September 21, 2005

Amtrak says private companies could bid for routes

By John Crawley

WASHINGTON (Reuters) - Some Amtrak routes should be offered
to the private sector to help salvage the debt-ridden national
passenger rail system, Amtrak's chairman said on Wednesday.

"We will consider every conceivable solution to make it
work. We're committed to hold the system together at acceptable
cost," David Laney told a hearing of the House of
Representatives railroads subcommittee.

The hearing revealed what one senior federal transportation
official said was a shift this summer in the debate over
Amtrak's future. Lawmakers have begun to move away from
criticizing or defending the railroad's finances and
performance to exploring options for passenger service to

Blueprints that would provide long-term funding to support
operations and improve antiquated track, signals, bridges and
tunnels, have received bipartisan support from House and Senate
lawmakers with influence over transportation matters.

Congressional funding proposals for 2006 include federal
subsidies of between $1.2 billion and $1.4 billion. Amtrak
received just over $1.2 billion this fiscal year, which ends on
September 30.

The Bush administration opposes any subsidy until its
reform agenda is met. This could range from deep cost cuts to
dismantling Amtrak's control over routes and its

Amtrak's board is considering limited reform, including the
possibility of jettisoning underperforming long-distance
routes, boosting investment by states, and opening some or all
of the system to private competition.

"Private operators need to be given a shot. Amtrak assumes
it will be competing for its future," said Laney, adding that
any change should be gradual.

Unions complain that Amtrak and the Bush administration's
proposals will hurt the railroad's 20,000 workers.

The Transportation Communications International Union says
Amtrak wants approval from Congress to do what bankrupt U.S.
airlines have done in restructuring -- remove workers from
pension programs and change contracts to gut work rules.

"The administration together with the Amtrak board of
directors have used every argument they can to lay blame on
Amtrak and its workers in order to kill Amtrak through
privatization," said Robert Scardelletti, the TCIU's president.

Rep. John Mica, a Florida Republican, planned to introduce
a bill to open Amtrak's flagship Northeast Corridor to

Amtrak will end the fiscal year with $120 million in cash
despite the loss of premium high-speed Acela service for nearly
six months because of a brake problem. But Amtrak's operating
loss will exceed $550 million, the Transportation Department
said. Amtrak's debt exceeds $3.5 billion.