(Reuters circulated the following story by John Crawley on December 8.)
WASHINGTON, D.C. — Amtrak, the nation’s financially troubled passenger railroad, must pay back a $100 million loan it received from the government to avert a shutdown in 2002.
After deferring repayment for two years, lawmakers included language in the omnibus appropriations bill signed by President George W. Bush to make Amtrak clear the loan from its books over the next five years.
An Amtrak spokesman said the railroad was ready to repay the debt, Which was a key component of the financial rescue package spearheaded by the Transportation Department in the summer of 2002.
At the time, Amtrak had virtually run out of cash and had no leverage to borrow more from its banks because of its weak financial condition and heavy debt. Amtrak had threatened to start shutting down service unless it received help from the government.
The bailout triggered a process of tighter Transportation Department oversight of financial matters at Amtrak, which depends on annual federal subsidies to survive.
The crisis also accelerated Bush administration efforts to find ways to reduce federal support for Amtrak even if it means shrinking the railroad’s operations.
For instance, the administration and its allies in Congress would like state governments to take a bigger stake in passenger rail service. One option is for states to competitively bid some short-haul service historically operated by Amtrak.
The appropriations measure makes available $2.5 million from this year’s Amtrak subsidy that 13 states, including New York, Pennsylvania, Illinois and California, can use to supplement their budgets and select a private rail company over Amtrak to run some routes.
“It’s part of the statute and Amtrak will certainly abide by it. But we still feel we’re the preferred operator in most cases regardless of that set-aside,” said Amtrak spokesman Cliff Black.
Steve Kulm, a spokesman for the Federal Railroad Administration, said the agency would begin working immediately with Amtrak on a schedule to repay the $100 million loan. Kulm added that lawmakers were concerned that another annual deferral for Amtrak would have adversely affected other federal credit programs.
Amtrak reported a cash loss of $635 million last year, despite record ridership of more than 25 million. Its subsidy for this fiscal year is just over $1.2 billion.