Amtrak Fact Check

An Examination of Statements by Amtrak Critics

Responses written by the National Association of Railroad Passengers


The following series of quotes are from the Fiscal 2007 Federal budget, Department of Transportation Section, subheading, “Restraining Spending and Managing For Results.” Specific page numbers are given at each quote.

Page 220
"The Budget also attempts to control spending by proposing to terminate DOT’s railroad loan program….in this case, there is not clear justification for the Federal Government to extend such favorable loan terms to private rail companies.”

When this program was first set up, very few loans resulted because the rules were too onerous. Then Congress changed the rules to fix those problems. Ironically, the Administration now cites those very changes as “reasons to question the program’s necessity.” What elimination of the Rail Infrastructure Financing (RIF) loan program does is reveal the Administration’s hostility towards rail investment. While purporting to favor capital investments, they kill ll an effective, well-used program intended to encourage private freight railroads to make key investments in infrastructure. Rail is the only mode of transportation where the private sector must maintain its own infrastructure at its own cost. The inevitable result, diversion of still more traffic from rail to highway.


Page 220
“While other countries have turned to new models for providing passenger rail service, the American approach is unchanged.”

Inaccurate, at best. Other countries have changed their models for providing passenger rail service…with disastrous results. The failures of privatization in Great Britan are well-documented: severe accidents occurred, the government-created private infrastructure company went bankrupt and passenger satisfaction tanked. While private operators continue to run the trains—at decidedly mixed public opinion—the government has re-federalized the infrastructure function. Also, comparing American rail service to other countries is an apples-to-oranges issue: with the exception of the Northeast Corridor and a short stretch in Michigan, Amtrak trains operate on rail lines owned by private freight railroads. The freights, through the Association of American Railroads, have emphatically stated their opposition to franchising or privatization of Amtrak services.

Page 221
The Washington Post Editorial Board on the Administration’s Approach to Amtrak Reform: “One bottom-line question is whether Amtrak should continue to operate money-losing long-distance routes that make little sense today but that have entrenched political support in Congress.”

Despite the insistence of the Administration, Amtrak’s long distance services are well used. They provide many other critical functions as well, including for the growing number of smaller cities with no alternatives, and people in cities of all sizes who don’t want to or can’t fly. In FY 2005, the average long-distance train handled 356 people; the average number on board at any time (passenger-miles-per-train-mile) was 156.

Click here for the full text of NARP Executive Director Ross B. Capon’s response to this Post editorial.

Page 221
“For example, Amtrak’s 15 long-distance trains that travel along World War II-era routes required $529 million in subsidies in 2005.”

Likewise, most of the big intercity highway traffic flows that existed in 1950 remain major traffic flows today.

Page 221
“While Amtrak has struggled to maintain a long-distance network, important parts of the system have experienced persistent underinvestment the busy Northeast Corridor…has a several billion dollar backlog of capital projects. Because Amtrak has not made the highly populated corridors its top priority, operating performance has suffered. The system-wide on-time arrival rate fell between 1999 and 2005 from 79 percent to 70 percent.”

As part of the continuing administration effort to pit the Northeast Corridor against the rest of the nation, claims are again made that “empty” long distance trains are being run “at the expense” of capital investment on the Northeast Corridor. In fact, the Northeast Corridor gets a lions share of Amtrak’s capital funding and a dramatic infrastructure improvement program has been in place along the Northeast Corridor for the past three years. While far from complete, vast strides have been made in improving the railroad.

The on-time performance figure shown above is a non-sequitur, since it refers to the entire Amtrak system (including long-distance trains), but the wording implies that the decline in on-time performance in corridors stems from Amtrak’s attention to long-distance trains. In any event, fingerring on time performance as a sign of “neglect” is problematic at best. First, infrastructure work causes delays: as projects take place, temporary delays will occur (it is akin to repaving and interstate, which often requires lane closures and results in congestion). Second, on time performance off the Northeast Corridor has suffered due to unprecedented growth in freight traffic and the inability of the private freight rail industry to make capital investments fast enough to keep up. Instead of addressing the root problem, the Administration wants to eliminate the Rail Infrastructure Financing program (discussed above).

Page 221
“The Administration remains committed to fundamental reform and changing the manner by which intercity passenger rail services are provided. Passenger rail service must be customer-focused, well-managed, and economically viable."

“In 2003 and again in 2005, the Administration sent to the Congress its Passenger Rail Investment Reform Act, which proposed opening passenger rail service to competition from outside operators, giving States freedom to develop custom rail services, and focusing the Federal Government’s role on funding capital investments as it does with airports and highways.”

The Administration plan has been soundly condemned as unworkable and dead on arrival on Capitol Hill. Senator Trent Lott (R-MS), “Part of my goal, hopefully, is to put a little pressure on the administration, because I don’t think their proposal has any credibility at all.” (Feb. 18 news conference)

Page 222
“Most businesses try to earn a profit or at least break even from food concessions. Amtrak, however, has chosen not to function like most companies. The Government Accountability Office has found that between 2002 and 2004, Amtrak spent $2 for every $1 in revenue it earned from food and beverage sales.”

“Amtrak’s contract with its food concessions contractor provides little incentive to limit costs since the concessionaire may pass its purchasing costs along to Amtrak.”

