Why then, would anybody expect such a ludicrous plan to work for passenger rail? Barring Amtrak's unique public, "for-profit" corporation status, this scenario is much like their ill-fated takeover of the Northeast Corridor (NEC) in 1976. In order to make the new for-profit Conrail corporation actually turn a profit, the NEC, and other lines, were relegated to the cynically-created, and perpetually under-funded Amtrak, who "bought" the lines for a mere $86,366,000. Certainly any outside observer (and anyone with an inflation calculator) could hypothesize that that $86 million would be perhaps better spent on new rolling stock or repairing the maligned infrastructure in question, than providing what could be construed as nothing more than a bailout to mitigate decades of mismanagement by the former Pennsylvania and New York Central railroads.
The federal government has also provided money for renewal of the Northeast Corridor; they've funded capacity expansion and electrified the northern half. Two programs aimed at bringing the corridor to a state of good repair had invested billions of dollars by 1998, but the start of the Acela service in 2000 apparently inaugurated a period of investment plateauing. With the absence of a dedicated funding stream for Amtrak, or the Northeast Corridor itself, federal investments now trickle in after a years-long process of environmental impact planning, lobbying, public outreach, design, likely more environmental impact planning, and downright begging. The implied logic of a statement such as, "not only was this bridge completed when Howard Taft was president, and not only does opening this bridge take dozens of workers, and often creates disastrous consequences when the bridge fails to close, but this bridge carries only two tracks, when there needs to be four, and it constitutes a major bottleneck, even when it functions properly," is clearly viewed as spurious.
The problem, one could contend, is that Amtrak falls victim to the same flawed mindset that prevents rich people from riding a bus; they have a fundamental contempt not only for public transportation, but for the people that use it as well, because, among other things, it is viewed as "money-losing." Indeed, many Republicans have garnered so much success from lambasting and denying money to passenger rail that they've convinced moderates and anyone looking for a little populist support, that speaking out against passenger rail investment brings guaranteed results. The same person who is making such a seemingly good case for why passenger rail wastes so much tax-payer money, would never be heard denouncing the FAA or calling for an end to federal subsidization of airports. The main reason being, that wherever this person is speaking at, they probably took an airplane to get there, and buying an airplane ticket or landing your private jet would instantly get a whole lot more expensive, if the federal government weren't spending nearly $16 billion (and the cities that own the airports spending millions of dollars) a year to keep those prices low.
The reality of the Northeast Corridor, is that in 2012 (the most recent year for which data are available) 15,168,327 intercity and 347,956,398 regional or commuter rail trips were made. Amtrak has captured 75% of the trips traveled between New York City and Washington D.C. Nobody can argue this line's importance, or Amtrak's importance for that matter. Amtrak's NEC services do make make money; they make far more money than it costs to operate them. Amtrak makes money on the Northeast Corridor the exact same way that airlines, freight trucks, and intercity buses make money. No one would even dream of Congress interrogating the management of American Airlines or J.B. Hunt about why are they costing the American taxpayers so much money, and how are they going to reform their businesses to not only make a profit (when factoring in their infrastructure costs) but to start generating enough money to maintain that infrastructure. If all modes of transportation would held to the same standards that Amtrak is, that's exactly the scenario that would unfold.
It is true, that neither American Airlines or J.B. Hunt own or control any portion of the public infrastructure that they operate over. It is also true, however, that Amtrak owns the NEC in a statutory sense only. The $86,366,000 dollars that was authorized in 1976 for it's purchase, was financed by Congress, not by Amtrak revenue. Congress has also put up most of the money that has since been used to upgrade and renew the NEC. Because Amtrak is burdened with the incredibly expensive task of maintaining the Corridor, they also require an annual operating subsidy from Congress. It should be obvious to most, that if Amtrak were not required to funnel all of the money generated from ticket revenue into their infrastructure, they would be much better positioned to operate without a subsidy, and indeed "for a profit." Why wouldn't the subsidy-loathing Congress, or the American people as a whole want this ridiculous charade of money flowing from one account to the next, with so many partisan-based political games played that dictate when, why, and how much money should be allowed to flow? Everyone, at least anyone that lives in the northeast, knows that because the Northeast Corridor is so fundamentally important to the continuation of American society that Congress would never let its downfall come about, so why should the question of whether or not the NEC should receive public financial support even continue to be raised?
The answer is that the NEC is owned mostly by Amtrak, and as stated earlier, since Amtrak's inception, there have been many people in America who are fundamentally opposed to it's existence. Amtrak management, who almost unanimously would rather let Amtrak be dissolved, than face a situation where the company didn't control the NEC, are completely opposed to letting go of the Northeast Corridor. The reality is, however, that its not entirely theirs to own. The American tax-payers have kept the NEC running, and will continue to do so until a truly private company can figure out how to make passenger rail infrastructure profitable (and if they were required to repay all of the money spent by tax-payers on improving the corridor, accounting for inflation, it would be completely impossible). This is a very good reason why the Northeast Corridor should not be under the control of a very small number of people, who hold their own biases about how the railroad should operate, the same way that no quasi public-private company should control Interstate 95. There would be extreme public outcry if such an organization were created to control I-95, and then imposed very hefty, and seemingly arbitrary, access fees to residents of New Jersey, while levying lower access fees from residents of Maryland.
