Home Open Account Help 195 users online
Today's stories

First publish date: 2004-04-15

Amtrak Losses Prompt Government to Seek Private Operator Information

The Bush administration sought information on Tuesday from states on how they would contract rail service to private companies if Amtrak were dismantled and some or all of its routes were open to competition.

The Transportation Department's regulatory filing also sought to determine which states or group of states would be interested in bidding out and overseeing privately run city-to-city service and which states would be best positioned to move forward.

Frustrated by Amtrak's perennial losses, its embarrassing failure to ween itself from government subsidies, and annual fights with Congress over rail funding, the Bush administration has proposed to dramatically overhaul the railroad's operations.

The plan would dismantle Amtrak's overarching responsibilities as a federal corporation over several years and turn over major oversight to the states, which could contract service to private companies or return the business to Amtrak.

Amtrak runs 250 trains in 46 states on an average weekday. Ridership topped a record 24 million in 2003 and current figures show Amtrak could carry more passengers this year. It has operated city-to-city routes without competition for 33 years.

A spokesman for the railroad had no comment on the latest development in the proposal but Amtrak President David Gunn is skeptical of privatization efforts, especially any proposal to separate Amtrak from its responsibility for maintaining its infrastructure.

Congress is weighing the administration's plan and has permitted the Federal Railroad Administration to gauge interest from the states even though many lawmakers whose states benefit from Amtrak service are not convinced that breaking up the railroad is wise.

State governments have also expressed some skepticism, particularly over cost at a time of severe budget constraints.

But Transportation Secretary Norman Mineta has said private rail operators may be able to provide more efficient, reliable and cheaper service.

The agency has tightened its oversight of Amtrak since a funding crisis almost triggered a shutdown in 2002. It must now meet a series of financial benchmarks to receive its annual subsidy, which exceeds a record $1.22 billion this year. Amtrak wants close to $2 billion next year, but the administration does not support this request.

The railroad has also taken steps on its own to reform its business practices and stem red ink.

Amtrak has cut nearly 3,000 jobs and other costs over the past two years and eliminated unprofitable and inefficient businesses. It has also boosted its high-speed Acela service and is addressing some pressing repairs and updates to track, train cars and tunnels.


Page created in 1.442 seconds