2001 news archives

Photo gallery

Subscription info

Rail gift shop

Rail Travel News is a twice-monthly print publication, published since Dec 10, 1970.
Publisher: Message Media Company,
PO Box 9007,
Berkeley CA 94709.
Website copyright © 1997-2005 by Message Media Co.

Contact us
Site map

Dear Mr. Gunn:

In view of Amtrak's declining cash position as we approach the last quarter of FY 2005, I am writing to strongly recommend that you immediately begin to implement cost-cutting measures with the purpose of reducing expenses and conserving cash in a manner that does not jeopardize safety.

I noted with concern your May 12 testimony before the Senate Appropriations Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies
regarding FY 2006 Appropriations. When responding to a question about whether Amtrak will end FY 2005 with a positive cash balance, you
said, " we'll have like $20 million left in the bank, something in that neighborhood." I am concerned that your projection assumes the release of $60 million set aside by law to pay for directed service
in the event Amtrak ceases operations. My review of your cash projections indicates you are counting on that money even though the law clearly requires the Department to hold those funds in reserve
until we are certain they will not be needed to maintain commuter operations at year's end. Given your recent Senate testimony, it is irresponsible to project a positive cash balance based on an
assumption about reserve funds, when without those dollars, Amtrak's cash position before September 30th could be as much as $40 million
in the red.

You cannot continue to spend at current levels when, according to your own estimates, the recent interruption of Acela Express Service due to cracks in the brake systems, is itself costing the company
roughly $1.25 million per week. Management of Amtrak's FY 2005 budget must be based on existing revenue streams and not on hopes for yet
another taxpayer bailout. It is imperative that you take meaningful steps to reduce costs as soon as possible. As the President of the corporation, you have a responsibility to identify and implement all
available operating expense reduction options necessary to ensure that Amtrak's cash position does not deteriorate to the dangerously low level you predicted before the Senate Subcommittee.

I have directed my designee to the Amtrak Board, Jeffrey A. Rosen, to raise this issue at tomorrow's Board meeting and I look forward to hearing from you about your specific plans to reduce operating
expenses in order to protect Amtrak's cash position and viability through the end of this fiscal year.

Amtrak's budget always assumed receipt of the full $1.2 billion (which included the $60 million) in appropriations. While Secretary Mineta's letter yesterday suggests an intention to withhold the $60 million, today his proxy to the Board indicated that Amtrak should, in fact, receive the $60 million by the end of the fiscal year so long as it could otherwise end the year with cash. Amtrak President David Gunn told the Board today that if Amtrak receives the $60 million, it should end the year with a positive cash balance.
-source: Amtrak, Gene Poon

Cover of forthcoming issue

Subscribe today!
For new subscribers
Renewing subscribers
To subscribe by US Mail
Request sample copy

ACELA BRAKE CRACKS WERE FOUND AS LONG AS 3 YEARS AGO

   Testimony before a House committee on May 11 revealed that the hairline cracks in Acela disk brake spokes that have sidelined the high- speed trains for several months were found in inspections in Philadelphia as long as 36 months ago.

   However, the report of the finding apparently was not passed on to higher Amtrak officials. 

  In addition, testimoney revealed that inspections should have been made every 12,500 miles, but were being performed much more infrequently. The inspection recommendation was not passed along to Amtrak mechanics because of a glitch in translating shop manuals from one European subcontractor to another.

  FRA Acting Administrator Robert D. Jamison also told the Congressmen that it was simply by chance that one of his inspectors noticed a hairline crack, which led him to look for more. He said that we were lucky that the cracks were found because a serious accident could have resulted if a brake rotor assembly failed. It could have caused a train axle to crack, derailing the train.