An Action Plan for the Restructuring and Rationalization of the National Intercity Rail Passenger Sy...
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An Action Plan for the Restructuring and Rationalization of the National Intercity Rail Passenger System Briefing by the Amtrak Reform Council February 14, 2002. Amtrak’s ridership is growing very slowly. Amtrak has a very small share of the intercity travel market . 2000 Ridership. Airlines.

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Amtrak’s ridership is growing very slowly. Amtrak has a very small share of the intercity travel market

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2000 ridership

An Action Plan for the Restructuring and Rationalization of the National Intercity Rail Passenger SystemBriefing by the Amtrak Reform CouncilFebruary 14, 2002


2000 ridership

Amtrak’s ridership is growing very slowly. Amtrak has a very small share of the intercity travel market

2000 Ridership

Airlines

610,000,000

Intercity Bus Carriers

42,000,000

Amtrak

22,500,000


Amtrak s financial performance

$1,200

$1,000

$183

$66

GAAP Loss

GAAP Loss

GAAP Loss

GAAP Loss

GAAP Loss

$142

$178

$166

$762 million

$930 million

$916 million

$1,073 million

$943 million

$800

$82

$90

$103

$142

$37

$600

$488

$405

$383

$337

$248

$400

$200

$341

$335

$310

$301

$292

$(5)

$-

Amtrak’s Financial Performance

Amtrak Financial Performance, FY1997 -- FY2001

Est. Excess Mandatory

Railroad Retirement

Capital contribution to

operating (progressive

overhauls)

($ millions)

Depreciation/non-cash

expenses

Operating loss for

purposes of self-

sufficiency

Operating contribution

to capital

FY1997

FY1998

FY1999

FY2000

FY2001


The council s plan is based on three concepts for reform

The Council’s plan is based on three concepts for reform

  • A new business model for Amtrak

  • The option to introduce competition

  • An adequate and secure source of funding


The new business model separates amtrak s functions into three components

The new business model separates Amtrak’s functions into three components

  • Government program administration and oversight

    • Funding

    • Corridor Development

    • Oversight

  • Train operations

    • A separate company with a strong business board to focus on market oriented services

  • Infrastructure

    • A separate federal government entity to own and manage the NEC infrastructure


Federal program management and oversight

Federal Program Management and Oversight

  • The National Rail Passenger Corporation (NRPC) would be restructured as a small government entity

    • The NRPC would be modeled after USRA’s role monitoring Conrail to manage the intercity rail program

    • A board of directors representing states, the federal government, the freight railroads, and rail labor


Federal program management and oversight1

Federal Program Management and Oversight

  • The NRPC would:

    • Secure and administer federal funding

    • Approve business plans of the operating and infrastructure entities and monitor their implementation

    • Manage franchising of train services

    • Lead high-speed rail corridor development


Federal program management and oversight2

Federal Program Management and Oversight

  • The NRPC would:

    • Hold the statutory franchise to access freight railroad rights-of-way

    • Make insurance available to train operators

    • Divest non-NEC assets

    • Ensure the NEC infrastructure company is brought to a state of good repair

    • Preserve and improve a national reservations and ticketing system


2000 ridership

Train Operations

  • The new train operating company would be a subsidiary of the NRPC

    • All services would be provided under contract with performance standards (similar to Amtrak’s commuter operations today)

    • All services would have separate, transparent accounting

    • A board of business professionals with expertise in transportation, operations and finance


Optional franchising of train operations

Optional Franchising of Train Operations

  • The NRPC would evaluate the merits of franchising specific services during an initial transition period (2 to 5 years)

  • Contracts would be let through a competitive bidding process for both profitable and unprofitable services

  • The need for adequate track capacity would be taken into account in designing and awarding franchises


Optional franchising of train operations1

Optional Franchising of Train Operations

  • If franchising is implemented, the Council also recommends that:

    • All franchisees be subject to the Railway Labor Act, Railroad Retirement and FELA

    • Existing Amtrak employees be given a right of preferential hiring with new train operators

    • Employees follow their work in seniority order with their collective bargaining agreements intact. Contracts could be renegotiated pursuant to the Railway Labor Act


Nec infrastructure

NEC Infrastructure

  • A new subsidiary of the NRPC would own, maintain, and upgrade the NEC

    • The board of directors would be made up of representatives of the NEC states, the federal government, freight carriers on the NEC and the train operator


An adequate and secure source of funding

An adequate and secure source of funding

  • Even with reform, the cost of the intercity passenger rail program will be considerable

    • Current annual operating subsidies are about $600 million

    • About $100 billion of funding over 20 years to develop all high-speed corridors including returning the NEC to a state of good repair


Conclusion

Conclusion

  • The Council’s Action Plan will provide:

    • An effective rail passenger program

    • More economical and higher quality services

    • The Congress with the confidence to fund the rail passenger program that the country wants and needs


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