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NATIONAL CENTER FOR POLICY ANALYSIS
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Not a Penny for Amtrak Without Reform
Daily Policy Digest

Privatization Issues / Privatizing Transportation

Thursday, June 27, 2002
Amtrak has a debt of $4.6 billion thanks to its politically inspired route system, critics say, as well as other failures due to ignoring economic principles. Now it is seeking another $200 million to continue the hemorrhaging.

For every successful Amtrak route, there are a dozen big-time losers. Almost 60 percent of Amtrak's traffic is carried on just 7 percent of its system.

Observers of the Amtrak mess are advancing three conditions to any additional bailout:

  • Continue operations and use any emergency funds to give state and local authorities time to arrange for continued operation only where sufficient demand exists.
  • Dismiss the majority of Amtrak's board of directors, who have repeatedly demonstrated inability to run the business.
  • Require Amtrak to initiate voluntary bankruptcy proceedings and place the corporation's assets under court-appointed trustees.
Amtrak constitutes a tiny part of the U.S. transportation picture, and liquidation that shuts down weak lines would hardly disrupt travel.

Contrary to the assertion of Amtrak officials, valuable parts of the Amtrak system could be privatized.

Source: Joseph Vranich (former member, Amtrak Reform Council), "End of the Line for Amtrak," Wall Street Journal, June 25, 2002

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