A direct government action related to Amtrak Research Paper

A direct government action related to Amtrak - Research Paper Example government owned corporation started its operation from 1971. It provides passenger train service in 46 states of U.S.A. and three provinces of Canada. Before 1971 the rail service was provided by several private corporations. Because of the declining financial condition Amtrak was established by U.S. congress. The board of directors’ members is appointed by the U.S. president and the senate of U.S. Most of the track of Amtrak is owned by the freight railroads which is a major source of earning. Amtrak has also its revenue from the ticket sales. In spite of these earning Amtrak needs government subsidies. There were many controversies has taken place about the direct government action. From the inauguration of Amtrak the financial condition was never stable. Despite of several financial aid given by the U.S. government Amtrak has never became self sufficient. This is the main cause of the controversies about Amtrak. But from the year 2007-08 the number of riders increased cont inuously which is a boost for the organization. This paper is an attempt to analyze that whether the government should continue to play a direct role in the operation of Amtrak. Description of Stakeholders The stakeholders of Amtrak are the U.S. government, the employees of Amtrak and the board of directors, the passengers, the taxpayers and the companies who are partners of Amtrak. The government owns all the stock of Amtrak and thus they would get the profit generated by Amtrak, but it is a fact that Amtrak has never been able to generate profit from 1971. The government has to provide subsidies for continuing the operation as it is an important medium of communication. The employees and the board of directors are the major stakeholders of the company. Approximately 19000 employees employee is working with Amtrak till date. They are responsible to provide quality service to its passengers and take steps necessary to improve it and inform the U.S. congress about the operations of A mtrak (duty of inspector general) (Amtrak Office of Inspector General, â€Å"About Amtrak OIG†). The taxpayers are providing tax and funding a major part of the needed capital of Amtrak. Some private companies or other government companies are work as the partner of Amtrak like Access America, AAA, eBags, Continental Airlines, iSeatz, Greyhound. They are the stakeholders of Amtrak as they have certain interest that how Amtrak will perform in the future and it is sensitive decision to continue partnership with them. The passengers are the major stakeholders as they are paying the price of the tickets and receiving the service. They would take the decision whether to continue travelling in the railroad or take some other medium. Arguments in support of Government’s Direct Role According to some critics if Amtrak get privatized then the company would become self sufficient and would generate profit. The private companies would divest the operations which is not so profita ble. But there are also lots of demerits of this decision. These are described as follows. If the transport medium gets privatized there is a high chance that the cost of transport would increase and the common people get affected, as this would cost more. There would be less money in people’s hand and this could be a reason of economic crisis. Though the organization is generating a loss every year the government is providing subsidies to them. The recent increase of riders results in decrease the net loss of the company. If the private sector would be there they would take measures for cost cutting or steps to increase the revenue. They can generate more revenue by increasing the costs of tickets or the cost of advertising and cut down the costs by decrease the budget which may lead to some lower