Amtrak appears to be backing out of a 1998 deal with New York State to upgrade track and locomotives in the Buffalo-NYC Empire corridor (MTR #191).According to the Times Union, Amtrak has told the state it cannot make a firm financial commitment to or name a completion date for a $15 million track project between Albany and Schenectady.

The Pataki Administration hopes to run 125mph trains between Albany and NYC.Refitted locomotives for the run are scheduled to enter service this summer, but track work permitting the top speeds hasn’t yet started.NYS DOT appears willing to move the projects forward itself.The Times Union reported in April that various elements of the program were significantly behind schedule.

Other warning signs from Amtrak were in abundance last week.The railroad received permission from the U.S. DOT to mortgage part of Penn Station NY for a $300 million loan Amtrak says it needs to bolster its operating budget from now to September.Amtrak officials blamed their budget crunch on late delivery of Acela Express trains for high speed Washington-Boston service. But they did not explain how that fact translated into a budget shortfall.Amtrak is entitled to charge penalties for late delivery.

Observers were surprised at the timing, since Amtrak usually has strong spring cash flows from advance summer ticket sales.They said the present situation seems far worse than earlier Amtrak budget squeezes.Revenues have been rising, but expenses are rising faster.Some say due to capital project cost overruns and significant unforeseen overtime costs.

It’s unclear yet whether an Amtrak budget crisis would bring rail service issues to a head in Congress.On one hand, Amtrak is supposed to implement a full schedule of Northeast Corridor trains this summer and ridership has grown during the past several years.Moreover, highway and airport congestion cry out for development of travel alternatives.On the other, the railroad remains fundamentally under-funded, and its claims of better service are often at odds with the experiences of actual train riders.Congress itself has a variety of perspectives, from critics of any spending on rail and critics of Amtrak as an institution to supporters of a bill to invest $10 billion in new high speed rail lines in urban corridors around the country.

Last month, Amtrak president George Warrington called on Congress to make up its mind about the railroad’s mission: should it be a profitable business or a public service?Congress’ insistence that the railroad achieve a profitable operating budget and operate a national passenger rail network is contradictory.U.S. commuter railroads and rapid transit systems, and successful inter-city train systems elsewhere all receive operating subsidies.

Even short of resolving the bigger issues, Congress and the states must take care to ward off any major reduction of Amtrak service, especially in the northeast where Amtrak trains make strong contributions to congestion reduction (Amtrak’s share of the Washington-NYC air/rail market is 70%). Last weekend, Amtrak announced the indefinite suspension of its Vermonter service due to track deterioration (on a line owned by the New England Central RR).That, and Amtrak’s inability to move forward with planned infrastructure improvements in NY State are clear warning signs that a stronger commitment to inter-city rail service is desperately needed.

Pataki Launches Big NY State Rail Program - October 9, 1998

Acela's Piecemeal Debut - February 4, 2000

Reform Council Offers New Amtrak Structure - March 26, 2001

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