DOT Proposes Another Loan to Amtrak
By John Crawley
Reuters
Saturday, July 13, 2002; Page E01
The Bush administration has proposed lending Amtrak up to $170 million to keep the national passenger railroad running through September, Transportation Department officials said yesterday.
The loan would be the second stage of a bailout plan approved two weeks ago by the White House. The bailout averted a threatened shutdown this month of all Amtrak trains and several heavily traveled commuter services in the Northeast and California.
The first stage of that agreement was a $100 million loan that Amtrak received from the government a week ago to keep all its service intact into August.
The second stage, as proposed in a letter Thursday from Transportation Secretary Norman Y. Mineta to congressional leaders, would involve another direct federal loan of up to $170 million.
House and Senate negotiators had included a $205 million appropriation for Amtrak -- the amount of money it said it needed to keep trains running through Sept. 30 -- in an emergency spending bill for homeland security and other government programs. But that bill is stalled in Congress by a veto threat from the administration, and the White House Office of Management and Budget yesterday rejected the notion of a direct grant.
"A direct loan is really the way to go here," Transportation Department spokesman Len Alcivar said. "A direct loan is the more fiscally responsible of all options. An app
posted by Charles at Monday, July 15, 2002
DOT Proposes Another Loan to Amtrak
By John Crawley
Reuters
Saturday, July 13, 2002; Page E01
The Bush administration has proposed lending Amtrak up to $170 million to keep the national passenger railroad running through September, Transportation Department officials said yesterday.
The loan would be the second stage of a bailout plan approved two weeks ago by the White House. The bailout averted a threatened shutdown this month of all Amtrak trains and several heavily traveled commuter services in the Northeast and California.
The first stage of that agreement was a $100 million loan that Amtrak received from the government a week ago to keep all its service intact into August.
The second stage, as proposed in a letter Thursday from Transportation Secretary Norman Y. Mineta to congressional leaders, would involve another direct federal loan of up to $170 million.
House and Senate negotiators had included a $205 million appropriation for Amtrak -- the amount of money it said it needed to keep trains running through Sept. 30 -- in an emergency spending bill for homeland security and other government programs. But that bill is stalled in Congress by a veto threat from the administration, and the White House Office of Management and Budget yesterday rejected the notion of a direct grant.
"A direct loan is really the way to go here," Transportation Department spokesman Len Alcivar said. "A direct loan is the more fiscally responsible of all options. An appropriation would be a continuation of the broken pattern of the last 30 years."
Amtrak's banks have denied it access to its credit line because of its horrendous finances and an incomplete audit report for 2001. Amtrak has never made money in its 31-year history and lost $1.2 billion last year.
The administration is seeking congressional approval of its most recent loan plan. But some lawmakers believe it would be a mistake to extend new credit to Amtrak because that would add to its debt, which is now almost $4 billion.
"Congress should provide the funding needed to maintain passenger rail service," said Sen. Patty Murray (D-Wash.), chairwoman of the transportation subcommittee of the Senate Appropriations Committee. "And that is the deal that the House and Senate had agreed to, until the White House stepped in to scuttle the deal."
The proposed loan would have to be paid back no later than Jan. 1, and Amtrak would have to adhere to conditions that require the railroad to cut costs and get better control of its finances. The loan agreement also would require management reforms and bookkeeping changes. The administration had pledged not to push for larger-scale reforms it wants, such as contracting out of some routes and jobs, as part of the short-term financing.
posted by Charles at Monday, July 15, 2002
The Wrong Track for Amtrak
Thursday, July 4, 2002; Page A22
Robert J. Samuelson calls for the dismantling of Amtrak [op-ed, June 26], citing mismanagement, inefficiencies and low ridership as reasons to, at the least, end its subsidies. On the same day, The Post's Business section carried a "demand" by United Airlines for a $1.8 billion loan guarantee and another article that discussed the recovery of America West Airlines through a $380 million loan guarantee by the federal government.
Have people forgotten that the airlines bellied up to the bar for huge subsidies after Sept. 11? And what have the airlines exactly done with that money?
• Stop or curtail meal services.
