(The Associated Press circulated the following article on May 26.)
WASHINGTON — Transportation Secretary Norman Mineta is urging Amtrak to immediately put in place cost-cutting measures, saying the railroad could be as much as $40 million in debt before Sept. 30.
In a letter sent late Wednesday to Amtrak President David Gunn, Mineta said Amtrak should cut costs by “reducing expenses and conserving cash in a manner that does not jeopardize safety.” Mineta did not state how much money Amtrak should be trying to cut.
Mineta asked his designee to Amtrak’s board of directors to raise his concerns at Thursday’s board meeting.
Amtrak spokesman Cliff Black said the routinely scheduled meeting was being held to discuss the railroad’s budget and other issues. Black declined to comment on Mineta’s letter.
Mineta said he was concerned with Gunn’s May 12 testimony before a Senate subcommittee when he said the railroad would end fiscal year 2005 with a $20 million positive cash flow. Mineta said Gunn was assuming Amtrak would be getting $60 million set aside by law to “pay for directed service in the event Amtrak ceases operations.”
“It is irresponsible to project a positive cash balance based on an assumption about reserve funds, when without those dollars, Amtrak’s cash position before Sept. 30 could be as much as $40 million in the red,” Mineta wrote.
He also wrote that Amtrak cannot continue to spend at current levels because the brake problems with the Acela Express trains is costing the railroad about $1.25 million per week in revenues. Acela’s entire 20-train fleet was taken out of service in April after cracks were found in some of the trains disc brake rotors. The cause of the problem is still not known.
Amtrak is asking for $1.82 billion for 2006 in federal funding. President Bush has proposed cutting off all federal funds. The railroad is getting $1.2 billion this year.