02-02-2005 19:03									#1
	Bush to seek Amtrak subsidy cuts Increase Your PM Length

quote: WASHINGTON - The Bush administration will for the first time propose eliminating operating subsidies for Amtrak as part of a push to cut budget deficits, people close to the budget process said yesterday. The President's fiscal 2006 budget, which he will send to Congress on Monday, will allocate no subsidy for the national passenger railroad to run its trains. But it will offer $360 million for maintenance on the flagship Northeast Corridor between Washington and Boston - which Amtrak owns - and for commuter services, the sources said. The proposal must be approved by Congress. Last year, the administration proposed $900 million in subsidies, but Congress increased that to $1.2 billion after Amtrak said the lower figure would force it to shut down. An Amtrak spokesman would not comment yesterday. Senior administration officials declined to discuss the budget figures but described the decision as part of Bush's broader push to restrain spending and eliminate what they see as wasteful programs. One senior official said: "Amtrak should be treated like any other form of transportation and funded like any other form of transportation. The other forms don't get operating subsidies." The administration has long hoped to wean Amtrak from federal subsidies, criticizing the condition of its infrastructure and service. It wants to open its rail lines up to competition. Amtrak employs 22,000 people and runs 265 trains a day, excluding commuter service, in 46 states. It has never made money in its 34-year history. To get its subsidy in recent years, Amtrak has had to agree to much closer Transportation Department oversight of its books and its operations. .

This is the first thing that I have found that I can support GWB on. I'm totally behind him on this.

I have used Amtrak for 3 years to commute to work. They have abysmal customer service, decrepit passenger cars, and poor track maintenance. They have not turned a profit in their entire 34-year existence. They cry for millions of dollars each year.

Best thing to do is to open up the nation's rail lines to competition. Amtrak is a money pit. When my home state of PA voted to give Amtrak $70 million in subsidies, I complained loudly to my state reps. They laughed at the idea that competition would change things for the better, citing that previous attempts here and abroad have failed. I hope Bush can make this happen.

	02-02-2005 19:05									#2
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That's insane. How can you have railway compeition anyway?

	02-02-2005 19:07									#3
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The British should know something about that

	02-02-2005 19:12									#4
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quote: Originally posted by Kidicious That's insane. How can you have railway compeition anyway?

That's very simple. The tracks remain property of the State, and the State maintains or expands the infrastructure. Private train companies thus are only responsible of exploiting the rail network, not building it. Transport companies thus own trains, like road companies own busses.

What's more difficult is to make a successful privatisation of railways. The Brits have utterly failed. The Germans have been truly stupid (they attempted to privatize the Deutsche Bahn, but in the attempt opf turining the public company in a profitable, sellable one, they lost so many customers because of the disaster in quality/proce, that Deutsche Bahn loses as much money as before, but now sucks). It seems the Swedes have some private rail transportation, and my little experience with Swedish trains is very good.

Edit: For urban and commuting transportation, it is generally agreed that the city / State grants an exploitation licence to a company for some time (the company has the monopoly for some years). If the company satisfies the demands of the city / State, the licence is renewed. In Bordeaux, where I lived, the whole public transportation of the city is managed by Connex (which has such operations across all of Europe). Connex keeps low prices and experiences fewer strikes than if the management had been public, because of their harsh methods. They also recieve subsidies, so that the price for the consumer can still be low. Although the working conditions are worse than in public companies, Connex had helped to make Bordeaux' transportation considerably better in recent years.

	02-02-2005 19:18									#5
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swedish railways

	02-02-2005 19:18									#6
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Do you realize how much fixed costs there are in running a railroad, even if the state owns the tracks. Airlines is one thing, even though competition there is limited, but trains is another thing. I don't see how companies would get enough customers to cover their fixed costs.

	02-02-2005 19:22									#7
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quote: Originally posted by Kidicious Do you realize how much fixed costs there are in running a railroad, even if the state owns the tracks. Airlines is one thing, even though competition there is limited, but trains is another thing. I don't see how companies would get enough customers to cover their fixed costs.

In principal its the same as the US highway system.

	02-02-2005 19:24									#8
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quote: Originally posted by Kidicious Do you realize how much fixed costs there are in running a railroad, even if the state owns the tracks. Airlines is one thing, even though competition there is limited, but trains is another thing. I don't see how companies would get enough customers to cover their fixed costs.

I don't know precisely what the railways industry in the US looks like. Considering that most long-distance travel is made by flight (because the US is far less densely populated than Europe), and considering that Yanks have an irrational love for their cars, it's true that trains are probably mostly empty in most of the country. Very few areas of the US can expect to have enough people interested in riding a train. That's mostly New England, where the population density allows it (although a case could be made for California, if trains were fast and cheap).

