RAILforum: Congress hears testimony on Amtrak's financial Plight

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Posted by Trainsandmore (Member # 896) on :

Guys I Have Just Found This on the Article From Trainsmag.com.

Amtrak's cash losses so far this year are $21 million higher than projected, Transportation Department Inspector General Kenneth Mead told congress today.

Amtrak President George Warrington said the railroad was running behind in its business plan, despite a 10 percent increase in ticket revenue. But he pledged that Amtrak will reduced its federal operating support from $318 million in 1999 to $59 million in the current fiscal year, the Associated Press reported. Amtrak must reach operational self-sufficiency by December 2002 of Next Year or face the possibility of liquidation.

Warrington told the House Transportation Subcommittee on Railroads that Amtrak continues to work on various cost-cutting plans that will enable it to meet the congressional deadline. He also urged Congress to pass the High Speed Rail Investment Act, which would provide $12 billion to develop high-speed corridors and improve the Northeast Corridor.

Rep. John Mica, R-Fla., and an Amtrak crittic, said Congress should begin Liquidating and restructuring Amtrak right now. "Congress cannot and will not continue to put good money after bad," he said of the high speed rail act.

Gilbert Carmichael, chairman of the Amtrak Reform Council, presented that panel's plan for restructuring intercity passenger rail. Earlier this year, the panel proposed dividing Amtrak into a profitfocused company responsible for train operations, a government-owned corporation to oversee infrastructure, and creating a consolidated government oversight agency for rail.

So what do you think guys.

Posted by Mr. Toy (Member # 311) on :

I saw part of that hearing on C-SPAN last week. I think it was the House subcommittee on rail transportation. I caught part of Warrington's testimony and a panel with Ross Capon, a representative from the bus companies association, and someone from Georgia's dept. of transportation.

The overall tone of this hearing (what I saw of it) was much more positive than a previous hearing I saw (the financial committee dominated by Republican bean counters). Most of the congressmen at this hearing were definitely pro-passenger rail, and many were sympathetic to Amtrak's situation. I didn't see John Mica, but nobody else on the committee seemed to echo his position. The general agreement seemed to be that passenger rail needs to be developed and expanded. Several members of the committee thought Congress as a whole wasn't doing enough. Many were sympathetic to Warrington's dilemma, and genuinely wanted to help him find a way out of it and make passenger trains work. It was fairly encouraging, overall.

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Trust God, love your neighbor, and never mistake opinion for truth.
-Mr. Toy

The Del Monte Club Car

Posted by MPALMER (Member # 125) on :

On a somewhat related note, Anthony Haswell has filed a request/complaint under the FOIA (Freedom of Information Act) against Amtrak to receive details about Amtrak's finances.

Anthony Haswell founded the National Association of Railroad Passengers ( a lobbying outfit) in the late 60's. Haswell was supportive of passenger rail but critical of Amtrak, especially in its early years.

Posted by deb2k (Member # 986) on :

Thanks for the interesting info. I've just had a horrible experience with Amtrak, my fist and last, and if they are increasing revenue by blatantly ripping off the consumer directly AND via the tax liability, I say shut them down sooner rather than later. I am reminded of the S&L years,junk bonds and many other fiascos wherein John Q Public paid dearly with his life savings, and only the government's debt was satisfied. I can't take it!

Posted by jkaplan (Member # 1023) on :

People need to realize that Amtrak gets much less government subsidy than most other systems in the world! I personally think that Amtrak should get the same amount of subsidy as road and air travel until the system reaches a point where it can live on its own.

If Amtrak loses its government subsidy, the system will become useless. The system cuts will be so large that no one will want to ride Amtrak, except perhaps outside of the Northeast Corridor. Some long distance trains may be cut entirely or be reduced to running once a week! Is this really what we want? I think the government's view of rail travel is awful.

Posted by Konstantin (Member # 18) on :

Jkaplan, I tend to agree with you with one difference. All types of transportation should be subsidized the same - not at all.

The price of gasoline should reflect the true price of what it costs to build and maintain roads, including the loss of property taxes for the road rights of way. The cost of plane tickets should reflect the true price of what it costs to operate planes, airports, etc. If people want to travel, or just get from one place to another, they should pay what it really costs to get there, not a subsidized cost. If gasoline ends up costing $5 per gallon, then that's what it costs, period.

