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Rail News: Amtrak

ARC decides Amtrak won't reach self-sufficiency by 2002 deadline


The handwriting might have been on the wall for a while, but now cold, hard reality in the form of a report soon will be on its way to Congress: Amtrak Reform Council (ARC) Nov. 9 decided it doesn’t believe the national passenger railroad will be able to free itself of federal dollars to fund its operations by next December.

"The fact of the matter is, … Amtrak has not made substantial progress," says Tom Till, ARC executive director. "And there’s no chance whatsoever they’ll turn it around in the next 13 months."

So now, ARC has 90 days to submit to Congress a plan to restructure and rationalize a national intercity passenger rail system; Amtrak, in the same timeframe, must submit to Congress a plan for its complete liquidation.

Amtrak responded Nov. 9 stating that ARC made the "wrong decision at the wrong time."

"The council is charged under the law to account for ‘acts of God, national emergencies, and other events beyond the reasonable control of Amtrak,’" said Amtrak officials in a prepared statement. "Despite the current National Emergency declared by President Bush and the heightened public service role that Amtrak has assumed since Sept. 11, there is no evidence that the ARC adequately considered this factor."

But ARC members could have come to the same conclusion long before Sept. 11. Reports from U.S. General Accounting Office and U.S. Department of Transportation’s Inspector General since 1997’s Amtrak Reform and Accountability Act stated that the challenge would be difficult, progressing to nearly impossible in later reports. DOT IG’s most recent report is due to be released in late November.

It’s unlikely, though, that the news would be any brighter — especially considering Amtrak took out a $300 million loan this summer to pay operating expenses secured, in part, by its real estate holdings at New York City Penn Station. The action required a waiver of DOT’s legal position as property lien holder.

The Amtrak Reform Act states that ARC could have made its decision and declaration any time after December 1999.

Amtrak also disputes that ARC considered whether the railroad has received adequate capital funding to carry out its financial plan.

Secretary of Transportation Norman Mineta also has urged Congress to consider structural reforms to Amtrak. In July, he wrote Congress urging members to consider what the nation’s passenger rail network should be, what the country can afford to pay for it and what reforms might be necessary.

He also stated that Congress should consider how the reforms should be implemented soon — "well in advance of the expiration of the current Amtrak authorization," according to a prepared statement.

Mineta, too, questions the timing of ARC’s decision, though, in advance of DOT IG’s report.

Amtrak stated it plans to continue serving its passengers while Congress and the Bush Administration address ARC’s decision.

And, at the end of the 90 days, Congress could accept ARC’s recommendations and order Amtrak to implement them. Or do nothing.

"It could just reauthorize what they’ve got or re-appropriate funds," says Till.

Either way, the clock’s ticking.

"I encourage ARC to issue policy recommendations on Amtrak reform as soon as possible," said Mineta.