GOP, Amtrak debate responsibility for long-distance train routes

by Keith Laing, The Hill Newspaper
5/21/13

House Republicans and Amtrak debated on Tuesday who should be picking up the tab for long-distance rail lines in the U.S.

Each side agrees that the routes are sure money-losers. But the agreement stopped Tuesday when it came to whether or not the federal government should be subsidizing the service.

“Year after year these routes lose money,” Rep. Jeff Denham (R-Calif.) said during a hearing of the House Transportation and Infrastructure Committee after acknowledging Amtrak’s gains in ridership on its shorter routes.

“In 2012, they lost a combined $600 million,” Denham said of the company’s long-distance service. “We simply cannot afford to continue these levels of subsidized losses year after year.”

Amtrak CEO Joe Boardman countered that subsidizing the losses on long-distance routes was a big part of the reason Congress created the company in the first place.

“Congress is clearly 100 percent in charge in directing how long distance train service is provided in the United States and has been ever since it created Amtrak more than 40 years ago,” Boardman said. “Should Congress again decide in the next passenger rail reauthorization to continue a national system, Amtrak is dedicated to ensuring that long distance trains are sustained and run as efficiently and effectively as possible.”

Amtrak has typically received about $1 billion in subsidies from the federal government since it was created by Congress in 1971.

Denham said he was not against all rail, pointing out that Amtrak was doing well in areas “where rail makes sense.”

“On the northeast corridor, Amtrak earns a substantial ‘above the rail’ operating profit and with the introduction of the Acela, Amtrak has captured 75 percent of the Washington to New York rail-air market,” he said. “Amtrak has also seen significant ridership increases on its state-supported routes, which connect metropolitan areas less than 750 miles apart.  In many ways, these are the routes where rail makes sense – connecting densely populated areas where rail trip times are competitive with air and automobile options.”

He criticized the company for not meeting reporting requirements for the financial performance of its longer routes, however.

“[The Passenger Rail Investment and Improvement Act of 2008] requires Amtrak to develop and post on its website performance improvement plans for its long distance passenger routes and implement those plans for its worst performing routes,” Denham said. “This all was supposed to be done by 2012.  However, as we all know, long distance has been losing more and more since PRIIA became law.”

Boardman told lawmakers that Amtrak was created by their predecessors many Congresses ago to take responsibility for those losses away from private rail companies, who were more likely to cut service because they were primarily motivated by profit.

“I think the basic vision for the most efficient and effective intercity passenger rail service was realized in the original Rail Passenger Service Act, which created Amtrak 42 years ago,” Boardman said. “It freed the private sector to concentrate on profit-making freight services, but ensured that private carriers retained some residual responsibility to the public to move our trains.”

Boardman told the committee that Amtrak’s long distance trains are “vital” and “represent a vital contribution to mobility.”

“Amtrak serves about 40 percent of America’s rural population, and in many places we are best tangible reminder for people of the federal government’s investment in transportation,” he said.

The debate came as lawmakers in both chambers are gearing up for debate over an extension of the PRIIA rail funding bill, which also contains Amtrak’s authorization for operation.

Denham called Tuesday’s hearing “another step towards the committee’s bipartisan efforts to complete a rail reauthorization bill this year.”

Boardman told lawmakers to focus their efforts to pass a new PRIIA bill on funding for capital improvements to the company’s rail system.

“Amtrak will have significant capital needs in the coming years if we are to deal with the challenges of an aging fleet and infrastructure,” he said. “These are capital investments of the kind that every transportation system – and viewed from the perspective of energy efficiency, it’s clear that our rising ridership and natural efficiencies offer the country a transportation policy solution that addresses fuel costs, congestion, and land use challenges in a single package.”

However, Denham said on Wednesday that it was part of Congress’ job to look at Amtrak’s operational expenses too.

“One of the key goals of the current [rail bill] was to seek cost efficiencies and savings in Amtrak’s operations,” he said.

http://thehill.com/blogs/transportation-report/railroads/301113-gop-amtrak-debate-responsibility-for-funding-long-distance-train-routes#ixzz2TyuzjyEU

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