LYCOS RETRIEVER 
Amtrak
built 193 days ago
The consequences of Amtrak's three decades of mismanagement are coming home to roost. The federally owned passenger rail company is threatening to discontinue all long-distance rail service in October if Congress doesn't give it $1.2 billion. The handout part is nothing new. When it was created in 1971 policy makers promised it would operate without subsidies within a few years. Instead, every year for the past three decades Amtrak has needed taxpayers' handouts that now exceed over $25 billion. In 2001 it posted a record high $1.1 billion loss. Over the years Amtrak has run too many money-losing lines with too few riders.
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[One] missing element in Amtrak coverage is international context. Successful railroads in other countries get much greater levels of government support. Canada has passenger-rail service that is "flush with a new infusion of federal government funding, new locomotives and rolling stock, improved railbed infrastructure and burgeoning ridership" (Windsor Star, 4/15/02). According to figures from the European Conference of Ministers of Transport, Germany spends 22 percent of its total transportation capital spending on rail, while France spends 21 percent. The United States spends 0.4 percent.
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Explanation: Amtrak has many partners including the Federal government, which is its primary financial partner. Without current authorizing legislation, the Federal government's relationship to Amtrak is not clearly defined, including its long-term financial commitment. DOT believes that Amtrak reform legislation is needed to clarify Amtrak's relationship to the Federal government and the states. Since 2003, FRA has overseen annual Federal appropriations by working closely with Amtrak to select the projects for its budgets and to establish goals for the grant process. From an operating standpoint, Amtrak's partners are states, commuter rail agencies, and freight railroad companies. The freight railroad companies own much of the track over which Amtrak operates, but they do not always commit to Amtrak's on-time performance goals.
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Amtrak soon had the opportunity to acquire railway. Following the bankruptcy declaration of several northeastern railroads in the early 1970s, including the Penn Central which owned and operated the Northeast Corridor, Congress passed the Railroad Revitalization and Regulatory Reform Act of 1976. A large part of the act was directed to the creation of a Conrail, but in addition the law enabled transfer to Amtrak of the vital Northeast Corridor railway from Boston, Massachusetts to Washington, DC. That trackage became Amtrak's crown jewel. In subsequent years, various short route segments not needed for freight operations were transferred to Amtrak. Nevertheless, in general, Amtrak remained dependent on freight railroads for access to most of its routes.
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Explanation: Amtrak's most recent management (starting in 2002) made progress correcting the railroad's operational problems. However, Amtrak's ability to plan effectively is undermined by uncertainty about its purpose and mission. Amtrak's authorizing statute expired in 2002, and Congress has not enacted new legislation that provides program objectives and authorities for undertaking reforms. Without this direction, Amtrak's planning has focused on maintaining the status quo system. GAO confirms, "Amtrak lacks a strategic plan that includes measurable corporatewide goals, strategies, and outcomes to guide the entire organization. In addition, without a mission or corporatewide goals, Amtrak cannot ensure that the annual department-specific goals developed by Amtrak's various departments support or improve overall corporate performance."
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Amtrak began operations May 1, 1971. The corporation was molded from the passenger rail operations of 20 out of 26 major railroads in operation at the time. The railroads made contributions of rolling stock, equipment, and capital. In return, they received approval to discontinue their own passenger services, and at least some acquired common stock in Amtrak. Notably, Amtrak received no railroad track or right-of-way at its inception. Railroads that shed passenger operations were expected to host Amtrak trains on their tracks, for a fee.
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