FRA directs Amtrak to take up restructuring proposal

The Federal Railroad Administration has revealed that it has instructed Amtrak to undertake an organizational restructuring that would split the railroad into three separate operating entities, the Rail Passengers Association (RPA) reported late last week.

In a Feb. 19 report, the RPA said the "dramatic" restructuring would break Amtrak into three distinct operational entities under a holding company. One entity would oversee operations, another would be in charge of rolling stock management and leasing, and a third would run infrastructure and construction management. The RPA has received an initial briefing on the proposed restructuring from FRA officials, with more in depth briefings scheduled, RPA officials said. Presumably, the proposal would be fleshed out through a public process in the coming months, they said.

"When done correctly, there are potential benefits to a structural reorganization. However, the experiences of European and Asian railways tell us there are clear and present dangers to this kind of restructuring," said RPA President and CEO Jim Mathews. "If done incorrectly, it can lead to service reductions, elimination of routes, increased fares for passengers, and even degradations in infrastructure and safety."

Without predictable and sufficient public funding, the restructuring is certain to fail, Mathews added.

The RPA noted a Bloomberg report that stated the Brotherhood of Locomotive Engineers and Trainmen (BLET) issued a memo to its members sounding alarm over the potential consequences of a restructuring of labor agreements for the roughly 18,000 unionized Amtrak workers.

“Shifts of this nature raise legitimate and substantive concerns regarding the maintenance of qualifications, preservation of established work jurisdiction, crew utilization practices, pilot requirements, and, most importantly, the continued protection and enforcement of existing Agreement rights,” wrote Patrick Darcy, chair of the Amtrak General Committee of Adjustment for the BLET.

In a response to Bloomberg's request for comments, the U.S. Department of Transportation denied that the move is part of a privatization scheme. “The Trump administration is considering ways to strengthen and modernize Amtrak for the future, but privatization is not under consideration,” Danna Almeida, a spokesperson for the Department of Transportation, told Bloomberg in response to inquiries.

FRA Deputy Administrator Drew Feeley mentioned the restructuring during a speech to the American Association of State Highway and Transportation Officials earlier this month. Although he didn't provide details, the restructuring would be done to make the railroad operate more efficiently and effectively. The proposal doesn't mean cutting routes or jobs, he said.