Privatizing Amtrak, Avoiding the Pitfalls

Privatizing Amtrak, Avoiding the Pitfalls

New Study Takes Lessons from the British Rail Experience
May 19, 2005

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Richard Morrison, 202.331.2273

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<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Washington, D.C., May 19, 2005—Amtrak is in crisis once again, from the most recent failure of its high-speed Acela line to the dangerous lack of long-term capital investment. In a new study from the Competitive Enterprise Institute, Senior Fellow Iain Murray explains why Congress should end government control over passenger rail service and take advantage of private industry’s skills of management, innovation, and foresight.

 

“Britain’s experience with privatization provides valuable lessons,” writes Murray in Privatizing Rail, Avoiding the Pitfalls: Lessons from the British Experience. Despite an announced intention to remove the government from management of the passenger rail system, “the British rail industry was never truly privatized, because coercive fragmentation of the industry that was chosen as the method of privatization allowed too much room for government interference.”

 

A privatization plan which is micromanaged by government agencies, the British learned, can be as burdensome and problematic as direct government control. According to Murray, “a better route is the American model of freight rail deregulation. An industry that is vertically integrated and free to decide its own routes and prices without government interference is more likely to provide a better service at a lower cost than a highly regulated industry.”

 

Read the full text of Privatizing Rail, Avoiding the Pitfalls: Lessons from the British Experience online.