Amtrak: Deteriorated Financial Condition and Costly Future Challenges
(Testimony, 03/23/94, GAO/T-RCED-94-145).

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-94-145
     TITLE:  Amtrak: Deteriorated Financial Condition and Costly Future 
             Challenges
      DATE:  03/23/94
   SUBJECT:  Railroad transportation operations
             Budget administration
             Costs
             Federal aid for transportation
             Financial management
             Equipment maintenance
             Postal service contracts
             Railroad research
             Obsolete facilities
IDENTIFIER:  Amtrak Northeast Corridor
             Amtrak Northeast Corridor Improvement Project
             Railroad Retirement Trust Fund
             DOT Essential Air Service Subsidy Program
             Amtrak Metroliner Project
             District of Columbia
             New York (NY)
             Boston (MA)
             High-Speed Rail Development Act of 1993
             
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