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6/21/2002



Rail News: Amtrak

Amtrak: Opinions abound, 'All aboard' soon might not resound


If Amtrak had a dime for every opinion voiced recently about its financial state and the Bush Administration’s long-awaited stance on intercity passenger rail, maybe officials wouldn’t be making plans to cease all operations by July 1, or applying for a $200 million loan guarantee from the Railroad Rehabilitation and Improvement Financing (RRIF) Program.



Although U.S. Senate and House committees and subcommittees have been holding hearings to examine Amtrak’s state and determine what the nation needs or wants in regard to intercity passenger rail, the Administration just recently formulated its opinion, which Secretary of Transportation Norman Mineta announced June 20 before the U.S. Chamber of Commerce.



"We must have clarity of mind and discipline to decide how and where to fund and operate intercity passenger rail, while separately deciding whether to fund and operate high-speed rail," he said, according to a prepared statement.



Mineta further related the Administration’s assertion that "prices and passengers — not politics — should drive service," and that Amtrak should transition to an operating company; separating operations from infrastructure would "shed better light on the true economics of passenger rail."



He also stated the federal government should introduce competition to intercity passenger rail by assigning operating rights to single operators per corridor. And he suggested several support services could be handled contractually through alternative sources.



The Administration and Mineta also agreed with Amtrak Reform Council’s (ARC) assertion that Amtrak be relieved of responsibility for the Northeast Corridor; instead, the states and various users of the corridor should identify practical solutions for the corridor’s ownership, management and control, he said. Mineta invited northeastern governors to work with him on this issue, and asserted that "the next authorization for intercity passenger rail — and plans for high-speed rail expansion — must balance equitably the interests of passenger and freight rail operators."



He also stated he believes more debate and further consultation with transportation policymakers is needed. In short, don’t look for a five-year authorization this year.



As could be expected, ARC Chairman Gil Carmichael applauded Bush and Mineta’s approach to reforming Amtrak — and especially their desire to work with governors.



And U.S. Rep. Don Young (R-Alaska), who chairs the House Transportation and Infrastructure Committee, commended the Administration for taking many of ARC’s recommendations.



"Clearly, after 30 years of suffering through the continued deterioration of our nation’s passenger rail service, it’s time that we do everything possible to dramatically improve service throughout the nation," he said. (Young also pointed out that legislation he introduced, RIDE-21 and H.R. 4545, are consistent with Bush’s desires to involve states in the development of high-speed passenger rail service and holding Amtrak more financially accountable.)



Citizens Against Government Waste also cheered the Administration for "proposing to terminate Amtrak’s monopoly on intercity passenger service, thereby introducing more competition," according to a prepared statement.



But not all responses were as positive.



U.S. Sen. Fritz Hollings, Chairman of the Senate Commerce, Science and Transportation Committee, believes "the timing on this proposal stinks."



"This is not a problem that developed overnight, and the Administration needs to step up to the plate with more than just ‘five principals,’" he said in a prepared statement. "The Administration’s proposal lacks any vision for passenger rail as a vital part of our transportation system, and the Administration’s failure to acknowledge its importance is simply ignorant."



Association of American Railroads President and Chief Executive Officer Edward Hamberger stated the organization was "deeply concerned about the proposal to franchise Amtrak’s operating authority and how that could adversely affect the world’s premier freight system."



ARC member James Coston believes franchising trains to private companies is "a totally unworkable and unrealistic proposal."



"The freight railroads are understandably paranoid about opening up their tracks to private passenger operations and will resist such an innovation. The unions fear privatization will reduce the number of union jobs," he said in a prepared statement. "History shows that when the carriers and the unions make common cause they are virtually irresistible."



United Transportation Union International President Byron Boyd Jr. acknowledged that, despite the foolhardiness of "mimicking the failed British system" of selling off portions of a railroad, the union was pleased that Federal Railroad Administrator Allan Rutter agreed there ought to be a passenger-rail summit involving freight carriers, rail labor, government and other stakeholders.



Meanwhile, in addition to agreeing on the unlikelihood of freight railroad and union support for the Administration’s plan, National Association of Railroad Passengers strongly opposes any suggestion that states be solely responsible for funding new high-speed rail service.



"Such a policy would be a total abdication of federal responsibility," said NARP in a prepared statement.



Midwest High-Speed Rail Coalition Executive Director Rick Harnish expressed similar sentiments, stating that, because intercity passenger rail routes cross state boundaries, the federal government should be responsible to coordinate and fund the basic system. And he expressed disappointment that the Administration hasn’t made high-speed rail a priority.



"The states have an excellent plan. Key projects are ready to go," he said, referring to the nine Midwestern states that have proposed a high-speed network linking 200 cities and airports. "All we are waiting for is the same kind of federal leadership provided to other essential transportation projects."



Also June 20 David Gunn, who’s been Amtrak’s chief less than two months, testified before the Senate Committee on Appropriations Subcommittee on Transportation and Related Agencies that the railroad took a proposal for a loan guarantee to FRA. Because of the uncertainty regarding Amtrak’s future, financial institutions have requested Amtrak provide some sort of collateral or federal loan guarantee before the railroad can have access to its short-term credit facility.



"Unless we are able to secure access to these funds either through a loan guarantee or another form of funding, I will have no choice but to announce a shutdown of the entire system," said Gunn, according to a prepared statement. "We are in the process of contingency planning and hope it does not come to that. However, I have to reinforce that our cash will run out in July and we have but the next few days to find a resolution to this short-term problem."



In his testimony before the same subcommittee, FRA’s Rutter said the Administration was reviewing Amtrak’s application under the RRIF program to determine whether Amtrak qualifies for assistance. He expects to have an answer early next week.



Meanwhile, U.S. Department of Transportation Inspector General Kenneth Mead in his testimony before the Transportation and Related Agencies subcommittee proposed alternatives, including a one-time federal loan guarantee or a direct federal appropriation, either as part of the 2002 supplemental appropriation or through some other legislative vehicle whose consideration by Congress is imminent.



Either way, July 1 is coming quickly.


Contact Progressive Railroading editorial staff.

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