Amtrak: America's Passenger Rail Service Getting out of Track?


Code : COM0086

Year :

Industry : Transportation

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:The state-owned intercity passenger railroad company of the US is called 'The National Railroad Passenger Corporation' (trade name Amtrak). Amtrak, which was established in 1971 with a federal grant, has been a national monopoly in the intercity railroad passenger transportation in the US.

Although Amtrak was expected to achieve operational self-sufficiency by 1973 without the US government subsidy, the company continued receiving federal subsidies, which amounted to $29 billion by 2004. It was also reported that Amtrak has been losing nearly $1 billion every year from the early 1990s.

Competing modes of transportation like airlines and automobiles have been the major cause of losses at Amtrak. In 2005, the US government introduced a bill in the Congress called the 'Passenger Rail Investment Reform Act', which intended to privatize Amtrak. However certain lobbies in the Congress are opposing the privatization of the national rail network. Amtrak, one of the oldest passenger railways in the world with its network in 46 states of the US, operates commuter trains under contract, maintains and leases railway lines to private freight carriers and provides mail services, in addition to shipping small packages (less than truckload).

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