May 26, 2011
House Transportation Committee leaders outlined on May 26 a dramatic change in direction to develop true high-speed passenger rail service in the Northeast Corridor (NEC).
Their proposal would transfer development of the nation’s most congested corridor from Amtrak to private sector competition.
Committee Chairman John L. Mica (R-Fla.) and Rail Subcommittee Chairman Bill Shuster (R-Pa.) announced at a Congressional hearing that they are preparing legislation to significantly speed up development of high-speed rail and reduce high taxpayer subsidization of the project.
“We plan introduce legislation to separate the Northeast Corridor from Amtrak, transfer it to a separate entity, and begin a competitive bidding process that would allow for a public-private partnership to design, build, operate, maintain, and finance high-speed service. Our plan would do so in a dramatically shorter time, in closer to 10 rather than 30 years, and at a fraction of the $117 billion cost proposed by Amtrak, while creating new jobs,” Mica said.
The May 26 hearing revealed that despite the tremendous potential of the corridor, Amtrak’s ridership in the NEC has actually decreased since 1977. In fact, Amtrak had 10.5 million NEC riders in 2010, down from 10.6 million in 1977.
“This is a dismal record and a pitiful statement of Amtrak’s lack of achievement in this incredibly valuable transportation corridor,” Mica said. “Amtrak’s plan to bring high-speed service to the NEC is unacceptable. We can attract private sector resources and expertise and do it in less than half the time.
“If anyone is holding their breath for Congress to approve $117 billion for Amtrak’s 30-year plan, they’re going to turn blue,” Mica added.
The 437-mile Northeast Corridor is the only rail corridor owned, almost in its entirety, by Amtrak. The NEC is one of the most valuable transportation assets in the nation, and its population density and other existing transportation connections make it the most viable location for successful U.S. high-speed rail.
“Amtrak’s ‘Vision Plan’ for high speed rail in the NEC lacks one important ingredient: vision,” Shuster said. “We’ve tried it Amtrak’s way without success for nearly 40 years, and it’s time to go down a new path and inject private sector competition.
It is time to deregulate America’s passenger rail system and the Northeast Corridor presents the best place to start with private investment and market-based ideas.
“I think it’s time for some new thinking to improve our passenger rail service. Our hearing showcased some international success stories that can be applied here at home,” Shuster continued. “I find it interesting that those who champion Amtrak’s passenger rail service are also afraid of a little competition. If Amtrak really is superior it would wipe the floor with private sector competitors in a fair and open process and put the issue of competition to rest once and for all.”
At the hearing, Mica highlighted an example of profitable private sector rail operations in Great Britain’s Virgin Rail, which doubled its ridership in six years, saw employment increase from 2,800 to 3,500, and has returned to the government an annual payment of $244 million in addition to $81 million in company profit. Witnesses provided additional examples of successful public-private partnerships in other countries.
Witnesses also discussed how to tap the vast potential for development in and around high-speed rail stations.
Summary of the Mica/Shuster Northeast Corridor Proposal:
Deregulating Passenger Rail in America’s Most Densely Populated Region
The Northeast Corridor (NEC) is home to 20 percent of our nation’s population and the poster child for crippling highway and aviation congestion. After trying Amtrak’s way for 40 years without success, it is time to bring the private sector and competition to the table.
Instead of throwing more and more taxpayer dollars at the program, the Mica/Shuster plan does more with less – by leveraging private sector investment, increasing competition, and opening the door to public private partnerships we can finally bring true high-speed rail to the NEC, and in half the time and at significantly less cost.
The Mica and Shuster proposal is being developed according to the following principles:
Ending the Amtrak Monopoly
• Separates the NEC from Amtrak, spinning it off as a separate business unit
• Transfers the title for the NEC to a separate entity
Bringing Competition and the Private Sector to the Table
• Requires a competitive bidding process for the NEC
• Establishes performance standards for true high speed rail with a requirement for service in less than 2 hours between Washington, DC and New York City
• Reduces and potentially eliminates the need for federal subsidies
The Time is Now
•Moves America forward in less than half the time as Amtrak’s proposal with firm deadlines for action
Creating Jobs and Worker Protections
• Ensures labor protections are kept in place and provides for hiring preference to any potentially displaced Amtrak employees