ticket sales and other revenue covered 88 percent of its operating costs in fiscal-year 2012, President and Chief Executive Officer Joseph Boardman told members of the House Subcommittee on Railroads, Pipelines and Hazardous Materials during a hearing held yesterday.
Amtrak is leveraging record ridership to reduce the railroad's dependence on federal operating subsidies, Boardman testified, adding that the federal government paid just 12 percent of Amtrak's operating costs last year.
Although Amtrak has taken action to reduce operating costs and increase revenue, a "vital" component of its success has been the federal capital investment in Amtrak's network, he said.
"Previous federal capital investment levels have sufficed to keep the system going, but they are not going to be adequate in the future," said Boardman. "If we are to realize rail's potential, we will need much higher levels of federal capital funding."
Also testifying at Tuesday's hearing was Association of American Railroads
President and Chief Executive Officer Edward Hamberger, who told committee members that American freight railroads plan to spend a combined $24.5 billion on their networks this year. That amount will surpass the record $23 billion spent in 2012, he said.
While the average U.S. manufacturer spends about 3 percent of its revenue on capital expenditures, U.S. freight railroads spend about 17 percent, Hamberger said.
The hearing was the subcommittee's first in the new congressional session, and the first called by the new chairman, Rep. Jeff Denham (R-Calif.)
Denham called the hearing to help set the stage for the subcommittee's goal to "strengthen and improve the efficiency of American rail transportation," he said in a prepared statement.
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