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Turn Amtrak Back to the Freight Railroads?

Posted on: Tuesday, 15 November 2005, 09:00 CST

By Wilner, Frank N

It is time to "TTX" Amtrak-to sell Amtrak back to the freight railroads much as TTX is owned by the major carriers using its pooled freight cars.

The manner in which Amtrak has been financed and operated since its creation in 1970 is no way to run a railroad. Amtrak's annual trek to Capitol Hill and ensuing begging mission-habitually impeded by conservatives anxious to kill it-begets barely sufficient funds to achieve mediocrity and discourages the best and brightest from seeking employment.

Alas, the electorate won't permit Amtrak to die; conservatives won't permit Amtrak to prosper.

The Bush administration proposes dismantling Amtrak and permitting forced access to freight rail tracks by perhaps a dozen "who-knows-whom" entities. This is neither an efficient nor safe solution to the reality that rail passenger service is here to stay. Instead, let's integrate rail freight and passenger service by transferring ownership and control back to the freight railroads.

But wasn't it the freight railroads that unloaded passenger rail service because it was such a drag on already perpetual revenue inadequacy? Yes, but that was a different era. What has changed is that Congress now permits rail passenger service to be operated more like a business and provides (albeit insufficient) subsidies. And privately owned freight railroads no longer reject accepting subsidies as they did 35 years ago. As Association of American Railroads President Ed Hamberger wrote recently, "Public/private partnerships create better value for taxpayers and provide public benefits that otherwise would not be obtained."

At Railway Age's 2004 Passenger Trains on Freight Railroads conference, Norfolk Southern Chairman David Goode said, "Five years ago, I was 'Dr. No,' but today I know it makes business sense (for passenger trains to run on freight railroad tracks). Will passenger trains be run by Norfolk Southern? That's a stretch, but even to mention it shows a big leap in the thinking."

Goode stresses that "certain rock-hard commitments are essential. For example, no reduction in capacity for freight rail, fair value for use of the tracks, and liability protection, to name a few." Hamberger similarly says, "Public/private partnerships must be voluntary on both sides-for government, to protect the public interest; and for railroads, to protect the interest of their employees, shareholders, and service to their customers."

Interest-based bargaining, whereby the feds, states, localities, and freight railroads each work to satisfy the other's needs, can accomplish the task. Provisionally, government might have a say in passenger routes, but eventually they would be determined by the marketplace.

Here are the gains produced by TTX-ing Amtrak:

* Conservatives who disdain government ownership in every form achieve privatization of Amtrak. A resulting sound business model would encourage conservatives to support predictable, stable, and reliable subsidies.

* With efficient and well-managed freight railroads operating a national intercity rail passenger network, private lenders would be more willing to participate in funding capital improvements that include new high speed, dedicated passenger lines.

* Freight railroads avoid the operating and safety nightmare of multiple federally franchised entities running passenger trains over their tracks.

* Railroad Retirement remains healthy through passenger rail's continued substantial contribution, which could be lost through a breakup of Amtrak and exemption of the new operators.

* Federal, state, and local subsidies could be used to supplement private investment to upgrade the joint-use infrastructure, which includes advancements in PTC and other technology.

* Rail unions could be assured representation of rail passenger employees covered by freight railroad agreements. Freight railroads benefit from existing working relationships with those unions, their safety culture, and operational excellence of the workers.

* Freight railroads and their unions could combine their already significant lobbying strength to attract, for joint freight/rail passenger operations, federal, state, and local subsidies; and for states to gain greater flexibility to use existing federal highway and transit subsidies for rail passenger purposes.

* A congested-highway weary public is assured an efficient intercity rail passenger network no longer hobbled by the uncertainly of Amtrak funding.

As former TTX President Ray Burton said, "Railroading is a complex business." Indeed, it should be left to those who do it best- and that includes operating the nation's intercity rail passenger network, whose time has come again.

Railroading should be left to those who do it best.

Frank N. Wilner

Frank N. Wilner, an economist, is author of The Amtrak Story and three other books on railroad economics and labor, and is editor-in- chief of the Journal of Transportation Law, Logistics & Policy. A former AAR public affairs officer and a chief of staff at the Surface Transportation Board, he is now public relations director for the UTU. The views expressed are his entirely.

Copyright Simmons-Boardman Publishing Corporation Oct 2005

Source: Railway Age

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