WASHINGTON, DC — A new direction that focuses on bringing competition to high-speed and intercity passenger rail service across the country was presented during a national briefing. The plan incorporates competitive bidding and private-sector involvement to bring high-speed rail to the Northeast Corridor and improve intercity passenger rail service nationwide.
U.S. Rep. John L. Mica (R-FL), chairman of the House Transportation and Infrastructure Committee, and U.S. Rep. Bill Shuster (R-PA), chairman of the Railroads, Pipelines and Hazardous Materials Subcommittee, presented their new direction for U.S. passenger rail service to national and state transportation officials and passenger rail stakeholders. The Mica/Shuster initiative is called the “Competition for Intercity Passenger Rail in America Act.”
“After 40 years of costly and wasteful Soviet-style operations under Amtrak, this proposal encourages private sector competition, investment and operations in U.S. passenger rail service,” Mica said. “Competition in high-speed and intercity passenger rail will cut taxpayer subsidies, improve service, and bring our nation into the 21st century of passenger rail transportation. Our plan will create jobs by finally bringing real high-speed rail to the one region of the country where it makes the most sense — the Northeast Corridor — and do so in a dramatically shorter time than Amtrak’s 30-year plan, at a fraction of their proposed $117 billion cost. “Amtrak has repeatedly bungled development and operations in the Northeast Corridor, and their new long-term, expensive plan to try to improve the corridor is simply unacceptable,” Mica continued. “The nation cannot afford to continue throwing money away on this highly subsidized, ineffective disaster. It is time for a new direction. Around the world, other nations and the private sector have successfully competed to develop high-speed and passenger rail service. There is no reason we cannot do the same in our most densely populated and congested region. By giving the private sector the opportunity to bring its resources and expertise to the table, we can lower costs, increase efficiency, and improve high-speed and intercity passenger rail service across the country.”
The Mica/Shuster proposal will also give states greater control and authority over their intercity passenger rail services, currently operated by Amtrak. Ridership on state-supported routes has increased significantly during the last 15 years, and incentivizing private-sector competition for rail services on these routes will ensure states and taxpayers get the best possible deal and the best possible service, the representatives said. The initiative will also open up other Amtrak long-distance money-losing routes to competition, allowing the private sector the opportunity to bid on any intercity route and potentially improve service.
“It is time to deregulate America’s passenger rail system, and give intercity passenger rail the same opportunity for success that the freight rail and commercial truck industry have benefited from” Shuster said. “We must look for more effective and innovative approaches to providing modern and efficient passenger rail service by focusing on projects that make sense, leveraging private-sector investment, increasing competition, and opening the door to public-private partnerships.
“Both around the world and right here in the United States we have seen that competition works,” Shuster continued. “When Virgin Rail began operating the West Coast Line in Britain, the company doubled the corridor’s ridership in six years and turned a profit. Here at home, in an open-bid process, Veolia won over Amtrak for Florida’s Tri-Rail South commuter line at $97 million to Amtrak’s $162 million. Success and cost savings like this can happen here if we end the Amtrak monopoly on intercity passenger rail and open it to competition. Done right, what in the past has been a liability can become an asset, generating jobs, economic development, and value for hardworking taxpayers.”
Northeast Corridor competition Mica and Shuster said the initiative will bring real high-speed rail to the nation’s Northeast Corridor (NEC) between Washington, D.C., New York City, and Boston. The NEC is the region of the country where high-speed rail offers the greatest chance of success and the most national benefits. The corridor is already owned almost in its entirety by Amtrak. It is the most densely populated and congested area of the United States, and has the essential transit connections necessary for a successful high-speed system. Unfortunately, Amtrak’s Acela currently averages only 83 mph between Washington and New York, and just 65 mph between New York and Boston. According to the representatives, the Mica/Shuster initiative will:
End the Amtrak monopoly • separates the NEC from Amtrak, spinning it off as a separate business unit • transfers the title for the NEC to U.S. Department of Transportation (DOT), including all assets, property, and trains DOT enters into a 99-year lease with a NEC Executive Committee, which would manage NEC infrastructure and operations
Bring private-sector expertise and financing to the table • requires a competitive bidding process for development of high-speed rail on the NEC • allows the private sector to recommend the best public-private partnership framework • establishes performance standards for competitive bidding process, including real high-speed rail on NEC — less than 2 hours between WDC and NYC; double total intercity rail traffic on NEC; highest level of private-sector participation and financing; lowest level of federal funding; full implementation in 10 years or less; and winning bids selected by NEC Executive Committee.
Protect the public interest • five-member NEC Executive Committee represents federal and state interests • all current commuter and freight operations on NEC are protected
The time is now • NEC high-speed rail in one-third of the time as Amtrak’s proposal, with firm deadlines • within 20 months of enactment, the NEC will transition from Amtrak monopoly to public-private partnership
Create and protect jobs • new jobs for rail construction and operations • new jobs associated with development around rail stations • hiring preference to any displaced Amtrak employees
Intercity passenger rail competition Fifteen states around the country currently pay Amtrak to operate intercity passenger rail. Unlike the NEC, most state-supported routes run on track owned by freight railroads. The Mica/Shuster proposal encourages private companies to compete on these state-supported intercity routes. Because these routes still require federal subsidy, and because they are operated by Amtrak, there is significant room for improvement in service quality and financial performance. The Mica/Shuster initiative will:
Create competition and improve service • promotes competition by encouraging states to initiate a competitive procurement process for a menu of services • incentivizes competition by redirecting funds from Amtrak to state DOTs • establishes an expert panel for recommending competitive best practices
Save taxpayer dollars • allows states to keep money saved through competitive bid process • saves federal taxpayer dollars by requiring a new allocation process in 2020 to reflect cost savings achieved through competition
Protect freight railroad interests • involves host freight railroads through market-driven access negotiations
Create and protect jobs • requires states to maintain current levels of service • creates private-sector jobs • provides hiring preference to any displaced Amtrak employees
Long-distance passenger rail competition This initiative will finally allow for competition to Amtrak’s least successful lines in an effort to reduce federal subsidies and improve service. Amtrak’s long-distance routes are subsidized at an incredible $117.84 per passenger on average. For example, the Sunset Limited, traveling between New Orleans and Los Angeles, lost $407.92 per passenger in 2010. Amtrak’s failing long-distance routes need to be opened to competition to reduce the burden on taxpayers and improve service for the traveling public. The Mica/Shuster initiative will:
Create competition and improve service • promotes competition by allowing private-sector operators to compete with Amtrak to operate long-distance routes • requires winning bids to be selected based upon the lowest possible level of federal support • allows private-sector operators to make a profit, incentivizing improved service and ridership growth
Save taxpayer dollars • mandates that operating subsidies for contracted long-distance services be lower than Amtrak subsidies
Create and protect jobs • creates private-sector jobs • provides hiring preference to any displaced Amtrak employees
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