“Amtrak’s high-cost labor force further drives up the cost of serving hamburgers and hotdogs.”

“Amtrak has a responsibility to address such money-losing services or to eliminate them—not to pass them on to American taxpayers.”

The GAO report referred to above focused on losses associated with Amtrak’s food and beverage service. The report was widely criticized as inflammatory and faulty. At a June 12 Railroad Subcommittee of the House Transportation and Infrastructure hearing, JayEtta Hecker of the Government Accountability Office took Amtrak to task for allegedly paying $3.93 a bottle for Heiniken beer. She said this even though Amtrak had told her beforehand that this figure was “a single data entry error that was corrected within 40 minutes….For over 200,000 bottles, Amtrak actually paid 83 cents a bottle.” (according to Amtrak’s official response to the report). Subcommittee Chairman Steve LaTourette (R-OH) called this an “attention grabber that I don’t think is fair. I can see the headline now: ‘Beer and Steaks Gone Amok’.”

In the transportation industry, the primary purpose of food and beverage service is to enhance ticket sales and ridership, not serve as a profit center. This is consistent with operations in other countries. In a November 2005 speech, Jonathan Metcalf, Chief Operating Officer of Britain’s Great Northeastern Railway, said that food service on his trains, “probably loses $2-$3 million Pounds (Great Brittan’s currency) a year, if we didn't do food, we'd lose passengers...it’s a key reason why they travel with us…we probably would have lost $20-$30 million Pounds in ticket revenue.”

The budget is silent on the fact that Amtrak has renegotiated its contract with Gate Gourmet and is implementing a modified service in dining cars which, by the middle of 2006, will be present on most long distance trains.

Page 222
“Likewise, Amtrak, through its Board, has acknowledged the urgent need for reform and issued a Strategic Reform Initiative plan that mirrors major elements of the Administration’s plan, such as introducing competition; empowering States to participate in infrastructure decisions; reducing operating subsidies; and enabling management to separate Amtrak’s train operations from its infrastructure management.”

While the Amtrak board plan—indeed a strategic vision unlike claims made in the GAO report discussed above—does call for reform and operating the existing network smarter, it does not call for wholesale elimination of services, the stated goal of the Administration. Amtrak Chairman David Laney has made several public statements committing to expansion and preservation of existing services.

As reported in NARP’s January 13, 2006 weekly news hotline, “He told the Milwaukee Journal-Sentinel that extending Hiawatha service to Madison is, “an excellent idea,” denied accusations that the Board was intent on dismantling the long distance train network, and stated that the Board was interested in adding routes.

As reported by Texas Rail Advocates President Peter LeCody from a speech Laney gave at TRA’s annual meeting, “‘The answer is clear - there is a place for intercity trains,’ Laney said. Truncating a passenger rail system into isolated corridors is not the answer, according to Laney.”

Page 222
“To sustain Amtrak while it undertakes further reforms, the 2007 Budget provides $900 million. This level will enable Amtrak’s new management team to keep the trains running and act on its mandate to reshape the company.”

The $900 million funding level is a shut-down budget and could not support the $500 million capital budget the administration claims. A $1.3 billion total federal grant would be needed to support such a capital budget.


The following is from the Office of Management and Budget “ExpectMore.Gov” website. Amtrak’s Rating: “Not Performing/Ineffective.”

“Amtrak performs poorly both financially and operationally. Amtrak's annual operating losses and debt burden continue to grow, and it faces a multi-billion dollar infrastructure backlog. As its infrastructure ages, the on-time performance and reliability of its trains are deteriorating. For example, the system-wide on-time arrival rate fell from 79 percent in 1999 to 70 percent in 2005.”

The portion of Amtrak’s federal grant used for operations has been declining, and is set for Fiscal 2006 at $495 million, down from $570 million in Fiscal 2005. The debt burden is not growing. Amtrak has taken on no new debt since July, 2002. During Fiscal 2005, Amtrak reduced its consolidated outstanding debt by $137.9 million or 3.6%.

Representative Mike Sodrel (R-IN), House Transportation and Infrastructure Railroads Subcommittee hearing, September 21, 2005
"When Amtrak began, Indian Trails quickly reduced service to one trip, and I don’t know if it’s still running. Amtrak ran Indian Trails out of business."

Fact: Indian Trails has never operated Chicago-Detroit service. Moreover, Amtrak reduced Chicago-Detroit service from three to two daily round-trips, when it began operations May 1, 1971, although the third frequency was later restored. Presumably, Rep. Sodrel is referring to Chicago-Flint services on both Indian Trails bus lines and Amtrak's Blue Water.

In April 2004, Amtrak--at the state of Michigan's request--rescheduled service in the Chicago-Flint-Port Huron market. It restored the Blue Water which originally ran from 1975-1982. This continued a relationship with the State of Michigan to financially support train service to East Lansing, Durand, Flint, Lapeer, and Port Huron.

While Indian Trails claims that this was a detriment to their operations, only one of Indian Trails' five daily Chicago-Flint round trip frequencies competed directly with the Blue Water. Indian Trails did cut this trip back to a Kalamazoo-Chicago run shortly after the inauguration of the Blue Water. However, one other round trip frequency (Indian Trails runs 24 and 27) competed with the Blue Water's predecessor, the International, and Indian Trails never complained about that train's impact on service.