In those areas where you have many people, it's really not that hard to make a profit out of the transportation business. If you keep to profitable lines at profitable times, your fixed costs won't be huge (a few trains - that's definitely cheaper than a flotilla of planes), and the money will roll in if you're good enough in comparison to the competition.

	02-02-2005 19:26									#9
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quote: Originally posted by Ogie Oglethorpe In principal its the same as the US highway system.

How many private bus lines are there? Two? Three? I would say really Greyhound has monopoly power don't they, although they compete with Amtrak, but in that sense Amtrak altready has competition.

	02-02-2005 19:28									#10
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If they can be smart about it (owning the tracks, and having Amtrak subsidies ONLY for cross country trains), this can be a very good idea. The problem is that the Bush Administration, even when it has good ideas, isn't smart about implimenting them.

	02-02-2005 19:29									#11
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Spiffor,

Yes the trains here are mostly empty, despite the low (subsidized) price. That's why I like riding on the train, but I don't travel much.

	02-02-2005 19:31									#12
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Me thinks the airline industry has something to do with this.

	02-02-2005 19:37									#13
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I'd like to remind to the proponents of privatization, however, that a privatization is not always good news.

Private rail companies will have to be profitable. Which means they can't have artificially low prices for their fare. It will deprive many to use trains. In turn, these people will switch to cars and worsen transportation on highways, which is bad news for everybody (negative externalities). Besides, some people will not be able to afford transportation at all, because they cannot invest in a car. By destroying their mobility, privatization also bars employers in neighbouring cities for having access to an enlarged pool of workers.

Besides, a company can very well be profitable with high prices and low quality. British rail companies show it every day (and yes, they are open to competition).

A successful privatization requires that the State demands the exploiting companies to care of the qulity of service so that the positive externalities continue to be fulfilled... Or it implies that there is still a public exploiting company out there to take the slack in the many areas where private companies can't satisfy. Such a private company is bound to live almost exclusively off subsidies, considering that all profitable ventures will have been vampirised by private actors.

	02-02-2005 19:40									#14
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quote: Originally posted by Kidicious Me thinks the airline industry has something to do with this.

Why? Because you want to see a conspiracy where none exists? Airlines are already beating the tar out of Amtrak and it is unlikely that those who travel cross country on the trains will switch over to planes. Usually the cost to fly is the same or less than the cost to take the train. Most likely, they'll go with buses. If they wanted to fly, they'd be doing it already.

	02-02-2005 19:43									#15
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Who said anything about conspiracy? Anyone who knows anything about business knows that lobbying is a normal and necessary aspect of it. And businesses like to get as much money as they can. They don't leave any stone unturned.

	02-02-2005 19:48									#16
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quote: Originally posted by Spiffor I'd like to remind to the proponents of privatization, however, that a privatization is not always good news. Private rail companies will have to be profitable. Which means they can't have artificially low prices for their fare. It will deprive many to use trains. In turn, these people will switch to cars and worsen transportation on highways, which is bad news for everybody (negative externalities). Besides, some people will not be able to afford transportation at all, because they cannot invest in a car. By destroying their mobility, privatization also bars employers in neighbouring cities for having access to an enlarged pool of workers.

If the government takes responsibility for rail infrastructure and replaces the current poorly maintained tracks with high-quality unsegmented rail, we can expect the train speeds to increase exponentially. Hi speed train travel on all commuter lines - not just DC-NYC line - will generate more new customers. The private companies operating the rail car service on these lines will compete and keep the prices down through their competition. Not only will they compete against each other but against the relative cost of commute by other modes like plane, car, bus..

	02-02-2005 19:50									#17
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quote: Originally posted by Imran Siddiqui Why? Because you want to see a conspiracy where none exists? Airlines are already beating the tar out of Amtrak and it is unlikely that those who travel cross country on the trains will switch over to planes.

This may have to do with the US' size.

But if planes are a cheaper way to travel than trains in smaller and more dense areas like New England (as said, I don't know jack about the specifics of the US transportation industry), this clearly means the trains are very badly managed, or they aren't nearly as subsidized as they should. In France, trains are far cheaper than planes for most lines except the cross-country ones. Also, since most journeys last less than 3 hours, it's often more sensible to take the train (from city-centre to city centre without having to wait in the station for a long time).

In Germany, ever since the prices have risen with the botched attempt at privatization, planes are significantly cheaper than trains. In my surroundings, many have switched from train to pllane, because German planes, at least, are not overexpansive nor sluggish. Something the trains could learn.

	02-02-2005 19:56									#18
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This is a good start.

	02-02-2005 20:00									#19
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quote: Originally posted by bfg9000 If the government takes responsibility for rail infrastructure and replaces the current poorly maintained tracks with high-quality unsegmented rail, we can expect the train speeds to increase exponentially.

