Amtrak CEO touts operational improvements

By Jerry Limone
During a House hearing on Amtrak’s financial losses on Thursday, Amtrak CEO Joseph Boardman touted improved performance, saying that Amtrak’s fare revenue covered 79% of its operating costs in fiscal year 2011, up from 76% the previous year.

Boardman also said Amtrak ridership has grown 44% since 2000, and that Amtrak has cut its debt by more than half over the last 10 years, from nearly $4 billion to $1.6 billion.

He called Amtrak’s performance a “high return on investment” for the nearly $39.3 billion in taxpayer money that Amtrak has received during the 41 years of its existence. Boardman said that amount “pales next to what virtually every one of our European and Asian competitors has spent on passenger rail.”

However, Cato Institute senior fellow Randal O’Toole in his testimony compared Amtrak’s subsidies to those of the U.S. airline industry.

“Starting from virtually zero in 1970, federal and state subsidies to Amtrak today are nearly 29 cents per passenger mile,” said O’Toole, who supports the privatization of Amtrak. “Airlines and highways receive subsidies, as well, but these amount to only about 1 to 3 cents per passenger mile.”

While receiving large subsidies, Amtrak hasn't been successful at holding down costs, he indicated.

“Over the last four decades, inflation-adjusted airline fares have fallen by 50%, while inflation adjusted rail fares have grown by 70%,” O’Toole said.

Amtrak inspector general Ted Alves said Amtrak is implementing cost-cutting initiatives that “have the potential to significantly reduce reliance on federal support.” These include a crackdown on overtime fraud.

“We recently reported that multiple employees defrauded Amtrak by being paid for regular and overtime hours not worked,” Alves said.

He also said there are initiatives to improve management controls over Amtrak’s food-and-beverage operation and to improve maintenance processes for the Acela trains.

Thursday’s hearing was the third in a series of Amtrak oversight hearings by the House Transportation and Infrastructure Committee.
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