Intercity Passenger Rail: Amtrak Needs to Improve Its		 
Decisionmaking Process for Its Route and Service Proposals	 
(12-APR-02, GAO-02-398).					 
								 
Due to the continuing deterioration of its finances and its	 
attempt to eliminate its federal operating assistance by December
2002, Amtrak undertook several actions to improve its financial  
condition, including changes in its routes and services. In	 
December 1999, Amtrak's board of directors implemented the	 
Network Growth Strategy to shift its route and service plans for 
new routes and expanded services on the freight tracks over which
it operates. Amtrak has not been successful in implementing its  
Network Growth Strategy. Two years after announcing the new	 
strategy, Amtrak has only implemented three routes, one of which 
was later canceled. Amtrak still plans to implement the remaining
three routes, although later than planned. The overestimation of 
express revenue and an inability to reach agreement with freight 
railroads over various aspects of implementing the proposals	 
contributed to the cancellation of any proposed route or service 
action. Increased mail and express revenues were the cornerstone 
of the Network Growth Strategy. However, Amtrak overestimated the
mail and express revenue expected. According to Amtrak, this	 
overestimation occurred because (1) it had no empirical basis for
its revenue estimates and (2) express shippers were reluctant to 
enter into contracts for service that did not yet exist. Six of  
the planned route actions were canceled because Amtrack 	 
overestimated the revenues associated with them. Amtrak was not  
able to reach agreement with freight railroads since they were	 
concerned about (1) Amtrak's plans to operate additional trains  
in already congested areas, (2) Amtrak's plans to carry express  
merchandise that might compete with their own business, and (3)  
compensation that Amtrak would pay for use of their tracks.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-398 					        
    ACCNO:   A03054						        
  TITLE:     Intercity Passenger Rail: Amtrak Needs to Improve Its    
Decisionmaking Process for Its Route and Service Proposals	 
     DATE:   04/12/2002 
  SUBJECT:   Financial management				 
	     Railroad transportation operations 		 
	     Railroad industry					 
	     Strategic planning 				 
	     Cost control					 
	     Program evaluation 				 
	     Amtrak Network Growth Strategy