Wednesday, October 28, 2009

Amtrak's Money Woes Continue

A new report by the Pew Charitable Trust found that Amtrak is a black hole for money, and that the overwhelming majority of its rail lines lose money. The rail service loses $32 per rider and 41 of the 44 routes lose money. The Northeast Corridor, which is the system's busiest, loses an average of $5 per customer.
Amtrak loses an average of $32 for every passenger who boards one of its trains, and 41 of its 44 routes lost money in 2008, according to a scathing watchdog report released yesterday.

Still, the federal government keeps pumping money into the train wreck.

Amtrak received $1.3 billion in taxpayer funds in 2008, and will get $2.7 billion in subsidies and stimulus dollars in 2009, the Pew Charitable Trusts study says.

"Losses range from nearly $5 to $462 per passenger, depending upon the line," the report said.

The loss-per-rider breakdown is the first of its kind.

"Everybody should be able to see what the subsidy is and make a judgment about whether that money is being well spent or not," said Marcus Peacock, the study director.

The group's loss-per-rider figures were four times higher than Amtrak's, because the new study took into consideration the inevitable decay of trains, buildings and rails and the cost of repairs.
That's completely unacceptable. Part of the problem may be that Amtrak has attempted to cut prices for tickets to lure customers away from air travel or bus service, but they can't sustain such low prices. That means that the prices will have to go up to close the deficit, or else taxpayers will find themselves once again bailing out the rail service.

Amtrak has been incapable of maintaining its infrastructure and the Northeast Corridor is no exception. Problems with the Portal Bridge in Hackensack regularly cause delays, as do power problems with the overhead power lines. The Portal Bridge is scheduled for replacement, but other problems continue to creep in, including problems with concrete railroad ties that required early replacement because they failed prematurely. The infusion of federal aid is a bandaid that does not address underlying problems with Amtrak and the fact that air travel is seen as preferable to train travel, even with all the security headaches and delays.

Trying to build a sustainable rail service in the US is going to take a serious commitment, and while the Obama Administration seems more than willing to do so, the supply of money to make it happen isn't endless. At some point, people are going to demand results - and for Amtrak to turn a profit. I just don't see that happening anytime soon, not when Amtrak has shown itself incapable of growing its existing routes, maintaining its rights of way and introducing new technologies and equipment that will make the service more competitive with other modes of transportation.

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