Surge in Business Is Short-Lived; Rail Line’s Survival Much in Doubt

Aboard a swift-moving Amtrak train, Los Angeles lawyer Robert Krasney whipped out a leather briefcase, scanned his morning paperwork and gazed at a stretch of freeway in Orange County.

“See that?” he said, pointing to the crawling traffic. “That’s why I’m taking the train. I just don’t want to deal with it.”

On this rush-hour trip to San Diego, Krasney was the very embodiment of what might be the best hope for passenger rail in America--a business commuter whisking off on a quick round-trip jaunt to avoid the hassle of a clogged freeway.

If fed-up commuters haven’t been enough to make Amtrak a popular transportation alternative, the Sept. 11 attacks on airliners seemed to provide another motivation: fear.

Like no other event in memory, the attacks gave Americans reason to reconsider flying and take the train.

Indeed, airport shutdowns and fear of flying initially boosted business by about 15% on some Amtrak routes. Although overall ridership on the rail giant slumped, Amtrak hoped to build on its few successes and to make permanent the shift of some fliers to the rails.

In Washington, Amtrak used the post-attack surge in business to ask Congress for increased funding to improve safety and service. Amtrak board Chairman Michael Dukakis argued that the rail giant had earned greater support by demonstrating since the terrorist attacks that it can be “the safety net for our entire transportation network.”

But nearly three months after the attacks, Amtrak looks less like a safety net than a sieve. Overall ridership has leveled off. The rail company continues to hemorrhage millions of dollars on top of a nearly $3-billion debt. Its trains remain too slow, too inefficient and too costly for Amtrak to seize the moment, critics say.

Searching for answers, many lawmakers and rail experts are pointing to California and suggesting that states must take the lead if passenger rail is to thrive.

“California is quite remarkable because it’s the only place where things are being done the way they should be,” said Paul Weyrich, vice chair of a congressionally appointed Amtrak watchdog panel.

The state pumps far more money into Amtrak passenger train service than any other. That has helped three routes to remain in business: the Surfliner, which runs from San Diego to Los Angeles (and on to San Luis Obispo), the San Joaquin, from Bakersfield to Oakland, and the Capitol, from San Jose to the Sacramento area.

The involvement of California and other states looms particularly large, as Amtrak’s support in Washington is foundering.

Defying the wishes of Transportation Secretary and panel member Norman Y. Mineta, the Amtrak watchdog group issued a report three weeks ago finding that the rail corporation has no prospect of turning a profit any time soon.

By law, the report triggers a series of actions that could lead to Amtrak’s breakup. The 30-year-old rail company now must come up with an outline for its liquidation while the reform panel offers a blueprint of its own.

Both plans will be presented to Congress, which by the end of next year will be asked to decide the future of American passenger rail. Among the options: Leave heavily subsidized Amtrak in place, order a massive organizational overhaul or start selling tracks and trains to private companies.

Lawmakers also will have the opportunity by next year to put meat on skeletal plans for high-speed trains, which many experts think are the best hope for making rail competitive with planes and cars.

One proposal would pump money into a Sacramento-to-San Diego high-speed line that has been a legislative stepchild.

The debate is in full swing in Washington: What to do with train service in America? Should Amtrak run it? Who should pay? Whom should it serve?

Short Routes Called Key to Company’s Success

Passenger rail’s best chance to compete with other forms of transportation has been on the short routes connecting major cities, usually trips of 250 miles or less.

Amtrak’s Surfliner, which runs 11 times daily between San Diego and Los Angeles, fits that description.

The nation’s second-busiest passenger rail corridor, the route attracts a variety of riders: surfers bound for San Diego County beaches, tourists enjoying ocean views and businesspeople who like to spread out and work on the 2 1/2-hour ride.

“It’s practically a commuter train for me,” said Krasney, the lawyer, as he parsed through some of his notes on his way to San Diego to depose a witness.

“It’ll take just a little bit longer than if I drove,” he said, “but I can sit back, do some work, have a coffee, read the paper and check out the ocean. Basically, I can go into the deposition really relaxed. Perfect.”

In sharp contrast, Amtrak struggles to provide fast, convenient service over the longer haul. With trains that usually run about 50 mph on long, winding, crowded routes, it simply can’t compete for time-pressed travelers.

The roughly 350-mile journey from Los Angeles to the San Francisco Bay Area is covered by a pair of Amtrak trains. Planes get there in one hour, cars in a little more than five. Amtrak’s trains average more than 10 hours.

“This thing is slow as molasses,” said Choot Amor-Jordan of La Habra, who took the train recently to see her husband, a veterinarian living in Petaluma. She found herself afraid to take her normal plane flight after Sept. 11, so she bought a ticket on Amtrak’s fastest link to the Bay Area.

Starting her day at 8 a.m., Amor-Jordan hopped aboard a train to Los Angeles, then boarded an Amtrak connector bus to Bakersfield (The Tehachapi Mountains are too steep for passenger trains, making the connecting bus route necessary.) before boarding her last train, the double-deck Amtrak San Joaquin No. 715 to Oakland.

By midafternoon, Amor-Jordan’s train sat dead still just outside Fresno, having yielded to a passing freight train. It was a delay typical for Amtrak, which shares vast stretches of single track with other passenger and freight trains.

Federal law mandates that Amtrak trains get the right of way, but the reality is more complex. In most of the country, Amtrak runs on track controlled by private rail lines such as Union Pacific and Burlington Northern Santa Fe. Private rail dispatchers often give priority to trains packed with coal, cars and timber while passenger trains wait. And many freight trains are simply too long to pull over onto short side tracks, so Amtrak trains must give way.