Indian Trails benefits from buses leased from the State of Michigan on very generous leasing terms. The State also has paid for improvements to terminals used by Indian Trails in Battle Creek, Grand Rapids, Saginaw, East Lansing, Benton Harbor, and Cadillac and subsidizes service on two routes along the eastern and western borders of the state across the Mackinac Straight to St. Ignace, MI. Indian Trails formerly had an excellent working relationship with Amtrak, providing extensive connecting bus service from Flint and East Lansing to Battle Creek to meet Detroit-Chicago trains. Sadly, this cooperation is now effectively limited to one round trip.

Finally, Indian Trails is very much still in business and, from a visit to its website appears to be doing well. The company has invested in new 29 and 49 seat motorcoaches and begun service to the Kalamazoo/Battle Creek International Airport (touting the company's ability to step in during flight disruptions).


Senator John McCain (R-AZ), Senate Commerce Committee, July 28, 2005
“Amtrak has never paid back a single penny of any money that has been loaned to them.”

Fact: Amtrak has serviced its debt reliably for many years. Standard & Poor’s had a ‘stable’ rating on that debt until March 29, when the Bush Administration’s zero budget request for Amtrak led to a ‘negative’ rating. Continuing funding uncertainty caused S&P in early May to put Amtrak’s debt ratings on “CreditWatch with negative implications.” Also, Amtrak is repaying its newest loan--$100 million from U.S. DOT in 2002--in five equal, annual installments starting this year.


Rep. Harold Rogers, House floor, June 29, 2005
"We simply cannot keep going on sending empty trains clear across the country with no riders."

Fact: The long-distance trains are heavily used, they are not empty.  In Fiscal 2004, the average long-distance run handled 364 passengers, and the average passenger-count on board at any given time was 171.  The correct way to measure economic performance is the share of costs covered by commercial revenues, or the avoidable loss per passenger-mile.  The passenger-mile—one passenger traveling one mile—is a standard reporting unit for intercity passenger travel. Simple passenger count—and thus subsidy “per passenger”—does not reflect the wide variations in trip lengths found in intercity service, but is frequently used by Amtrak critics to make Amtrak look bad.

 


Rep. Joseph Knollenberg, House floor, June 29, 2005
"This marks the sixth time since 2002 that Amtrak's CEO...has threatened a shutdown if we do not provide more money."

Fact: As President and CEO, David L. Gunn has a responsibility to give Congress advance warning if a funding level under serious consideration would result in the chaos of a shutdown and bankruptcy; Gunn would be subject to even more intense criticism if a shutdown followed his failure to issue such warnings.  Legislators who don’t want to hear statements about possible shutdowns should not propose funding levels seen as shutdown levels not just by Gunn, but also by most informed observers including DOT Inspector General Kenneth M. Mead.

 


Rep. Joseph Knollenberg, House floor, June 29, 2005
"The limitation in the bill [list of 18 routes on which federal funds may not be spent] protects the northeast corridor.  This amendment [to strike that list] does not.  Amtrak supporters in the northeast need to understand that supporting this amendment redirects the funding to the highly unprofitable routes."

Rep. John Sweeney, House floor, June 29, 2005
"For my constituents, and those of us on the lines that are most dependent upon Amtrak use, this bill [with $550 million for Amtrak] ensures, as these negotiations go forward, that the essential services we need will be maintained."

Fact: A $550 million federal grant would force Amtrak to end all service and enter bankruptcy.  As Rep. Steve LaTourette said (also on the floor June 29), “Amtrak would be forced to pay $360 million in mandatory labor severance payouts for employees laid off from the elimination for the 15 long distance routes and three shorter routes in the bill and $278 million for debt service.  Since that total of $638 million is greater than 550, Amtrak...would be forced to default on its debts, abandon its labor agreements and declare bankruptcy.”

 


Rep. John Sweeney, House floor, June 29, 2005
"And to Mr. Gunn at Amtrak and those people who run Amtrak...I am deeply, deeply disappointed in their failure thus far, frankly, of bringing about meaningful proposals, other than asking for more money...other than fighting over money, we do not ensure any strengthening of the system, or any increase in the vibrancy of the system…We have been asking for Amtrak to reform itself for a number of years.  We have not gotten much of a response.  In fact, we have gotten resistance."

Fact: President and CEO David L. Gunn has been widely praised for reforming—and bringing transparency to—Amtrak’s financial accounting, and for unprecedented strides in advancing capital investment both in infrastructure (primarily the Northeast Corridor) and in the nationwide fleet.  Also, as stated by Rep. Harold Rogers (R-KY; House floor, June 29), Amtrak now complies with “a series of reporting requirements and business practice modifications…so the Congress and the American taxpayers would know the financial stakes involved.  These…include developing a quarterly grant process, giving the Secretary of Transportation direct oversight into Amtrak decisions [in addition to his long-established membership on Amtrak’s Board], separating out operating and capital expenses, and also requiring monthly financial reports and zero-based budgeting.  And we insisted that Amtrak employ generally accepted accounting principles…”

Also, Amtrak on April 21, 2005, submitted to Congress “Amtrak Strategic Reform Initiatives and FY06 Grant Request.”  The Board, comprised entirely of President Bush’s appointees, made reform recommendations and requested $1.82 billion in fiscal 2006 funding to continue Gunn's efforts to return the railroad to a state of good repair.

