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Amtrak promises better business model, high-speed rail

By Kelly Catalfamo

Publication: The Day

Published November 29. 2012 4:00AM

Washington - Amtrak executives testified before a congressional committee Wednesday, detailing steps the government-subsidized corporation has taken to improve its business model.

But although the hearing before the House Transportation and Infrastructure Committee focused on Amtrak's structural reorganization and financial accountability, the issue of high-speed rail came up repeatedly.

Delegate Eleanor Holmes Norton, D-Washington, D.C., asked Amtrak President Joseph Boardman whether the corporation's strategic plan included provisions for such a "very 21st century" project.

Boardman responded that Amtrak's Boston-to-Washington routes - which include stops in New London - would benefit greatly from high-speed service. "This high-speed rail will be coming … because that is the most efficient way to move people in such a dense corridor as the Northeast," he said.

The committee will meet with Amtrak representatives again on Dec. 6 and 13 to discuss high-speed rail, both in general and specifically within the Northeast Corridor.

During Wednesday's hearing, Boardman and other executives sought to detail Amtrak's progress. But committee members from both sides of the aisle, while expressing a fondness for rail, made clear that they plan to push for increased financial accountability.

The controversy over Amtrak's finances stems from a number of issues that have plagued the corporation. The Transportation and Infrastructure Committee previously had identified more than $83 million in overpayments to host railroads and a direct operating loss of $526 million over the past six years within the company's food and beverage service, among other problems.

"When you tell me that in a year you are able to recover over $20 million in overpayments, I've got to tell you that sends all kinds of whistles going off in my head," U.S. Rep. Elijah Cummings, D-Md., told Boardman. "How much have we done to address that? How much is still out there? Because I've got to tell you, if someone's got something against you, they'll take stuff like that and do some damage."

Amtrak Inspector General Ted Alves stressed that the issue was being resolved but contended that pursuing repayment for overpayments from five or 10 years ago was not a cost-effective strategy.

Acknowledged Boardman, "One of the issues with Amtrak early on was the lack of accountability and a lack of even understanding what a budget was."

Meanwhile, Boardman pushed for continued federal subsidies to Amtrak, noting that while the Northeast Corridor is able to cover more than 100 percent of its operating costs, the long-distance trains that Amtrak runs incur an operating loss. Amtrak currently receives about $1.4 billion annually from the federal government in subsidies to cover capital and operating costs.

"That subsidy need will continue for a long time, as recently exposed in Storm Sandy, where we lost one of our substations because we didn't make the investment," said Boardman, referring a New York City substation that flooded during the storm. "We as a nation, as a region, didn't make the investment to make sure that the water didn't come into that substation."

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