(rshsdepot) Amtrak reform plan didn't end troubles

["Alexander D. Mitchell IV" <LNER4472_@_bcpl.net>]

Amtrak reform plan didn't end troubles
Congressional hearing called regarding report urging rail's breakup
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Associated Press
Originally published February 11, 2002



WASHINGTON - With Amtrak's future at stake, Congress may be finding that 
its previous attempt to turn around the passenger railroad had 
unintended consequences.
A 1997 law gave Amtrak five years to end its reliance on operating 
subsidies from the government. Amtrak sought to meet that goal by 
devoting its limited funds to expensive projects that seemed to promise 
profit, such as its high-speed Northeast train, Transportation 
Department Inspector General Kenneth Mead said.

That meant fewer dollars went to basic maintenance in the busy Northeast 
Corridor. And Amtrak borrowed money to buy cars and locomotives, piling 
up debt.

"Every law that you pass has two reactions: the one you want, and the 
one you don't want," said Gilbert Carmichael, chairman of the Amtrak 
Reform Council, a congressional advisory panel.

Amtrak President George Warrington told Congress on several occasions 
that the corporation was "fixated" on achieving self-sufficiency. He 
said the process forced the company to become more disciplined.

But this month, in a plea for more federal money, Warrington called 
self-sufficiency "impractical, inappropriate and destructive" given 
Amtrak's backlog of needed improvements and its determination not to 
shut down unprofitable routes.

Now, Congress is ready once again to take up the future of Amtrak and 
passenger rail.

The House Transportation Committee has scheduled a hearing Thursday on a 
report by the advisory panel that calls for the breakup of Amtrak and 
the introduction of competition into passenger rail.

Adding to the urgency, Warrington has warned that Amtrak will cancel 
long-distance routes unless it receives $1.2 billion in the 2003 budget 
year, which begins in October. President Bush has proposed $521 million. 


Mead recently reported that Amtrak chose to spend much of its capital 
funds from the government on its high-speed Acela Express service in the 
Northeast Corridor. That project received about $900 million from 1998 
to 2001.

Additional money went to refurbish existing equipment and stations to 
promote Acela.

Mead said the money should have been used to reduce a $3 billion backlog 
of "minimum needs" maintenance. Because those funds went elsewhere, he 
said, Amtrak delays in the Northeast - as measured in total minutes - 
rose nearly 75 percent between 1998 and 2001.

Also in pursuit of self-sufficiency, Amtrak borrowed money to buy 
equipment. That freed up federal funds but added debt.

Principal payments on the debt are expected to grow to $126 million in 
2005 from $64 million last year.

The requirement that Amtrak wean itself from operating subsidies 
originated in a 1997 compromise in Congress.

Congress provided $2.3 billion that had previously been promised to 
Amtrak for capital improvements. But it also ordered that, in five 
years, Amtrak "shall operate without federal operating grant funds."

That period ends Dec. 2, but the congressional panel has determined 
Amtrak will fall short of fulfilling the order.

Amtrak's ridership and revenue have increased since 1997 but not by 
enough. The railroad was about $335 million shy of self-sufficiency in 
1997; this year it is about $217 million short.

Amtrak's chairman, former Massachusetts Gov. Michael S. Dukakis, said 
self-sufficiency would have been achievable had Congress set up a 
dedicated source of capital funds for rail in 1997.

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