Amtrak defends plan to get back on track

Malia Rulon Herman, Gannett Washington Bureau | USATODAY

WASHINGTON — Amtrak continues to rely on government subsidies but served more travelers in the past year than ever before and posted record ticket revenues, its leader told lawmakers Wednesday.

"While there are still plenty of challenges ahead, the basics for success are definitely here and Amtrak is doing well," Amtrak President and CEO Joseph Boardman told members of the House Transportation and Infrastructure Committee.

Amtrak, created 41 years ago, has never functioned as the for-profit corporation it was intended to be. Last year, in response to criticisms of the railroad's performance, Boardman introduced a five-year strategic plan intended to streamline the organization, reduce costs and boost revenue.

"When we're done, Amtrak will look more like a business and less like a government agency," Boardman told lawmakers. "Customers will find that our system is easier to use, more convenient, timelier, and more comfortable."

The new plan involves reorganizing Amtrak into six business lines, with each line held accountable for revenue goals and losses. The reorganization should be complete by the end of 2013.

Wednesday's hearing to examine the plan was the committee's fourth hearing on Amtrak this year. The panel plans to reauthorize rail programs next year.

Amtrak's current federal funding formula expires in September and the railroad is looking for federal help to build a $151 billion high-speed rail line between Washington and Boston. It also wants to undertake a $6.5 billion renovation of Washington's Union Station.

Previous hearings have focused on losses in Amtrak's food and beverage service, the railroad's inability to compete with the private sector for commuter rail operating contracts, and Amtrak's continued reliance on federal subsidies, which last year totaled $1.4 billion.

Committee Chairman John Mica, R-Fla., a critic of Amtrak, plans two more hearings before the end of the year.

"Sometimes our role is one of oversight, sometimes of prodding," he said.

Boardman said Amtrak just set the ninth ridership record in the last 10 years and has for the first time exceeded the norm of 18 million-to-20 million rides per year, recording 31.2 million rides last year. He added that Amtrak has cut its debt in half and that 2012 was its best year for on-time performance.

"Better ridership has helped drive an improved financial performance," Boardman said, adding that next year Amtrak will operate with about half as much federal support as it had in 2004.

Healso said Amtrak has covered 85% of its costs, when non-rail operations are factored in.

Ted Alves, inspector general of the National Railroad Passenger Corp., Amtrak's corporate parent, told lawmakers Amtrak's new plan is on the right track.

"Amtrak relies on the government for its existence and survival, but I think what's different now is that there is a focus in the company and in the leadership levels on making the business as efficient as it can be and focusing on the customer," he said.