It should be obvious now, that because a very old and worn out railroad, like the NEC, is incredibly expensive to maintain, it should not be owned by any organization attempting to generate a profit off of controlling it. Public infrastructure-airports, interstate highways, dams, railroads, etc.-should not be owned or controlled by profit-generating organizations for no reason other than they do not generate a profit-when factoring in all associated costs of maintenance and expansion, and not factoring in economic impact. The Northeast Corridor is an incredibly expensive railroad, and it is in need of an incredible amount of investment to bring it into a truly good state of repair. It is, however, and incredibly important public asset, that supports the livelihood of tens of millions of people every day, and needs to be invested in heavily to keep America functioning. If the NEC were brought to a state of good repair, and maintained with a dedicated and adequate funding stream, it would generate hundreds of millions of dollars of revenue a year both for Amtrak, and for the regional railroads that also use it, assuming their cost to use it were commensurate to the access fees charged to airlines and trucking companies for their equivalent infrastructure usage.
Freeing Amtrak from the burden of the NEC, the exact same way that Conrail was freed from it, would create a profitable Amtrak that could operate and potentially expand all of its national services, without an operating subsidy from the federal government. The Conrail story was considered by most to be a success, and Amtrak can certainly have the same fate. Amtrak would be able to run all of its services much more efficiently and would remain much more focused on their primary role as a train operating company after being released from the burden of rallying political and financial support to invest in their physical infrastructure. While cannibalizing their revenue surplus in an attempt to fix the never ending list of repair projects on the NEC, cuts are made anywhere possible in the Amtrak system, which ultimately leads to a loss in ridership-further adding to their perpetual funding problems.
Before this can happen, however, a public rail infrastructure manager needs to be created, whose sole task is maintaining the network of publicly held rail lines, and regulating their access, in a completely non-biased way. Examples of similar organizations to this can be found all over the world, but most notably in Great Britain. Network Rail was created as a result of the many disasters that followed the de-nationalization of British Railways, but it has since become a model of how a liberalized rail network, orignially born from private companies, can operate successfully. America can learn from Britain's mistakes without having to make them ourselves. A not-for-profit infrastructure manager, like the FAA or the Federal Highway Administration is the only solution to rebuilding and maintaining America's railway assets, and would fit well among it's sister infrastructure organizations in America's currently democratic and capitalistic society. It is highly likely that given an accurate representation of the current state of public funding for public transportation infrastructure, and the desperate need for added infrastructure capacity, more politicians and American citizens would support dedicating the amount of funding needed to bring America's passenger rail infrastructure to an acceptable state-of-good-repair, that could increase train ridership, and reduce environmental pollution, exponentially.
Ironically, one would be hard pressed to come up with a better name for a federal organization that did nothing but manage and maintain public railroads than Amtrak (perhaps AMTRACK?), but such a visionary metamorphosis in American government would certainly require a break from the historical way of branding (and running) these organizations. Amtrak was created as a temporary stop-gap, that in the interim, relieved freight railroads from running a truly money-squandering business of what were in some cases very luxurious and inefficient passenger trains. Most of these trains used out-dated, worn-out rolling stock (due to the railroads' intentional degradation of service, to make a better case for abandonment) that were running well under capacity, exacerbating financial stress on the companies. For what the railroads considered to be a great bargain at the time, merely having to accommodate a few passenger trains per day and maintain the track that those trains ran over to the same standards it was in before Amtrak began operation, the railroads were relieved of their legal obligation to run passenger trains, and they shed the many expenses that running passenger service required: rolling stock maintenance, scheduling of both passenger and freight trains, and employing a small army that kept the railroad maintained and the passenger trains running.
What no one expected at time, however, is that Amtrak would succeed in not only relieving the freight railroads of great financial burdens, but it created a national network of passenger trains that grew more efficient every year, eventually realizing the economy, and flexibility, of scale. Amtrak’s fare-recovery was at 89% in 2013, and it continues to rise. The main impediment to Amtrak succeeding is that it has never had a dedicated source of funding, and the inadequate subsidies it has received only cover their operating costs and do not provide for any expansion of service. Acquiring new rolling stock and increasing train frequencies would immediately lead to an increase in ridership, eventually leading to an increase in fare-recovery. The Northeast Corridor and most high-density commuter rail lines, however, have limited capacity for increased train frequencies, so to accomplish this, investments in infrastructure need to come first.
Once the American people, and government, can accept railroads as a completely necessary and complimentary piece of our public transportation portfolio, only then can we move forward with rebuilding them. There are infinitesimal and painfully slow steps being made to do this, but the reality is that America, and the environment, can no longer accept the glacial pace at which America's railroads and the NEC are being modernized. In order to not only make a significant impact on reducing America's impact on global climate change, but to continue to operate on a daily basis, with it's gridlocked-highways and over-crowded airports, America has to confront the issues surrounding it's neglected, publicly-held railways and make real and lasting change. Passing legislation that moves towards creating a network of open-access, well-maintained railways, that fosters competition to not only create more intercity and regional rail service, but to do so safely and profitably, is the only solution to moving beyond the mistakes made in the 20th century that has left America's railways neglected, underfunded, unsafe, inefficient, and so grossly behind the international standard of national and international transportation for both passengers and freight, that it is completely humiliating.
No comments:
Post a Comment