Is Amtrak’s Proposed Reorganization a Good Idea?

Compartmentalized Responsibility

Amtrak, at the prompting of the Federal Railroad Administration, is proposing a major restructuring.

According to Amtrak’s website: “The preliminary framework would transform key parts of the organization into smaller, more focused businesses centered on passenger rail’s most critical activities: infrastructure, passenger-rail services and fleet. A parent company would provide overall governance, strategic direction and coordination among the three subsidiaries.”

Great Britain implemented similar structure in the mid-1990s. It is now in the final stage of undoing that experiment.

To be clear, the incentives in the current structure have led to bad results. Amtrak has consistently failed to invest in enough coach cars, bedroom cars, and locomotives to meet demand. And, the states that purchase service from Amtrak don’t trust Amtrak’s costs.

However, it isn’t clear how this proposal will result in more people riding trains.

Amtrak is requesting public comment on the restructuring but has provided few details. A video and a deck posted on their website offer only the barest outline.

Separating rolling-stock ownership from service delivery poses the biggest risk. The physical train is the foundation for the service provided. Giving one entity the responsibility for fleet plans and ownership—and another entity the responsibility for maintenance and operations—could easily lead to conflicts as they operate at cross-purposes.

Other unanswered questions include:

How will the restructuring be paid for?

What other structures were considered?

How will this help with cost transparency?

Who will be responsible for increasing ridership and revenue?

How will this result in increased investment in rolling stock?

Will the Administration request an appropriation big enough to foster expansion?