Wednesday, March 28, 2012

Privatized Passenger Rail - Possible or Pipe Dream?

I've said lots in this blog about how Passenger Rail will never make a profit on its own.  It is always going to need a subsidy.  I have also pointed out that there are other modes of transportation business, and other businesses in general, that are subsidized by the government in various ways that are not as overt as, for example, Amtrak.

So I started thinking about this question:  Under what circumstances would privatized Passenger Rail work and not work?

The first thing you have to do is define "privatized."  For my thought experiment, "privatized" does not mean take what you have now and throw it into the hands of private enterprise and try to make it work.  "Privatized" does, however, allow for the possibility of private enterprise buying existing assets for the purpose of running passenger trains under new and/or different business plans.  Okay now, we've already started the list of what will and will not work.  So let's step back and start with the rest of what will not work.

What Will Not Work - Item 1:  If you didn't get my drift from the last paragraph, let me spell it out.  Do not take an existing Passenger Rail service - Amtrak or Chicago's Metra, for examples - throw it's system into the hands of private enterprise by some means - sale or lease contract, for other examples - and demand that service continue as is while the private operator struggles to run what was already a losing proposition while, at the same time, trying to make changes that will bring the system into profitability.

What Will Not Work - Item 2:  Do not expect freight railroads to jump in and start operating Passenger Rail of a robust nature using existing freight rail infrastructure.  The freight railroads are in the business of moving goods and commodities.  Sure, they'll take a look at a proposal that throws money their way, but their hearts will not be in it.  We who love Passenger Rail will rue the day we try this one.

What Will Not Work - Item 3:  Do not wait until private investors get all goo-goo-eyed over High Speed Rail. At least not in our venue (USA and/or North America).  The HSR project now underway on "The Continent" involves lots and lots of investor's money and that's just for trains and routes over infrastructure that already exists or has already been approved and passed environmental muster.  (Perhaps a key to what will work.)  With the stranglehold that greens have over is, don't expect to see anything get approved economically unless it is by fiat.  And the Fiatster In Chief does not like corporations and investors making a profit.

More next time.

©2012 - C. A. Turek -

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