Can Amtrak survive?

Despite its impressive new Boston-Washington bullet train, the national rail service faces daunting problems.

Published March 11, 1999 8:00PM (EST)

Amtrak finally unveiled its new bullet-train service this week, a $2 billion experiment dubbed "Acela," which, starting in December, will shuttle passengers from Boston to Washington at speeds of up to 150 mph. By electrifying the 470-mile route, straightening its curves and employing new trains, Amtrak will cut a half hour off its popular three-hour Metroliner service between Washington and New York, making it rival the time it takes to travel by plane, when travel to and from the airport is factored in.

But the victory for Amtrak is bittersweet. It unleashes its pride and joy under the watchful eyes of the Amtrak Reform Council, created by the 1997 Amtrak Reform and Accountability Act, which demands that Amtrak be able to pay its own way by 2002 or face privatization. The council can write up liquidation plans as soon as December if it determines Amtrak will not meet those goals.

What would Amtrak's privatization mean for train travel in America? "We shouldn't have any illusion that we'll have any rail service if we privatize," says Ross Capon, executive director of the National Association of Railroad Passengers (NARP), a rail advocacy organization. He bristles at the mention of an "Amtrak privatization debate."

Joseph Vranich, however, wants the debate to take place. A former Amtrak employee who's a high-speed rail advocate and member of the Amtrak Reform Council, Vranich argued for privatization in his book "Derailed: What Went Wrong and What to Do About America's Passenger Trains." He blames Amtrak for poor business practices and blocking progress in high-speed rail, and despite Amtrak's good year, does not see things changing. "With reform hanging in the air like a big neon sign, it's business as usual at Amtrak. Look at the route system -- is there one money-losing route system that's been curtailed? Is there one money-losing route that has been re-routed to serve bigger cities? No."

While he calls his solution privatizing, Vranich is no free-market purist. In "Derailed," he outlines a variety of incentives that states and the federal government could provide to entice private capital to operate trains in a post-Amtrak world. The public could buy the track and rights of way (airline and highway rights of way are publicly owned, as are rail lines in the Northeast corridor and some commuter rail lines). States could subsidize regional rail. Or states could be permitted to use federal funds from the Congestion Mitigation and Air Quality Improvement Program (CMAQ) and the Surface Transportation Program. (Called "flexible funding," the money can be used for highways, bicycle trails or other projects, but currently cannot be applied to intercity rail.) Or the federal government could transform the highway trust fund into a general transportation fund. "Privatization as I see it," says Vranich, "is where government makes sure the service gets provided, but doesn't provide the service. Subsidies are still OK."

One option would be just to give Amtrak more money. Even Vranich concedes that Amtrak has suffered from chronic underfunding. The current system is "designed to ensure that the huge highway and airways systems get bigger and Amtrak just limps along," says Capon of NARP. Along with the National Governors Association, he would like to see the "flexible" funds made available to rail. "When a rail advocate goes to a state legislature, the thing that cripples him is not the merit of his project, but that there's no federal funding," he says. Capon argues that it's no coincidence that Amtrak has been operating its fast trains, the 125-mph Metroliners, between Washington and New York for nearly a decade, and is pouring much of its budget into bringing that up to 150 mph. "[It's a] natural result of a directive they've been given from both ends of Pennsylvania Avenue," says Capon.

Still, if Amtrak were dismantled, public-private partnerships like the Florida Overland Express, where a consortium of private companies teamed up with the state of Florida to build 200-mph rail between Miami, Tampa and Orlando, might be able to obtain greater federal support. In the current climate, when newly elected Gov. Jeb Bush pulled the $70 million annual funding the state had planned on providing, there was not enough federal support to back the project.

I recently took the train from Boston to New York. The imposing grandeur of Boston's South Station, with its high, sculpted ceilings, evoked the era of railroad supremacy. With Logan Airport closed due to inclement weather, the station was packed with sopping-wet travelers. I purchased the tickets I'd reserved over the Web and stood with a mob of people I figured were going to New York. After several minutes the Amtrak employees let drop the barrier, and as if they'd heard the starting gun at a track meet, everyone sprinted ahead. Happily, I found a seat without a tussle.

My seat was wide and comfortable, much better than flying coach class. I
asked my neighbor, a graying man probably in his mid-50s, if he
rode the train regularly. No, he said, the last time he was on a train he
was in Switzerland. What did he think it would take to get more people to ride
the train? "You can't have them stopping at every dinky
town," he replied, adding that you would also need rental car offices at the train station, since so many businesspeople are headed for the highway "loops" that encircle cities.

His points were valid. But Amtrak's real
problem, and the main reason it's in such a fiscal pickle, is that it
mostly operates long-distance trains. While these scenic routes may hold an allure for rail enthusiasts,
adventurous travelers and those with a lot of time on their hands, they simply
aren't pulling their weight.

