Amtrak, Foes Differ on Future
Amtrak reported that it beat its business plan target by more than $2 million in the first quarter of fiscal year 2000, with total revenue up 8% to $476 million.
Amtrak reported that it beat its business plan target by more than $2 million in the first quarter of fiscal year 2000, with total revenue up 8% to $476 million. Amtrak has surpassed its business plan targets for two consecutive years. The business plan is its blueprint to meet Congress' mandate that the railroad become operationally self-sufficient by 2003. However, critics charge that these results aren’t good enough, and that they present a misleading snapshot of the railroad’s long-term financial health. They point to two independent reports released at the same time as Amtrak’s document. "We are keeping our commitment to Congress and the American people to run Amtrak like a business and we continue to achieve solid financial improvement," said Wisconsin Gov. Tommy Thompson, Amtrak's chairman of the board. Major train service showing significant improvement includes the Capitols (Oakland to Sacramento, Calif.), up 33% and Metroliner (New York to Washington, D.C.), up 7%. Amtrak also announced that its Acela Regional service between Boston and New York has been scheduled for Jan. 31. Acela Regional service will reduce travel times between Boston and New York from about five hours to just under four hours. "The launch of Acela Regional is another milestone in the high-speed program in the Northeast that will boost our ridership and revenue and positively impact the bottom line," added George Warrington, Amtrak's president and chief executive officer. To supplement its core passenger-related revenue, Amtrak is aggressively pursuing commercial opportunities that will help achieve operational self-sufficiency, such as in express package carriage, telecommunications and real estate development. All major business units beat business plan targets, causing Moody's Investor Services to raise the corporation's credit rating to A3. The rating firm said it did so based partly on "Moody's expectation that operational self-sufficiency will be achieved..." However, the General Accounting Office, the investigative arm of Congress, recently concluded that Amtrak’s report painted too rosy a picture. The GAO applied a standard corporate measurement, overall revenue minus overall expenses, including capital costs, to come up with a $907 million operating loss in 1999. The report of the Amtrak Reform Council, the watchdog group established by Congress in 1997 to advise lawmakers on what to do with the railroad, sided with the GAO. It said that private-sector standards are a better indicator of its self-sufficiency. Amtrak officials counter that standard accounting rules do not apply in this case because Congress does not require the railroad to cover the cost of equipment depreciation. Excluding depreciation, Amtrak concluded it was $484 million short of self-sufficiency in 1999.
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