Foreign Intercity Passenger Rail: Lessons for Amtrak? (CRS Report for Congress)
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| Release Date |
June 7, 2002 |
| Report Number |
RL31442 |
| Report Type |
Report |
| Authors |
John F. Frittelli, Resources, Science and Industry Division |
| Source Agency |
Congressional Research Service |
Summary:
Congress is debating the federal government's role in providing intercity passenger rail service.
Many believe that Amtrak's future is now at a crossroads. Amtrak's worsening financial situation
and its relatively small overall share of the intercity passenger market have led some policymakers
to consider other models of passenger rail regulation. The experience of other countries is often
cited in debates about passenger rail regulatory regimes.
The foreign experience can provide some perspective and some insight in the debate on U.S.
intercity passenger rail. Many countries have dramatically reorganized the regulatory framework
of their railroads. Market forces and political pressures were the underlying causes of railway
reform. The objectives of rail reform was to reverse declining market shares due to competition
from the automobile and airplane, to make the railroads more responsive to customers, and to reduce
the railroads' dependence on government subsidies.
In order to accomplish these objectives, governments have reorganized their railways along
several dimensions. Some national railroads were divided geographically into separate entities by
region. In some cases, national railroads were also divided by business sector, such as freight
separated from passenger services. Vertical integration, where one entity controlled both train
operations and track infrastructure, versus vertical separation, where train operations and track
infrastructure were controlled by separate entities, was another choice offered by rail policymakers.
Rail policymakers also faced a choice between public versus private ownership. Levels of
privatization can be distinguished among several foreign railroads. A final important element of
railway regulation is the role of competition. Theoretically, competition in passenger rail service can
take the form of multiple train operating companies competing on the same track. However, in
practice, competition more readily takes the form of franchises bidding for government contracts to
perform rail services and/or competition from other modes, such as automobile, bus, and airplane.
The regulatory framework of passenger rail in seven countries is profiled: Argentina, Canada,
France, Germany, Japan, Mexico, and the United Kingdom.
The level of government support for passenger rail in Japan and European countries far exceeds
the level of government support in the United States. In many cases, at the initial stage of
restructuring, foreign governments absorbed the large debt that the previous national railroad had
accumulated. Even the most market-oriented governments have accepted some kind of public
support for new (high speed) track construction. Federal governments also provide direct operating
subsidies to their railroads in most cases. In Japan, a few lines are able to cover their operating
expenses without government operating subsidies. Although restructuring may provide opportunities
for increasing productivity and efficiency, many rail analysts contend that a more critical issue facing
Congress is the high level of government spending a viable intercity passenger rail system requires.
