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PASSENGER
RAIL REFORM
Questions
and Answers
What
is the Administration's proposal for passenger rail and for rescuing Amtrak?
The
Administration believes we need a fundamental shift in our paradigm for
providing passenger rail service. For
the past 30 years, we have provided a subsidy to a private company both to
operate passenger trains and to plan our passenger rail network.
It's time to shift to the same system we have for every other mode of
passenger transportation - a system of federal/state partnerships for building
transportation infrastructure and a reliance on other parties to operate over
it.
Putting
passenger rail on a solid foundation of planning and investment will give this
important mode of transportation the support it needs to grow.
What
will happen to Amtrak under the Administration's proposal?
The
current Amtrak will be split into three different entities.
One
private company will provide maintenance and operations on the infrastructure of
the Northeast Corridor (the stretch of track between Washington, D.C. and
Boston, Massachusetts). The
infrastructure on the Corridor that is currently owned by Amtrak will be
transferred to the federal government, which will lease it to a multi-state
compact of the states on the Corridor.
A
second private company will provide train operations - just as Amtrak currently
does for commuter rail lines and state-funded intercity passenger trains.
A
third company, a government corporation, will hold Amtrak's right of access to
its current routes over the lines of the freight railroads and the Amtrak name
and logo. Both the right of access
and the logo will be licensed to states and multi-state compacts that want to
provide passenger rail service. Those
entities will present proposals to the Department of Transportation, specifying
the service to be provided, the capital investment plan they have worked out,
and the train operations provider they want to use. DOT will review and approve the plans, grant the right of
access and the ability to use the Amtrak name, and will match 50 percent of the
capital investment in the service (tracks and other infrastructure, and the
trains themselves).
States
are already strapped for cash. How
can you expect them to carry more of the load in passenger rail?
States
are already investing more than $345 million per year in intercity passenger
rail service. Roughly $140 million
of that is capital investment, which would now be eligible for a federal match
under the Administration's plan.
The
states where passenger rail is a priority are already investing.
We believe that states are the best judge of where that service is
important, where people need it, want it, and will use it.
We think that, as in all modes of transportation, the federal government
should let local priorities guide its investments.
The
British had severe problems when they split train operations from
infrastructure, as the Administration proposes to do. Why won't we have the same problems?
Passenger
train operations and infrastructure ownership are already split in the United
States, and have been for decades. Amtrak
operates trains over more than 22,000 miles of track in the United States; it
owns only 730 miles of track (mostly on the Northeast Corridor between
Washington, D.C. and Boston, and in Michigan).
All other tracks are owned either by freight railroads or by the states.
Also,
the British rail deregulation model privatized both train operations and
infrastructure. The
Administration's proposal would give states a substantial role in the planning
of passenger rail service. Infrastructure
operations off the Northeast Corridor would remain with the freight railroads,
while passenger rail train operations would be carried out under contract to
state governments and multi-state compacts.
On the Northeast Corridor, both infrastructure operations and train
operations would be carried out under contract with a multi-state compact.
Every
mode of transportation receives subsidies of some sort.
How can you expect passenger rail to be any different?
We
don't. The Administration's plan
would remove the burden of infrastructure investment from Amtrak and place it
where it lies for every other mode of transportation - a state/federal
partnership. On the Northeast
Corridor, that would mean a partnership between the federal government and a
multi-state compact. The same
situation could exist outside the Northeast, say with a compact of states to
implement the Midwest Regional Rail Initiative.
It could also mean funding a specific state's initiative, such as those
in California, North Carolina and Washington.
You
say you're going to introduce competition into passenger rail.
How are you going to do that?
In
this case, the competition will come when train operators compete for contracts
with states and multi-state compacts. In
many cases, we expect states to choose private companies to operate the trains,
but public agencies (such as transit agencies) may also be chosen.
Under
the Administration's proposal, we do not dictate solutions to the states in
advance. Some states may choose
private sector providers, some will choose public transit agencies to operate
trains. The federal investment will
be limited to capital investment (track upgrades and maintenance and purchase of
trains) - while states will cover any required subsidy of train operations.
Since the states would bear the burden of any operational subsidies, we
believe the states should have the freedom to choose the best value among the
available options among train operations providers.
The
freight railroads say there is no room for passenger trains on their tracks,
which is borne out by Amtrak's current on-time performance.
How will your proposal address the existing capacity problems on the
freight railroads?
We
recognize that capacity issues are a major potential limiter on the growth of
passenger rail service. Outside the
Northeast Corridor, where tracks are almost entirely owned by freight railroads,
states and multi-state compacts would have to negotiate with freight railroads
for the addition of any new routes. Under
the Administration's proposal, states would be eligible for a 50 percent federal
match to their passenger rail infrastructure capital investments.
In their negotiations with freight railroads, the states would come to
the table with capital dollars for the expansion of existing capacity.
What
will be the impact on Amtrak's unionized work force be if this proposal is
implemented?
The
impact is expected to be minimal. The
proposal preserves all existing collective bargaining rights and Railroad
Retirement eligibility. The
two private companies to be spun off from the existing Amtrak, the passenger
rail services company and the passenger rail infrastructure management company,
would both be classified as railroads for benefits and labor protection
purposes.
In
addition, the Administration believes that by placing passenger rail planning
and investment on a solid foundation, this transportation sector will realize a
new potential for growth.
Why
should states be asked to assume the responsibility for routes that provide for
national mobility, e.g routes that connect the coasts or the Great Lakes to the
Gulf of Mexico? Shouldn't this be
the responsibility of the federal government?
In
no other mode of passenger transportation does the federal government take on
the entire responsibility for the system, and the wisdom of that approach has
been proven time and again. States
and local governments are the best judges of where a particular transportation
service is needed, and the best judges of where their people want to go.
Much
of the current Amtrak route structure was laid down in the 1960s. (Amtrak's
routes are effectively the passenger routes run by the freight railroads before
their passenger rail responsibilities were transferred to Amtrak.)
With the current structure, in some areas the government is subsidizing
service that very few people use and, as a result, missing opportunities to
support passenger rail service in areas where people need and want it today.
The
bill does not preclude a national system. However,
it embodies Secretary Mineta's principle that our passenger rail system must be
based on sound economics. A
national system must be composed of routes that people actually want to travel
in sufficient numbers to justify the expense.
David
Gunn, Amtrak's President, says the company needs $1.8 billion per year in
federal funding. The House
Transportation and Infrastructure Committee and the
Senate Commerce Committee have voted to authorize $2 billion per year in
Amtrak funding. How much federal
funding is contained in your proposal?
The
bill authorizes such sums as may be necessary to carry out the programs to be
established. The Administration's
budget request for Amtrak for Fiscal Year 2004 is $930 million.
But no amount of money will ever solve Amtrak's problem without
meaningful reform, and that's exactly what we propose.
Where
will these funds come from?
The
program described in the bill would be funded from General Fund revenues, just
as the current Amtrak appropriation is.