Posted on 03/04/2003 1:14:37 PM PST by B-Chan
Passenger Rail: Learning From the British
In the wake of the September 11 attacks, and with the continuing and alarming decline on the domestic air transport industry that preceded and followed the attacks, much discussion of alternatives to long-distance air travel has occurred. Such discussions generally center on domestic passenger rail service, and the same questions are generally asked: Why is American passenger rail service -- Amtrak -- so bad compared to that enjoyed by the Europeans and Japanese? Why can't Amtrak seem to run its lines profitably? And what business has the federal government running a rail passenger service in the first place?
These are good questions, deserving of good answers. Unfortunately, instead of striving to find those answers, discussions of the various questions relating to domestic passenger rail often devolve into bickering, driven mostly by those individuals with a political or ideological ax to grind. The laissez-faire Free Marketers object to the very idea of publicly-funded transport; the community-worshipping Socialists object to the idea of anyone making a profit by moving people from Point A to Point B. The Car Lovers think trains are for cattle, freight, and homosexuals who just can't understand the joys of big-block internal combustion; the Car Haters think everyone ought to be forced onto crowded trains by bayonet-wielding People's Guards for their own good. The Bus People say "a pox upon both your houses". And everybody has an Amtrak horror story or inner-city John Rocker subway drama to relate.
Lost in all this contention is the middle position: that rail passenger service is neither bane nor panacea, that trains can form an important part of a mix of transport modes, a mix that should be adjusted based upon the differences in geography, economic conditions, and demographic composition extant between various regions of our country. My position is that passenger rail travel can and should be promoted as a part of that mix, and that the most important aspect of any rail transport plan is its infrastructure -- the physical network of roadbeds, rails, switches, signals, bridges, tunnels, crossings, and traffic control that allows the operation of a unified nationwide rail transport system.
But who is to pay for and administer this infrastructure? I believe that a legally-chartered public-private monoply partnership should, with the federal government providing initial capitalization and as-needed investment support.
Public funding for transportation infrastructure is nothing new; from the National Road of18th Century colonial America to the Erie Canal to the ports and harbors of the Eastern Seabord, from the land grants given to the great transcontinental railroads of the pioneer West to the earliest airports, from the two-lane blacktop of Route 66 to the massive bridges and tunnels of the Thirties to the sprawling expanses of the Eisenhower Interstate and Defense Highway System (now part of the National Highway System), the federal government has always provided the capital and maintenance funding for national transportation infrastructure. Far from being socialistic, such funding of infrastructures has correctly been thought of as being quintessentially American in character -- with the federal government providing leadership and capitalization, and leaving the construction, maintenance, and use of the infrstructures to state and local governments and to private industry respectively. In other words, the practice in America has always been for the government to fund the port, not sail the ship; to pay for the highway, not drive the truck; to standardize and implement aids to aerial navigation, not to fly the airliner.
Rail should be no different. I support the creation of a nationwide network of high-speed intermodal ground transport centered on a technologically sophisticated, organizationally simple rail transportation system -- a "new Interstate" of rails instead of roads.
Support for the concept of a rail analog to the Interstate Highway system is widespread; in "Rail: The Case for 'Interstate II'", a speech given to the Washington (DC) Highway Transportation Fraternity in May 1999, rail proponent Gil Carmichael notes
...[O]ur success in freight inter-modal points the way to the most promising strategy for transportation improvements in the years ahead. I call it "Interstate II." It is a new vision of truly high-speed inter-city travel that is based upon steel, not pavement. The concept is not radical. It combines the proven efficiency of rail transportation with the strengths of the inter-modal system. Interstate II can take advantage of rights-of-way that already exist -- both rail and highways... The evolution of Interstate II reminds me of the conditions that prevailed during the decade prior to our construction of the first interstate routes. The old two-lane roads were not adequate for traffic volumes. Several states took the lead in building toll roads -- Pennsylvania, New Jersey, New York, Ohio, Indiana, Illinois, Kansas and Oklahoma. Important segments of "Interstate I" already were in operation before Congress voted to launch that project. The same thing is happening in the 1990’s. These state and regional initiatives represent the beginning of a network of high-speed rail lines. Many of them will parallel interstate highways.
(Interestingly, Texas Governor Rick Perry is currently promoting his proposal for a Trans-Texas Corridor system, a network of road and rail "intrastates" for the Lone Star State.)
Furthermore, notes Carmicheal, such an "Interstate II" would be safer, more environmentally-friendly and more affordable than simply building more freeways:
...For the equivalent of two cents on the motor fuel tax, one penny at the federal level and a second penny from the states, America could have within twenty years' time a network of high-speed rail corridors that approaches the scale of the Interstate Highway system. That commitment of fuel tax dollars would offer a powerful incentive to additional private investment as well. States and cities should be partners in the process, bringing additional revenues to the table. Again, we are talking about the equivalent of one cent on each state's motor fuel tax. Some people will argue that motor fuel taxes should only go to highway projects. But highway construction is not solving the gridlock problem. More important, the existing level of highway user fees doesn't even come close to covering the costs that highway transportation now inflicts upon our economy and society. More to the point, it is not building the system we need, one that captures the safety and capacity of the 21st Century inter-modal passenger and freight network. Cities, towns, counties and citizens already are paying for that funding gap in many indirect ways. Law enforcement costs. Emergency services costs. Land lost to highway rights-of-way that goes off the tax rolls. Pollution rules that drive industrial jobs out of urban counties despite the fact that most of the emissions are highway-related....Rail corridors will prove to be cheaper than hundred-million-dollar interchanges that only relocate traffic jams. They will be safer than 43,000 deaths per year on America’s roadways... And Interstate II will provide plenty of work for the traditional highway-builders. Building this very safe, 20,000-mile, grade-separated, high-speed inter-city rail network is the key to the quality of transportation services during the next century.Please note, however, that I believe that the government has only the obligation to fund and build the railroad network; Amtrak is proof positive that the federal government has no business running the day-to-day operations of a railroad. The inefficiencies, bureaucratic tangles, and log-rolling politics of a government operation are ill-suited to operating a business of any sort, much less a business as demanding as a rail passenger line.
