TRAINS NEWSWIRE for this contains a story by of Fred Frailey referencing the move in Congress to strip the NE Corridor away from AMTRAK, and give an entry to Privatization by other Operators ( I am guessing an"Open Access" situation similar to that in the UK(?).
FTA:"….Rep. John Mica, R-Fla., thus began what promises to be a long and maybe ideological struggle over control of Amtrak’s most valuable asset, the 457-mile line connecting Boston with Providence, R.I., New York City, Philadelphia, Baltimore, and Washington. In fiscal 2010, the corridor carried 10.4 million Amtrak passengers and many times more commuter rail passengers using the same tracks. It’s the closest thing Amtrak has to a profitable corridor, earning in 2010 $50 million more than fully allocated costs, but failing to cover its capital needs by several hundred million dollars…"
FTA:"…Democrats joined Amtrak president Joseph Boardman in questioning the wisdom of Mica’s initiative. Boardman told reporters at a briefing, “This is even broader than the Northeast Corridor. The bill privatizes intercity passenger rail. This takes Amtrak apart almost completely. I am not supportive of the way this would be structured.” Boardman spoke before the actual wording of the bill was made public. But he stopped short of explicitly opposing Mica’s legislation…"
*There has been some discussion in these Threads from time to time (*Futuremodal,on ‘Open Access’ comes immediately to mind[banghead]. It seems that Rep. Mica has an ‘ax’ to grind with AMTRAK(?) One has to wonder some of the, Whys and Wherefores of this position spring from. Hope it will be an interesting discussion.
My father, Joseph V. MacDonald, was a member of the Amtrak board of directors from July 1974 to June 1978. I learned from the linked article that he didn’t think Amtrak owning the NEC was a very good idea.
If you want to kill something that is the way to do it. Take it’s most valuable asset away from it and watch the losses skyrocket. That will help you get public opinion on your side as you try to kill it.
“Senator [Durbin] announces bill that would undercut Amtrak privatization”
FTA:'…W_ASHINGTON — A U.S. Senator with a history of supporting Amtrak has introduced legislation that would likely shut down plans to privatize Amtrak, Crain’s Chicago Business has reported. Sen. Dick Durbin, D-Ill., has introduced a bill that would make spinning off federal transportation infrastructure dramatically more difficult…"_
FTA:“…The bill appears aimed at the Amtrak proposal outlined by Rep. John Mica, R-Fla., and Rep. Bill Shuster, R-Pa., earlier this week, as well as an aborted plan to sell Chicago’s Midway Airport a few years ago. Mica and Shuster’s plan would sell the Northeast Corridor and open all of Amtrak’s routes to competition from private groups…”
Looks like AMTRAK may have ducked another"Bullet"… [^o)]
It is not possible to have competition on rail routes as long as one company owns the rails.
If Interstate 77 was owned and operated by one trucking company why would they let any other trucking company use it? What would trucking cost if each company had to build and maintain their own roads?
The only way to have competition is to separate the main line operation from the service providers; Government owned, or privately owned by a separate entity and operated like a toll road.
I’ve wondered this myself. Never heard of anyone being particularly interested in it or anything.
I’d go so far as to say its not possible to have competition on passenger routes at all, regardless of who actually owns the tracks.
Theres only one best way between points A and B. The two options are a common route or two competing routes. If its a common route with the two companies providing the same services (slightly different schedule of course) at the same price, theres no competition at all. Neither company can gain any sort of advantage, outside of onboard amenities to attract customers. The likely course is that ultimately they would merge. Leaving you with one company.
If they use competing routes, one route will have a more desirable arrival time, because it will be shorter. Whoever has that wins. Leaving you with one company.
Theres only so much space for optimal or semi-optimal routes. Otherwise, cities would have competing subway systems. There’s certain things that are just better off in public hands. Namely ground transportation, and to an extent the airports and seaports. Its difficult or impossible to have competing intra-city bus systems, subways, light-rail, and so on. I’d extend this out to intercity passen
You are speaking of an open access situation. Do you really think that a potential private owner of the NEC would be willing to give up the private enterprise right to decide who can use his private property?
I can tell you that the private freight railroad are always opposed to government mandates that require them to let a competing freight train operator use its tracks. And, even though they were relieved of huge financial burdens when they spun off passenger service, the fact that Amtrak is able to get away with paying less than their full share of the cost of the necessary private rail capacity, the deal does not sit very well with the host freight railroads.
