The little Amtrak that could
Amtrak, like the little train that could chug, its way up the hill in the famous children's story, is proving to be a decidedly gritty railroad competitor. The National Railroad Passenger Corp., as Amtrak is formally known, is facing the prospect of sharp budget cuts that could seriously imperil its existing transportation structure, particularly in the western US. But does Amtrak merely resign itslef to the reductions, yield up its routes, and turn into a minor-league regional trunk line?
No, it stuns the US railroad community by proposing to make up its operating shortfall by diversifying into private business ventures. In fact, by doing so, argues Amtrak president Alan Boyd, the carrier may be able to phase out federal assistance for its operating budget altogether by 1985, although federal support will still be necessary for capital projects involving rolling stock, tracks, and station maintenance.
Amtrak's bold plan deserves the solid support of Congress and the Reagan administration. As we noted recently, Amtrak has largely filled the public need for which it was created -- namely, national passenger railroad service. The problem has been that such a federally subsidized system has meant a continuing and costly drain on taxpayer dollars at a time when the public is rightly demanding that Washington justify each and every expenditure.
The Amtrak proposal to diversify into business ventures makes good sense. Most are not believed to require legislative assent, although the carrier is correctly courting congressional backing to help gain acceptance within the business community. If diversification works, the resulting profits could conceivably offset federal budget cutbacks.
According to Mr. Boyd, the plan has several facets. These include commercial development of some of the carrier's real estate; providing railroad renovation services for rail cars from private carriers; and training car-shop workers. Perhaps most ambitious of all, Amtrak is seeking private investors to help set up a $30 million fiber-optics communication system for message transmission.
Amtrak has sought $853 million for fiscal year 1982. The Reagan administration trimmed that amount to $613. A House committee recently approved a $725 million budget, which would enable the carrier to retain at least 85 percent of its track structure.
Amtrack now meets slightly over 40 percent of its operating budget from ticket sales. Congress has mandated that tickets must provide 50 percent of that budget by 1985. The carrier now estimates it will do so by late 1982. So perhaps Amtrak officials are on course in believing that they could make up the difference in operating expenses from profits garnered from commercial ventures.
The Reagan administration has urged government agencies to be both creative and businesslike in their operations. Amtrak officials deserve kudos for coming up with a novel approach which, if successful, would keep a lot of trains run ning.