- The Washington Times - Saturday, June 29, 2002

ASSOCIATED PRESS
Amtrak and Bush administration officials closed a deal last night to help Amtrak get the $200 million it needs to keep passenger trains running through September.
The agreement, tentatively reached Wednesday, helps Amtrak avert the first systemwide shutdown in its 31-year history, a shutdown that had been threatened to begin next week.
The Transportation Department will give Amtrak an immediate $100 million loan, then will join with Amtrak in asking Congress to provide the remainder.
"Our goal was to ensure uninterrupted service for the over 750,000 Americans who rely on Amtrak and our nation's commuter rail service every day, and we have accomplished that goal," Transportation Secretary Norman Y. Mineta said at a news conference.
The announcement capped a week of shuttle diplomacy among Amtrak leaders, Bush administration officials and members of Congress.
The final negotiations hinged on what conditions the administration would place on its $100 million loan. Amtrak agreed to 12, many involving improved financial accountability.
"A lot of this is stuff that should be done," Amtrak President David Gunn said.
The conditions require Amtrak to spend all its money over the next 15 months on existing assets and services rather than expansion of service.
Also, Amtrak must freeze all management salaries and suspend any annual bonuses for this year for employees with salaries over $75,000.
Officials had said one sticking point was a provision that would prevent Amtrak from entering into any new agreement that restricts its ability to contract with private firms.
The administration wants Amtrak to move toward a system in which it uses outside companies to handle its reservations, food service and equipment maintenance, and perhaps even some routes.
In the end, that requirement was left out.
Still to be resolved is the form of the congressional assistance. Amtrak would prefer an appropriation which it would not have to pay back but a loan is also possible.
Amtrak is already carrying heavy debt, estimated at $3.85 billion in March.
"This has been an important week for passenger rail because the events of this week have forever dispelled the question of Amtrak's relevance in the nation's transportation future," said John Robert Smith, chairman of Amtrak's governing board.
Mr. Gunn had warned that Amtrak could begin shutting down its entire nationwide system as early as next weekend if it did not get government help to close a $200 million budget gap.
Mr. Mineta and members of Amtrak's governing board reached a tentative agreement Wednesday night and had been working since then to finalize it.
Mr. Mineta has made it clear that, at some point, the administration will seek major changes in how Amtrak does business.
He has proposed ending federal operating subsidies, introducing competition and making states more responsible for paying for train service. His plan would also gradually remove Amtrak as owner of 366 miles of tracks in the Boston-Washington corridor.
Mr. Gunn, who became Amtrak's president May 15, has said that he agrees the railway needs to make major improvements in its finances and operations but that he does not agree with many of the more drastic reforms the administration is seeking.


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