The recent Amtrak derailment outside of Philadelphia, which killed eight people and injured over 200, is a somber reminder that quick action by Congress is necessary to prevent another passenger rail catastrophe. Amtrak is the sole operator of trains on the Northeast corridor between Washington, D.C., and Boston, and thus bears responsibility for providing safe passenger train travel. Yet, despite a posted 50-mph speed limit on that section of track, the train was traveling at 106 mph around a very tight turn. Amtrak’s contract to operate trains on the Northeast corridor should be terminated immediately.
But wait. No such contract exists. Amtrak has an uncontested, indefinite monopoly on intercity train operations in the United States. The problem lies therein: Amtrak is unconstrained by the fear of losing its operational rights, and thus its revenue, regardless of safety or on-time performance.
The corridor includes stops in such major population centers as Baltimore, Philadelphia, Newark, N.J., and New York. It is highly profitable, with the tight population densities, moderate distances, and concentrated central business districts that are critical for successful passenger rail. The NEC should be a showcase for how the United States can deliver a self-sustaining, reliable, safe, and affordable high-speed passenger rail. The barrier is not geography or insufficient taxpayer spending but appalling, outdated federal rail policy.
We can do better. One appealing solution is a public-private operating partnership, or PPOP. Under this approach, the NEC would be separated from the rest of Amtrak’s routes. The NEC already differs fundamentally from the rest of the passenger rail system. Amtrak owns most of the tracks and rights of way on the NEC, but utilizes freight train tracks in the rest of the country.
A 2013 report from the Brookings Institution notes that the NEC routes, which carry some 11.4 million people each year, earn an operating profit of about $205 million annually. The rest of Amtrak’s nationwide network, however, hemorrhages cash.
Under a PPOP, the right to maintain and operate NEC trains would be bid out at regular intervals of, say, 10 to 15 years. A PPOP concession contract would specify key aspects of service, such as rates, service frequency, and safety standards. Bidding would occur on the basis of the largest upfront concession payment an operator is willing to make for an exclusive operational right subject to the pre-set terms of service.
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