Panel Concludes Amtrak Will Miss Deadline

Amtrak’s will fail to meet a December 2002 deadline for financial self-sufficiency, its oversight panel has concluded, a decision that requires the U.S. passenger railroad to draft a liquidation plan within 90 days.

Trains will keep running while the railroad, the oversight panel and Congress decide the future of passenger service. The 11-member Amtrak Reform Council reached its conclusion on a 6-5 vote. The railroad could choose not to act on the council’s finding or to mount a legal challenge.

“The structure [of Amtrak] can’t go on as it is,” said John Norquist, the mayor of Milwaukee and council member who cast the deciding vote. “I don’t see the harm in stating that fact.”

Congress in 1997 required Amtrak, which has never made a profit in its 30-year history, to cover all operating costs by the end of 2002 or face liquidation. Congress is considering legislation that would lift the deadline and give Amtrak $3.2billion to boost security, fix tunnels and repair equipment.

“The decision of the Amtrak Reform Council is the wrong decision at the wrong time,” Amtrak said in a prepared statement. “The practical effect of ARC’s decision is to limit Congress’ role in making critical policy choices.”

Amtrak maintains that it will operate as normal, Transportation Secretary Norman Mineta said.

Congress created the council in 1997 during a debate about the future of the railroad, which carried more than 23 million passengers in the fiscal year ended Sept. 30. With Friday’s vote, the council will have to present a plan for Amtrak’s future within 90 days.

Chicago attorney James Coston voted against the finding, saying the decision would be best left until January. That would give the group time to review a Department of Transportation inspector general report that Coston said is due later this month. In addition, he said, Amtrak has failed to provide sufficient financial data.

Deputy Assistant Inspector General Mark Dayton testified at a Senate Commerce Committee hearing that “restructuring and liquidation ought to be considered, but as part of the broader debate on the future of intercity passenger rail.”