Written by: William C. Vantuono, Editor-in-Chief For newly minted Amtrak President Charles Wickliffe (Wick) Moorman IV, a winter of discontent is nigh. Amtrak is unlike the polished and profitable Norfolk Southern from which this Mississippi-bred civil engineer and son of college professors retired as president, chairman and CEO. Indeed, Amtrak, on life support since its 1971 creation, is a poster child for legendary talk-show host David Letterman’s signature empathy, “I wouldn’t give those troubles to a monkey on a rock.” Neither U.S. presidential candidate shares President Obama’s passion for passenger rail spending; the electorate increasingly opposes higher taxes, more subsidies and bureaucracy; and Amtrak haters in Congress are a formidable force, successfully and progressively shifting financial responsibility for passenger trains to cash-strapped states. Amtrak’s statutory dispatch preference over freight trains is under attack as neither absolute nor in perpetuity; a statutory provision allowing Amtrak to conspire with federal regulators to saddle freights with performance standards when hosting Amtrak trains was nullified by federal courts; and a Surface Transportation Board definition of “on-time” arrival of Amtrak trains on freight-rail track is ripe for court challenge. Internally, Amtrak is troubled. Its top cop is ensnarled in a fraud and conflict-of-interest investigation over a $2 million contract given an alleged paramour. Previously, a chief engineer favored a neighbor with a $2 million consulting contract. Acela Express was plagued by 9,000 design changes, production delays and breakdowns that spawned extensive and costly litigation. Deception has been alleged in Amtrak financial accounting. And former presidents Tom Downs and George Warrington disingenuously proclaimed to Congress that Amtrak was on a “glide path to self-sufficiency.” Recently, Amtrak was outed in a failed effort to suffocate commuter-operator competition by limiting access to Washington Union Station; Joe Boardman relentlessly changed out senior executives, many in essential safety positions; and Boardman, after citing declining revenue to justify limits on new hiring plus cuts in retiree health-care, pension benefits and departmental budgets, puzzlingly hired as a consultant the wife of a union boss deeply involved in Amtrak labor issues. As for Amtrak’s inspector general, charged with sniffing out waste, fraud and abuse, he serves at the pleasure of the Amtrak board. While Amtrak’s White House-nominated and Senate-confirmed board of directors to which Moorman reports no longer is larded with political hacks, its oversight, given the above examples, is arguably weak. Moreover, it has passively allowed Amtrak senior management to ignore the loss of significant numbers of Northeast Corridor passengers to intercity bus operators offering more frequent departures and competitive trip times. Nor is there effort to partner with Uber—the world’s most valuable startup—to create a seamless “first” and “last” mile using an app to summon a car. This all should be enough to make a preacher cuss, but Moorman, with his private-sector background, understands fully the tragedy of the commons—that when everybody owns something, nobody takes an ownership interest. Surely Moorman can encourage public-private partnerships injecting greater market-based disciplines. The Federal Railroad Administration is writing rules to implement a congressional urging that up to three Amtrak long-distance routes be privatized—a pilot program to transfer, for up to eight years, 90% of Amtrak’s existing subsidy for that route to a responsible applicant proposing equal or better service. Yes, it’s risky. Amtrak supporters fear that even limited privatization will further erode congressional support for a national interconnected rail passenger network. The reality is that Amtrak is an island of socialism in an American sea of capitalism, and the status quo cannot much longer endure. Privatization also may be a viable solution for the 450-mile Northeast Corridor, whose price tag for renewal of century-old infrastructure, capacity expansion and increased train speeds conservatively exceeds $50 billion. Only an irrational romantic assumes Congress, which starves highway and other critical domestic infrastructure projects, will appropriate the funds. The American Intercity Rail Network for the 21st Century (AIRNet-21), a public-private partnership prepared to invest $60 billion in NEC infrastructure renewal and expansion over 50 years, with zero from congressional appropriations, deserves Moorman’s attention, along with other responsible market-based alternatives to the status quo. Moorman has opportunity to transform a winter of discontent into a Casablanca-movie moment: Wick, this could be the beginning of a beautiful friendship with Congress and the American people. Continue reading...