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Elias Valley Railroad (N-scale)
www.geocities.com/evrr

Posted by Mr. Toy (Member # 311) on :

I'd like to respond to Deb's comment. Certainly she had a bad experience, and I don't blame her for not wanting to ride Amtrak again. Most of my experiences have been pleasant, but never perfect.

You must understand Amtrak has a lot of external problems. Funding, relations with freight railroads, Congressmen who never really gave it a chance to succeed, etc. Amtrak has its hands full dealing with these problems, so it has relatively few resources to deal with internal problems. Shutting down Amtrak would be throwing out the baby with the bathwater. Amtrak needs genuine support from Washington so it can spend more time running the trains instead of begging for funds and track space.

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Trust God, love your neighbor, and never mistake opinion for truth.
-Mr. Toy

The Del Monte Club Car

Posted by MPALMER (Member # 125) on :

The recent projections about reduced tax revenues (and reduced 'surplus') will only increase the financial pressure on Amtrak. Amtrak is a creation of Congress and will remain that way, whatever it turns out to be. It might be reformed out of existence, but it is rare for Congress to eliminate something.

Speaking of S&L's, the agency that took them over (Resolution Trust Corp) did eventually go out of business, but that's because there were enough healthy banks to take over the weak ones. Amtrak has no such 'savior'.

As for shutting down wasteful spending, there are far larger excesses in Government that waste taxpayer dollars.

Amtrak is not alone in horrible travel experiences...remember the Northwest airlines plane that sat on the runway for eight hours? How about the recent stories about unaccompanied minors getting "lost" on wrong airplane routes? Does the fact that these events happened with 'private enterprise' firms make them less outrageous? I don't think so.

Amtrak has problems, to be sure. But like other posts have mentioned, I doubt that it will devote the resources to "quality of travel" issues until it gets its funding sources on more solid ground.

Posted by Konstantin (Member # 18) on :

In response to Mpalmer,

Yes there are problems with airlines such as you mentioned, but those are isolated incidents. The majority of plane flights go well. Amtrak on the other hand, regularly has problems. I have rarely ever arrived on time while riding Amtrak, and every trip I go on I have a list of complaints, many of them could have been solved without more money, just by employees who cared about their jobs.

I love to travel on Amtrak, but I am the first to admit that many, if not most Amtrak employees are losers and should have been fired long ago.

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Elias Valley Railroad (N-scale)
www.geocities.com/evrr

Posted by MPALMER (Member # 125) on :

Konstantin,
I agree with you on most points. I fly on business monthly, and while I would say the airlines' timeliness is reasonable, both Amtrak and the airlines get a "poor" rating for communicating delays.
A few months ago I was on a flight that was delayed, and then the "brains" in the scheduling department removed it from the departure board (even though the flight was still scheduled to leave, although at a later date). As you might imagine, there was a lot of confusion. There were no other departing flights on that route that night--imagine the chaos.
Another time, we were on the plane waiting for it to back away from the gate, when the trucks pulled up and off-loaded the drinks and the luggage. It was obvious to anyone looking out the window what was going on.
It was some time after this process began that they finally came on the PA and said "it looks like this flight will be cancelled", and let folks off the plane.
On long distance routes, Amtrak delays are routine. I have resisted recommending Amtrak to anyone who lacks flexibility in their schedule. One cannot rely on it for timeliness. But for those who do use it, the 1-800 number (or web site) is great for keeping a status before you leave for the station.
On a separate post I mentioned that the departure board in some stations has not been updated to include Acela. How are they supposed to sell a premium service, when people don't see that it is there? One should not have to call the 1-800 number or talk to the ticket agent for arrival info when there are monitors in the station.

Posted by Trainperson (Member # 1084) on :

very intresting.
I hope Amtrak dosent raise the ticket price again

Posted by Trainperson (Member # 1084) on :

Lets all hope amtrak dosent loose any more money

Posted by Geoff Mayo (Member # 153) on :

Over here in the UK we've got a similar problem, not quite the same, but similar. Railtrack, the company which owns all the track, signalling, and some of the stations, has gone under. Over US$1.5 billion (ish) under. They say the government won't give them the millions they need to maintain the railway, let alone upgrade lines. The problem is, they also have shareholders who demand money - and balancing money between shareholders and safety is always going to be a nasty affair.

Could be interesting to watch what happens to Railtrack now.

Geoff Mayo.