However, despite the many failures Amtrak has had over the years, it has succeeded in providing vital transportation services to people in an area where private automobile traffic is ever more expensive or undesireable -- the Northeast Corridor -- and in doing that limited job fairly well. Furthermore, many critics of government involvement in the rail industry forget that the same Congress that created Amtrak also created Conrail -- the freight-carrying equivalent of Amtrak.
Competition from trucks [operating on then-new federal Interste Highways], shifts in the economy and the effects of a regulated rail industry ultimately took their toll on all the northeastern railroads. One by one, they fell into bankruptcy. First it was Central Railroad of New Jersey, followed by Penn Central, Lehigh Valley, Reading, Erie Lackawanna and, finally, Lehigh & Hudson River. In 1976, Congress stepped in to create Consolidated Rail Corporation - Conrail - out of the remains of those six railroads. In 1980, relief in the competitive arena was on the way with passage of the Staggers Rail Act, which cleared the way for railroads to compete in the marketplace like other businesses. In 1981, Conrail had the first profitable year in its history. The Northeast Rail Service Act mandated that Conrail be returned to the private sector when profitability was restored. By 1985, 14 potential buyers had submitted bids for Conrail, and the Department of Transportation endorsed Norfolk Southern as the winning bidder. [Source: Norfolk Southern Railroad].So we see that government involvement is not necesarrily the hallmark of a money-losing operation: just as government intervention saved the airline industry post-911, government intervention saved the rail freight industry post-Interstate Highway System.
(That being said: Although I will be sad to see it go, I support defunding Amtrak and selling its assets to private operators. )
But what is to replace Amtrak? Privately-owned and operated rail passenger lines, operated on a system of federally-funded modern railroads owned and managed by a privately-owned non-profit monopoly corporation. This is the system employed in the United Kingdom, where the assets of the inefficient and money-losing British Rail system were distributed among several private operators. As private operators took over running the trains, the tracks and other infrastructure were spun off into a single company, RT Group PLC (Railtrack), which immediately began to invest in improving the antiquated British rail network and upgrading it to modern standards. Network Rail CLG, which acquired Railtrack in October of 2002, is a Company Limited by Guarantee (CLG), a "not for dividend" company without shareholders run along commercial lines. It's goal is to make surpluses from its operations, and to invest same in improvements to the infrastructure instead of distributing profits to shareholders. Network Rail is owned by its members (not by shareholders) and run by a board elected from them that owns and maintains the unified system of British rail infrastructure: the tracks, signals, tunnels, bridges, viaducts, level crossings and stations of Britain's railway network. It provides access to the tracks and stations for all passenger and freight trains, coordinates their movements and operates the signals system as trains move on the network. Their chief customers are the TOCs (Train Operating Companies) and FOCs (Freight Operating Companies) who run train services over Network Rail's network.
The amazing thing is that this enterprise is not funded by taxpayer dollars. Network Rail is capitalized through a £9 billion bridge finance facility procured from a syndicate of leading investment and commercial banks which will be used to finance the acquisition, refinance Railtrack's existing debt and fund its operations; further capitalization will be acquired via through capital markets corporate bond issues. Significantly, there is no Government guarantee of funding for Network Rail. However, in certain circumstances and where Network Rail is unable to raise any further finance, stand-by loans provided by the Government's Strategic Rail Authority will be provided. By serving as the "investor of last resort", the Government satisfies its obligation to the nation to provide rail service without venturing into areas of operation to which private industry is best suited.
I contend that the example of Network Rail is the one that should be followed here in the United States. An American "Interstate Railway System" should be created by Congress, to be administered by a nonprofit corporation that would fund and implement the upgrade of existing rail infrastructure to high-speed standards; this would include the construction of new line where necessary. Capital for these improvements would be procured from both private sources (bond sales) and from state and federal Department of Transportation appropriations. Meanwhile, the assets of Amtrak would be auctioned off to private operators who, freed (like airlines, motor carriers, and overseas freight lines) from the burden of maintaining and funding their own infrastructure, could expect profitably to offer rail passenger service. Extant Amtrak trainsets could be used until new, modern rolling stock (such as Bombardier's high-speed JetTrain) could be acquired. Spurred on by the profit motive, private rail carriers would invest in reserach and development of exciting technologies such as magnetic levitation transport and in improvements to passenger safety, comfort, and accomodations. Finally, the revival of rail transport would provide jobs for porters, crews, staff, and customer service agents, revive the economies off neighborhoods associated with the stations, and do much to ease the problems of freeway gridlock, auto emissions, and the frantic, frustrating experience that travel has become.
All this done well, America would possess a nationwide high-speed passenger rail service equal in quality and efficiency to any in the world, and one suceptible neither to government inefficiency (and attendant union problems) nor the inequalitiers of the current playing field vis-a-vis motor, air, and marine carriers. We would do well to learn from the experiences of the British when laying the groundwork for our future national ground transportation systems.
©2003 B-chan. All Rights Reserved.
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That said, I have to say that the British privatization paradigm has been a catastrophic failure and has been responsible for the spate of train accidents they've had in the past few years. I'm going to look up an article about this, and if I can find it, I'll post a link.
The general rule is that the BNSF will gladly build you anything you want -- as long as you pay for it.
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