Policy Study

Replacing Amtrak

A Blueprint for Sustainable Passenger Rail Service

Executive Summary

Amtrak is a failed national experiment. By its own admission, Amtrak is headed for bankruptcy unless Washington provides another multi-billion-dollar bail-out. Another federal rescue is unjustified considering that federal and state subsidies to Amtrak since its inception in 1971 are nearing $22.5 billion, an amount out of proportion to Amtrak’s usefulness in most of the nation.

The federal government does not run a national airline. It doesn’t operate a national bus company. There’s no justification for a national railroad passenger operation. America needs passenger trains in selected areas, but doesn’t need Amtrak’s antiquated route system, poor service, unreasonable operating deficits, and capital investment program with low rates of return. Amtrak’s failures result in part because it is a public monopoly-the very type of organization least able to innovate.

This study reveals an Amtrak credibility crisis in the way it reports ridership figures, glosses over dwindling market share, understates subsidies, issues misleading cost-recovery claims, offers doubtful promises regarding high-speed rail, lacks proper authority for the freight business it recently launched, and misrepresents privatization as its applies to Amtrak.

It’s time to liquidate Amtrak, privatize and regionalize parts of it, permit alternative operators to transform some long-distance trains into land-cruise trains, and stop service on hopeless routes.

In a post-Amtrak world, the United States can have passenger service closer to market needs, but we first must learn from the 40 nations that are privatizing and regionalizing rail services. Such railway transformations are described more fully in the Appendix to this study. Each of those countries, if it had to struggle with Amtrak, would phase it out of existence. This study offers a plan to create an Amtrak Transition Board to initiate the Amtrak liquidation process, and sets forth policy guidelines for post- Amtrak passenger rail service.

Attachments

Joseph Vranich is president of Spectrum Location Solutions. Mr. Vranich has been involved in rail passenger issues for more than 40 years. He has advocated building high-speed train systems through public-private partnerships and served as President/CEO of the High-Speed Rail Association in the early 1990s, where he won the Distinguished Service Award. He has testified numerous times before the U.S. Congress on high-speed rail and Amtrak-including Amtrak's high-speed Acela program. Early in his career he served as an Amtrak public affairs spokesman.

He has spoken internationally at the invitation of Japan's Ministry of Transport, Japan's Railway Technical Research Institute, European railway suppliers, and addressed a visiting Chinese government delegation in comments that were published in Vital Speeches. Also, he has met with the U.S. Department of Transportation, the Office of Management and Budget, and the U.S. General Accountability Office on rail passenger issues and was a U.S. Senate appointee to the Amtrak Reform Council.

Mr. Vranich is co-author of The California High-Speed Rail Proposal: A Due Diligence Report published by Reason Foundation in September 2008, which anticipated many of the project's shortcomings that have come into public view.

He is the author of Supertrains (St. Martin's Press, 1991), a book advocating construction of high-speed rail systems in the U.S. His second work, (St. Martin's, 1997), recommended creation of public-private partnerships and competitive franchising. His most recent book, End of the Line: The Failure of Amtrak Reform and the Future of America's Passenger Trains (AEI Press, 2004), outlined how Amtrak failed to comply with reform laws; it also detailed development of Amtrak's high speed Acela trains and examined railway reforms in 55 nations.