Intercity passenger rail : Amtrak needs to improve its decision making process for its route and service proposals

The National Railroad Passenger Corporation (Amtrak) is the nation's intercity passenger rail operator. In recent years, facing the continuing deterioration of its financial condition and its attempt to eliminate its need for federal operating assistance by December 2002, Amtrak undertook a number of actions intended to improve its financial condition. Among these actions were changes in its routes and services. In December 1999, Amtrak's board of directors shifted its route and service strategy toward planning to implement new routes and expand services, the Network Growth Strategy, on the freight railroad tracks over which Amtrak operates. Amtrak has not been successful in implementing its Network Growth Strategy. About two years after announcing it, Amtrak has only implemented three routes, one of which was later canceled. Amtrak still plans to implement the remaining three routes, although later than planned. Typically, more than one reason--such as overestimation of express revenue and inability to reach agreement with freight railroads over various aspects of implementing the proposals--contributed to the cancellation of any single proposed route or service action. Increased mail and express revenues were the cornerstone of the Network Growth Strategy. However, Amtrak overestimated the mail and express revenue it expected to obtain. According to Amtrak, this overestimation occurred because (1) it had no empirical basis for its revenue estimates and (2) express shippers were reluctant to enter into contracts for service that did not yet exist. Six of the planned route actions were canceled in part because Amtrak overestimated the mail and express revenues associated with these routes. Amtrak was not able to reach agreement with freight railroads over whose tracks it would operate. Freight railroads were concerned about (1) Amtrak's plans to operate additional trains in areas that were already congested, (2) Amtrak's plans to carry express merchandise that might compete with their own business, and (3) compensation that Amtrak would pay them for use of their tracks