Amtrak Should Exit Commuter-Rail Business, Mica Says

Amtrak, the U.S. long-distance passenger railroad, shouldn’t be in the business of operating commuter railroads under contract because it’s a bad deal for taxpayers, the top House Republican overseeing transportation said.

Amtrak, which receives taxpayer support, costs 11.5 percent more than private-sector commuter rail operators, Representative John Mica, chairman of the House Transportation and Infrastructure Committee, said in a report panel Republicans released today.

“Amtrak should not be in the commuter-rail business at all,” Mica, from Florida, said today at a hearing in Washington. “There are plenty of private-sector providers who can provide this service and provide it at lower costs.”

Amtrak operates commuter service for three providers -- in Maryland, Connecticut and California -- and provides other services, such as maintenance, for operators, Amtrak Chief Executive Officer Joseph Boardman said in his prepared testimony.

“It is very sad that we are wasting the committee’s time micromanaging Amtrak,” said Florida Representative Corrine Brown, the top Democrat on the House rail subcommittee, saying there are more important transportation concerns on the 11th anniversary of the Sept. 11 terrorist attacks on the U.S.

Competitive Bidding

Amtrak bids for commuter-rail operations in addition to the monopoly it has on long-distance intercity service. Mica’s report says Amtrak tries to “stifle competition,” citing a lawsuit contesting a contract to operate commuter rail in his home state. The report says Amtrak shouldn’t use U.S. funds for lawsuits related to competitive bidding.

Amtrak said Veolia Transportation, a unit of Paris-based Veolia Environnement (VIE), illegally approached Amtrak employees when it submitted the bid it won to operate passenger rail service for Tri-Rail in south Florida.

Mica released a report last month saying Amtrak lost $84.5 million selling food and beverages last year and $833.8 million over 10 years. According to the report, cans of soda that cost taxpayers $3.40 were sold by Amtrak on its trains for $2.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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