It’s the Infrastructure, Stupid: Amtrak, derailed

The news that the Department of Transportation’s Inspector General is deeply concerned about the dangerous state of Amtrak’s railroad infrastructure should come as a surprise to no one. Amtrak has been chronically mismanaged and has never shown any signs of being fiscally responsible. Yet somehow the blame for Amtrak’s recklessness is laid at the door of Congress, for failing to give Amtrak every penny it wants. The problem is not one of underfunding, it is that railroads cannot be run effectively when government is their prime source of revenue. Congress, far from turning up the funding tap, should be preparing to turn it off. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />

Amtrak’s infrastructure is crumbling. As the inspector general, Kenneth Mead, says, there are “interlockings, bridges and tunnels that are well beyond their economic life.” Amtrak has been deferring capital expenditure on these assets for years. Mead goes on, “Continued deferral brings Amtrak closer to a major point of failure on the system, but no-one knows where or when such a failure will occur.”

This state of affairs is familiar to me, as I was part of the team that privatized the British rail-infrastructure body, then called Railtrack, in 1996. We were aware that there had been a huge backlog in capital expenditure on the railway throughout the 40+ years of public ownership of the British railroad system. That, indeed, was one of the reasons Railtrack had to be privatized, in order to bring in new flows of investment capital that would not be dependent on the political vagaries of the British appropriations process, where rail was pitted against schools and hospitals in the battle for taxpayers’ money.

The trouble was that no one realized just how degraded the infrastructure was. It transpired that many of the rails along which the (mostly passenger) trains were running were in serious disrepair, something that helped contribute to a fatal accident at Hatfield in October 2000. The accident brought Railtrack to its knees, as it found itself unable to rectify the investment-backlog problem and continue to provide a decent service to its customers, the train operators.

If anything, Amtrak’s infrastructure is in worse disrepair than the British system’s was. Former Amtrak official and passenger-rail advocate Joseph Vranich talks in his new book, End of the Line: The Failure of Amtrak Reform and the Future of America’s Passenger Trains, about the serious risk posed by Amtrak’s ownership of New York rail tunnels. A 2002 DOT review of these tunnels determined that $900 million was needed to bring them up to modern safety standards. Those of us who have had experience of rail accidents in tunnels know just how dangerous this state of affairs is. A 2001 freight accident in a tunnel in <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Baltimore saw a street collapse and part of the city closed as emergency teams took five days to extinguish the fire. As Vranich points out, the New York tunnels pose a massive risk not just to railroad passengers but to the city itself.

Yet, despite the sure knowledge that terrorists are only too ready to attack major transportation systems, as the attacks in Madrid demonstrated, Amtrak has repeatedly failed to allocate funds responsibly. As Mead says, “Programming millions of scarce capital dollars for fixing long-distance sleeper cars when bridges that Amtrak owns are beyond their functional and economic lives and must be refurbished or replaced is unacceptable.” Ample evidence that Amtrak is more interested in trains than in infrastructure is provided by Amtrak spokesman Cliff Black, who told in reaction to the inspector general’s report that, “Asking Amtrak to maintain railroad tracks is like asking Greyhound Lines to maintain the interstate highways.”

The inspector general did indeed suggest that one remedy to the underfunding problem would be for Congress to increase funding to Amtrak. Yet the problem of Amtrak’s failure to prioritize responsibly would remain. Again, I am unsurprised. When I was working with it, the nationalized provider of London’s famous tube service would regularly fail to make investments in certain lines, in the knowledge that political pressure would cause its funding to be increased. We cannot allow Amtrak to use the New York tunnels like a sword of Damocles, forever hanging above the nation’s head. All experience suggests that Amtrak has perverse incentives not to invest properly while it is assured of remaining in public ownership.

Instead, we should consider two other options Mead advanced as stopgap measures to prepare the railroad for privatization: “(1) a requirement to focus development on corridors where passenger rail service can make economic sense, (2) decreased funding and elimination of certain operations.” Congress can attach these provisions to any funding it grants to Amtrak. The problem is that this will require political courage from individual congressmen.

For some reason, congressmen seem to think that Amtrak should continue to serve their own district even when they recognize that other routes are a financial burden on the country. Yet it is time Congress cut Amtrak down to size. It should force it to cut routes no one travels on, spend money now where it is most desperately needed, and get the infrastructure back into the condition that passenger safety demands. If that is done, a safe railroad system can then be put back into the hands of people who can provide better service to the customer than to the bureaucrat: the private sector.