Sitting on the No. 715 as it waited for nearly an hour for a freight train to pass, Amor-Jordan gazed out at a vast expanse of flat earth and dirt, clearly rankled.

“Maybe I should have flown,” she said. “If I’d flown, I’d have at least been with my husband hours ago.”

Amor-Jordan arrived in Petaluma about 10 p.m., 14 hours after leaving Orange County.

Many Factors Led to Lack of Profits

Amtrak, created by Congress in 1970 as a government-supported alternative to money-losing private carriers, operates essentially without competition on the rails.

But its high labor costs, poor ridership, outdated equipment and infrastructure, and management troubles have left the company far short of profitability. The system carried less than 1% of the nation’s long-distance travelers in 2000.

That’s turned Amtrak into a political target in Washington.

In the 1980s, President Reagan attempted to stop federal funding every year of his presidency, only to be rebuffed by Congress.

In 1997, Congress passed the Amtrak Reform and Accountability Act. The law kept the nearly bankrupt rail line alive with a $2.2-billion funding package, created the Amtrak Reform Council and set a December 2002 deadline for the company to start turning a profit.

When it issued its report this month that Amtrak would not be able to pay for itself by 2003, the reform council pointed to the rail corporation’s most recent failings, including mounting debt and the mortgaging of New York’s Penn Station for $300 million in May just to keep afloat.

Even the Northeast line serving Boston, New York and Washington--supposedly the economic engine that would prop up the entire national system--is struggling. Despite heavy investments there and the fact that Amtrak owns the rails, the line has fallen far short of revenue projections.

Proponents think some losses are just part of the natural order. Indeed, even sleek and popular European and Japanese trains benefit from deep government funding.

While U.S. subsidies for highways and air transportation have become part of the political landscape, the newer Amtrak payments have been a much more popular target.

Critics say some of the government support has reached absurd proportions. Even with substantial federal backing, for example, the Coast Starlight lost $26 million in 2000. The roughly 40-hour connector from San Diego to Vancouver mostly ferries retirees and vacationers up and down the coast.

Taking note of the company’s anemic financial performance, Sen. John McCain (R-Ariz.) recently called Amtrak a “failed experiment” that places the American taxpayer at financial risk. McCain and other lawmakers on Capitol Hill have been asked by Amtrak and Transportation Secretary Mineta to come up with a long-term vision for passenger trains. In the shorter run, Congress faces the rail quagmire with a full menu of options.

The Senate attached a $9-billion investment in high-speed trains to its latest economic stimulus package and has had hearings on a $35-billion loan measure for rail upgrades. Both plans rely heavily on Amtrak. In the House of Representatives, a committee is set to consider a far-reaching bill to provide as much as $71 billion for high-speed rail and a massive overhaul of the American rail system. That bill has one caveat: Amtrak can’t be involved.

One Amtrak restructuring plan would focus on the short runs like the one businessman Krasney enjoyed to San Diego. Another would turn most of the corporation’s long-distance routes over to private companies that would focus on the tourist trade. But long-distance Amtrak service has powerful legislative allies, including Sen. Trent Lott (R-Miss.), who insist that trains cannot abandon small-town America.

The prospects for all of the legislation is murky, particularly given the budget retrenchment since the Sept. 11 attacks, said Gil Carmichael, chair of the Amtrak Reform Council.

“One thing I know, we can’t just keep sinking money into something that’s totally broke,” he said.

State Subsidies Vital for Amtrak

The most successful Amtrak trains in recent times have thrived, in part, because they have received an additional layer of planning and finance from the states.

Oregon and Washington have formed a partnership to buy new European-style trains that make the trip from Eugene to Seattle almost as fast as a car, serving local cuisine and Starbucks coffee along the way. North Carolina spends heavily, refurbishing trains to increase service on short routes and partnering with Virginia on plans for new train service to the nation’s capital.

California, which has spent $2.4 billion since the 1970s on the three lines, is by far the biggest state investor in rail. State money has helped bankroll operations and infrastructure--new trains and improved tracks, signals and stations

The subsidies, counted as “revenue” by Amtrak, are crucial for the three California lines. Without them, they would have combined losses of at least $96 million in the fiscal year 2000.

The investment has kept the lines alive to compete with cars and planes. But trains continue to move just a fraction of the state’s travelers.

The Surfliner from Los Angeles to San Diego carries more riders than any line outside the Northeast, an average of 4,500 passengers a day.

But, according to the California Department of Transportation studies, the rail line accounts for only 4% of all daily trips between San Diego and Los Angeles. But even that small contribution can help prevent freeway gridlock, state transportation officials insist.

Company’s Future Tied to High-Speed Rail

The real hope for successful train service will come with the advent of high-speed rail, advocates say. Plans for trains running up to 200 mph are being made in 11 federally designated regions, including California.

California lawmakers created a High-Speed Rail Authority five years ago, intending to build a line that would whisk travelers from Los Angeles to the Bay Area in under three hours.

But for all of its grand plans, the effort faces serious roadblocks. Even the rosiest projections anticipate the line would not be completed for about 20 more years.

The authority is in trouble and searching desperately for $7 million just to complete an environmental study.

“If the money doesn’t come, this effort comes to a stop,” said Mehdi Morshed, the authority’s director.

The biggest hurdle of all is the project’s price tag--$25 billion. Many say the authority’s plan is just too grandiose.

“It would be wonderful to wake up tomorrow and have [European]-style trains running all over the country,” said James Coston, a member of the Amtrak Reform Council. “But for it to really happen, you should start slow and build incrementally. You take trains like San Diego-to-L.A. and you make them faster. Then you keep building out. You have to crawl before you walk.”

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