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Railway Age got it right.
agree
Great article! I especially agreed with the idea that if passenger rail should not get any Federal money, neither should car and plane transport.
Are there any stipulations in the enabling legislation for the Interstate System, Air Traffic Control System, or Inland Waterway System - that require those systems to ‘turn a profit’, such as has been written into the legistlation that enabled Amtrak?
Are you kidding?
PS. I cannot find in the enabling legislation any requirement that Amtrak shall make a profit… Do you know of any such reference?
Here you are, easily found through Google.
SEC. 301. CREATION OF THE CORPORATION.
There is authorized to be created a National Railroad Passenger
Corporation. The Corporation shall be a for profit corporation [my emphasis], the
purpose of which shall be to provide intercity rail passenger
service, employing innovative operating and marketing concepts so as to fully
develop the potential of modern rail service in meeting the Nation’s
intercity passenger transportation requirements. The Corporation will
not be an agency or establishment of the United States Government.
I know that sounds like a good rationale for Amtrak’s subsidy, but the reality is the subsidy per passenger mile for intercity travel has Amtrak at a 10:1 disadvantage. If we did away with all intercity passenger travel subsidies, air and auto travel would get just a bit more expensive, but Amtrak LD train fares would have to double.
Also, remember a good bit of the subsidy for air is balanced by taxes on tickets and a good bit of the highway subsidy is balanced by the fuel tax.
Quite right. Amtrak was created as a “for profit corporation.” This does not say Amtrak will make a profit. It doesn’t even say Amtrak is intended to make a profit. If refers only to the nature of the corporate structure. The title of section 301 is “CREATION OF THE CORPORATION.” That refers to the way Amtrak is structured in the law rather than what it is intended to do. The title is helpful in understanding the section.
But Don, some people would argue that Amtrak’s subsidy is comparable to highway subsidies. Consider for example this information from The Economist: http://www.economist.com/blogs/gulliver/2011/11/road-v-rail
The article considers not only the direct outlay for Amtrak but also a lot of externalities. You may disagree with the externalities but they do need to be addressed.
Finally, the last line of the article is worth considering. We need to look at the benefits we get from Amtrak in a decision about whether or not to keep it.
John
What if Amtrak had been set up by the federal government like the Federal Barge Line was in 1920?
http://www.encyclopediadubuque.org/index.php?title=FEDERAL_BARGE_
But a barge line is quite different from a railroad. Barges operate on rivers and rivers are by an large free. Even where we build canals to connect them the canals connect free bodies of water. When we have all this transportation available why should we go to the expense of putting down a railroad?
SEC. 303. GENERAL POWERS OF THE CORPORATION.
The Corporation is authorized to own, manage, operate, or contract for the operation of intercity trams operated for the purpose of
providing modern, efficient, intercity transportation of passengers, and
to carry mail and express on such trains, to conduct research and
development related to its mission; and to acquire by construction,
purchase, or gift, or to contract for the use of, physical facilities,
equipment, and devices necessan to rail passenger operations. The
Corporation shall, consistent with prudent management of the affairs
of the Corporation, call upon railroads to provide the employees necssary to the operation and maintenance of its passenger trains and to
the performance of all work incidental thereto, to the
extent the railroads are able to provide such employees and services
in an economic and efficient manner.
Of course, JWR’s reading of this clause will also be the opposite the way it is written.
TITLE VI—FEDERAL FINANCIAL ASSISTANCE
SEC 601. FEDERAL GRANTS.
There is authorized to be appropriated to the Secretary in fiscal
year 1971, §10,000,000 to remain available until exhausted, for payment to the Corporation for the purpose of assisting in—
(1) the initial organization and operation of the Corporation:
(2) the establishment of improved reservations systems and
advertising;
(3) servicing, maintenance, and repair of railroad passenger
equipment;
(4) the conduct of research and development and demonstration programs respecting new mil passengerservices;
(5) the development and demonstration of improved rolling
stock: and
(6) essential fixed facilities for the operation of passenger
trains on lines and routes included in the basic system over which
no through passenger trains are being operated at the time of
enactment of this Act, including necessary track connections
between lines of the same or different railroads.
I agree that external costs/benefits belong in the equation, but the analysis should be apples to apples.
The problem with that analysis is that it compares “all highway” against Amtrak. A major chunk of “highway” driving is commuting, not intercity transport. No doubt rush hour travel in urban areas is what contributes most to the external costs (crashes, pollution, etc.) Amtrak is not competing for these trips. And, these urban highways would exist with or without the connecting Interstate network. So, a fair comparison would be comparing the intercity trips on the Interstate network with Amtrak.
Amtrak probably does hold up well in the comparison in the NEC, but on direct comparisons on LD routes, I don’t think so… A single LD train carries no more than 10 lane-minutes of traffic.
The interstate highway system is very large. Certainly, especially around cities, rush hour commuting contributes to the traffic. It could be helpful to have some actual data on how much.
However, it is not clear to me that rush hour commuting adds significantly to crashes or pollution per person mile traveled. No doubt there is more pollution and more accidents at these times but there is also a lot more people using the highway to account for them. Even if we pulled out all of the commuters it might not make much of a difference to the per person mile statistics.
I do suspect maintenance costs for highways per person mile are highest in rural areas because relatively few people use those highways and a lot of maintenance problems arise because of deterioration even though the highways get less actual wear.
The percentage of truck traffic is higher. Impact on highway structure is a function of axle loading to the 5th power.
As for pollution…the impact is greatest in areas where the air quality is low. I-70 has to have a near zero effect on health in rural Kansas. There is only a minute change in air quality and there is no one there for it to effect.
I certainly agree that trucks degrade highways far more than cars do. But that leads to another analysis which is really more than I can handle right now.
John just look at the no truck roads in the New York area. Some have gone 40+ years wih no major pavement repairs.