WASHINGTON, D.C. — The Bush administration estimated Thursday it would cost at least $2.5 billion annually to fund train service between U.S. cities, but did not embrace calls to break up or privatize Amtrak, a wire service reported.
Deputy Transportation Secretary Michael Jackson did say that big change was necessary for long term success and that he wants states, and perhaps industry, to share the expense.
He also said in testimony to Congress that the administration was open to spending more than the $521 million budgeted for Amtrak next year, acknowledging the rail service’s desperate need for money.
“We need to support with federal funds inter-city passenger rail,” Jackson told a Senate appropriations panel. “What kind of passenger rail system can we sustain? No system? That’s not viable.”
Amtrak, a private corporation set up by the government that receives direct federal subsidies, is struggling with debt, money-losing routes and huge capital needs.
Jackson estimated that it would cost between $2.5 billion and $3 billion per year to run passenger rail. He said state government and passenger revenue should play important roles in maintaining service. “We also need to look at private sector investment,” he said.
Jackson said there were talks within the administration about the future of rail and what direction the Transportation Department would take in a proposal it hoped to present to Congress in the near future.
Amtrak President George Warrington, who announced on Thursday that he would resign this spring to take a job with New Jersey’s rail and bus service, New Jersey Transit, pressed Congress for quick action on his request for $1.2 billion in federal funds to stabilize Amtrak in the near term.
For the first time, Warrington said the administration’s proposed $521 million in subsidies for 2003 would not be enough to keep the service viable.
He also said proposals to restructure Amtrak have hurt the railroad with lenders who are uncomfortable with uncertainty surrounding the railroad’s future. Warrington said Amtrak recently lost $52 million in financing because of a formal recommendation to Congress that it be broken up.
“Right now our banks are supportive, but there are no guarantees,” Warrington said.
Amtrak pays roughly $300 million to meet mortgage and debt obligations annually.
Warrington said wholesale austerity measures and deferred capital expenses have not compromised safety at the railroad.