Amtrak: Financial Condition Has Deteriorated and Future Costs Make Recovery Difficult (Testimony, 03/17/94, GAO/T-RCED-94-155). Amtrak, which has always relied heavily on federal subsidies, has been under increasing pressure to reduce its dependence on federal money. Several indicators suggest that Amtrak's financial condition has deteriorated in recent years. Amtrak has dealt with its passenger revenues shortfall by increasing other revenues, such as those from its commuter rail business and shipments of U.S. mail, and by reducing expenses, including staff cuts and deterring maintenance on some routes. Over the next few years, Amtrak will face difficult and costly challenges that Amtrak must meet if it is to run a viable intercity network. These range from modernizing its locomotive and passenger rail fleet to negotiating new operating agreements with the freight railroads, which own about 97 percent of the track over which Amtrak operates. The President's proposed fiscal year 1995 budget for Amtrak of $987.6 million--a nine-percent increase over 1994--should help Amtrak address its growing operating deficit but will not resolve its short and long-term cost challenges. Only a handful of Amtrak's routes may ever generate enough revenue to cover all operating costs. Even in Europe, where economic conditions are more conducive to rail travel, intercity passenger service has required substantial public support. Amtrak and the federal and state governments must decide whether Amtrak is to continue its present course, expand into new areas such as high-speed rail service, or pare back its network to a few relatively well-traveled corridors where losses can be minimized. --------------------------- Indexing Terms ----------------------------- REPORTNUM: T-RCED-94-155 TITLE: Amtrak: Financial Condition Has Deteriorated and Future Costs Make Recovery Difficult DATE: 03/17/94 SUBJECT: Costs Railroad research Budget administration Federal aid for transportation Financial management Railroad transportation operations Equipment maintenance Postal service contracts Obsolete facilities IDENTIFIER: Amtrak Northeast Corridor Beech Grove (IN) Amtrak Northeast Corridor Improvement Project Railroad Retirement Trust Fund District of Columbia New York (NY) Boston (MA) High-Speed Rail Development Act of 1993 Bear (DE) Amtrak Route Profitability System Amtrak Train Information System ------------------------------------------------------------------------ We regret that electronic text of GAO Testimony is not available at this time. See the GAO FAQ - Section 2.0 for printed copy ordering information. The FAQ is automatically retrieved with all WAIS search results or can be obtained by sending e-mail to: [email protected]