UPDATE: FRA issues proposed rules on bidding out long-distance Amtrak routes

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WASHINGTON — Amtrak’s 45-year near monopoly on overnight passenger trains could end based on a proposal announced today by the Federal Railroad Administration to introduce a pilot program allowing independent entities to run long-distance trains on as many as three routes.

Citing its rule-making authority, the FRA says its proposal is a response to the Fixing America’s Surface Transportation Act, or FAST Act, of 2015, in which the Department of Transportation is directed to implement a program “for selection of eligible petitioners in lieu of Amtrak to operate not more than three long-distance routes.”

Among the key elements of the proposal are:
• The winning bidder would assume the “right and obligation” to operate intercity passenger service over a specific route, and receive an operating subsidy not to exceed 90 percent of that provided to Amtrak for that route during the preceding year. The initial contract for each route would extend for four years, with extension subject to transportation department approval.
• Amtrak would be obligated to provide the new operator with access to its own reservation system, stations, and facilities.
• Employees of a new operator would be subject to laws and regulations governing current similar Amtrak employees, and winning bidders must provide hiring preference to displaced, qualified Amtrak workers.
• If an alternate operator fails to provide service, the transportation department, in collaboration with the Surface Transportation Board, would “take any necessary action consistent with the FAST Act to enforce the contract and to ensure the continued provision of service.”

The docket filed today offers no information about likely long-distance routes of interest to outside parties. It does say that Amtrak would be allowed to bid to continue operating certain trains “if Amtrak chose to do so.” It also opens the field to a wide range of potential bidders, from Class I railroads to short lines to state-sponsored consortia.

Bidders will be required to describe how they would assume the new service, including an operating plan, a financial plan, details of agreements for operating on track they do not own, as well as “ancillary” activities not directly tied to operating trains and providing on-board services.

Under the proposal, FRA would establish a process for the DOT secretary to review bids and select winners. The agency is accepting written comments about the proposal until August 22, and says it has no plans for public hearings unless specifically requested by July 22. Based on various deadlines outlined in the docket, it could take more than a year to decide on winning bids.

UPDATE: Full story June 22, 2016, 12:19 p.m. Central time.

NEWSWIRETrains News Wire

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