European rail group knocks Amtrak's views on privatization

The Alliance of Passenger Rail New Entrants in Europe (ALLRAIL), which represents passenger railway operators and ticket vendors in Europe, is taking issue with Amtrak's recently issued white paper on privatization.

In a memo issued last week, ALLRAIL officials said that Amtrak's white paper used "very selective" language in its critique of the United Kingdom rail model.

"For example, it conveniently failed to mention how rail ridership in the United Kingdom more than doubled since privatization, increasing by 107%," the memo stated.

Amtrak issued the white paper earlier this month. The document addresses whether privatizing some of its train operations and/or the Amtrak-owned Northeast Corridor (NEC) infrastructure would improve passenger rail in the United States. In a nutshell, Amtrak concludes the answer is "No."

"Proponents of privatization assert that it would produce better service at a lower cost and reduce or even eliminate the need for public funding," the Amtrak document states. "Britain’s recent renationalization of its rail service after three disastrous decades of privatization, and past unsuccessful efforts to privatize various Amtrak operations, show otherwise."

Proposals to privatize Amtrak have been around throughout the national intercity passenger railroad's 50-year history. The controversial subject has resurfaced since President Trump began his second term in January. Earlier this month, billionaire and tech mogul Elon Musk, who has been advising President Trump on slashing federal programs and services, suggested at an analysts conference that Amtrak and the U.S. Post Office should be privatized.

The subject came up again last week when Amtrak CEO Stephen Gardner abruptly resigned "to ensure that Amtrak continues to enjoy the full faith and confidence of this administration." Amtrak officials did not comment further on Gardner's reasons for stepping down, but various national news outlets reported that he was forced out by the White House.

Rail Passenger Association President and CEO Jim Mathews told NPR over the weekend that he believes Gardner would have fought an effort to privatize the railroad, which he served for 16 years.

"I think [Gardner's] devotion to Amtrak's mission would make him be very hostile to the idea of privatization because, No.1, it is a mission-driven organization. It is not a profit-driven organization," Mathews told NPR. "But No.2, to privatize Amtrak is, by definition, to dismantle it, and I just don't think he would have stood for that."

Created by an act of Congress, Amtrak is a government-owned railroad that relies on federal subsidies, ticket revenue and agreements with states to fund its operations. Federal grants help cover the cost of infrastructure and fleet upgrades.

In its recent white paper, Amtrak officials said it's not clear what problem privatization proposals are intended to solve. 

"Despite inadequate federal funding throughout nearly all of its existence, Amtrak has achieved notable success since it began train operations in 1971 and acquired ownership of most of the NEC in 1976," the document states.

The paper notes that Amtrak set all-time records in ridership and revenue in fiscal-year 2024.

"It is not clear what proponents of Amtrak privatization expect it would accomplish. A private entity would face the same constraints as Amtrak, but it would lack Amtrak’s essential statutory right to operate over the national rail network," the paper states, adding that privatization would increase costs as private operators would include profit in their bids.

Amtrak describes Great Britain's attempt to privatize in 1994 as a failure.

"Great Britain did what proponents of Amtrak privatization advocate: It conveyed its rail infrastructure to a newly-formed private entity and franchised its train operations to private operators. Three decades later, it has completely reversed course," the paper states.

But Amtrak's description of Great Britain's experience raised the ire of ALLRAIL's membership. In its response to Amtrak's arguments, the group also noted that European Union (EU) passenger-rail operators no longer receive directly awarded subsidies; they must bid in order to provide services partly paid for by taxpayers, according to ALLRAIL officials. Both publicly and privately owned companies can participate in the bidding process.

"In the EU, private and public and private operators compete with each other by enhancing service, punctuality, amenities and more," ALLRAIL's memo stated. "Without any similar competitive pressure, Amtrak will lack the incentive to innovate."