(Reuters circulated the following article by John Crawley on September 20.)
WASHINGTON — The financial impact of losing some or all of its premium Acela service for nearly six months staggered Amtrak but did not create the acute cash crisis that some rail and government officials had feared, Amtrak said on Tuesday.
Although the books do not close until Sept. 30 and another substantial annual loss is expected systemwide, Amtrak managed to hold on to enough operating funds after abruptly idling its 20 high-speed Acela trains in April to avert a possible shutdown or an embarrassing request to Congress for more money.
“That was a concern. At the height of the Acela (outage) we were behind about $1 million a week as we indicated we would be,” Amtrak spokesman Cliff Black said.
“That began to abate later in the summer when we began to get a significant number of Acelas back on line. We’re very close to full Acela operations and expect to get there within a week or two,” Black said.
He said Amtrak would end the year with about $120 million cash on hand. Much of the balance is due to deferred capital projects, mainly track work, and other savings, Black said.
Acelas were taken out of service last spring because of brake rotor cracks, disrupting daily express and business class service between Washington, New York and Boston.
New brake parts were designed and installed and an updated inspection and safety plan was put in place.
The extra money will likely be counted against next year’s federal operating subsidy, which Amtrak needs to survive. Congress is considering between $1.4 billion and $1.2 billion in Amtrak aid.
The House of Representatives railroad subcommittee will review options at a hearing on Wednesday for future passenger rail business models, including a proposal by the Bush administration that would dismantle the current Amtrak system and get states and private industry more involved in passenger rail service.
The Bush administration has proposed no money for Amtrak until it cut costs further and dramatically restructures its business plan.
A Senate funding proposal would cut operating subsidies by 40 percent over six years and freight railroads could get the chance to run passenger service on some routes.
Last week, Amtrak rolled back a proposed fare increase of $4 in the Northeast and $3 elsewhere that was scheduled to go into effect on Tuesday. The railroad changed its plans due to congressional pressure.
Amtrak also said hurricane Katrina had little impact on its overall bottom line even though the storm and its aftermath disrupted several daily trains. An Amtrak locomotive left behind when other equipment was evacuated before the storm is providing electricity to the temporary jail at the New Orleans bus and train stations.