Air Date: Week of July 5, 2002

Host Steve Curwood talks with Hank Dittmar of the Great American Station Foundation about Amtrak's current financial woes and what lies ahead for the passenger railroad.

Transcript

[THEME RETURN]

CURWOOD: Welcome to Living on Earth. I’m Steve Curwood. Amtrak’s recent financial woes all boil down to one basic problem: Congress thinks the passenger rail service should be self-sufficient, while Amtrak says it needs federal subsidies. A promised loan guarantee from the federal government averted the latest crisis, but Congress is still pushing the railroad to restructure and cut costs. I’m joined now by Hank Dittmar, a train proponent who heads the Great American Station Foundation. Tell me, Mr. Dittmar, why is it so difficult for Amtrak to be financially self-sufficient?

DITTMAR: Well, it is basically running on the private tracks of the private railroads, and so they have to pay them for the use of those tracks. They have to run a system that is essentially a nineteenth century rail route network, and they have to cobble together the votes every year from Congress to run that route network, which means running some routes that may not otherwise pan out. And they have inherited from the original legislation that created Amtrak a whole lot of obligations. For instance, paying for the railroad retirement system, inheriting union contracts. But further, it’s just basically true that transportation systems can make back, sometimes, the cost of operations, but not the cost of capital. The airlines get the government to pay for their airports and the air traffic control. Our highways are paid for by taxes. And we need to expect that the same kind of framework needs to be set up for passenger rail.

CURWOOD: There’s a big portion in Congress right now towards privatizing the railroad and opening up the passenger rail business to competition. How would that work? How could that work?

DITTMAR: Well, if you open up the present business to competition, but you still continue to subsidize the contracts, I expect that you would get some competitors to run trains. If, however, you asked these private companies to run without subsidy, I expect you would get no bidders. And so it depends on what you think. If you think that private companies can operate more efficiently than government companies, you might make some savings. England has tried this, and they’re actually reconsidering the great experiment and moving a lot more of the decision-making and policy back into the government framework.

CURWOOD: Well surely there are some advantages to privatization. What are they?

DITTMAR: Well, you might be able to privatize certain operations and in privatizing them hire companies that pay lower wages and have operating costs from paying lower wages. And some people think that is a plus. In other cases, it may be that if you franchised out certain parts of the train operation -- for instance essentially do what the airports have done in moving from one sort of low-end vendor that supplies all the food in the airports to bringing recognizable companies in to supply brand names -- and that’s increased overall revenues.

CURWOOD: The federal government would like to see the states get more involved in the passenger train business. What’s the plan there?

DITTMAR: Well, I think the idea is that, if you want enhanced service in a particular state, states can invest to improve service. And that model has worked for Amtrak successfully on the West Coast. California has put millions and millions of dollars into upgrading stations and buying trains, and so have Oregon and Washington. But that model presumes that you have a national system which runs a national route structure and operates to national standards, and provides a basic level of service. The Mineta proposal, the Bush administration proposal, actually seeks to get federal government out of supporting rail with any operating funding all together and asks the states to take that over. My conversation with state officials has been that they’re totally unwilling to take that deal. They’re willing to have a partnership, but not to be handed the whole ball of wax.

CURWOOD: Hank Dittmar, if you had the final say, what kind of plan would you lay down for the future of Amtrak?

DITTMAR: I’m glad you asked that question, Steve. We need a national network of medium-distance rail routes and we need to interconnect them in the same kind of hub and spoke system that we have for air travel, and we need to link them with our inner city bus system and with our airports. Creating that kind of connection, as we are beginning to do at Milwaukee, at Newark, at Providence, Rhode Island, begins to create a more secure system, and it becomes to secure a more economically viable system. So I would fundamentally redraw the map and, at the same time, I would begin to try to create some structures for financing that encourage the private sector to invest in some of these improvements. And maybe encourage the airlines to think about collaborating to run joint trips that involve both air and rail.

CURWOOD: You outline an ideal view of the future of Amtrak. Looking at what’s going on now on Capital Hill and the financial arrangements that are being made, what do you see down the road these next few months, these next couple of years, for Amtrak?

DITTMAR: In the next few months, I expect that we will continue to see Amtrak lurch along. Next year, with a new Congress and the opportunity to reauthorize the air, rail and highway bills, I think there’s the opportunity to move some legislation forward that provides a stable basis for federal-state partnerships to expand the system. Obviously we need to see, at the same time, a commitment from Amtrak to operating efficiency and transparency. But I’m hopeful if that happens, the logjam in Congress will be overcome, and the opposition of the Office of Management and Budget to Amtrak will be overcome by the clear indication that the public supports it. Seventy-five percent of the people think that we should have high-speed rail in this country, according to a Conference of Mayors poll. So it seems that ought to weigh in with the president, in some way.

CURWOOD: Hank Dittmar is the president and C.E.O. of the Great American Station Foundation, an organization that works to revitalize communities through their railroad stations. Thanks for taking this time with us today.

DITTMAR: Thank you, Steve. It’s great to talk to you.

[MUSIC: John Coltrane, "Blue Train", BLUE TRAIN (Blue Note -1990)]