A couple of years ago I took the Lake
Shore Limited from Boston to Toledo, Ohio (it continues on to Chicago).
During the sluggish 19-hour trek, I was little surprised that a neighbor implored me to accept Jesus as my personal savior, but I found it hard to believe that we hardly appeared to accelerate beyond 60 mph. Maybe that's why the Limited is one of the few Amtrak trains whose passenger base declined in 1998, to 333,886. According to the conservative Wendell Cox Consultancy, this train in 1997 was subsidized to the tune of $89.58 per passenger.

Most of Amtrak's long-distance trains fare worse. The City of New Orleans
(Chicago-New Orleans) carried 198,251; Kansas City-St. Louis, 179,040;
Pennsylvanian (New York-Pittsburgh), 144,227; Three Rivers (New York-Chicago), 120,643
and so on. When compared with the 2.1 million people who rode 125-mph
Metroliners between Washington and New York, or the 5.9 million who
took the Northeast Direct trains (Washington-Boston and Vermont), it's clear that the long-distance train, as a competitive mode of
transport, is an anachronism.

But trains themselves are by no means obsolete -- as proved by the success of commuter rail. The Long Island Railroad carried 75.8 million passengers in 1997, and claims an on-time performance of 92.2 percent. Metro-North, which serves northern New York and Connecticut, provides 62 million trips per year. Both of these railroads leave Amtrak's numbers in the dust. And new trains are
popping up. In California, a company called the Altamont Commuter
Express (ACE) began providing much-needed commuter service nine months ago
between Stockton, in the booming Central Valley, and the Silicon Valley jobs in San Jose, and already claims 1,800
passenger trips per day (a project of three counties, it derives a portion
of its funding from CMAQ federal monies).

But despite commuter rail's success, it is not a money-making venture.
"It's an inherently unprofitable operation which is expensive to provide,"
says Vranich. "I don't have any problem with those subsidies either
because I think there's a social good." The issue is who will run the
subsidized rail lines -- Amtrak or private entities.

The only trains that make a profit are high-speed trains, like the
bullet train Amtrak hopes to run between Boston and Washington
starting in October. Most of the French, Japanese and German high-speed trains, which zip passengers along at 186 mph, are competitive with both air and car travel. Some net between $100 million and $300 million a year. Amtrak is hoping to balance its books on the success of its Acela line, which is expected to bring in between $151 million and $180 million in annual revenue.

"I think people are going to be enormously impressed with it, but it's taken 20 years," says former
Massachusetts Gov. Michael Dukakis, now a visiting professor at
UCLA and vice chairman of Amtrak. "There are at
least six, seven, eight, nine different sections of this country where
high-speed rail is absolutely essential."

Dukakis' support for a genuine national high-speed rail system isn't reflected in Amtrak's actual policy (supported by both the
NARP and the High Speed Ground Transportation Association), which is to implement "incremental" upgrades that the system then markets as high-speed rail. "Amtrak invests $25 million in High Speed Rail Service for the
Midwest" reads a recent Amtrak press release, touting trains that will be capable of going 110 mph.

"I think it's worth it to improve the Midwest trains, but I object to them calling it a high-speed rail program," says an exasperated Vranich. "There's not one train that will be competitive with air service. I think Amtrak is going to so tarnish the name of high-speed rail that it's going to become a
late-night comedian's joke. You don't serve someone a hot dog and tell
them it's a steak."

For the moment, Amtrak appears safe from being dismantled. The Clinton
administration, encouraged by a letter from 43 senators, recommended $571
million in capital funding in its 2000 budget request. And Congress seems
prepared to give Amtrak a chance, having fully funded it last year
($609 million). It helps that Amtrak is supported on both sides of the
aisle. Republican Sen. Bill Roth of Delaware secured $2.2 billion in capital
funding for Amtrak in 1997 and Republican Sen. Kay Bailey Hutchinson
just attended the grand opening of a new San Antonio train station.

Nevertheless, Vranich contends that subsidies are masking an actual
deterioration at Amtrak. He believes that we will soon see "more
serious discussion of not just privatization, but devolvement of Amtrak to
states, or segmentation of Amtrak. We ought to start raising the question,
What is a national system? Can it be a series of corridors that are really
serving America's travel needs? In reality it would be making far more of
a national contribution."

With auto congestion growing and air travel often unreliable (American airline companies' on-time performance was an unimpressive
74.5 percent in 1996), Americans might turn to intercity train routes if they
were faster.

My trip to New York was quite comfortable, though I was fortunate
to have a seat. The train was so packed that people were reclining in the
aisles and transformed the roomy handicapped bathrooms into lounges. But
the atmosphere was affable. Groups of strangers engaged in conversation,
something you rarely see on planes. It was so enjoyable and interesting
that I didn't even notice we were a half hour late.

By David M. Fine

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