 


Rep. Joseph Knollenberg, House floor, June 29, 2005
"This has been recommended to the CEO of Amtrak over and over again: eliminating sleeping car service would save $100 million a year.  Just improving their food and beverage service would save another $83 million.  If it would match its train sets to the actual locomotives and cars they need, they could save still more money.  All those things have been ignored."

Fact: Neither of the dollar figures is supportable. The “net direct operating loss” of Amtrak’s food and beverage service in FY 2003 indeed was $83.8 million, and it is generally acknowledged that this could be reduced by revising the Amtrak/GateGourmet contract under which GateGourmet provides food to the trains and runs commissaries, but no one has suggested that this would result in savings anywhere near $83 million.  Elimination of food service is not realistic either.  As Amtrak Senior VP William L. Crosbie testified at a House Railroads Subcommittee hearing June 9, the primary purpose of food and beverage service “is to enhance ticket sales and ridership, not serve as a profit center.”

NARP’s analysis indicates that eliminating sleeping cars would worsen, not improve, Amtrak’s bottom line, both because sleeping-car revenues are so big, and because so many coach passengers take very long trips.  For trips 800 miles and longer, FY 2004 ridership was 819,870 in coach and 318,378 in sleeper.  (The $100 million is from a flawed analysis which assumes dining cars could be eliminated with zero loss of coach revenues, and assumes that adequate food service could be provided to coach passengers at no net cost.)  See NARP news release 05-22.

Knollenberg’s reference to “match(ing) its train sets…” apparently refers to an Appropriations Committee news release that criticizes Amtrak for operating a bigger train “through sparsely populated parts of Texas, New Mexico, Arizona and Southern California” than it operates from Orlando to San Antonio.  The release and Chairman Knollenberg don’t explain why Amtrak does this: bigger passenger loads due to combining two trains into a single train.  [The two trains are the Orlando-San Antonio-Los Angeles Sunset Limited and the Chicago-San Antonio-Los Angeles Texas Eagle.]

 


House Appropriations Committee, "Smarter More Effective Funding for Amtrak," June 15, 2005:
“Amtrak points to increased ridership as a sign that the railroad is on its way to financial health and as a justification that Congress continue to inject vast sums of taxpayer resources in passenger rail service. However, in order to increase ridership, Amtrak has charged ticket prices that are well below costs.”

Fact: Amtrak yields (average revenue per passenger-mile) have risen steadily while they have fallen on most major airlines. The Amtrak yield (system wide average) rose from 20.07 cents in Federal Fiscal Year 2000 to 22.61 cents in Fiscal 2004 and 23.81 cents through the first seven months of Fiscal 2005. The table below shows the yields and percentage changes each year for Amtrak and for domestic air travel, based on airlines reported by the Air Transport Association.  This does not include Southwest Airlines, which is shown separately in the last two columns.  All of the airline numbers are for the calendar year; Amtrak data is fiscal year.

Year Amtk Yield % Change Airline Yield* % Change SWA Yield % Change
1994
13.96   13.06   11.56  
1995
14.91 6.81% 13.39 2.53% 11.83 2.34%
1996
16.85 13.01% 13.67 2.09% 12.07 2.03%
1997
17.74 5.28% 13.73 0.44% 12.84 6.38%
1998
17.83 0.51% 13.80 0.51% 12.62 -1.71%
1999
18.82 5.55% 13.95 1.09% 12.33 -2.30%
2000
20.07 6.64% 14.48 3.80% 12.95 5.03%
2001
21.45 6.88% 13.24 -8.56% 12.09 -6.64%
2002
23.64 10.21% 12.05 -8.99% 11.77 -2.65%
2003
22.10 -6.51% 12.01 -0.33% 11.97 1.70%
2004
22.61 2.31% 11.52 -4.08% 11.76 -1.75%
to Apr '05
23.81 5.30% 11.58 -5.60% not avail.  
__________________________________________________________________________________
Average % change
5.09%   -1.56%   0.22%

(yield is shown in cents per revenue mile)

 


House Appropriations Committee, "Smarter More Effective Funding for Amtrak," June 15, 2005:
“For example, Amtrak is currently offering fares that are discounted by 90% -- this is simply not good business in light of Amtrak’s current projection that 2005 revenues will be $95 million short of its original estimate.”

Fact:This fare was instituted recently and applies only to the third through sixth people in a small group whose first and second members have paid full fare.

Speculation: If Amtrak did not offer innovative, targeted discounts of this nature, it would be—and has been in the past—criticized for lack of entrepreneurial initiative.

House Appropriations Committee, "Smarter More Effective Funding for Amtrak," June 15, 2005:
“Unprofitable Services:  The Chairman Mark’s fully supports rail service for 4 out of 5 riders or 80 percent of Amtrak’s ridership.  Specifically, the bill permits Amtrak to use federal funds to support operations for:  all routes in the Northeast Corridor including spurs that run from New York City to Albany, from New Haven, Connecticut to Vermont and from Portland, Maine to Boston; routes running through Pennsylvania; most corridor routes in the Midwest; trains running from Portland, Oregon to Vancouver; and corridor routes in California. In order to address capital needs, the Chairman’s Mark includes $50 million for the Secretary of Transportation to improve the condition of the Northeast Corridor.”