That is exactly my point. All the silly talk about privatization opening it up to competition will not work without open access. You cannot have competition without open access.
Competing bus companies all use the same road. Competing airlines all use the same jet routes and the same air traffic control system. Competing ship lines all use the same ocean routes. Competing trucking companies all use the same roads. The only way you can have competing train companies is if they all have access to the same ROW.
If the Ray LaHood, Secretary of Transportation called me today and said he had been granted full authority to sell me the NEC for $1.00, including the railroad infrastructure, maintenance facilities, and all the Amtrak rolling stock to run the trains**-free of all debt**-, I think my response would be "Do I look that stupid?
As the new owner, I would be faced with an annual “normal” capital expenditure of upwards of $200 million per year just to keep the railroad at its present physical condition. As noted in Fred Frailey’s blog here on the Trains website, that amount, save for one year, would be well in excess of any operating profit generated by the NEC.
I guess I could try to cover the expense and make more profit by running more trains, but since the Hudson River rail tunnels are at capacity, it looks like I would have to come up with maybe $25 Billion to get that done.
There is one business plan that I think would work. As the new private owner, I could sell the line for scrap value, giving the commuter lines that operate on my track the right of first refusal. I can just see New Jersey Governor Christy jumping at the chance to buy the part of the NEC used by New Jersey Transit for scrap value.
Good idea. Forget about the 862 thousand people a day who rely on the NEC for transportation. Let’s cut it up for scrap. They are probably all Liberals and socialists anyway. If someone can’t get rich doing it then it shouldn’t be done.
Of course they could all drive their cars. I mean why should I be bothered by traffic jams on I-95 or another 2-4 millions of gasoline burned each day. I live in fly-over country and we are up-wind.
Pretty obviously, no one is going to be able to run commuter service for hundreds of thousands of people per day in the NEC route and turn a profit. So, is that the only criterion to determine whether or not a service is worth running? For some of the ideologically pure, it seems to be so. However, the economic disaster that would result if that notion were carried to its logical consequence is too ridiculous to bother to discuss.
Not to say that the idea of privatization of any government activity or entity is a non-starter-it is more of a “Be very careful what you wish for”.
I think Senator Durbin’s bill has established an important criteria as a starting point. From what I understand, his proposed bill says that the minimum selling price for any government infrastructure would be the public investment in the property, less depreciation. That seems reasonable to me. It basicly says that taxpayers will have paid for the assets used up during government ownership, but would not be giving away assets not yet used up for less than their cost.
He added a caveat that a buyer of such property would have to specify the amount of any “special” tax credits that might come as a result of the sale. Such would have the effect of reducing the value of the transaction to the taxpaying public.
It seems to me that this is a reasonable requirement that ought to be acceptable as a starting point for anyone without regard to their ideological view. After that the debate can go on as to whether any given deal is a “good” idea.
Interestingly, someone who was involved representing the buyer(s) on Chicago’s proposal to privatize Midway Airport, said that Durbin"s price critera would have been a deal breaker. (Coincidently, sale of Midway has been off the table for some time).
A caution, speaking of ideology: we are ot permitted to introduce it to our discussions. Talk about pragmatism, limitations, dreams, opportunities…but not about ideology.
I am sure you understand that the physical constraints of railroad track and the resulting need for extremely tight control on the movement of trains over that track. A trucker can pull on a highway at almost any point and observing rules of the road run that truck over any route and completely control the movement and direction of the truck without specific instructions from a higher authority. Obviously a train can not be operated with the same freedom of choice. In fact, as you know, a train cannot move the first inch without specific dispatch authority to start to move.
That is not to say that something more like a “semi-open access” system couldn’t work. Suppose that a law was passed that said any or all Amtrak services should be opened for bidding for a contract to operate the trains and Amtrak would also have to compete for the contract to continue to run the service. Although some believe that entities other than Amtrak could run trains at less cost, all things considered, it seems likely the continuation of any service would still require government support. That’s not bad, but there is also a very high risk that an entity getting a contract would not have the managerial experience and expertise to
Can you elaborate on that? I had to look up ideology to find out if there is some aspect of its definition that would explain why it is suddenly off limits for discussion on this forum. I could not find anything that would explain it.
The debate is basically about whether we should have privatized or nationalized transportation. One side says we need to provide nationalized transportation because some people say they need it and can’t afford it. The other side says that if the user can’t pay for it, they should not have it. Both of those positions are ideological. And both are the heart of every single post that has ever