US to break up struggling Amtrak

Amtrak has never made a profit

The US Government is effectively proposing the break up Amtrak, the long-distance rail operator that came close to collapse a year ago.

The Transportation Department submitted a bill to Congress, scrapping direct federal rail funding, and turning over much of the responsibility to state governments.

The plan would split Amtrak into operating and maintenance companies and open both to competition from outside contractors.

Amtrak, which was not consulted on the proposal, said it would continue to strive for the $1.8bn (£1.1bn) in federal subsidy it says it needs to remain in operation.

Amtrak, which has never made a profit, was nearly shut down last June, after banks became alarmed at its $4bn in debt.

For and against

The bill would dramatically increase the level of competition on US railroads.

Currently, private firms provide commuter services in some places, but Amtrak is the only firm licensed to run an intercity service.

The reform has already sharply divided opinion.

Government supporters welcome the notion of drawing a line under the billions of dollars of federal funding poured into Amtrak in recent years, arguing that the company needed an incentive to get its own house in order.

But the National Association of Railroad Passengers said the bill "would mean the end of much if not all intercity passenger rail".

Dividing responsibility among states, the association argued, would not only make budgeting more difficult, but would lead to endless disputes over schedules.

Congress, meanwhile, is evenly divided on Amtrak, and the bill is not likely to have an easy passage.

Model rebuilt

The plan's proponents have taken an unsentimental approach to the need for reform.

They point out that Amtrak was created in 1970 as an attempt to form a viable passenger rail firm, not in order to form a nationwide rail network.

That business model, they say, has now decisively failed.

Transportation Secretary Norman Mineta said that state control of rail had demonstrably worked, citing the Cascades rail service, developed by the states of Washington and Oregon, as a model.

The two states, he said, have invested $170m to improve track, purchase new trains and upgrade stations, and have hired Amtrak as an outside contractor to operate it.

Cascades, Mr Mineta said, was an idea likely to be imitated by states all over America.

"As with highways, transit and aviation, local and regional priorities should govern rail transportation planning and investment," he said.