CEO: Privatization proposal 'takes Amtrak apart'

Rep. John Mica's proposal to privatize passenger rail service in the northeast would end Amtrak as it currently exists, the CEO of the federally-subsidized railway said Wednesday afternoon.

Mica (R-Fla.) announced the details of his proposal to allow private companies to compete for bids to provide high-speed rail service in the northeast corridor, which is currently operated solely by Amtrak. Mica said private companies could provide the service faster and more cheaply than the national passenger rail service could.

But Amtrak CEO Joseph Boardman disagreed.

"This is broader than the northeast at this point," Boardman said on a conference call with reporters. "This is the Privatize Passenger Rail for America Act. The overall impact is this takes Amtrak apart, from an infrastructure standpoint, and replaces it with a government entity."

The privatization proposal, which will be contained in legislation Mica said Wednesday would be introduced next week, would remove Amtrak from control of the federally-designated northeast rail corridor and transfer it to the Department of Transportation. A newly-created Northeast Corridor Executive Committee would oversee bidding process for rail projects in the northeast, which Mica said Wednesday Amtrak would be allowed to compete for.

But Boardman said Mica's assertions that Amtrak was not up to the job of providing high-speed rail were based on "old facts."

"We run a very good operation on this corridor," he said. "We need to make sure the people who are running this corridor know what they're doing for the economy of New York."

He added that decisions about rail service should be made with passengers in mind instead of solely saving money.

"This transportation artery is critical, and that criticality is lost in this proposal because this proposal is about financing and real estate, not transportation first," he said.  

Transportation Secretary Ray LaHood did not criticize Mica's proposal as harshily Wednesday, but he also said Amtrak was the best fit for operating rail service.

"Chairman Mica and I share a strong interest in high speed rail, particularly in the Northeast Corridor," LaHood said in a written statement. "He should be commended for giving this topic the attention it deserves. However, based upon our preliminary review, we have many questions about the Mica proposal's feasibility.  At present, we believe Amtrak is the entity most capable of taking the next steps to modernize rail service in the Northeast Corridor, which is why the administration has serious concerns about any proposal to privatize Amtrak's Northeast Corridor.

"The administration also has the responsibility to ensure that taxpayer investments are protected and well-managed," LaHood added.

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