Plans call for Amtrak to lose tracks, stations

WASHINGTON – Amtrak would be forced to relinquish ownership of tracks and stations, bridges and tunnels under proposals by a federal panel studying the financially troubled passenger railroad.

The Amtrak Reform Council meets Friday to finalize recommendations it will deliver to Congress on Feb. 7. The recommendations hold no legal weight but will help frame the debate on Amtrak’s future.

The three proposals under consideration differ in how much – and how fast – they would open Amtrak’s current monopoly to competition from private companies. But all three scenarios envision transferring ownership of Amtrak’s tracks and stations, said Tom Till, the council’s executive director.

The new owner likely would be one or more new subsidiaries of the National Rail Passenger Corporation – an existing federal entity that, until now, has been synonymous with Amtrak. Under the council’s plans, Amtrak would act only as an operating company under the federal corporation.

Eventually, ownership of the stations and track could be transferred to states or cities.

Amtrak owns 730 miles of track, mostly in the Northeast Corridor between Boston and Washington, plus in Michigan. It owns stations along the Northeast Corridor, plus Union Station in Chicago.

The tracks and stations Amtrak owns represent just a tiny fraction of its network. Amtrak serves 500 stations over 22,000 route miles. Most of the tracks are owned by freight railroads, which receive usage fees from Amtrak.

Amtrak was not originally designed to own real estate. It took possession of the Northeast Corridor assets in 1976 from the estate of Penn Central Railroad as part of the creation of Conrail.

The railroad uses its assets to raise revenue. It plans to build a hotel inside Baltimore’s Penn Station and an office tower or hotel near the 30th Street Station in Philadelphia.

In addition, Amtrak expected to raise $33 million last year from letting telecommunications companies use cables and install antennas along its route throughout the Northeast.

But the assets also impose substantial costs. The reform council estimates that it takes $800 million to $1 billion each year to keep the Northeast Corridor in a state of good repair. It says Amtrak has spent just $71 million on Northeast Corridor maintenance each of the past two years.

A majority of the 11-member reform council has long said that Amtrak should lose its real-estate holdings and focus exclusively on running trains. Amtrak officials have shown little enthusiasm for the idea.

A 1997 law gave Amtrak until Dec. 2, 2002, to begin operating without federal subsidies, and it created the reform council to monitor the railroad’s progress. A majority of council members concluded last month that Amtrak will not achieve that goal.

That finding meant the council had 90 days to draw up a plan for a restructured national rail system. The council wants to take much or all of Amtrak’s authority and divide it among states or private companies.

Amtrak posted a cash loss of $405 million in the first eight months of 2001 and has consumed more than $25 billion in subsidies since its inception in 1971.

The council is steering clear from discussions of cutting routes.

“The ultimate size and structure of the system is going to be determined by the Congress,” Till said.

A major topic of discussion at Friday’s meeting will be who will operate intercity trains.

Under one scenario, Amtrak would continue to run trains but would begin reporting to a government agency on route and service decisions.

Under a second scenario, private companies would submit bids for certain routes. Government subsidies would be available as long as they are lower than those Amtrak is receiving.

A third scenario envisions a gradual transition from current Amtrak management to a system of competitive bids.

All three scenarios leave open the possibility that states would take over management of train routes that affect them.