Bloomberg News

Amtrak Reduces U.S. Subsidy Request After Loss Narrows

March 28, 2013

Amtrak Reduces U.S. Operating Aid Request After Smaller Loss

After automatic budget cuts, Amtrak is getting $1.3 billion in taxpayer money for fiscal 2013, with $905 million of that going to capital costs and debt service. That’s less than the $1.4 billion the railroad received the previous year. Photographer: Andrew Harrer/Bloomberg

(Corrects year-earlier loss in 11th paragraph in article published March 27.)

Amtrak, the U.S. intercity passenger railroad supported by taxpayers, today will ask Congress for 16 percent less in operating assistance for next year after recording its smallest annual loss in 38 years.

Amtrak will seek $373 million in operating support, compared with the $443 million it’s getting this year. It didn’t specify how much it will seek for capital improvements. The Washington-based railroad will submit to Congress today its budget request for its 2014 fiscal year, said Steve Kulm, a spokesman.

While Amtrak gets U.S. aid every year, its request comes as its authority from Congress to operate is due to expire in September. Amtrak is looking for more money in legislation to expand service and increase speeds between Washington and Boston, where it’s doubled its share of the rail-air market in the past decade, while its subsidies have been criticized by some congressional Republicans.

“Only in America could we pour more taxpayer dollars into a Soviet-style passenger rail system,” Representative John Mica, a Florida Republican who previously headed the House transportation committee, said today in an e-mailed statement.

The railroad, created in 1971 to take over money-losing passenger operations from freight carriers, has never made an annual profit.

Replacing Acela

Amtrak has said it wants to expand its Acela fleet serving the U.S. Northeast and replace the 20 existing Acelas, which were built by Bombardier Inc. (BBD/B) of Montreal and Alstom SA, based in Levallois-Perret, France. It also plans to upgrade its wireless Internet service, or Wi-Fi, to faster 4G technology on its trains.

The railroad said in January it will work with California, the only U.S. state planning to being construction on a high- speed rail project this year, to buy Acela equipment. In January, it began asking companies for information on building as many as 60 trains to add units on the Northeast Corridor, replace Acelas and buy equipment for California. It hasn’t said from whom it will buy those trains.

After automatic budget cuts, Amtrak is getting $1.3 billion in taxpayer money for fiscal 2013, with $905 million of that going to capital costs and debt service, Kulm said. That’s less than the $1.4 billion the railroad received the previous year.

“The highest imperative of passenger rail legislation should be to provide dedicated, multiyear operating and capital funding to support existing intercity passenger rail services and assets, and the development of new ones,” Amtrak Chief Executive Officer Joseph Boardman said in a statement.

Market Share

Amtrak says its share of the rail-air market between Washington and New York has risen to 76 percent from 69 percent in 2010 and 37 percent before the Acela began service. The comparison doesn’t include buses, the fastest growing mode of U.S. transportation. Ridership throughout the Amtrak system rose 3.5 percent in the year that ended Sept. 30 to a record 31.2 million passengers.

The Washington-based railroad said Jan. 10 that its cash operating loss for the year ended Sept. 30 fell to $361 million, the lowest since 1975, from $446 million in the previous 12 months.

The Brookings Institution, in a report issued this month, found 83 percent of passengers ride Amtrak routes of less than 400 miles. The Washington-based public policy group suggested Amtrak share costs for money-losing long-distance routes of more than 750 miles with states.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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