Gunn wants Amtrak on a 'pay as you go' budget; wants $1.8 billion for fiscal 2004

by Wes Vernon
Washington Correspondent
National Corridors Initiative

Amtrak President David Gunn said last week he would seek a 73 percent increase in Amtrak’s budget for fiscal year 2004, about twice what the Bush administration has proposed.

Having just been granted $1.05 billion for the current fiscal year, the passenger rail CEO announced a request of $1.812 billion in operating and capital investment for fiscal 2004. That compares with the Bush budget of $900 million.

At a press briefing at Amtrak’s Washington headquarters, Gunn said the money is needed not for any grandiose expansion – There are no plans for that – but “in order to continue... efforts to bring stability to the passenger rail service, provide its customers with safe, secure and reliable service and reverse the deterioration of its physical plant and equipment.”

The breakdown is $1.044 billion in capital needs and $768 million to support operations.

If that appears to be a mammoth leap in spending, Gunn points out that, unlike past fiscal years, there is no borrowing planned for the coming cycle. Thus, he is, in effect, putting the railroad on a “pay as you go” basis.

When you include borrowing, he notes, in the seven years from 1997 to 2003, combined federal capital and operating support for Amtrak averaged $1.1 billion – and that was when the railroad had no money to repair damaged cars, and in some cases, had to scrounge the equipment pool just to make up consists.

In what some would define as a classic understatement, an Amtrak press release noted that “this [past] level of funding was insufficient to support Amtrak’s true capital and operating needs. Consequently, the company’s previous management increased Amtrak’s debt by more than $2.5 billion and slowed or halted important capital projects and deferred maintenance during this period to keep trains running and avoid insolvency.”

Not that there was anything “malicious” in this, Gunn explained. It’s just that previous management did that to try to keep on the elusive “glidepath to self-sufficiency.”

Not only is the phase-out of the money-losing express service continuing full tilt, but the Gunn regime at Amtrak is “taking a look” at mail service on the trains, as well. That part of it that makes money (or at least doesn’t lose money) will remain. Mail service on other routes may very well go the way of the express service.

“We’re going to go back to being a passenger railroad again,” he said, since that is Amtrak’s mission, after all.

“Amtrak’s past practice of borrowing money and deferring capital investment to make payroll cannot be sustained,” declared Gunn, “We must address the deteriorated assets and, over the next several years, return our equipment and infrastructure to a state of good repair if operation is to continue.”

The aim is to keep the trains – both on the Northeast Corridor which Amtrak owns, and on other parts of the system where Amtrak is hosted by the freight railroads – “are returned to a good condition.”

Gunn is proposing to repair 20 more damaged coaches and 10 locomotives for fiscal 2004, rebuilding five major interlockings, installing 120,000 new ties, and investments in several major maintenance facilities.

Trackwork will include reconstructing five major interlockings between New York and Washington. Amtrak and Metro-North will join forces for an at-grade project at Shell Interlocking, in New Rochelle, N.Y., where westward Amtrak trains leave M-N iron and return to Amtrak territory.

Another capital project that merits attention, he believes, is initial reconstruction of three important bridges on the NEC, all of them in Connecticut.

[D:F Vol. 1 No. 9; June 2, 2000] –Ed.]

In answser to my questions Thursday, however, Gunn said that, as important as the reconstruction of the bridges is, their shortcomings cannot be blamed for failure of the Acela Express to reach the goal of 3 hours Boston-NY. (It is closer to three-and-a-half hours, still a significant improvement). In the past, the Amtrak CEO has spoken of incremental speedups on the NEC. Its ownership of the tracks there gives Amtrak more control than in most other parts of the country where the Class I freights prevail and call the shots.

One deck in need of replacement is over the Miamicock River, opened in 1906. It is a 76-foot fixed span at MP 114.3 in East Lyme, Conn.

Two William Scherzer-designed rolling lift bridges are in need of major overhaul, including Nan, at milepost 116.7. Completed in 1908, this deck spans the Niantic River between Niantic and Waterford. The other is the Thames River Bridge, MP 124.2, between New London and Groton, completed in 1912. All three are double-track bridges.

Amtrak management envisions operating locomotive-less trains on the New Haven, Conn. to Springfield, Mass. branch of the NEC and the short-distance Chicago-Milwaukee service. That would enable Gunn to “get rid” of some 4,100hp locomotives, which are expensive to run. These diesel multiple unit trains would resemble old self-propelled Budd equipment, which merely required a cab for the engineer on the head-end car. No contracts have been signed, but one company that Amtrak is looking at as a possibility for this order is Colorado Railcar Mfg. Co. of Fort Lupton, Colo.

