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Associated Press Top Story November 9, 2001
Amtrak Told to Plan Liquidation
http://dailynews.yahoo.com/h/ap/20011109/us/amtrak_future.html
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Friday November 9 6:12 PM ET
Amtrak Told to Plan Liquidation
By LAURENCE ARNOLD, Associated Press Writer
WASHINGTON (AP) - A federal panel ordered Amtrak to come up with a liquidation
plan for itself on Friday, concluding that
one more year won't be enough for the national railway to end 30 years of
operating deficits.
The Amtrak Reform Council voted 6-5 to declare that Amtrak will not meet a
congressional deadline of Dec. 2, 2002, for
covering its operating costs without government help.
The ruling does not mean any immediate changes in train service. Amtrak has 90
days to draw up a liquidation plan, and the
council will use that time to plan a restructuring of passenger rail in
America.
Congress and the White House ultimately will review both plans and make a
final
decision about the future of Amtrak and rail
service.
Amtrak criticized the council's decision.
Among other issues, Amtrak questioned whether the council took into account
the
railway's ``heightened public service role''
since the Sept. 11 terror attacks. The law creating the council required it to
consider ``acts of God, national emergencies, and
other events beyond the reasonable control of Amtrak.''
Rep. Jack Quinn, R-N.Y., chairman of the House Transportation subcommittee on
railroads, also cited the Sept. 11 attacks
and said, ``The Amtrak Reform Council's decision could not have come at a
worse
time.''
Congress already has started to ponder Amtrak's future, so the ultimate impact
of the council's decision is unclear. Senate
Commerce Chairman Ernest Hollings, D-S.C., has proposed eliminating the
self-sufficiency requirement as a part of a
multibillion-dollar package for the railroad.
Ross Capon, executive director of the National Association of Railroad
Passengers, called self-sufficiency ``a stupid objective''
and the council's decision ill-timed.
``You have a national emergency that directly relates to the business Amtrak
is
in - transportation - and you have an agency
stretched to its limits,'' Capon said. ``To lay on them the many burdens
associated with a liquidation plan seems, to put it
charitably, lousy public policy.''
The council's chairman, Gilbert Carmichael, a former federal railroad
administrator, insisted the panel is united in support of
passenger rail but divided over whether Amtrak should continue to provide it.
``All this council is trying to do is come up with a strong new national
passenger rail system,'' Carmichael said. ``This country
wants it and needs it.''
Congress created the council in 1997 as part of a law giving Amtrak five years
to wean itself from operating subsidies. Amtrak
has made progress toward the goal, but the council said it still won't meet
the
deadline.
Amtrak posted a cash loss of $405 million in the first eight months of fiscal
2001, $17 million more than the comparable period
last year. It has consumed more than $24 billion in subsidies - both operating
and capital - since 1971 and is receiving a $521
million federal subsidy this year.
Amtrak President George Warrington has repeatedly urged Congress to decide,
once and for all, whether Amtrak should run
only profitable routes or continue to serve the entire nation.
The key issue Friday was whether the council should vote immediately on its
finding or wait until January. The Bush
administration's representative on the panel urged waiting.
Council members split 5-5 on whether to approve an immediate finding. The
meeting adjourned while council staff scrambled to
contact the 11th member, Milwaukee Mayor John Norquist, by telephone.
``The future of Amtrak rests on whether we can find the mayor of Milwaukee in
the next 10 minutes. This is absolutely nuts,''
said council member Charles Moneypenny, who represents rail unions and
supports
a continued role for Amtrak.
Norquist's voice came over a phone speaker moments later, and council members
lobbied for his vote.
Paul Weyrich, president of the Free Congress Foundation and the leading
advocate of an immediate finding, said that even if the
council votes yes, ``no trains are going to stop, (and) we're not going to
have
any employees laid off. What is going to happen is
we will have the opportunity to really face up to this issue.''
Norquist cast his deciding vote for immediate action.
``I think we all know Amtrak as it is currently structured can't produce more
revenue than it has to pay out,'' Norquist said. ``It
has a structural problem that has to be addressed.''
Amtrak service began in New York on May 1, 1971. Then-Transportation Secretary
John Volpe said Amtrak would break
even financially in about three years.
But Amtrak has never turned a profit. Strapped for cash, the railway had to
mortgage part of New York's Penn Station for
$300 million last summer to cover its operating costs through September.
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On the Net:
Amtrak: http://www.amtrak.com
Amtrak Reform Council: http://www.amtrakreformcouncil.gov
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Message has 1 Reply:
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| (...) As someone that doesn't think rail has gotten a fair shake at the feeding trough (rail owns its own right of way, which it pays tax on, trucks pay pretty small fuel taxes (5000 a year per truck does not buy you a lot of highway) and nothing (...) (23 years ago, 10-Nov-01, to lugnet.off-topic.debate)
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