House to introduce bill to privatise rail in Northeast Corridor

House Transportation and Infrastructure Committee Chair John Mica said he supports a proposal to put a lucrative segment of the state-owned passenger rail service up for private sector bids.

Republican House Transportation and Infratructure Committee Chairman John Mica said today he plans to introduce legislation to privatise a portion of US state-owned passenger rail carrier Amtrak, potentially opening up a large, lucrative bidding opportunity to the private sector.

Mica said “we will be offering up in the next few weeks legislation” that would take the Northeast Corridor, which connects the cities of Boston, New York, and Washington DC  “out of Amtrak’s purview”. The Northeast Corridor is the most well-traveled and most lucrative part of Amtrak’s operations, and operates express trains that travel between Boston, New York, and Washington DC in about six and a half hours.

Mica said the legislation would likely transfer to the authority for the Northeast Corridor to the US Department of Transportation, before moving toward “putting the Northeast Corridor up for private sector bid”.

“We would take offers from the private sector to control and operate the infrastructure and also operate the train sets,” Mica said. “We are looking at combinations . . . whatever would be most beneficial to the tax payer.” 

Mica said Amtrak’s current proposal to upgrade the Northeast Corridor to “true” high speed rail – which Mica said is defined under federal statute as traveling at average speeds of over 110 miles per hour – was too expensive and would take too much time to construct. Amtrak has proposed a plan that would cost $117 billion over 30 years.

Mica said that anyone waiting for federal funds for such a project is “going to turn blue” and objected to Amtrak’s previous record, saying it was “probably one of the most dismal records on earth for any rail service”.

Instead, he said the private sector could complete the renovation and upgrade to high-speed rail in a third of the time Amtrak has proposed.

But Mica’s proposal was not universally well-received in the hearing. Senator Frank Lautenberg, a Democrat from New Jersey , emphatically opposed the idea of putting Amtrak’s northeast operations up for private sector bid.  He argued that “privatising the northeast corridor is not a smart or viable way” to meet the challenges facing the development of the corridor.

“Thank you for your ringing endorsement of my proposal,” Mica replied.

Others argued that a previous request for proposals to manage high-speed rail had not solicited any interest from the private sector.

“I have my doubts, to put it mildly, about the proposal that has been outlined here,” said Jerrold Nadler, a Democratic Representative from New York. “We’ve started down this road before.”

He said that the case had not yet been made for privatisation, and that any private sector project would still likely require a “backstop” from the federal government. He also argued that taking control of the Northeast Corridor out of Amtrak’s hands would allow any one state along the corridor to block the entire project.

“I don’t think we are prepared to go ahead with any privatisation scheme at this point,” Nadler said.

Amtrak has expressed interest in having private sector investment in the project to upgrade the Northeast Corridor to speeds of 220 miles per hour. Al Engel, Amtrak vice president for high-speed rail, said in a recent statement that he will “aggressively pursue private investment.”

Amtrak would still remain the “key developer and operator,” of any project, according to the statement, but is looking for ways for the private sector to help finance the construction of infrastructure and acquisition of equipment. Amtrak has issued a request for proposals for the development of the financial and business plan for private investment in the project.

An Amtrak spokesperson said that 26 private entities had responded to the request for proposals for the development of the business and financial plan. Bids are due by the end of June.