Amtrak’s president and CEO told a House committee that an overhaul of the government-subsidized carrier’s corporate structure is beginning to have an effect.
Growing ridership, an improving financial performance and an infusion of fresh blood in the top ranks have put Amtrak on the path toward profitability, the passenger railroad’s chief executive told skeptical lawmakers Wednesday.
Amtrak President and CEO Joseph Boardman told the House Transportation and Infrastructure Committee that an overhaul of the government-subsidized carrier’s corporate structure initiated last year is beginning to have an effect.
“When we’re done, Amtrak will look more like a business and less like a government agency,” Boardman told the panel. “And customers will find that our system is easier to use, more convenient, timelier and more comfortable.”
In response to congressional criticism, Boardman last year introduced a five-year strategic plan designed to simplify the organizational structure, reduce costs and boost revenue. The plan calls for reorganizing the railroad into six business lines.
The hearing was the fourth in a series, as the committee examines Amtrak operations in preparation for a reauthorization of rail programs next year. The current authorization (PL 110-432) expires next September.
Committee Chairman John L. Mica, R-Fla., has been a longtime Amtrak critic and an advocate of privatizing the railroad’s operations. While he and the panel’s incoming chairman, Pennsylvania Republican Bill Shuster, have backed down on demands for privatization, they are certain to insist on further steps to save money and improve operations in the next authorization.
Mica said there will be two more Amtrak hearings before the end of the year.
Critics say the passenger railroad has received tens of billions of dollars in federal subsidies since it was cobbled together in 1970. Last year alone, Mica said, Amtrak received $1.4 billion, about $500 million of that to bolster its operating budget.
But Boardman said the railroad is making strides in implementing its strategic plan. He said general managers have been named to head the long-distance, Northeast corridor and state-supported services divisions. He said hiring for the head of the commuter rail contracting division is on hold while that operation is restructured.
“We had to be careful coming in to reorganize Amtrak,” Boardman testified.
With ridership at an all-time high in fiscal 2012, Boardman said Amtrak is doing better at covering its own costs.
“In 2011, our train operations recovered 79 cents of every dollar, turning in the best performance of any passenger railroad in the nation,” Boardman said. “When you include the revenues derived from other revenue sources, such as real estate and commuter business, the number rises to 85 percent.”
Terri Henderson, 6, center, whose mother is El Salvador, attends a rally with members of Congress at Union Station's Columbus Circle to announce the Restore Opportunity, Strengthen, and Improve the Economy (ROSIE) Act on July 29, 2014. The legislation provides incentives for government contractors to pay a living wage and other benefits that would help low-income workers.