Flush with $66 billion in infrastructure-bill cash, Amtrak wants to revive its rail service on the Gulf Coast. But fiscal watchdogs see a taxpayer-funded trainwreck coming down the line.
“For taxpayers, it doesn’t make any sense because Amtrak is so heavily subsidized and the numbers just don’t show that this will be a profitable route for Amtrak,” says David Williams, president of Taxpayers Protection Alliance. “They really need to stop this effort.”
That “effort” is adding service between New Orleans and Mobile, Ala. shut down by Hurricane Katrina in 2005. As is the case with most of Amtrak’s routes, the rail damaged by the massive storm was owned by someone else — freight rail companies in this case — who since rebuilt the track. But as a freight rail line, much of it is single track, meaning there can only be one train going over that territory in one direction at a time. To operate Amtrak and keep the freight flowing, the route needs double track, an expensive proposition.
And one that is unlikely to cover its costs.
In testimony before the Surface Transportation Board (STB) on Monday, Jim Blair, Amtrak’s senior director of host railroads, acknowledged that, according to its own 2022 ridership projections, fewer than 25,000 people would ride the Gulf Coast line in the entire year. As a result, the net taxpayer subsidy would be $336 per rider.
And TPA’s director of tech policy Daniel Savickas testified that, according to Amtrak’s 2015 analysis, Gulf Coast service would lose $4 million annually while drawing a paltry 26 passengers per trip.
Nevertheless, Amtrak says it is barreling ahead.
In 2021, after more than five years of what Amtrak claims is data-driven research, it initiated a process before the U.S. Surface Transportation Board to require CSX and Norfolk Southern (NS) to permit the operation of two daily Amtrak trains between New Orleans and Mobile.
“Under STB procedures, CSX and NS will be required to provide Amtrak access to their railroads for this service or prove to the public why they cannot successfully host these trains in accordance with the law,” Amtrak said in a press release.
Amtrak says it began work in 2015 with groups including Southern Rail Commission, CSX, and NS return service to the Gulf Coast. Amtrak even produced a working group plan in 2017 that laid out the “necessary steps to beginning Amtrak service on the route and laying out potential improvements,” which Amtrak says have been funded since 2019.
“Prior to the service start, a station track at Mobile would need to be built and repairs made at stations, projects Amtrak has been pursuing during recent months. Amtrak has a legal right to use this route, which has sufficient capacity to host these trains and up to $66 million in targeted improvements has been granted to support the new intercity passenger rail service along this line,” the passenger rail provider said.
According to Amtrak, these potential investments have been reviewed, approved, and funded by the Federal Railroad Administration (FRA), Amtrak, and others.
Marc Scribner, senior transportation policy analyst at Reason Foundation, tells the story differently.
“Amtrak pulled out of a joint study and then filed a petition with the STB to compel the freight carriers to grant Amtrak access to their track so they could restart service, and that’s sort of what this fight is all about,” says Scribner. “The freight carriers say ‘No, Amtrak, we have not agreed on what the infrastructure needs are,’ and it’s a big messy fight, something that we have not seen in some years.”
Williams says you can add supply chain issues to that mess.
“Amtrak instituting this line on the Gulf Coast means that freight rail is going to be delayed and with supply chain issues, we need all the tracks that we can have for freight and getting supplies to people. So, this is a double whammy because it is a whammy on taxpayers but also consumers that really need for these rail lines to be free so freight can be on it,” Williams said.
The Biden administration, which is aggressively messaging that it’s confronting the inflation crisis, has already given its blessing to Amtrak’s return to the Gulf Coast.
“The Biden-Harris administration believes that the expansion and improvement of intercity passenger rail service, though efforts such as the restoration of Gulf Coast service, plays an essential role in meeting the most important objectives of our transportation system, including combating climate change, ensuring equity in personal mobility, and driving economic growth and vitality,” Acting General Counsel with the Department of Transportation John Putnam told STB this year.
Sen. Roger Wicker (R-Miss.) is one of the few Republicans who support the return of the Gulf Coast service, which will have stops in Pascagoula, Biloxi, Gulfport, and Bay St. Louis, Mississippi.
“For the Mississippians who lost a transportation option along with so much else to Hurricane Katrina, this case is not an abstract policy question,” said Wicker at an STB hearing in May. “It’s about continuing and completing the recovery.”
Wicker pointed out the Gulf Coast had a rail service before Hurricane Karina and it can have it again. However, that service was extremely limited: six trains per week, running in the middle of the night. What Amtrak is proposing, critics say, isn’t a “recovery,” but a new rail service — which is how Amtrak identifies it in its marketing materials.
Meanwhile, the entire Alabama congressional delegation sent a letter to the STB raising concerns about the passenger service plan and its impact on freight rail, the supply chain, and the Port of Mobile.
“A decision by the Board to mandate Amtrak service, in this case, will have significant consequences for the national rail network and supply chain,” they wrote.
Even if Amtrak does get its way, Scribner doubts many people will be lining up if and when conductors yell, “All aboard!” He points out it takes about two hours to drive from New Orleans to Mobile, while the train would take three hours and 20 minutes. “And you can hop on a Megabus, which is not taxpayer-subsidized, for about 30 bucks.”
Scribner thinks Amtrak will be hauling low numbers of tourists or hobbyists who are there for the experience.
“I just don’t think it’s right to expect taxpayers to fund your weekend joyrides.”
