Hotline #216 - November 9, 2001

The Amtrak Reform Council met in Washington today and approved a resolution, on a 6-5 vote, to report formally to Congress a finding that the ARC believes Amtrak will continue to require operating grants after December 2, 2002 -- in other words, miss the 1997 legal requirement of operational self-sufficiency. Under the 1997 Amtrak reauthorization law, the ARC must produce a restructuring plan for passenger rail in the U.S., and Amtrak must produce a plan for its own liquidation, both within 90 days. The law adds that if Congress does not adopt the ARC's plan (or any other plan) during the 90 days after that, a "liquidation disapproval resolution" will be put before the Senate (but the law is not clear on what would happen if the Senate does not act at that point).

Those voting for the finding were Republicans Weyrich, Cox, Gleason, Connery and Chapman, Democrat Norquist (the mayor of Milwaukee, breaking a 5-5 tie). Opposed or seeking a delay were Chairman Carmichael (R), Secretary Mineta (represented by Mark Yachmetz of the FRA), and Democrats Coston, Kling, Moneypenny.

ARC's action today raises two urgent concerns. First, as some ARC members (including the Bush Administration) argued, the nation does not need the additional confusion that would be the result of any potential Amtrak liquidation. Congress and the Administration are already preoccupied with aviation issues arising from the September 11 attacks, and their immediate ability to give deep attention to a radical restructuring of passenger rail is questionable. The Administration asked the ARC to wait two or three months until it could decide what it wanted for passenger rail reauthorization starting in 2003. The ARC vote also means that an Amtrak whose resources already are stretched to the limit must find time to write its own liquidation plan, and spend more time reassuring those who hold Amtrak’s debt.

[Indeed, by law, the ARC is supposed to consider "the level of Federal funds made available for carrying out the [mandate]" and "national emergencies." There was no mention today of the fact that Congress has appropriated for Amtrak only half of what was authorized in 1997.]

Second, given recent past ARC publications, anything that the ARC proposes is likely to require significant capital funding from unidentified sources. There is no reason to think -- in the absence of such capital funding -- any ARC restructuring will be better for railroad passengers (on corridors or long-distance trains) than what exists now. In other words, the true problem is inadequate funding for passenger rail, not quasi-ideological perceptions about corporate structure.

The Senate Finance Committee, on a party-line (11-10) November 8 vote, approved the tax portion of a stimulus package that partially includes the High Speed Rail Investment Act (HSRIA), plus $2 billion for a new railroad tunnel under the Hudson River. The HSRIA portion is $7 billion over three years (technically, one year with a two-year carryover period for unexpended balances). The bill is expected on the Senate floor the week of November 13.

While Republicans have denounced the bill, it may be significant that -- at least in the comments reported by the New York Times -- Senate Minority Leader Trent Lott (R.-Miss.) did not mention rail when he was critically citing examples of pork in the bill. On November 1, Lott in the Senate Commerce hearing on Amtrak had expressed the hope that the HSRIA could emerge from the Finance Committee soon.

Please tell your legislators you strongly support the rail passenger portions of the Finance Committee's stimulus bill, and you hope this portion survives to become law. (If you support the entire bill and want to say so, be sure to single out the rail passenger portions so that Republican legislators in particular will know you place a priority on that.)  Click here for ways to contact your legislators.

Another pending item is the Hollings-McCain authorization of $1.77 billion for Amtrak safety and security, S.1550. Timing of floor consideration is unclear, but it could be next week. NARP supports a possible Hutchison amendment to include repairing existing Amtrak cars (and heavy overhauls of other cars), and a McCain amendment to impose aviation terrorism penalties on railroad terrorists.

A means of appropriating the improvements authorized by S.1550 would be the Byrd "homeland security" spending package, but it is unclear when that will come to the Senate floor. The Byrd package has $1.2 billion of the safety and security items from S.1550, and may have a slightly better chance of enactment than the full $1.77 billion from S.1550.

