Amtrak's Current Situation

Amtrak, by law, must become self sufficient by December 2, 2002. No more subsidies from the federal government are to made available. Amtrak is currently 1.1 billion dollars in debt part of which is due to the economic conditions prevalent after the September 11th terrorist attacks. A congressional advisory panel has suggested that Amtrak be broken up and that routes be made available to private companies, via franchise-based competitive bidding, to run.

So much for congressional wisdom. Any entity that is expected to provide service across the United States, even in areas where service could not possibly be made profitable due to low ridership and distances, is bound to result in losses because pricing cannot reflect actual costs in these low traffic areas and therefore will always result in losses.

The only options for private firms to succeed would be for rail ticket prices to be raised making the costs un-competitive with air travel, or to only provide service in the Northeast corridor, which is the only section of Amtrak that has a high enough ridership to justify its existence.

If Amtrak is expected to provide reasonably priced passenger rail service through the United States, some form of federal subsidy is required. Congress' attempt to privatize the rail network will only mean a loss of passenger rail service for millions throught the US.

02/07/02 ( 320 )
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