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Amtrak: De-Railing America?

Would Amtrak’s privatization help commuters and make railways more competitive?

February 7, 2002

Would Amtrak's privatization help commuters and make railways more competitive?

Amtrak’s critics argue that the system has cost the American taxpayer dearly. Over the past 30 years — since the state-owned corporation was established by the Nixon Administration — its chronically unprofitable operations have consumed some $25 billion of taxpayer money.

Critics of Amtrak never tire of citing this “enormous” sum when they propose to privatize, abolish or kill it. But as far as transportation issues go, the U.S. Congress seems to have a double standard. For instance, lawmakers were quick to offer a $15 billion bailout to troubled airlines after the September 11 attacks. Yet, Amtrak endures criticism for its measly budget.

Here’s another way to look at it. The $25 billion that has been spent on Amtrak over its entire 30 year journey is equal to $800 million per annum. Now consider the size of the U.S. defense budget request for FY 2002, which amounted to $335 billion.

Against that backdrop, Amtrak’s yearly budget amounts to just 0.2% of the U.S. defense budget proposed by the Bush Administration for last year alone!

Now, there may be plenty of waste and overspending within Amtrak. But it was the Pentagon — not the U.S. railway system — that made $1,000 toilet seats so famous.

One of the most popular notions that been circulating is for Amtrak to be privatized. The most frequently cited example of such a move is Great Britain, which sold off its National Rail. As a result, the U.K. government now no longer has to spend money on the country’s railroads — and has even seen an increase in ridership, the argument goes.

Well, this happens to be a particularly bad time to follow the Britain’s lead in rail privatization — which occurred under Margaret Thatcher, who served as Prime Minister from 1979 to 1990. If the United States privatizes Amtrak “because the British have done it,” the rest of the world would hoot with laughter.

That’s because Britain has recently done its own study of its privatized railway system. The results? Customer satisfaction is at an all-time low — and a series of fatal crashes have made Brits wary of taking trains.

Britain’s Strategic Rail Authority — a government agency — now proposes to spend 33.5 billion pounds on the rails by 2010. The money will remedy what it calls “almost three decades of under-investment” since the system was privatized. This new UK investment translates to $46 billion — or nearly twice the total subsidies for Amtrak over 30 years.

Other examples of this trend that are also mentioned include the privatization of parts of railway systems in both Sweden and Japan. Yet, Japan, in particular, spends massive amounts of government funds on infrastructure projects — building bridges, resurfacing highways and, of course, upgrading rail tracks.

Japan has also raced ahead in making rail travel quicker and more efficient. In the United States, there is only one 18-mile stretch on the 452-mile Boston to Washington rail line where trains can reach their maximum speed of 150 mph.

By contrast, the entire length of Japan (nearly 1,500 miles of track) is served by Shinkansen — or bullet — trains. These trains travel at speeds up to 185 mph for most of their journey. The first bullet train was introduced in Japan in 1964 — some 35 years before a pale imitation, Acela, was built in the United States. So much for the notion that that Japan can’t compete anymore with U.S. industry.

Already, Japanese trains travel at speeds some 20% faster than Acela’s top speed over Japan’s entire high-speed rail network.

There are currently plans to increase the speed to as much as 217 mph. If such a train existed in the United States, it would be possible to reach Chicago from New York City — 719 miles as the crow flies — in just 3 hrs and 20 minutes. Try beating that, even absent current, terrorist-related airport delays.

But, of course, pursuing faster rail travel will require laying new tracks through fields, building tunnels — and circumventing big cities. This is how the Japanese would have done it. And this is how the French routinely do when they build their own Trains de Grande Vitesse (TGVs).

But there is no way it can be done in the United States. Here, an antiquated — if not anti-modern — political system requires members of Congress from every conceivable jerkwater constituency to insist that the bullet train make a stop in their hamlet, too.

The most likely outcome, therefore, is that Amtrak will be privatized — with disastrous consequences for rail travel in the United States.

To be sure, rail service in the country’s busy Northeastern corridor will survive. But unprofitable smaller routes will no doubt wither away. Thus, America, already ranked 21st among the 23 industrialized countries in rail travel, will probably sink even lower.

For the U.S. rail system — and its many passengers — it’s been a long and sad journey downward from Promontory Summit.

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