The Prospects for Intercity Passenger Rail
in the Aftermath of September 11

Reprinted from Innovation Briefs, Vol. 12, No. 6, Nov/Dec 2001

The events of the 11th of September have heightened the interest in intercity train service as an alternative to flying. Rail advocates contend that the increased use of Amtrak in the wake of the terrorist attacks has underscored the need for a national system of high-speed passenger rail services. Amtrak was quick to exploit these sentiments. It asked for an emergency cash infusion of $3.2 billion as part of the federal relief package, even though, as critics point out, it suffered no loss of passengers or revenue as a result of the terrorist attacks. But even if Amtrak is successful in obtaining emergency help, its problems are by no means over.

In the weeks since the terrorists attacks, Amtrak ridership has gone up, causing some members of Congress to push for more financial support for intercity passenger service. House Transportation and Infrastructure Committee chairman Don Young (D-AL) has introduced legislation, The Rail Infrastructure Development and Expansion Act for the 21st Century, (RIDE-21, H.R. 2950) to provide $71 billion in tax exempt bonds, loans and loan guarantees to finance a national high-speed passenger and freight rail network over the next decade. In announcing the new initiative, Congressman Young declared "During the past two weeks thousands of Americans have come to depend on passenger rail service as an essential component of our transportation network....It is our duty to provide the resources for the development and deployment of high speed rail corridors across the country."

The bill provides that the funds would be made available not to Amtrak but to states, which would be allowed to issue tax-exempt bonds to finance upgrading of present rail corridors to handle high-speed service. At a hearing on the bill on October 2, Congressman Young stated, "Amtrak has too much control over the approval and funding of high-speed systems...RIDE-21 puts the federal and state governments in control of the development of high-speed passenger rail and balances their roles."

In addition, a security-related measure is working its way through Congress. The bill, titled the "Rail Security Act of 2001" (S. 1550) is intended to provide Amtrak with funding for system-wide security upgrades and improvements to key infrastructure. No more than 50 percent of the funds for the security upgrades may be spent inside the Northeast Corridor. The bill is a scaled-down version of an earlier proposal that would have provided Amtrak with $3.2 billion in emergency aid.

Despite the 17 percent surge in ridership, many observers think this popularity is only temporary. They point out that business travelers are time-sensitive and will revert to flying when memories of the September 11 tragedy have receded. Outside the Northeast Corridor trains cannot compete with air travel. For example, a trip from San Jose to Los Angeles takes only a little over an hour by plane but 11 hours by train. Chicago to Washington DC takes two hours by air but 17 hours by train; and Austin is only one hour away from Dallas by plane but six hours by train. Although Amtrak trains can cruise at 80 mph, unimproved track owned by freight rail companies often forces them to creep along at much slower speeds. By contrast, in Europe and Japan high-speed trains operate at average speeds of 120-160 mph on specially built tracks, dedicated exclusively to high-speed passenger service.

Even in the Northeast corridor, train service has been barely competitive with air travel. Amtrak counted on the new Acela high-speed train service between Washington, New York and Boston to generate increased ridership and enough additional revenue to subsidize the rest of the system. But the Acela is functionally no more than a conventional train "with a bullet-train bonnet" as one critic put it. Although it is built to run at 150 mph it can only operate at that speed for a small portion of the run. The result is that Acela trains shave only 10 minutes off the Metroliner schedules. Time savings between New York and Boston are somewhat more substantial, although critics are quick to point out that fifty years ago the New Haven Railroad's Merchant Limited made the trip in four hours - only half an hour longer than the fastest trip by Acela. Still, with security checks and access to airports adding at least an extra hour or two to the air trip, rail service in the Northeast Corridor can be counted upon to grow in popularity.

    ...with security checks and access to airports adding at least an extra hour to the air trip, rail service in the Northeast Corridor can be counted upon to grow in popularity.

This cannot be said about the rest of the Amtrak system. Wendell Cox, a member of the Amtrak Reform Council, contends that Amtrak's version of "high-speed" service averages only 80 miles per hour and thus is competitive only with air service for trip distances of less than 250 miles. These trips make up approximately eight percent of the nation's air travel according to U.S. Department of Transportation data (Intercity Transport Fact Book, "Distribution of U.S. Air Travel by Distance," Outside the Northeast Corridor and a few other short, heavily traveled routes on the West Coast (San Diego-Los Angeles, San Jose-Sacramento, Portland-Seattle-Vancouver) it is doubtful that business travelers will abandon air travel in favor of trains, even after taking into account the ever-growing airport delays and the added security concerns attendant to air travel in the post September 11 climate. In an age when time is a precious commodity, long distance train travel in America has become- and will remain - an anachronism.

Some rail proponents have argued that a robust rail system would provide the nation with "redundancy" - a back-up transportation system in the event of an emergency like the total airport shutdown following the September 11 terrorist attacks. But a rail system is no more immune to sabotage than the air system. "Imagine what a well-placed bomb in the Pennsylvania RR tunnel under the Hudson River would do to rail traffic in the Northeast Corridor," one railroad industry analyst commented to us.

* * *

Congress mandated four years ago that Amtrak should become self-sufficient by the end of 2002. Confronted with this mandate, Amtrak developed a business plan that depends heavily on making the Acela high-speed service in the Northeast Corridor sufficiently profitable to subsidize the rest of the system, which has been losing money to the tune of more than $800 million per year over the last decade. But Acela's ridership and revenue sag below target levels, and Amtrak now appears almost certain to fail to meet the Congressional deadline for breaking even. In that case, the law requires the Congressionally created Amtrak Reform Council to submit a liquidation plan for the company and to reorganize the national rail passenger system.

Will the events of September 11 boost political support for Amtrak and save it from liquidation? There is movement afoot in the Senate to eliminate the legislative mandate for Amtrak to become self-sufficient by 2003. As of this writing, the prospects for this measure appear uncertain, with Sen. John McCain (R-AZ) likely to fight against any such bail out. House Transportation and Infrastructure Committee Chairman Don Young (R-AK) has also been reported as skeptical.

Still, security concerns will, no doubt, heavily influence future congressional transportation decisions. While A mtrak itself may have to be reorganized because it has lost credibility even among many rail supporters, the events of September 11 have demonstrated all too clearly the need for a backup surface transportation system. A restructured passenger rail system, serving densely populated regions over distances of up to 300 miles, would go a long way toward providing more flexibility in our transportation system.

(c) 2001 --- Wendell Cox Consultancy --- Permission granted to use with attribution.
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