Privatize the Northeast Corridor? Don't hold your breath

Posted by Fred Frailey
on Monday, June 13, 2011

So, where was I? Fate conspired to pack into the month of June a year’s worth of family drama (one college graduation, one Big Apple moving van fiasco, two weddings of the same daughter, and a family reunion for 20 in Tuscany). All this has pretty much paralyzed my brain. But there is an event coming up this week that you’ll be hearing a lot of in weeks, months, and I suppose years to come that I cannot resist commenting upon.

John Mica, the Florida Republican who chairs the Committee on Transportation and Infrastructure in the U.S. House of Representatives, doesn’t think much of Amtrak. But he seems to care a lot about the Northeast Corridor, Amtrak’s Boston-Washington route and pretty much the only railroad that Amtrak’s actually owns. Mica was vexed that Transportation Secretary Ray LaHood ignored the NEC in the first two rounds of “high-speed” rail grants last year, only making a $450 million award when recently redistributing the money that Florida had returned to the government.

Mica has sung the I-hate-Amtrak-but-I-love-the-NEC anthem repeatedly since gaining the chairmanship of the Transportation Committee this year. On Wednesday, June 15, he and Pennsylvania Republican Bill Shuster (who chairs Mica’s subcommittee on railroads) will co-sponsor legislation that would take the corridor away from Amtrak and begin a process of “selling” it to the private sector. In the manner of privatization of passenger railroads elsewhere in the world, the federal government would continue to invest in this key route. But so would private investment groups, as partners with the government. Mica says his objective is to attract private investment into the NEC and lessen the government’s cost of upgrading the line for far faster trains. Amtrak has proposed its own $117 billion, 30-year plan that Mica says is beyond the ability of the government to finance and Amtrak to manage.

I’m not prepared to say whether this is a good or bad idea. But I know this much: Mica will need skills he has so far failed to display to get this legislation made the law of the land during the current Congress, which extends through 2012. Perhaps he can roll it through the House of Representatives, where Republicans hold a 240-to-193 majority (two seats are vacant). But that’s unlikely to happen in the Senate. There, Democrats have the edge, 53 to 47, and some Republican senators could defect. Then there is the president, whose veto pen is undoubtedly quivering in his fingers even now.

So it’s just not going to happen in this Congress. I said exactly this to Mica at a reception a week ago, and he only smiled and replied, “Maybe I can make new friends.” To do so, he has a lot of convincing to do. First of all, his attacks on Amtrak for mismanging the NEC are vague and poorly substantiated. Equally vague is the interest of private investment groups. You would think that in the past 40 years, if there were any money at all to be made in developing the NEC, some hungry Harvard MBA graduate would have figured it out. But nobody has, and that includes witnesses at two hearings Mica has held on privatization. Finally, Mica creates credibility problems for himself by repeatedly comparing Amtrak’s 83-mph Acelas between New York and Washington (average speed or thereabouts) with 150-mph and 220-mph trains in Europe and elsewhere (maximum speed).

I could be convinced that privatization of the NEC is doable and worth the risk that it would turn into the same disaster that followed privatization of British Rail. But only if Mica, Shuster, and their so-far-silent allies on Wall Street make a convincing case, and they have done a poor job of it so far. A more likely scenario: This is round one. Mica will discover the weaknesses of this legislation, improve upon it and try again in the next Congress, beginning in 2013. By then, he may have more friends in the Senate and the White House. — Fred W. Frailey

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