mile-line to be opened up to private competition.

This post will take all of the emotion out of the debate and explain why stripping ownership of the NEC from Amtrak is an excellent idea.

Unlike past efforts by the Amtrak Reform Council, no break up options of Amtrak are included. Instead, the Mica-Shuster plan will let a private company own the infrastructure. If anything needs to be done, the two congressmen should take a gigantic step and transfer all trackage from the railroads to a track maintenance organization (TMO), which would be a public-private partnership. The USDOT and a private infrastructure company would oversee the tracks. Just as blogger ant6n brought up in March, all railroads would pay track fees, which would be done on an annual basis. The railroads--Class Is, regional/shortline RRs, Amtrak, AIPRO members, other passenger carriers--will only have to focus on carrying people and goods. The TMO itself would most likely resemble a nonprofit like Britain's Network Rail

"Removing Amtrak as the owner would lead to the carrier losing out in the long run"
Not exactly true. There are already more commuter trains on the line than Amtrak trains right now. Even if Mica gets his wish and sees someone other than Amtrak on the line, the congressional delegation from MD to MA would make things difficult for the new operator.

"Amtrak wouldn't be a REAL railroad without owning the NEC"
This argument is very flimsy. As RailPAC's Noel Braymer points out:
  1. Amtrak lost $159 million in 1973 when the route was still in the hands of the bankrupt Penn Central
  2. In 1980, Amtrak's losses ballooned to over a billion dollars. This was four years after the Ford Administration scooped in to rescue the Northeastern Class I railroads from going under and rebranded them as Conrail. The feds transferred control of the corridor from private rail to Amtrak. Had the USDOT had the right of way, Amtrak wouldn't have been forced to stave off bankruptcy during George Warington's tenure
  3. Amtrak was never supposed to own any track rights
The truth is that owning rail infrastructure is just as costly as highway infrastructure. Rather than spending $117 billion on a brand-new NEC, Amtrak could focus on running their trains while the TMO would be able fix various defects at a far cheaper price and return the entire NEC to a state of good repair in the process. The biggest losers would be the commuter agencies because they have never paid a dime since Conrail's creation led to many of these companies becoming state-owned. If the end game means that Amtrak takes over these commuter agencies, then so be it. Since the bulk of Northeast Regionals and all of the Acelas are not state-supported, the commuter agencies would be forced to pay up for their commuter trains.

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