Amtrak off track with money
By Staff
July 26, 2001
WASHINGTON (AP) Amtrak's cash losses so far this year are far greater than expected, a Transportation Department official told Congress Wednesday.
At a hearing of the House Transportation subcommittee on railroads, Kenneth Mead, the Transportation Department inspector general, said Amtrak's cash losses in the first eight months of fiscal 2001 were $21 million more than projected.
Amtrak registered a cash loss of $561 million last year. Cash losses are different from traditional operating losses because the government lets Amtrak exclude several costs, notably depreciation.
Mead said Amtrak's cash loss in the first eight months of 2001 was $405 million, which is $17 million more than the same period last year.
Meridian Mayor John Robert Smith, a member of the Amtrak Board of Directors, left for Washington Wednesday night and the board is meeting today.
The passenger rail service has until December 2002 to wean itself from government operating subsidies.
Amtrak President George Warrington said the railway will successfully reduce its federal operating support from $318 million in 1999 to $59 million in the current fiscal year. That is the number that must reach zero by the end of 2002 to meet a mandate from Congress.
But Warrington said that, despite a 10 percent increase in ticket revenues, Amtrak is not meeting its business forecast this year. He said the railroad is working on scores of internal cost-management efforts but did not detail potential cuts in service or work force.
Warrington urged Congress to pass the high-speed corridor funding bill, saying rail travel has been underfunded for decades.
Gilbert Carmichael of Meridian, Miss., chairman of the Amtrak Reform Council, presented that panel's plan for restructuring intercity passenger rail.
The council wants to divide Amtrak's responsibilities among a profit-focused company responsible for train operations, a separate government-owned corporation to oversee assets such as tracks and stations and a consolidated government oversight agency.
Rep. John Mica, R-Fla., said the national passenger railroad is on life support and near death. He said Congress should begin liquidating and restructuring Amtrak now.
Mica also opposed legislation that would help Amtrak raise $12 billion over 10 years to develop new high-speed rail corridors around the country. Congress cannot continue to put good money after bad,'' he said.