Fact: The record is clear that $550 million or anything remotely close to that would throw Amtrak into bankruptcy. This means the railroad would shut down and no service would continue. Amtrak President & CEO David L. Gunn has said that just running the Northeast Corridor alone would cost more than one billion dollars.

 


House Appropriations Committee, "Smarter More Effective Funding for Amtrak," June 15, 2005:
“For too long, Amtrak has played a Chicken Little game with Congress over its funding levels.  Officials would declare a crisis, threatening immediate shut downs of service because of supposed inadequate funding.”

Fact: Amtrak has at various times indicated the dire consequences of specific funding cuts, which fortunately have never been implemented. On the other hand, former Chairman Istook, in a February 12, 2004, “dear colleague” letter incorrectly stated: “Last year Amtrak claimed it would shut down if it didn’t get $1.8-billion. They didn’t get it, and they didn’t shut down either. This year they are repeating the same claim, and it has the same level of credibility.”  Amtrak never said failure to get $1.8 billion would lead to a shutdown. Amtrak did say the $900 million requested by President Bush for FY 2004 would lead to a shutdown, so it is Chairman Istook who has the credibility problem. (Amtrak actually got $1.2 billion in FY 2004.)

 


House Appropriations Committee, "Smarter More Effective Funding for Amtrak," June 15, 2005:
“The proliferation of low cost airfares makes national railroad service less necessary. For example, a rider taking a train from Orlando to Los Angeles receives a $466 taxpayer subsidy on top of a $165 ticket for a trip that takes more than 71 hours.  For $211 – less than half of the federal subsidy alone – a traveler could fly from Orlando to Los Angeles in just six hours.”

Fact: The committee completely ignores the fact that many passengers on Amtrak's national network trains are riding between intermediate points.   Many of these communities lack attractive air service: more than 100 Amtrak-served communities have no commercial air service and many more have no access to the discount air services that the committee's release trumpets.  In addition, Americans are presented with transportation options and make conscious decisions to choose rail.  Some citizens do not want to fly or are medically unable to fly.

To compare Amtrak to airline financial performance is problematic at best.  In 2004, the airline industry lost over $7 billion dollars.  When divided by the number of passengers carried—the method of choice for those critical of Amtrak to point out the railroad’s “inefficiency”—airline loss per passenger is nearly $100.00.
Sources: 2004 10-K “Annual Report” financial statements of Delta, Northwest, United, American, Continental, and US Airways.

 


JayEtta Hecker, Director, Physical Infrastructure, Government Accountability Office; testimony before the House Transportation and Infrastructure Committee Amtrak Food and Beverage Oversight Hearing, June 9, 2005:
"Amtrak's price paid for several goods varied widely.  For example, the cost of one bottle of Heineken beer ranged from $0.43 to $3.93, while the cost beef tenderloin ranged from $3.05 to $6.59."

Fact: $3.93 represented a one-time data entry error by an Amtrak clerk, which was corrected within forty minutes of posting.  For over 200,000 bottles, Amtrak actually paid 83 cents a bottle.  The $6.59 steak price represented a one-time, emergency purchase at a local grocery store due to a late train.

This testimony is all the more disturbing as the GAO apparently ignored explanations presented by Amtrak during a four hour teleconference call several days prior to the hearing. William Crosbie, Amtrak’s Senior Vice President, Operations, vigorously defended Amtrak at the hearing and the Chairman of the Railroads Subcommittee, Steve LaTourette (R-OH), admonished Hecker, saying, "In this era of 24-hour news, I'm concerned about the sound bite nature of this information.  This is an attention grabber that I don’t think is fair. I can see the headline now: 'Beer and Steaks Gone Amok'."

 


Washington Post Editorial, “Off Track,” May 3, 2005
“But the other 20 percent of Amtrak's business, comprising routes that take more than five hours, cannot hope to compete with airlines… But there is no justification for spraying billions at a national rail network that attracts one-fourteenth as many passengers as intercity buses and one-seventeenth as many as the airlines; spending federal dollars on uneconomic lines is pure pork.”

Fact (From NARP Executive Director Ross B. Capon’s response, published May 10, 2005):
“We are not ‘spraying billions’ at long-distance trains. Amtrak says eliminating such trains would save at most $300 million a year, and only several years after service ends. Elimination also would leave 26 states without passenger trains. We would have four isolated mini-networks serving 21 states -- probably not enough to generate support in Congress for funding anything. Moreover, long-distance trains are heavily used; last year they averaged about 364 passengers per run, and subsidy per passenger-mile is almost identical for long-distance trains and for short-distance trains outside the Northeast Corridor.”

 


Washington Post Editorial, “Off Track,” May 3, 2005
“But the surest route to better management is the one supported by the administration: allow competition. This does not mean privatizing the rails, which are a natural monopoly. But train operators should compete to operate services on government-run tracks. State and local jurisdictions such as North Carolina and Boston have shown that this can work.”

Fact (From NARP Executive Director Ross B. Capon’s response, published May 10, 2005):
“The editorial cited two examples of competition. In one, North Carolina owns some tracks, but Norfolk Southern controls the tracks, and there has been no competition among passenger carriers. The Post's other example involved local commuter rail in Boston and thus involves different rules. There is, however, no evidence that Boston's service has improved since Amtrak ceased providing it.”

