Posted on 06/28/2002 5:28:24 PM PDT by RCW2001
Friday, June 28, 2002
©2002 Associated Press
URL: http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2002/06/28/national2011EDT0852.DTL
(06-28) 17:18 PDT WASHINGTON (AP) --
Amtrak and Bush administration officials closed a deal late Friday to help Amtrak get the $200 million it needs to keep passenger trains running through September.
The deal helps Amtrak avert the first systemwide shutdown in its 31- year history, which had been threatened to begin next week.
The Transportation Department will give Amtrak an immediate $100 million loan, then will join with Amtrak in asking Congress to provide the remainder.
"Our goal was to ensure uninterrupted service for the over 750,000 Americans who rely on Amtrak and our nation's commuter rail service every day, and we have accomplished that goal," Transportation Secretary Norman Y. Mineta said at a news conference announcing the deal.
The announcement culminated a week of shuttle diplomacy among Amtrak leaders, Bush administration officials and members of Congress.
The final negotiations hinged on what conditions the administration would place on its $100 million loan. Amtrak agreed to 12, many involving improved financial accountability.
"A lot of this is stuff that should be done," said Amtrak President David Gunn.
The conditions require Amtrak to spend all its money over the next 15 months on existing assets and services, not to plan for expansion of service.
Also, Amtrak must freeze all management salaries and suspend any annual bonuses for this year for employees with salaries over $75,000.
Officials had said one sticking point was a proposed provision that would prevent Amtrak from entering into any new agreement that restricts its ability to contract with private firms.
The administration wants Amtrak to move toward a system in which it uses outside companies to run its reservations, food service and equipment maintenance, and perhaps even some routes.
In the end, that requirement was left out.
Still to be resolved is the form of the congressional assistance. Amtrak would prefer an appropriation, since it would not have to pay that back, but it also could be a loan.
Amtrak is already carrying heavy debt, estimated at $3.85 billion in March.
"This has been an important week for passenger rail because the events of this week have forever dispelled the question of Amtrak's relevance in the nation's transportation future," said John Robert Smith, chairman of Amtrak's governing board.
Gunn had warned that Amtrak could begin shutting down its entire nationwide system as early as next weekend if it did not get government help to close a $200 million budget gap.
Mineta and members of Amtrak's governing board reached a tentative agreement Wednesday night and have been working since then to finalize it.
Mineta has made clear that, at some point, the administration will seek major changes in how Amtrak does business.
He has proposed ending federal operating subsidies to the intercity railroad, introducing competition and making states more responsible for paying for train service. His plan would also gradually remove Amtrak as owner of 366 miles of tracks in the Boston-Washington corridor.
Gunn, who became Amtrak's president May 15, has said he agrees the railway needs to make major improvements in its finances and operations, but he does not agree with many of the more drastic reforms the administration is seeking.
Like renewal of a labor union contract that would prohibit Amtrak from utilizing private, non-union firms?? Union control of the Amtrak work force must be loosened if Amtrak is to have any chance of reforming itself, and gaining support in Congress. The airlines are being required to cut personnel costs as a condition of federal loans. Why not Amtrak.
Poor guy. Obviously, he's struggling with enormously unfavorable poll ratings.
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