Beggining the '70's, my antecessor, Prof. Eng. Enrique Arquímedes Porta started a investigation to understand better railway deficit.

He used the nonsense method, asking itself What would be of the economy if tomorrow we close all railways.   Sound this similar to Nobel Economy Pride Robert Vogel work?   Well...

On those times, passengers trains were in a economical collapse situation.  Germany were considering the possibility to replace the railways by an Autobahn net.   But... but... but, using Porta's calculation method they discovered if doing that fiscal deficit will shot up 9 times.   So they decided to maintain railways, and to put focus on the ICE project.

In USA... we know.   Private passengers train went to bankrupcy, and "state" Amtrak born.  

So... A socialist style company in the heart of a capitalist system.?   Why?

Simple.   Having Amtrak is costly.   But not having it is... more costly.   This was Prof. Eng. Porta conclusion

If tomorrow we close Amtrak, the result will be a big damage on the US economy.   How do I know this?   Easy.   In the '90's we closed railways, and we replaced all traffic by trucks and buses.   Now we are paying that, and believe me... is not a good business.

So... Amtrak... Why?

Because «Public Benefit»

8 Replies

  • Amtrak loses money in such large amounts because it consistently puts all of its capital investment into its smallest, weakest segment, the Northeast Corridor. In the NEC, Amtrak generates its smallest annual output of passenger transport, measured by revenue passenger miles, and has its lowest market share (well under two percent) and a sub-50% load factor. (Its long distance segment generates half again the annual output of the NEC and has double the market share, plus nearly sold-out load factors.)
    And, the NEC accounts for ALL of Amtrak's annual subsidy need. We know that because Amtrak itself said so, in a letter to a U.S. Senator that reported that its annual subsidy need would rise, not fall, if all long distance trains were eliminated.
  • In reply to Sisyphus:

    I checked my calendar to make sure it wasn't April Fool's Day. Aside from its role as a track access purveyor to various Northeastern commuter agencies, Amtrak's contribution to transportation output and mobility is trivial. As a share of transportation market nationwide, Amtrak generates less output (one butt in one seat traveling one mile) than the private-owned motorcycle fleet. Sadly, due to wrecks and other mishaps on the NEC, we get real world tests of Amtrak's significance. During shutdowns of the vaunted Northeast Corridor, the region does not grind to a halt. Few people notice.
  • In reply to dcmcrider:

    Dear dcmcrider: You can make a parellelism with Ferrocarriles Argentinos case. FA had a very small travel market participation, but when it was closed this affected strongly the argentine economy. State rail subsidies have to be transfered to private buses companies. Buses resulted more deficitary than FA, and today turned into a non sustainable model. Road traffic increased. Road useful life reduced drastically, increasing our fiscal deficit. Road accidents increased also, and behind them legal demands. The car represents here 70% of the touristic traffic, but this percent is falling, as drivers refuse to drive because they don't want to drive sharing lane with buses and trucks. This tendence is affecting main touristic cities, generating a hotel performance reduction. Airlines and rent a car companies are the winners now, but airlines cannot expand demand because Buenos Aires airport, which is the "main" is collapsed. If IC trains could operate at less 20% of passenger and touristic traffic, this will be a very big help to reduce fiscal deficit, road accidents (20 to 22 daily deaths), and also will help to increase hospitality performance, because «Logistical deficit» will be reduced
  • In reply to Cassano:

    Different market environment, different results.
    When the crash of Amtrak #188 closed the NEC entirely for a week last summer at its busiest point, the effect on parallel roads and airports was...nothing. No gridlock, no problem. Delta Airlines even advertised it had shuttle seats available. I-95 was the same as it always is. THAT is what a sub-2% market share looks like. After $100 billion (in 2015 dollars) in public capital "invested" into the NEC, the effect is imperceptible. Amtrak contributes essentially nothing to regional mobility.
  • The nonsense on this sit regarding Amtrak is beyond pervasive. The facts remain that the relatively small investment in the national rail system is small compared to public support to other transport with benefits realized beyond the cost to taxpayers.

