Amtrak's Troubled Railroad

December 28, 1993

Thomas M. Downs, the new president of Amtrak, has his hands full. He walks into a situation where his quasi-private company is in crisis. Revenues are flat, there are big unmet maintenance needs, the public is losing confidence and Washington's financial commitment to America's only passenger railroad is in doubt.

Ever since it was established in 1971 to take over unprofitable private-sector passenger rail operations, Amtrak has led a troubled life. But along the way, Amtrak restored rail travel in the Northeast Corridor and along the West Coast and made it a popular alternative to the car or airplane. Huge federal outlays for rail bed improvements and for new passenger cars and locomotives led to better service along its 24,000 miles of track in 45 states.

Still, Amtrak has never come close to achieving an operating profit. Only two routes are clearly in the black. Help from Washington remains essential to its continuing in business.

Mr. Downs' predecessor, W. Graham Claytor Jr., succeeded in increasing Amtrak service and its revenue (till the recession) while its federal subsidy was slowly decreasing, But, ironically, that lack of federal aid meant cuts in maintenance that led to deteriorating on-time performance and a recent raft of derailments. Now Mr. Downs has to find ways to make riding the rails more popular once again while fending off efforts in Washington to sharply curtail Amtrak's subsidy.

For fiscal 1994, Congress approved $351 million for Amtrak's operations, plus $195 million for capital improvements and $225 million for electrifying Amtrak's New Haven to Boston route and buying 26 high-speed trains. The railroad now covers nearly 80 percent of its operating costs through ticket sales (up from 48 percent in 1980).

But next year, Congress will make basic decisions about Amtrak's future when it takes up reauthorization legislation. There is also the threat that the Clinton administration, faced with severe budget restrictions on existing programs, will not see Amtrak as a priority. That would be tragic.

Public inter-city rail transportation will never be a profit-making enterprise. Some sort of government underwriting is essential, as it is through various subsidies for air and highway travel. Most other industrialized countries help fund railroads, and benefit by it. If Washington officials want maintenance improved, modern high-speed trains in operation and a low-polluting option to the automobile preserved, Amtrak's subsidy should be continued and its capital needs met. Starving Amtrak isn't the answer. That would only compound the railroad's problems and bring on more complaints from the riding public.

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