Word: railroads
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...Administration argues that Amtrak is a prime candidate for the ax because it carries only 2% of long-haul passenger traffic (vs. 86% for airlines and 12% for buses). Moreover, Dole maintains, the railroad is a gravy train for middle- and upper-income passengers. A survey of riders in the Northeast showed that 55% had incomes of $30,000 or more...
...Administration's proposal drew instant fire from passengers and Amtrak officials. "It's really ridiculous," said Ross Capon, executive director of the National Association of Railroad Passengers. Amtrak executives argued that shutting down the 23,600-mile system could cost more than running it, at least in the short term. The line has $3.1 billion in assets, including train cars and stations, that Amtrak officials say would be worth almost nothing if passenger service becomes extinct. In addition, more than 25,000 workers would demand some $2.1 billion in severance...
...debate about Amtrak's future comes along just when the railroad is picking up steam. The Government created the line, officially named the National Railroad Passenger Corporation, in 1970 to give America's struggling railroads a break. While hauling freight is potentially profitable, carting people around has long been a money-losing business. Amtrak's infusion of federal cash helped turn the line from an ancient, rusty clunker into a relatively sleek machine...
Travelers noticed. The railroad carried 19.9 million passengers in 1984, a gain of about 5% from the previous year. Business on scenic trains like the California Zephyr, which snakes through the Rockies, has been growing about three times as fast. As a result, the railroad's revenue is covering an increasing portion of expenses. Even so, the Government picks up more than 40% of the real cost of an Amtrak traveler's ticket...
Dole chose Norfolk Southern because it was the only railroad among the finalists and boasts a $1.2 billion cash hoard. "It has excellent management," said Dole at a press conference announcing the sale last week. "Norfolk Southern certainly offers what it takes to ensure that this railroad will be strong forever...