 


Secretary of Transportation Norman Y. Mineta (Statement delivered at U.S. DOT following Senate Commerce hearing on Amtrak, April 21):
“I just returned from a trip to Asia where I saw firsthand how the Japanese have transformed failed passenger rail into a model of efficiency. For decades, Japan National Railway was a heavily subsidized train service that operated routes that nobody used and was known for its inefficient structure and poor financial service. But in 1987, Japanese leaders had the courage to break up the railway into six smaller companies that are today known around the world for their on-time performance, cutting-edge technology, and high profit levels.”

Fact: Japan National Railway (JNR) was known for excellent on-time performance and cutting-edge technology long before the national railroad was broken up. However, cutting-edge technology obviously is not universal, as evidenced by the April 25 wreck of a West Japan Railway Company commuter train which killed the driver and 106 passengers and injured 460 other passengers, making it Japan's fourth-deadliest railway accident in postwar history—although safety has been very good in Japan overall.  The issue before privatization was inefficiency, not lack of demand.  In fact, demand growth was not startling either before or after privatization, but demand has always been high

When JNR was broken up, the Government directly assumed responsibility for well over $200 billion in debt. Privatization was not total, as much of the remaining debt is held by regional and national governments, public pension funds and quasi-public organizations like the postal savings bank. Profitability of today’s Japanese railroad companies also stems from Japan’s unique circumstances—high population density, high incomes, high gasoline taxes and high “interstate” road tolls—as well as diversification into non-rail activities like real estate and department stores.  Finally, the privatization package included the highly profitable Shinkansen system.

 


Secretary of Transportation Norman Y. Mineta (prepared remarks, Sacramento, CA, press conference, March 31):
“Californians give Amtrak over 27 million of their tax dollars each year to operate the San Joaquins service between Oakland and the Central Valley. And what do they get for their investment? Trains that are late more than 44 percent of the time.”

Fact: A massive levee break and washout of the railroad trackbed between Martinez and Stockton, CA, caused two lengthy suspensions of service and continuing speed restrictions.  Thus, the floods delayed Amtrak trains directly—by flood-related track “slow orders”—as well as indirectly, by freight train congestion.  It is nonsense to blame Amtrak for these problems.

 


Mineta (prepared remarks, Sacramento, CA, press conference, March 31):
“Today, even where there is natural demand—between cities such as St. Louis and Kansas City, Cleveland and Pittsburgh, or Los Angeles and San Diego—due to poor service, Amtrak doesn’t sell enough tickets to cover the cost of operations. As a result, states like California that want service are forced to pay Amtrak an operating subsidy.”

Fact: The need for “an operating subsidy” does not stem from problems with Amtrak service quality.  Indeed, ridership on the Pacific Surfliners (San Diego-Los Angeles-Santa Barbara) rose 7.6% in FY 2004 to 2.3 million.  To eliminate an operating subsidy would require a massive capital investment program; and perhaps, in addition, a big increase in the cost of driving.

Union Pacific, which owns the St. Louis-Kansas City tracks, has been quite open about the need for a public-private partnership to address track capacity problems that delay both freight and passengers on this line.  Such investments are the key to improving passenger-train on-time performance and ridership, but the operating grant requirement would still remain.

Amtrak’s presence in the Cleveland-Pittsburgh market is limited to a middle-of-the-night by-product of the Washington-Chicago service.  Since the running-time is about three hours in a market where the Interstate highway mileage is 137 (for an average well under 50 mph), major track investments and speed improvements would be needed to attract significant ridership to trains timed to serve Cleveland-Pittsburgh.

All of these services would be put at risk by the Administration's “reform” plan to transfer all operating costs to the states.  Missouri's governor announced on March 24 that his state can no longer afford even its partial support of the St. Louis-Kansas City route.  The Administration’s plan would force Missouri to pay about $9 million a year for the service instead of the present $6 million.

Using “selling enough tickets to cover the cost of operations” as a standard for keeping a service would wipe out most of Amtrak, and a huge amount of airline and bus service.  FAA Operations gets about $3.0 billion a year from general funds.  “Despite the fact that load factors reached an all-time high, U.S. airlines lost an estimated $10 billion in 2004, following losses of more than $23 billion in the three previous years,” according to Air Transport Association President and CEO James May in a March 10, 2005, speech.  The New York Times reported on October 30, 2004—well before the latest round of fuel price increases—that major airlines expect to lose another $5 billion in 2005.

 


United States Senator Robert Bennett (R-UT), March 15, 2005, Senate Floor Speech:
“Fewer than 100 people a week that come into that station in Salt Lake.”

Fact: Ridership of 29,489 in fiscal 2004 means an average 564 people a week arrived or departed at Salt Lake City on the California Zephyr.  This was 14% above fiscal 2003 when the Salt Lake City number was 25,886. The same train also serves the Utah communities Provo, Helper and Green River. (Source: Amtrak state fact sheets at <www.amtrak.com>)

That said, Amtrak’s Utah presence is weaker than in most other states. This is partly due to serving Salt Lake City at undesirable hours (11:47-11:59 P.M. west; 3:35-4:06 A.M. east) in order to serve other important stations at attractive times, which is especially vital for the key, endpoint markets—Chicago and Bay Area—where a high percentage of Zephyr passengers connect with other trains. While the Zephyr likewise serves four communities in Nevada, Reno and Sparks are at attractive times, and total Nevada ridership last year at 86,846 was almost 2-1/2 times higher than the Utah total of 34,914. (Utah nevertheless was up 10% from fiscal 2003.)

