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Mica Calls for Northeast Rail Corridor Privatization

WASHINGTON — House Transportation Committee chairman John Mica wants to take the Northeast rail corridor away from Amtrak and privatize most of it to get true high-speed rail service — trains that can travel at 220 miles per hour.

The Florida Republican held a hearing Thursday to present his plan and to examine other ideas for bringing private money into upgrading the 437-mile railroad from Washington to Boston. Committee members said they favor bringing in private money, but disagreed on how to do so.

To begin overhauling the system, Mica said he will offer legislation to transfer the Northeast Corridor, which Amtrak owns, to the U.S. Department of Transportation. If the legislation becomes law, the government would then take private-sector bids for controlling and operating both the infrastructure and the trains “with little or no taxpayer money,” he said.

Amtrak officials, who were not represented at the hearing, have presented a $117 billion, 30-year plan for high-speed rail in the Northeast Corridor. They have said they “will aggressively pursue private investment.”

If you are waiting for that to happen, Mica warned at the hearing, “you’re probably going to turn blue because it isn’t going to happen.” He wants the redevelopment time cut to 10 years.

During the hearing, Democrats said they want private money involved in upgrading the rail corridor, too. But they questioned Mica’s plan as well as Republicans’ motives.

Rep. Nick Rahall, D-W. Va., said Northeast Corridor privatization could be a new way to derail Amtrak, a long-term goal of many Republicans, describing it as “kicking it in the caboose by trying to dismantle it.”

Without the Northeast Corridor, the rest of Amtrak would be financially unstable.

Holding up photos of Virgin Rail trains, Mica enthused about the British company as an example of what he wants to see here. Virgin is one of several private companies licensed to operate various routes along Britain’s privatized rail network. Virgin’s London-to-Manchester and London-to-Glasgow trains doubled ridership and went from a $250 million loss to a $250 million profit after the company took over, according to Mica.

But Democrats on the committee pointed out that fares also jumped 40%, Virgin’s contract renewal has been delayed by a government review, and the profits come from running trains on government-built tracks.

“There’s no free ride for this rail,” said Rep. Eleanor Holmes Norton, D-D.C.

There is no shortage of ideas about how to bring in private money.

Several witnesses at the hearing proposed public-private partnerships or privatization to attract the private investment. They generally talked about separating the rail service from the rail infrastructure and said the infrastructure would be a candidate for P3s. The owners of the rails would make money by charging trains access fees. The trains themselves could be privatized, making money from ticket sales, food and alcohol, among other revenue streams.

James Richardson of Forest City Enterprises, a real estate developer who testified at the hearing, offered another source of revenue for the railroad: development above and around stations or adding airport-style shops to stations.

But Edward Wytkind, president of the transportation trades department of the AFL-CIO, criticized the proposals as unrealistic. “It’s wishful thinking,” he said. “All of those private models have significant, in come cases billions, of government support.”

The divisions in the committee and in the whole House are sufficiently deep that two Democrats, Norton and Rep. Jerrold Nadler of New York,  urged Mica not to put his Amtrak plan into the overall transportation bill he’s writing.

“It will kill the transportation bill,” Norton said.

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