Is This Any Way to Run a Railroad?

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The U.S. passenger-rail market is still too small and fragile to have multiple carriers enter routes between cities, as the airlines have. But separate regions that have already formed high-speed corridors could open up their service contracts to competitive bidding--as many now do with commuter service--from a scaled-down Amtrak or private companies that operate commuter and passenger-rail services around the world, such as Connex and Herzog. "We see potential there, and we'd like to see opportunity," says Jim Stoetzel, a vice president at Connex North America, a division of France's Vivendi, which runs passenger trains in Europe.

Since 1996, 21 states, led by California, have invested almost $1 billion in intercity- rail projects in conjunction with Amtrak. Illinois, for instance, is helping finance a $400 million high-speed link between Chicago and St. Louis. If Congress would provide matching funds, the states would have added incentive to invest. In high-density parts of the Midwest, Florida, Texas and the West Coast, intercity rail could gain 20% to 30% of the travel market--just as Amtrak commands 40% of mass-transit trips between New York City and Washington.

One possible casualty under this scenario would be the long, scenic routes that cross the country, serving small, remote towns--and losing millions of dollars. The only way such lines will survive in the long run, Heritage Foundation economist Ronald Utt argues, is to morph into entertainment and recreational offerings, as cruise ships have done.

Before that can happen, though, Washington will have to find a new way to keep the trains running at all. And travelers looking for an alternative to the crowded highways and long lines at airports have to hope that Amtrak--or its successor--can seize this chance to get on track.

— With reporting by Elizabeth Coady/Chicago, Unmesh Kher/New York and Jeffrey Ressner/Los Angeles