services should Amtrak go out of business.14
before 1997 Amtrak was required by federal
law to operate a specific route system--basi-
Hence, the ARC's proposal appears to be
cally the same network it had been running
anti-competitive; it sets up a bidding system
since it was created in 1971. The Reform Act
in which Amtrak is guaranteed to win despite
repealed that mandate, as well as other
the quality of other proposals.
impediments to Amtrak's redeploying its
resources on current-day routes to fit actual
The Dangers of Limited
market conditions. Yet, in the last five years,
Reforms
Amtrak has not discontinued service in any
of its long-distance markets so as to reassign
equipment to serve more promising short-
Recent lawsuits filed against Amtrak
distance markets. In fact, Amtrak has worked
underscore the conclusion that Amtrak has
in Washington to preserve the status quo. It
conducted itself in ways that jeopardize the
is unclear how the ARC's recommendations
future of rail passenger service and injure the
will change that failed paradigm.
public interest.
Worse, the ARC's recommendations have
Egregious Amtrak actions include manip-
the potential to inhibit innovation and pri-
ulating the public competitive bidding
Amtrak has
vate-sector participation by granting Amtrak
process, disrupting the efficient construction
worked in
authority over rail-franchising arrangements
of the high-speed Acela express trains, and
while at the same time granting an Amtrak
attempting to sway public opinion by with-
Washington to
subsidiary authority to operate trains under
holding critical information about its
preserve the
accounting system and operating losses.15
franchises. Amtrak could exercise authority
status quo.
to approve operation of its subsidiary's trains
Those actions have in the last six months
and obstruct proposals from newcomers. It
sparked significant litigation from a variety
exhibited such behavior when the Guilford
of sources.
Rail System, a private freight carrier, offered
Bay State Transit Services filed suit
to purchase or lease Amtrak's Northeast
against Amtrak and rail labor organizations
Corridor line and to operate private passen-
in November 2001 for restraint of trade in
ger service as a "responsible approach to the
violation of antitrust laws. Amtrak had been
inevitable failure of Amtrak"11 and when the
operating and maintaining trains under a
Railway Service Corporation, also a private
franchise from the Massachusetts Bay
company, offered to take over Amtrak service
Transportation Authority. Noting that
between Harrisburg and Philadelphia.12
Amtrak was inefficient in maintaining com-
States have begun to consider a private-
muter train equipment, MBTA put the con-
sector role in converting Amtrak routes into
tract out for bid in a fair, open, and rigorous
locally controlled operations. A Washington
competitive procurement pursuant to
State Transportation Department official
Federal Transportation Administration
commented in January: "What we'd really
requirements. Four companies bid, three of
like to do is take the best from Amtrak, and
which came in between $175 million and
turn it into a program that really allows us a
$195 million for the five-year contract;
Amtrak's bid was a staggering $291 million.16
great deal of flexibility and a whole new set of
opportunities. . . . We think there's a future
Bay State's complaint outlines the coordinat-
for rail, and we would like to determine our
ed action of Amtrak and the rail unions to
own future."13 According to the GAO, Illinois
undermine the award process and force
had been subsidizing regional Amtrak service
MBTA "to terminate its agreement with Bay
for years. In 1996, when Amtrak requested
State despite Bay State's vastly superior bid
more money for the service, state officials
and enter into another contract with
Amtrak."17 That occurred even though Bay
indicated that they would be interested in
arrangements with other parties to continue
State's bid was $116 million less than
3