Amtrak Unveils Expansion Plans

Posted on March 2, 2000

Amtrak has unveiled a dramatic new plan to expand its passenger service and increase its fledgling freight business. The plan calls for expanded routes and more frequent service on selected corridors, a foray into the refrigerated produce shipping business and expanded mail and express freight service. The plan has been met initially with mostly favorable reviews. At a hearing before the Senate Commerce Committee’s Subcommittee on Surface Transportation chaired by Sen. Kay Bailey Hutchison (R-Tex.), most wanted to see even more passenger service than the new business plan envisions. Sen. Ron Wyden (D-Ore.) was especially critical of the railroad for not restoring service that was discontinued several years ago in rural eastern Oregon and northern Idaho. In the hearing, Amtrak Chair Gov. Tommy Thompson (R-WI) acknowledged that the decision "was probably a mistake," and promised to look into the service restoration further. "The new board believes that the way to improve Amtrak’s financial health is to expand service," he said. "That is a very different philosophy from what Amtrak’s leadership did before." The hearing also focused on Amtrak’s financial status, and how well it was meeting its Congressionally mandated target of operating self-sufficiency by 2002. Amtrak President George Warrington indicated that the railroad was ahead of the business plan’s goals. Some, however, including a recent General Accounting Office report, have challenged that assumption on the grounds that Amtrak does not use widely accepted accounting principles in business, counting, for example, subsidies as income. APTA President Bill Millar defended the Amtrak approach, explaining that depreciation and heavy vehicle overhauls are funded are similarly accounted for in urban public transportation. One Amtrak advocate turned critic doesn’t buy the explanation, however. Joseph Vranich, a member of the Amtrak Reform Council established by Congress, a best-selling author and former Amtrak spokesman, said that the expansion plans were politically driven and lacking sound business rationales. He also charged Amtrak with "hiding something" because the reform council still has not seen copies of Amtrak’s revised business plan, even though it was finished last fall. Both Thompson and Warrington denied any wrong-doing and said in the Senate hearing that each part of the new service expansion strategy was based on practical market analysis. Amtrak added that increased investment has demonstrated at increased ridership. Warrington, in fact, said there has been "almost a direct correlation." An example is in the Pacific northwest, where the Talgo tilt trains have greatly boosted patronage. Moreover, the new trainsets, the first in Amtrak's fleet with European styling, were recently voted the highest in passenger satisfaction according to a customer survey, Amtrak announced.

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