Administration says Amtrak needs major overhaul
- Published Tuesday, April 29, 2003, in the GovExec.com
Administration officials say Amtrak needs major overhaul
By Michael Posner
Bush administration officials Tuesday called for a sweeping overhaul
of the money-losing Amtrak passenger rail system to cure what an
official says is a deteriorating operation.
"Amtrak's core business design suffers from structural rot," said
Deputy Transportation Secretary Michael Jackson. "For decades, the
federal government has embraced perverse incentives that
consistently impel Amtrak to make irrational business decisions."
Jackson and Transportation Department Inspector General Kenneth Mead
outlined to the Senate Commerce Committee a six-year authorization
plan to create multi-layered state and regional compacts and
companies to run the passenger train operations with the help of
federal capital grants.
The administration has proposed giving Amtrak $900 million in fiscal
2004, just half of the $1.8 billion Amtrak President David Gunn told
the committee he wanted.
Gunn last Friday proposed a five-year, $8 billion plan to upgrade
Amtrak's infrastructure, but Mead said a complete reform of the rail
operation is needed.
"We do not propose to eliminate Amtrak," Mead said, "but we do
propose comprehensive structural changes to be implemented at a
prudent pace spanning the entire six-year period of the next
authorization cycle. Amtrak would be required to form a pure
operating companyone that does indeed make a profit by providing
excellent service for its government customers."
Gunn backed his five-year capital improvement plan as a "practical,
pragmatic, no-frills approach" that would keep existing rail
servicesan approach that angered Commerce Committee Chairman Johb
McCain, R-Ariz., who has been trying to eliminate unprofitable
lines, such as the Sunset Limited that runs between Los Angeles and
Orlando that lost an estimated $347 per passenger in 2001.
"I cannot support an approach which further postpones reform and
calls for operating the same trains over the same routes with
millions more in operating losses and a continuing need for large
infusions of capital from the taxpayers," McCain said.
Gunn testified that it was "a myth" to think Amtrak would ever be
profitable and derided calls for reform. "The word reform is like
catnip to those interested in a quick fix to Amtrak," he said. "If
the answer were quick and easy, we would have solved the problem
long ago." What is needed, he said, was a tightly managed company.
But Commerce Surface Transportation and Merchant Marine Subcommittee
Chairwoman Kay Bailey Hutchison, R-Texas, supported a national rail
system as a federal government responsibility. A similar view came
from Sen. Frank Lautenberg, D-N.J.
The administration plan would include a federal-state compact over
the Northeast corridor rail infrastructure that would eventually set
up a company to run service between Washington and Boston.
Elsewhere, state and regional operating companies would run trains
and receive capital grants.