Panel is to Propose Breaking Up Amtrak

WASHINGTON -- According to the New York Times, Amtrak, the money-losing national railroad, should be broken up, with the government taking ownership of the tracks and competing companies taking over some or all of the most popular train routes, a plan to be unveiled today says.

Competition would be encouraged, long-haul lines could be put out to bid, and Amtrak itself would have to become more accountable under proposals by the Amtrak Reform Council, which was created by Congress to come up with a restructuring plan if Amtrak failed to become self-sufficient.

The council, made up of 11 political appointees representing labor and railroad interests, determined in November that Amtrak, a for-profit government corporation that lost $340 million last year, had no chance of weaning itself from operating subsidies by the Dec. 2, 2002, deadline set by Congress.

The council has until Feb. 7 to prepare a plan for rebuilding Amtrak. Congress, which is divided over the value of rail subsidies, will make final decisions about Amtrak's fate.

But with the restructuring proposals still being developed, a dispute has already broken out in Washington over Amtrak and the council itself. Railroad unions have accused the council of being anti-Amtrak and have demanded that it be shut down. After the November finding, the council's federal budget was cut in half, and it will probably run out of money and have to close in the spring.

Several senators have sharply criticized the timing of the council's report, coming so soon after the Sept. 11 attacks exposed the vulnerability of the nation's transportation system. Amtrak initially reported a sharp upsurge in ridership after the attacks, but when the final figures came out, ridership was shown to have declined 6 percent in September, and about 1 percent in October and November.

Regardless, the senators, in particular Joseph R. Biden Jr., Democrat of Delaware, argued that even discussing Amtrak's demise could hurt the railroad's standing with its creditors and the public. The senators passed a bill that prohibits Amtrak from drawing up a plan for its own liquidation, as called for by Amtrak's last five-year reauthorization in 1997.

But the council insists that it is not trying to shut down Amtrak or even end all subsidies, acknowledging that some government support for mass transit is necessary.

"This committee is pro-rail," said Mayor John O. Norquist of Milwaukee, who is a council member. "What we want to do is set up a system where what the customers want is what the railroad delivers."

As the Feb. 7 deadline approaches, the debate over what a national passenger railroad system should look like is expected to intensify.

"It isn't a matter of reforming Amtrak, it's a matter of replacing Amtrak," said Joseph Vranich, a former member of the council who was manager of Amtrak's news bureau for most of the 1970's. "The major flaw in setting up Amtrak was to meet the political requirement of making it a national system."

In effect, said Mr. Vranich, there are two Amtraks. One comprises busy routes, like the Northeast corridor from Boston to Washington, that need little or no government subsidies. And then there are long distance trains that run through less populated areas, losing money with every passenger.

Amtrak began operating in 1971 after the government took over passenger service from bankrupt railroads. Formally the National Railroad Passenger Corporation, Amtrak now serves more than 500 communities in 45 states and employs about 21,000 union workers.

Amtrak has never run in the black. By 1997, it had gone through $22 billion in government money. As Congress reauthorized funding that year, it set up the Amtrak Reform Council to monitor the railroad's finances, and Amtrak made a commitment to become self-sufficient before its reauthorization expired in December.

After the council determined in November that Amtrak would not meet that deadline, it released nine recommendations for restructuring the railroad. At a meeting today, it will narrow those proposals to three, all of them based on the business model of spinning off ownership of the tracks, stations and bridges in the Northeast corridor to take possession away from Amtrak and giving it to the government, leaving Amtrak to run trains, not maintain tracks.

The three proposals are:

--Creating national or regional monopolies.

--Having Amtrak continue to operate Northeast Corridor trains, but opening up competition for long-haul trains.

--After a two- to five-year transition, opening all intercity rail markets to competition, with Amtrak eventually being completely privatized.

"Congress can accept or throw away our recommendations," said Gilbert E. Carmichael, chairman of the council. "But this is the time to decide if we want to continue with the old Amtrak and all its old problems or have a new Amtrak and a new national rail policy."