    As for Amtrak's trivial share of the Corridor traffic that would be more representative of commercial air.

    Gridlock was pervasive, travel was chaotic and yes Delta had available tickets during the train 188 disaster; for the few that could pay $1300 a pop; one way for a trip between DC and NYC.

    As for the Amtrak contribution to transportation outside of the Corridor, an online search of the possibility of a reroute for Southwest Chief indicates communities large and small were lobbying vigorously to either maintain service or be included in any new route. Congressmen suddenly became active in keeping Amtrak service for their districts.
  • In reply to Sisyphus:

    One week is not enough to see "public benefit" results.
    Process is longer and more complex than you see. We have direct experience of it 20 years after closing passenger trains the transportation subsidies were altered in a way so today "liberal" economists are considering seriously to develop a state passenger system to reduce private transportation deficit.
    No doubt today roads have more traffic than Amtrak, and this is what increase state deficit
    If you want to reduce fiscal deficit you have to increase NEC capacity, allowing third companies to operate by open access, exactly as Europe do it so.
    Airlines require subsidies to operate, and they are sensitive to fuel costs.

    Future scenery is interesting. A direct receipt to reduce fiscal deficit by closing railroads will produce exactly the opposite effect, turning non sustainable air and roads operations.

    If crude price increases private airlines and buses and truck companies will require more operative subsidies to the Goverment. Subsidied fuel, subsidied tyres, tolls exemption, and tax subsidies.

    This receipt was used here, and showed to be more deficitary. Now we concluded we need to invest in rails to reduce fiscal deficit
  • In reply to Cassano:

    Amtrak has failed so as others because here in the US we refuse to keep up with times and stick to some 'nostalgic', outdated, old and bleak concepts that do not work in modern world. Here , investment means hiring a zillions of corporate crooks like CEOs, CFOs etc, ripping off profits overnight by merging or selling companies, or simply pocketing all the profits. A government alternative is even worse: hire the same crooks, pay them premium wages and mind-blowing bonuses.... for what? By doing a job as required? No wonder that passenger rail and transit agencies post no profits to support healthy operations and capital expansions. All profits are being wasted to pay all the worthless managers.

    Whether it is forcing to keep old fashioned cars in production, or trying to keep Amtrak alive, it is not going to work. We don't want tacky old-fashioned ugly Cadillac, we want modern, high tech, tastefully designed Audi and BMW. We don't want to ride slow, dirty, technologically dead Amtrak or Metrolink and bums 'camping' in the stations, we would love to ride Eurostar of TGV! Non-stop LA to SF or to PHX, 250 mph plus, clean modern, professionally designed carriages with technologies and fresh food served on porcelain with real silverware- not frozen chow served on plastic. And, yes, civilized clean station facilities.
  • In reply to Nordic Cat:

    Dear Nordic Cat: Excelent observation by your part, and wonderful your comparison between an old fashioned Cadillac and a modern Audi or BMW. I think they standarized rolling stock in superliners and metroliners due practicity, and here could be a point of confusion on Amtrak's management. Seems to be they have not in clear the difference between touristic traffic and passenger traffic. Both traffics are quite different, and consequently requires very different rolling stock. Perhaps they think same rolling stock can serve to both traffics. If this is the thought, then they are wrong. Superliners and Metroliners are in the middle of both targets, and are not suitable for one or the other. If you want to operate passenger traffic, you will need modern "fashioned" and practical rolling stock, with a highly standarized interior layout. Yes, Audi or BMW quality design, as you mentioned. To this targets point designs like the Talgos or ICE's. In this aspect european designs are much modern than northamerican ones. But if you want to convert some trains into touristic atractives, then you will need a completely opposite design, because tourist want to live an experience. In Spanish they say "separate the waters" Passengers want practicity. Tourists want experiences. GIve me the California Zephyr, give me enough $$$ to replace it by another "more atractive" train, and I will turn it into a very one of the most commented northamerican touristic destinations. P. D.: Grammatical corrections are always welcome to what I write
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