Amtrak reports that Acela Express/Metroliner ridership for October was 43% above a year ago and 11% above plan. Sleeping-car occupancy remains strong, with high-fare solo businesspeople traveling now where couples using cheaper fares were traveling a year ago. Thus, sleeper revenues are up even where ridership is down.

Bombardier, the builder of the Acela Express train sets, filed suit against Amtrak in federal court on November 8, seeking "at least" $200 million in damages. Bombardier claimed that Amtrak owes it for cost overruns associated with indecision and that Amtrak didn't provide "adequate" track upgrades (though tracks were approved by the Federal Railroad Administration). Amtrak responded that Bombardier failed to adhere to a process for submitting claims and hearing from a dispute resolution board before suing, and that Amtrak is allowed to assert $250 million in claims of its own against Bombardier under the terms of the 1996 contract.

The contract agreed to by Bombardier and Amtrak in 1996, for the most part, was based on performance specifications based on getting a train from Boston to New York on the route in three hours. Most of the infrastructure work Amtrak had to perform after 1996 involved the New Haven-Boston overhead electrification. A significant delay in train testing came in the summer of 1999, when wheel-wear and truck-hunting problems were identified. The first train sets were delivered for revenue service late in 2000, and Amtrak and Bombardier have been in talks since then to determine whether Bombardier would be subject to penalties for the late deliveries.

Thanksgiving is coming, and Amtrak has released its plans for this year. The biggest change is on the spine of the Northeast Corridor, where for the first time ever, all trains will be converted to "reserved-only" status -- except for some Keystone, Clocker, and New York-Albany trains. On most trains, however, no unreserved tickets will be honored, and no tickets for another train will be honored.

This apparently is a move on Amtrak's part to eliminate the numerous -- but fare-paying -- standees on the Northeast Corridor trains. They have been common in past years, particularly on Wednesday and Saturday of that week. The change should make it easier for people boarding at mid-point stations to get a seat (or even board the train). As before, extra equipment will be deployed, including borrowed commuter cars. Some trains on those two days are already selling out. Peak fares will be in effect for the entire period (Tuesday, November 20-Monday, November 26). If you are traveling by train that week, plan ahead and book as soon as possible.

Amtrak is considering a limited extension of its Pacific Surfliner corridor south a few miles to National City, according to a recent article in the San Diego Union Tribune. This would be done in conjunction with the establishment of a facility to allow cleaning and light maintenance of trains that currently spend the night in the station in San Diego. There is no start-up date yet, but plans for the facility could be ready in January.

The Secretary of Transportation and Construction in Massachusetts, Kevin Sullivan, wrote to that state's Congressional delegation on October 26 to express support for the North-South Rail Link in Boston. He asked them to work for an appropriation of $60 million to be used to complete the link's design, engineering, and environmental permitting; and to begin preliminary construction.

A former employee of Nava-Hopi Tours in Arizona has created a new bus company to fill some of the void left by Nava-Hopi's demise in October. However, it's too soon to say if the new carrier will take over any of the Amtrak Thruway routes Nava-Hopi used to operate -- Flagstaff (Amtrak)-Grand Canyon, and Flagstaff (Amtrak)-Camp Verde-Phoenix (three locations). According to a wire story, the chamber of commerce and the visitors' bureau in Flagstaff are looking for a carrier that can pick up the Flagstaff-Grand Canyon route. The Grand Canyon Railway's van/rail Thruway service from the Williams Junction Amtrak stop is still in place.

Houston voters on November 6 adopted Proposition 1, allowing the light-rail project now under construction to proceed, but also requiring future rail extensions to be subject to voter referenda. The referenda would be required by state law anyway, since the extensions would be paid for with bonds issued by Houston Metro. The measure passed with about 74% of the vote. A competing measure, Proposition 3, got only about 46% of the vote, and would have called for a referendum on the current light-rail project. Such a referendum had been thought illegal, since Houston Metro is not issuing bonds for the starter line. The line is now about one-quarter completed.