NEW YORK — According to a wire service, a final agreement has been reached between The National Railroad Passenger Corp. and the Bush Administration, which will enable Amtrak to continue to operate through the summer (the company had threatened to shut down operations as early as this week).
Ratings for Amtrak remain on CreditWatch with developing implications. Ratings were lowered to current levels on June 21, 2002.
The agreement calls for the Department of Transportation to initially provide a $100 million loan to the company (to be paid back by Nov. 15, 2002, out of Amtrak’s annual appropriation) to enable it to continue to operate. Potential additional funding, of up to $170 million, would be provided by Congress, in the form of a direct appropriation or a loan guarantee.
This would allow the company to operate through Sept. 30, 2002, at which time it is expected to receive its annual appropriation (it has requested $1.2 billion). In return, Amtrak must reduce its cost structure, make its management and bookkeeping practices clearer, and may not expand services for at least the next 15 months.
Over the longer term, the Bush administration will seek major changes in Amtrak’s operations. Therefore, Amtrak continues to face issues regarding its longer term funding as well as the structure and magnitude of its operations.