• Overbook flights.
• Continue to lose luggage.
• Cancel or delay flights for no discernible reason.
• Generally inconvenience passengers under the guise of increased "security."
Granted, Amtrak is government-run and, therefore, not likely to excel. But is its management worse than that of the privately run airlines?
Does Amtrak need reform? Undoubtedly. But we need a rail system because many people no longer fly. Then again, "pigs will fly" before Congress quits doling out subsidies based on contributions and considers the greater good of the American people.
LAURA MAGNER
Sylvia de Leon sets a dangerous precedent for American businesses by suggesting that the excise tax on diesel fuel paid by freight railroads be turned over to Amtrak ["No Way to Run a Railroad," op-ed, June 24]. Trucking companies are not required to subsidize bus lines; freight railroads should not be required to subsidize passenger railroads.
North America's privately owned freight railroads pay the entire cost of maintaining and improving our nation's rail infrastructure and rights of way. They also pay property taxes. No other mode of transportation bears this burden. It makes sense to eliminate the diesel fuel tax so that freight railroads can compete on a more level playing field and increase investment in the infrastructure and equipment that has made our nation's freight rail system the best in the world.
Amtrak was created more than 30 years ago because unprofitable rail passenger service was placing a devastating burden on freight railroads. I hope we don't have to relearn that history lesson. Privately owned and operated freight rail carriers cannot and should not be expected to subsidize passenger rail.
EDWARD R. HAMBERGER
President and CEO
Association of American Railroads
Washington
French reassure UK workers on the futureBY ANGELA JAMESON
TENS of thousands of UK employees of Vivendi Universal were yesterday offered reassurance over their future with the French media and utilities company. Vivendi Environnement, the utilities business that is 44 per cent owned by Vivendi Universal, last night said that it was business as usual for its 18,000 workers, who work mainly in areas of transport, water and waste management. These assurances failed to dampen speculation among rival transport and utilities companies that Vivendi Environnement might be split up, triggering an auction of the company’s UK assets. However, analysts said that the crisis in Vivendi Environnement’s parent company, which last night ushered in a new chief executive, was likely to strengthen the hand of Henri Proglio, chief executive of Vivendi Environnement. Vivendi Universal last month agreed to reduce its controlling stake in Vivendi Environnement to 40 per cent, reducing the influence of the Vivendi Universal board on MProglio’s team. Robert Miller-Bakewell, water analyst for Merrill Lynch, said: “In April, Messier tried to oust Proglio, but he saw him off. With Messier gone, Henri Proglio is in a much stronger position. I expect Vivendi Universal will leave Vivendi Environnement alone.” Analysts also played down speculation that another utility might end up buying Vivendi Universal’s share of the Environnement company. Competition issues would rule out either RWE or E.ON, the large German utilities. In the transport sector, UK groups such as Stagecoach and National Express would be keen to acquire parts of Connex’s bus and rail operations. Both companies compete at home and abroad with Connex. However, the continuing upheaval in the UK’s rail industry means it is unclear whether that could happen. “It’s a question we ask, but the assumption is that the French Government will want to keep the whole business,” said one transport industry insider. Vivendi Environnement is the holding company for several businesses that have become familiar to the British public in the past ten years as the French group has strengthened its grip on many aspects of public services. It has bought three small water companies, culminating in a deal to be completed in October to buy Southern Water. Connex runs trains out of Victoria, Waterloo and Charing Cross stations in London. Onyx, the waste management business, has 40 waste management contracts with local authorities across Britain.British assets of Vivendi Universal Connex: Train operator in Kent, South London and parts of East Sussex 6,000 employees Onyx:UK-wide waste management business, including contracts with 40 local authorities 7,000 employees Vivendi Water Services: includes Tendring Hundred, Folkestone & Dover and Three Valleys3,500 employees Southern Water:due to be acquired from Royal Bank of Scotland in October 2,100 employees ChambersHarrap: the Edinburgh-based dictionary publisher 50 employees Vizzavi: mobile internet portal. A joint venture with Vodafone 317 employees
posted by Charles at Monday, July 15, 2002
