Private-Sector Dollars Sought for Transit, High-Speed Rail
As mass transit officials, struggling to keep aging systems in usable condition, explored the possibility of private-public partnerships, Republicans unveiled on June 15 a plan to take the Northeast Corridor away from Amtrak and privatize it.
House Transportation and Infrastructure Committee Chairman John Mica (R-Fla.) fleshed out a plan to draw private-sector money to upgrade passenger rail service from Washington, D.C., to Boston to high-speed levels.
The plan would remove from Amtrak's control its 363 route miles of the 457-mile-long Northeast Corridor (NEC). The proposal would seek bids to build, maintain and possibly operate high-speed rail there, including new, dedicated high-speed track along the route.
Amtrak has proposed a $117-billion, 30-year plan for the NEC and seeks private-sector investment. But Mica contends his proposal could do the job in 10 years and at a much lower cost.
Transportation Secretary Ray LaHood commended Mica for focusing on high-speed rail in the Northeast Corridor but said, “Based upon our preliminary review, we have many questions about the Mica proposal's feasiblity.”
LaHood added, “At present, we believe Amtrak is the entity most capable of taking the next steps to modernize rail service in the Northeast Corridor, which is why the administration has serious concerns about any proposal to privatize Amtrak's Northeast Corridor.”
Mica said Amtrak would not be precluded from bidding. Under his plan, drawn up with the assistance of Rep. Bill Shuster (R-Pa.), the U.S. Dept. of Transportation would assume control of the NEC, review bids and narrow the contenders to two or three finalists. A new NEC executive committee, to include members representing federal and state governments, would pick the winner.
Former Pennsylvania Gov. Edward Rendell (D) praised Mica's plan, saying, “We have to build our own dedicated line. We can't share a line with commuter trains. We can't share a line with freight traffic.”
Amtrak President Joseph Boardman said the corridor “is not just a piece of real estate” and that Mica's proposal “takes Amtrak apart only to put something in its place that looks quite similar.”
Mica is likely to get his plan through committee and maybe the full House. However, the measure is likely to stall in the Senate, which Democrats control. Sen. Frank Lautenberg (D-N.J.), said, “The Republican proposal to privatize rail on the Northeast Corridor would increase costs for passengers and make rail travel less reliable.”
At the American Public Transportation Association's annual rail conference, held in Boston that same week, Federal Railroad Administrator Joe Szabo pointed out that Amtrak has seen 19 consecutive months of ridership growth. Asked about the Mica plan on June 13, he said, “We need a good conversation about the role of private investment.” But he expressed caution about “letting this public asset slip away from us.”
Charlie Hogue, a spokesman for the Brotherhood of Maintenance of Way union, says the Mica proposal would jeopardize the retirement plans of some 10,000 workers on the corridor and questioned why Mica would want to privatize the one Amtrak line that was already profitable.
APTA officials largely supported President Obama's proposed $556-billion surface transportation reauthorization bill, which includes $53 billion for high-speed rail over the next six years. The plan proposes to merge Amtrak's subsidies into the high-speed-rail program as part of a “system preservation” initiative, requiring Amtrak to compete for grants.
Panelists discussed the successes and failures of rail-related P3s around the world. Nicholas Hann, managing director for investor Macquarie, noted that an initial attempt to privatize British rail failed, although, eventually, the private sector took over again. For greenfield projects, P3s often are seen as a funding mechanism, Hann added. “They are better regarded as an efficient delivery mechanism,” he said.