The switch engine fleet would be downsized, but would be made more reliable. Some of them, Gunn said, are 50 to 55 years old. In some cases, “It’s a wonder they’re running at all.”

There may be some long drawn-out labor negotiations as union contracts expire – or maybe not. Gunn said he’s looking for work rules changes, but that they will involve “nothing draconian.” He would not elaborate, saving that for the negotiations. Whether the changes he has in mind are something the unions can live with will be discussed as he sits down with the labor leaders or representatives at the bargaining table.

Since last summer, the workforce has been reduced by more than 600 employees. Amtrak has also closed a reservations center, much to the chagrin of some rail supporters in the Chicago area where that center was located.

Security is an issue that Gunn believes will be handled by the new Transportation Security Administration. Security on the railroad, he said, presents problems that are different from those of the airlines where they are more internal. The railroad has an infrastructure spread out for thousands of miles on the ground, as opposed to the air carriers where “three hundred people are enclosed thousands of feet up in the air.”

He said Amtrak’s performance in the recent snowstorm when it was virtually the only conveyance that was moving, demonstrated its potential value in a security emergency. The bad weather did not deter Amtrak from operating most of its trains on the NEC where it owns its own tracks. Spokesman Dan Stessel told D:F Wednesday that during the storm that buried the Northeast for several days, 75 percent of the NEC trains continued to operate, mostly on time.

Elsewhere, the story was different. CSX closed the tracks heading south out of Washington. Not only were all passenger trains south of D.C. canceled, but one in particular, the Washington-New Orleans Crescent, had to be scrubbed in both directions just because of the CSX-owned seven-mile stretch from Washington to Alexandria, Va. Most of the Crescent’s run is on Norfolk Southern which imposed no such all-encompassing restrictions. Just that one seven-mile stretch served as a bottleneck that wiped out the train.

CSX said it had its hands full rescuing its own stopped freights, and did not have the manpower or equipment to rescue stranded passenger trains. On February 18, the freight railroad issued a press release saying it was attempting to get D.C-Virginia commuter rail service back to normal as soon as possible. The commuter rail service Virginia Railway Express was quite put out about the stoppage, but Amtrak’s Stessel declined to pass judgment on an emergency decision made by CSX.

As Destination: Freedom noted last week, the just-passed fiscal 2003 appropriation provided that Amtrak, for the first time, will have to go to the Secretary of Transportation for specific pots of money, including the operation of individual long distance trains.

President Bush signed the omnibus appropriations bill on Thursday.

Some observers have raised questions as to whether this kind of short-leash micromanagement makes it difficult for Amtrak to make business decisions.

At Thursday’s briefing, Gunn said he had already had conversations “with those people” and would not criticize a process that had not even been implemented yet.

He dismissed a scenario where, as Destination: Freedom phrased it in a question, the USDOT Secretary would be deciding how many dining car attendants are required on a specific run.

Speaking of which: Those who have blamed the long-distance trains for Amtrak’s problems are pursuing “a red herring,” Gunn believes. The White House OMB and others have pinpointed figures running into hundreds of dollars per passenger supposedly being lost every time certain trains operate. Gunn said the math on that is questionable because it includes allocated overheads that would still prevail if the train were to disappear. It isn’t clear how much of those figures include “avoidable costs,” he told the Thursday briefing.

The Gunn budget appears to be a “put up or shut up” document. Congress has reaffirmed time and time again that it wants Amtrak to survive. Amtrak’s seventh CEO, in the executive suite at Washington’s Union Station for eight months, has stated that the days of “Let’s pretend” budgets and fantasy “glidepaths” are over. He has said that if Congress and the people want a national passenger train system, they are entitled to a straight cards-on-the-table outline of what it costs to run it in an efficient, no-frills way. As it is, he said, Amtrak has been “close to insolvency.”

With those cards on the table, Gunn is looking to Capitol Hill and saying, in effect, “This is what it costs. Let the debate begin.”  

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Amtrak CEO David Gunn wants to spend some money “reconstructing” Nan and Thames movable bridges, and a fixed span over the Miamicock River, all in Connecticut. Nan spans the Connecticut River, and Thames over the Thames River. More than two years ago, when F-40PHs were still in charge of moving fast passenger trains, No. 173, with engine 300 in charge, blasted over the deck at 55 mph.

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Used by Permission
Copyright 2003, NCI, Inc.
Reprint from Destination Freedom, Vol. 4, No. 8.