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Privatize Amtrak

May 23, 2011 - Rob Weaver
Today’s editorial concerns a proposal to lease the Ohio Turnpike, and in my blog I want to take the concept of privatization to transportation on a national level.

I suggest a long-term lease of Amtrak.

Amtrak, created by the Rail Passenger Service Act of 1970, operates passenger rail service in the United States. Although the official name -- National Rail Passenger Corp. -- sounds like a business, and Amtrak is structured as a corporation, its board members are presidential appointees and its stock is controlled by the government. What this means is Amtrak is run like a bureaucracy, not a business.

A business exists to earn a profit by selling products or services to customers. If not, it will cease to exist. A bureaucracy exists by getting money in the national budget. Amtrak has gotten more than $40 billion during its existence. Last year, Amtrak received $563 million in operating subsidies and $1 billion in capital and debt service grants. The stimulus act provided another $1.3 billion.

Traveling by train is less convenient than driving and slower than flying. Of course, buses are saddled by the same disadvantages, but bus lines stay in business by beating airfares and the cost of owning a car.

It’s time to let a private entity try to make money by transporting passengers by rail. Railroads seem to be doing a good job of moving freight in a cost-competitive manner.

There’s another compelling reason to sell -- or at least pursue a long-term lease of -- Amtrak. The Passenger Rail Investment and Improvement Act of 2008 will require states which have the passenger service to negotiate cost-sharing agreements with Amtrak in 2013.

It’s a good thing Ohio opted out of subsidizing high-speed rail service between Cleveland and Cincinnati. In less than two years, Ohioans may be subsidizing slow-speed rail service.

 
 

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