An Action Plan for the Restructuring and
Rationalization of the National Intercity Rail
Passenger System
Briefing
by the Amtrak Reform Council
February 14, 2002
Amtrak’s ridership is growing very slowly.
Amtrak has a very small share of the intercity
travel market
Airlines
Intercity Bus Carriers
Amtrak
2000 Ridership
610,000,000
42,000,000
22,500,000
Amtrak Intercity Ridership
FY1972 -- FY2002
60.0
50.0
40.0
30.0
20.0
10.0
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
-
1972
millions of riders
70.0
Amtrak Reform Council
Amtrak’s Financial Performance
Amtrak Financial Performance, FY1997 -- FY2001
$1,200
GAAP Loss
GAAP Loss GAAP Loss GAAP Loss $1,073 million
$930 million $916 million $943 million
$1,000
$183
($ millions)
GAAP Loss
$762 million
$142
$800
$82
$142
$166
$103
$178
$248
Capital contribution to
operating (progressive
overhauls)
$90
$37
$600
$66
Depreciation/non-cash
expenses
$488
$405
$337
$383
Operating loss for
purposes of selfsufficiency
$400
$200
$335
Est. Excess Mandatory
Railroad Retirement
$301
$310
$292
Operating contribution
to capital
$341
$(5)
$FY1997
FY1998
FY1999
FY2000
FY2001
Amtrak Reform Council
The Council’s plan is based on three
concepts for reform
• A new business model for Amtrak
• The option to introduce competition
• An adequate and secure source of funding
Amtrak Reform Council
The new business model separates Amtrak’s
functions into three components
• Government program administration and oversight
– Funding
– Corridor Development
– Oversight
• Train operations
– A separate company with a strong business board
to focus on market oriented services
• Infrastructure
– A separate federal government entity to own and manage
the NEC infrastructure
Amtrak Reform Council
Federal Program Management and Oversight
• The National Rail Passenger Corporation (NRPC)
would be restructured as a small government entity
– The NRPC would be modeled after USRA’s role
monitoring Conrail to manage the intercity rail program
– A board of directors representing states, the federal
government, the freight railroads, and rail labor
Amtrak Reform Council
Federal Program Management and Oversight
• The NRPC would:
– Secure and administer federal funding
– Approve business plans of the operating and
infrastructure entities and monitor their implementation
– Manage franchising of train services
– Lead high-speed rail corridor development
Amtrak Reform Council
Federal Program Management and Oversight
• The NRPC would:
– Hold the statutory franchise to access freight railroad rights-ofway
– Make insurance available to train operators
– Divest non-NEC assets
– Ensure the NEC infrastructure company is brought to a state of
good repair
– Preserve and improve a national reservations and ticketing
system
Amtrak Reform Council
Train Operations
• The new train operating company would be a
subsidiary of the NRPC
– All services would be provided under contract with
performance standards (similar to Amtrak’s commuter
operations today)
– All services would have separate, transparent accounting
– A board of business professionals with expertise in
transportation, operations and finance
Amtrak Reform Council
Optional Franchising of Train Operations
• The NRPC would evaluate the merits of franchising
specific services during an initial transition period
(2 to 5 years)
• Contracts would be let through a competitive bidding
process for both profitable and unprofitable services
• The need for adequate track capacity would be taken
into account in designing and awarding franchises
Amtrak Reform Council
Optional Franchising of Train Operations
• If franchising is implemented, the Council also
recommends that:
– All franchisees be subject to the Railway Labor Act,
Railroad Retirement and FELA
– Existing Amtrak employees be given a right of
preferential hiring with new train operators
– Employees follow their work in seniority order with
their collective bargaining agreements intact. Contracts
could be renegotiated pursuant to the Railway Labor
Act
Amtrak Reform Council
NEC Infrastructure
• A new subsidiary of the NRPC would own, maintain,
and upgrade the NEC
– The board of directors would be made up of
representatives of the NEC states, the federal
government, freight carriers on the NEC and the train
operator
Amtrak Reform Council
An adequate and secure source of funding
• Even with reform, the cost of the intercity passenger
rail program will be considerable
– Current annual operating subsidies are about $600
million
– About $100 billion of funding over 20 years to develop
all high-speed corridors including returning the NEC to
a state of good repair
Amtrak Reform Council
Conclusion
• The Council’s Action Plan will provide:
– An effective rail passenger program
– More economical and higher quality services
– The Congress with the confidence to fund the rail
passenger program that the country wants and
needs
Amtrak Reform Council