 


Senator Bennett, March 15, 2005, Senate Floor Speech:
“…how shabby the depot had become through misuse over the years.”

Fact: Amtrak is in a temporary facility while the city’s new intermodal facility is under construction. The city long has planned for Amtrak to be in the new facility.

 


Senator Bennett, March 15, 2005, Senate Floor Speech:
“...the schedule only comes through three times a week.”

Fact: The California Zephyr runs seven days a week—two trains a day, one westbound, one eastbound.

 


Senator Bennett, March 15, 2005, Senate Floor Speech:
“The administration, in this budget, as I understand it, has provided for $360 million that would go to the Surface Transportation Board that would be available to reimburse Amtrak in those areas where it needs it to keep the kind of service that has been described here on the Senate floor.”

Fact: The $360 million is to preserve commuter train operations of New Jersey Transit, Long Island Rail Road, and other, similar carriers whose trains use Amtrak-owned tracks. The money comes into play only in the case of an Amtrak bankruptcy, which would be inevitable should Amtrak get inadequate funding or zero funding.

 


Senator Bennett, March 15, 2005, Senate Floor Speech:
“Americans don’t like to travel that way anymore.” [referring to long trips by rail]

Fact: In Fiscal 2004, the average long-distance Amtrak train handled 364 passengers per run, and there was an average of 171 on board at any given time. The latter figure is called “passenger-miles-per-train-mile”. It is lower than total passengers handled because, except on Auto Train, passengers get on and off along the route, often in communities with little or no other public transportation options. The number of Amtrak communities without intercity bus service is growing, with Garden City, Hutchinson and Dodge City, Kansas, and La Junta, Colorado, among those soon to join the list.

 


Mineta (prepared remarks, Detroit, MI, press conference, March 24):
"Today, Amtrak is a dispatching company, a real estate business, a track repair firm, and a reservation system. If Amtrak were in the aviation business instead of passenger rail, it would be assuming the role of airline, travel agency, airport, and the FAA all rolled into one.  Our plan fixes that by freeing Amtrak from having to worry about a hot dog stand that is late on its rent or a commuter train that is off schedule."

Mineta (prepared remarks, Boston, MA, press conference, March 23):
“Amtrak may in fact be America’s last monopoly. Today, if the Commonwealth of Massachusetts wanted a better deal on Boston-to-Springfield trains, it could only choose from Amtrak or… Amtrak. Our plan will instead allow states to choose who runs their intercity trains. Amtrak will compete with private companies and public operators to run routes. And this healthy competition will give Amtrak a reason to run the trains on time, to keep them clean, and to provide better service.”

Mineta (New York Times op-ed, Feb. 23):
The Administration's planned Amtrak "reform package...would introduce fair and open competition when picking someone—be it Amtrak, a regional organization, a state agency or a private company—to run the trains."

Fact: Amtrak is organized in the same way railroads have always been successfully organized since they were created as our country's first major industry, including a real estate department that brings in revenue to support the rest of the company and a department that repairs the track.

“Vertical integration” (common ownership of tracks and trains) is standard in the U.S. both for freight and many commuter railroads.  Separating Amtrak into various ownership and operating entities would create duplicative bureaucracy, and new legal “turf wars”.  One example: operating railroads want to maximize track availability; track-owning companies want to give work crews maximum time to maintain the track.  Thus, when a single CEO cannot mediate such disagreements-—because the responsibility is split between two companies-—wasteful litigation can result.

Most tracks Amtrak uses are owned by private freight railroads. The Association of American Railroads' Amtrak reform principles include this: “Safety and the integrated nature of railroading require that intercity passenger rail be provided by one entity:  Amtrak.  Further, Amtrak’s right of access, preferential access rates, and operating priority should not be transferred or franchised.”

Speculation: In this matter, the railroads almost certainly would beat back any attempt to change federal law in a way that they regard as hostile. By doing the dispatching over nearly all of the Northeast Corridor, Amtrak controls the priority of its own trains and honors its partnerships with transit agencies and other partners.  Amtrak trains would likely get a lower priority and be charged an "access fee" to use the corridor, probably resulting in slower schedules and a higher cost, if the administration's plan is implemented.

 


Mineta (prepared remarks, Detroit, MI, press conference, March 24):
"Our plan introduces healthy competition for passenger rail service.  Today, Amtrak may in fact be America’s last monopoly. Right now, if Michigan wants service options to operate the Blue Water train from Port Huron to East Lansing, it can only choose Amtrak or… Amtrak.  Our plan will instead allow states to choose who runs their intercity trains."

Fact: Amtrak has not had an exclusive right to provide intercity passenger rail service since the 1997 Amtrak reauthorization.  Amtrak, working closely with the Michigan Department of Transportation, responded to market demand, severe on-time-performance problems, and requests from passengers by rescheduling its Chicago - Port Huron service. The train no longer continues on to Toronto, Canada, rather, it terminates at the border. A more Michigan-friendly schedule is now in place (westbound in the morning, eastbound in the evening). When one compares data between January 2004 and January 2005, ridership increased 26%.

