House GOP Plan for Privatizing Northeast Corridor Fails to Offer Viable Solution

AcelaTrainOn June 15th, Chairman John Mica (R-FL) and Rep. Bill Shuster (R-PA) of the House Transportation and Infrastructure Committee proposed a bill to privatize the Northeast Corridor and bid it out to private investors under a contract to design, build, and operate a high-speed rail system. It would also open up all of the nation's state-sponsored and long distance passenger rail corridors currently operated by Amtrak to private competition, turning over Amtrak rolling stock and reservation systems to the highest bidder.

While America 2050 shares the goal of achieving world class high-speed rail service in the Northeast Corridor and improving passenger rail service throughout the nation, the bill is seriously flawed in its current form.

Photo: Flickr/AmtrakFanNEC927

The legislation, titled the "Competition for Intercity Passenger Rail in America Act," would separate the Northeast Corridor's physical assets from Amtrak, transfer them to a new unit under the U.S. Department of Transportation, and ultimately offer them to private investors, who would bid to maintain and upgrade the physical infrastructure, including the right-of-way, tracks, overhead catenary wires, and rolling stock. Revenue for maintaining the Corridor, as well as for providing a return on investment to private capital, would be generated by charging all trains operating along the Corridor a neutral, common track access fee. With operations separated from infrastructure maintenance, the government would accept bids from private companies or from Amtrak to design, build, and operate a new high-speed passenger rail service on the Northeast Corridor.

While public-private partnerships can play a critical role in delivering high-speed rail service, no high-speed rail system in the world has succeeded without significant up-front public investment and involvement. In this case, the Northeast Corridor has an existing $8.8 billion backlog of repairs and maintenance that the federal government took responsibility for when it created Amtrak in 1971. No operator, be it Amtrak or a private company, will be able to deliver successful high-speed operations until this backlog is dealt with. Also, Amtrak has a track record of successful performance along the Northeast Corridor. It would be counterproductive to neglect their expertise and unfair to transfer their equipment and rolling stock to a private actor, as is proposed by the legislation.

The proposed legislation would also negatively impact corridors outside the Northeast. State-sponsored Amtrak services, which currently operate in 15 states like Pennsylvania's Keystone Corridor and Maine's Downeaster, would be opened up to private bidding. While the Northeast Corridor and other lines serving relatively densely-populated areas may be viable for public-private partnerships, state-sponsored and long-distance corridors are likely to continue to require public subsidy.

Despite chronic underfunding, Amtrak has been a reliable operator along these routes and has long-standing relationships with the freight railroads that own the track. There is little to gain by putting these lines out for competition and much to lose.

Download a copy of the legislation here.

Read America 2050 Co-Chair Robert Yaro's comments on the legislation here.