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Privatizing Amtrak: the Pros and Cons

According to The Hill, Mitt Romney released an op-ed in the New Hampshire Union Leader supporting the privatization of Amtrak. Romney stated that because the federal deficit is so high privatizing Amtrak would help offset the nation’s debt. Although House Republicans proposed this measure last June, it is getting much more publicity due to Romney’s increasing popularity for the 2012 presidential election. Hearing this prompted me to do my own research on the issue so I could be clear on what exactly is being proposed and why it is a good idea to privatize Amtrak or not.

Supporters of privatizing Amtrak consistently point out Amtrak’s mediocre quality; often times their high-speed rail doesn’t even run over 80 mph. According to Romney and other House members, Amtrak has received exorbitant amount of funding out of which they have produced an average rail system. A plan presented by John Mica, the chair of the House Transportation and Infrastructure Committee, suggests transferring Amtrak’s control of the Northeast Corridor to the Department of Transportation, after which bidding by private companies would take place for control of infrastructure design, rights for building a high-speed rail, and maintenance of passenger rails currently running. Bidders would be monitored by a House-appointed committee to ensure stellar quality. As good as this may sound, privatizing things in the past has been nearly disastrous in some cases. The reason Amtrak exists in the first place is because the privatized rail systems in operation before were even more unreliable, and contenders against this plan fear a repeat of history.

Moreover, those in favor of keeping Amtrak federally funded recognize that Amtrak is in its sixth year of record ridership and because of that are even more optimistic for the future. Most importantly selling off the Northeast Corridor would be selling off the most lucrative tracks Amtrak owns, whose profits help maintain other less popular routes. House members against Mica’s initiative also fear that his plan simply won’t work at least anytime soon, which would leave thousands of riders in a bad predicament.

There is no doubt that aspects of Amtrak’s business plan need to be remodeled, however, with all of the other issues being debated in Congress-war, healthcare, unemployment-I don’t think Amtrak would get the proper attention needed. Others have suggested keeping Amtrak the primary operators of the rail system, but selling off portions of its tracks to private investors. There is no way to tell what will happen in the future, however, I believe that privatizing such a primary railroad could lead to a monopoly effect. If one private company decides to buy several Amtrak shares, then they will have primary ownership, effectively cutting out the possibility of government intervention. That may sound good in theory, but doing so could put Amtrak in the hands of one bidder leaving dependent passengers at their mercy.

      

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