Amtrak Shoots for the Moon, Hopes to Stay in Operation

With a flurry of ambitious, and big ticket, proposals unveiled over the past three weeks, chronically under-budgeted Amtrak is shifting its strategy in the hopes of proving its potential worth.

1 minute read

August 4, 2012, 9:00 AM PDT

By Jonathan Nettler @nettsj


With recent proposals to renovate Washington's Union Station at a cost of $7 billion and bring high-speed rail to the Northeast Corridor for a measly $151 billion, Amtrak doesn't seem so dowdy any longer.

In an audacious strategy, Amtrak, "which got a $1.4 billion federal subsidy this year and needs congressional reauthorization to continue operations past September 2013," has liberated itself from the minor inconveniences of begging for funds to keep rolling every year, in the hopes of proving its potential long-term value.

"It's an aggressive strategy to put themselves in a better negotiating position," said Joshua Schank, president and chief executive officer of the Eno Center for Transportation, a Washington research group. "Rather than playing defense and asking for a little bit of money so they just don't die, they're saying, ‘Here's what we could accomplish if we really get some money.'"

Detractors argue for a free market solution to American passenger rail. "A better solution would open up Amtrak routes to competitive bidding to lower costs," says the author summarizing Emily Goff of the Heritage Foundation.

The $151 billion high-speed rail plan includes both, with government funding expected to attract private investment. Amtrak hopes ambitious plans can attract sovereign wealth funds that are increasingly looking for ways to invest in U.S. transportation projects, notes Plungis.

Thanks to Andrew Gorden

Monday, July 30, 2012 in Bloomberg

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