I don't know about the quality of your tracks, but unless they're similar to the third world's, you wont't get that much speed from better maintenance. High-speed railways are specific technologies, and they're viciously expansive to build (because of the cost, it took decades for the French government to decide building the much needed high-speed track from Paris to southern Germany). The needed investments in infrastructure are huge, if you want high-speed tracks.

quote: Hi speed train travel on all commuter lines - not just DC-NYC line - will generate more new customers.

That is completely true. The ability to win or lose customers with other commuter modes os often overlooked. Trains have a natural advantage on medium distances, for which cars are too slow, and planes are too much of a hassle to bother. If train can be fast enough (while remaining acceptably cheap), it wins over both the others.

quote: The private companies operating the rail car service on these lines will compete and keep the prices down through their competition.

This is far from sure. You may end up with a "natural monopoly" of sorts, with only one really big player and some small niche players. The one big player will have to remain vigilant from potential competition, but there will still be room for complacency, as nobody will make the large initial investments to challenge the well-implemented actor, if the expected profits are too low or too slow.

	02-02-2005 20:00									#20
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Well in the densily populated areas, the trains (and buses) are cheaper than planes. That makes sense, since it costs more to load up the plane and fly it to somewhere close by than it does to fly cross country. Though, in places like New England and Mid-Atlantic, a private train system should be HIGHLY profitable.

That's not the problem. The problem is the cross country stuff, which is basically all the rest of the country.

	02-02-2005 20:05									#21
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Without a change to railcars that are much faster than Japan's bullet trains, cross-country rail makes little sense in the U.S. It's fundamentally not a good idea.

	02-02-2005 20:09									#22
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quote: Originally posted by Imran Siddiqui That's not the problem. The problem is the cross country stuff, which is basically all the rest of the country.

I don't think that cross-country line to ever become profitable. Because I don't see how it could ever be useful for passenger transportation, now that commercial planes do exist.

Maybe the best idea would be to turn the cross-country track into freight-only, and to subsidize some air travel, so that cross--country transportaiton remains affordable (the aim of the cross-country train, from what I understand)

	02-02-2005 20:12									#23
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The cross country track is already overwhelmingly freight and is privately owned by the freight railways.

The freight railways make good money on the cross country lines and are expanding their rail networks to accomodate additional traffic. There was an excellent article about this in the Wall Street Journal over the holidays.

	02-02-2005 20:14									#24
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Screw Amtrak. The fact a large number of their trains have virtually no riders should be a clue of how well they use the money.

	02-02-2005 21:24									#25
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quote: Originally posted by DinoDoc Screw Amtrak. The fact a large number of their trains have virtually no riders should be a clue of how well they use the money.

Something is definately wrong with Amtrak. They cost as much as a plane to take, and take longer than a bus to arrive. Privatising it isn't the answer, since the reason Amtrak exists is because all the private passager rails went out of business. As the Japanese and Europeans show, government rail isn't the problem. Something else is.

They need to think of Amtrak as public transit, instead of a regular corporation. Using Amtrak cuts down massively on pollution, so we should subsidize it more, lower costs, and get more people to use it, as opposed to planes, cars, and buses.

As it is now, many of our airlines are going out of busines. United isn't going to last much longer. The holding company is squeezing it dry and forcing cuts on the employees, who are all looking for new jobs since they don't get paid enough to live anymore, and they no longer get free travel.

	02-02-2005 21:36									#26
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quote: As the Japanese and Europeans show, government rail isn't the problem. Something else is.

It's pretty easy to figure out what the problem is. It costs $35 roundtrip from Washington to NYC by bus and $152 by train.

What idiot would subsidize the train enough so that it is competitive with bus? And this is an area (the NE corridor) where passenger rail is supposed to make sense!

	02-02-2005 21:54									#27
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quote: Originally posted by DanS It's pretty easy to figure out what the problem is. It costs $35 roundtrip from Washington to NYC by bus and $152 by train.

How long does it take by bus, by rail and by plane?

	02-02-2005 21:54									#28
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quote: Originally posted by DanS It's pretty easy to figure out what the problem is. It costs $35 roundtrip from Washington to NYC by bus and $152 by train. What idiot would subsidize the train enough so that it is competitive with bus? And this is an area (the NE corridor) where passenger rail is supposed to make sense!

$85 round trip airfare from Atlanta to most NorthEast destination cities (in markets normally held hostage by US AIR no less)

	02-02-2005 21:58									#29
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quote: How long does it take by bus, by rail and by plane?

Bus and rail take about 4 hours. Maybe a couple minutes longer for bus. Plane takes 1 hour + security checks + cab ride to and from downtown NYC or Washington.

As Adam Smith has pointed out on numerous occassions, they could improve the switching near New York that would cut some 1/2 hour to 45 minutes from the rail trip.

	02-02-2005 22:08									#30
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I recently wrote a poem about trains, passenger rail in particular.

It's so sad that they've been mismanaged.