 


Mineta (response to press question, Detroit, MI, press conference, March 24):
“…The problem is if the Empire Builder is going from Seattle to Chicago and it’s going through lets say Montana, but there are only 53 people a day using that train service, can I really justify pouring that kind of subsidy into the Empire Builder for a segment of that service?”

Fact: In fiscal 2004, the Empire Builder handled 437,200 passengers, an average 1,195 per day (597 per trip, since there is one eastbound and one westbound train per day).  This was 5% above the fiscal 2003 level, and 19% above that of fiscal 2002.  In fiscal 2004, boardings and alightings within the state of Montana totaled 129,044 or an average of 353 per day.  At the same time, about 100,000 passengers (average 275 per day) traveled all the way across Montana en route between Idaho-west and North Dakota-east points.

 


Mineta (prepared remarks, Detroit, MI, press conference, March 24):
“Moreover, Amtrak continues to delay desperately needed maintenance of the infrastructure that it already owns. This neglect leads to unreliable service and unacceptably slow travel times between places like Detroit and Chicago. Two out of every five trains on the Wolverine line arrived late last year – and that was the best performance among Amtrak’s passenger lines serving Michigan.”

Fact: Michigan trains were delayed a total of 218,537 minutes during fiscal 2004.  Delays due to Amtrak infrastructure conditions accounted for 8,369 minutes or 3.8% of these delays. The lion’s share of delays to these services comes from freight train interference encountered on tracks owned and operated by Norfolk Southern and Canadian National Railroads.

 


Mineta (prepared remarks, Boston, MA, press conference, March 23):
“Governor Romney and I agreed that Amtrak urgently needs reform. It is dying, and if we continue down this current track, there is no hope for recovery…It is important to recognize that a primary reason why Amtrak is dying is its neglect of the Northeast Corridor – its single most valuable asset and single most lucrative market.”

Fact: Amtrak’s Northeast Corridor capital improvement program is in better shape than ever, thanks to President and CEO David L. Gunn. Amtrak will install 183,000 concrete ties this year, up from 104,000 in FY04, and zero in FY01-FY02. [More details in attachment to Amtrak’s February 17, 2005, annual report to Congress at http://www.amtrak.com click “Inside Amtrak,” then “Government Affairs,” then “Other Reports.”] Amtrak’s board on March 17 approved advance orders for FY06 work that includes replacement of the Thames River bridge in Connecticut; Phase Two of the new Oakland (CA) maintenance facility; the Baltimore tunnel replacement project; and materials for overhauls and remanufacturing work on Amfleet and Superliner cars.

Amtrak issued this statement on March 23 in response to reporter inquiries:

“In addition to the work already underway on the Northeast Corridor, Amtrak plans to spend nearly $2.5 billion in federal grants over the next five years on track, bridges, tunnels, signals, and other facilities, including the Thames River Bridge, New Jersey interlockings and Hudson River tunnel projects. This plan has been approved by the Amtrak board of directors, of which Secretary Mineta is a member. Currently, thousands of Amtrak Engineering Department employees in the Northeast Corridor supervise and perform this work while the corridor is used by multiple railroads, including Amtrak’s own high-speed operations. Plans to transfer this responsibility and the obligation to fund it will certainly be scrutinized by all passenger rail policymakers and stakeholders in the months to come.”

 


Mineta (prepared remarks, Boston, MA, press conference, March 23):
“The Commonwealth [of Massachusetts] owns the tracks and stations on the Northeast Corridor, and they have operated them successfully.”

Fact: Amtrak dispatches trains and maintains tracks on the Massachusetts part of the Boston-Washington Northeast Corridor, as on the rest of the Corridor (except for New Haven-New Rochelle).

 


Mineta (prepared remarks, Boston, MA, press conference, March 23):
“We [would transfer] the tracks and stations owned by Amtrak today to state and local control. Commuter trains constitute the majority of traffic on Amtrak’s tracks, so it just makes sense to put state and local officials in charge of the tracks and stations that are so vital to their economies.”

Fact: The majority of train-miles on the Northeast Corridor are Amtrak’s. Amtrak passenger trains are the only passenger trains on these Corridor segments: Springfield-New Haven, Providence-New London, Newark (DE)-Perryville (MD), Harrisburg-Coatesville. (There are more Amtrak-only segments on weekends, when some commuter services do not run.)

Only Amtrak trains run the length of the corridor, across territory shared with multiple regional transit authorities. Viable intercity service requires pathways for hourly “memory pattern” services, pathways that would be jeopardized if the regional transit authorities exercised more control over scheduling. For more detail on corridor usage, read our October 6, 2000 comments to the Amtrak Reform Council [link to be restored].

Mineta (prepared remarks, Boston, MA, press conference, March 23): “Massachusetts also provides us with an example of how competition can revitalize and reenergize rail service. Three years ago, the Commonwealth shopped around for its commuter train service. A private company won that competition, and despite predictions of doom and gloom, the T’s commuter trains have been a reliable and profitable system ever since.”

Fact: MBTA commuter trains are not “profitable.” Amtrak no longer operates the service partly because of its own choice not to bid in light of the liability.