Long-range plans for Amtrak unviled

Amtrak releases five-year plan; Bush Administration plan relies heavily on state funding

In recent months, both Amtrak and the Bush Administration have unveiled long-range plans for the passenger railroad.

The Amtrak Plan

Amtrak's five-year strategic capital investment and operating plan would try to restore its physical plant and train equipment to a state of good repair and improve the railroad's operational reliability. The plan is based on prudent investments in existing infrastructure and equipment, and proposes no new significant passenger services - focusing instead on improving the reliability and cost-efficiency of the passenger railroad's existing services.

To support the strategic plan, Amtrak proposes that annual federal funding range from $1.8 billion in FY '04 to under $1.5 billion in FY '08 for the combined capital investment and operating needs. More than half of this funding would be invested in two major capital categories: the 1,959 track miles of infrastructure that Amtrak owns and maintains and the passenger fleet, which would be better standardized to increase reliability and availability. The passenger fleet would be reduced by about 10 percent (from 2,278 passenger cars and locomotives today to 2,057 in FY '08).

Over the course of the five-year strategic plan, Amtrak estimates that its operating cash loss will decrease from $744 million to about $650 million, as a result of a combination of management initiatives and revenue growth, based in part on improved operational reliability. The management initiatives include the rationalization of the mail and express service presently underway, improved schedules, better crew utilization and negotiated work rule changes with its agreement-covered employees.

Taken altogether, these initiatives are expected to result in $120 million in annual savings by FY '08. While the current annual baseline passenger revenue growth is one percent, with improved equipment, greater reliability, some individual trip time reductions, and an improved travel economy by FY '05, an annual revenue growth of four percent, or $222 million by FY '08, is estimated.

Amtrak will not undertake new train services unless any operating loss is fully covered by the state or states it serves. Additionally, beginning in FY '04, Amtrak plans to seek full state funding for any incremental operating loss associated with existing state-supported services.

The White House Plan

Under the Bush administration's six-year plan, the federal government would pay about half the capital costs for passenger routes (mainly new short-distance corridors between urban areas) and states would assume liability for operating costs nationwide.

Under the administration's plan, which was unveiled in late April, the badly deteriorated rail infrastructure between Washington and Boston would be leased for 99 years to a federal-state compact that could apply for capital-improvement grants and could also finance improvements through private debt markets.

The plan is not in final legislative form, and several key questions remain unanswered, including how much money the administration would be willing to commit. If the federal government funds half the capital costs of only a moderate number of the urban corridors that states already have in the planning stages, it will spend many billions of dollars more per year on passenger service than it does now in subsidizing Amtrak.

States are likely to view the program in sharply different ways. For California and Oregon, which are already paying most of the capital and operating costs of their expanding passenger rail systems, the plan could provide a windfall of new capital funds.

But the states of the Northeast Corridor, which now pay for a minor portion of capital improvements, would be expected to pay for 50 percent of such improvements, potentially a new multibillion-dollar liability. Some estimates put the cost of making the deferred capital improvements as high as $12 billion. Almost 90 percent of trains in the corridor are commuter trains serving Maryland, Delaware, Pennsylvania, New Jersey, New York, Connecticut and Massachusetts.

The plan faces an uphill battle in Congress, which has repeatedly voted to keep Amtrak running in its present form but has provided far less money than needed to keep the system in good repair.



© 2003 Brotherhood of Locomotive Engineers