1. An Action Plan for the Restructuring and Rationalization of the National Intercity Rail Passenger System Briefing by the Amtrak Reform Council February 14, 2002

2. Amtrak Reform Council Amtrak’s ridership is growing very slowly. Amtrak has a very small share of the intercity travel market 2000 Ridership Airlines610,000,000 Intercity Bus Carriers42,000,000 Amtrak22,500,000

3. Amtrak Reform Council Amtrak’s Financial Performance Amtrak Financial Performance, FY1997 -- FY2001 ($ millions) Est. Excess Mandatory Railroad Retirement Capital contribution to operating (progressive overhauls) Depreciation/non-cash expenses Operating loss for purposes of self- sufficiency Operating contribution to capital GAAP Loss $762 million $335 $301 $310 $292 $341 $248 $405 $337 $383 $488 $82 $103 $90 $142 $166 $178 $183 $(5) $66 $37 $- $200 $400 $600 $800 $1,000 $1,200 FY1997FY1998FY1999FY2000FY2001 GAAP Loss $930 million GAAP Loss $916 million GAAP Loss $943 million GAAP Loss $1,073 million

4. Amtrak Reform Council The Council’s plan is based on three concepts for reform A new business model for Amtrak The option to introduce competition An adequate and secure source of funding

5. Amtrak Reform Council The new business model separates Amtrak’s functions into three components Government program administration and oversight –Funding –Corridor Development –Oversight Train operations –A separate company with a strong business board to focus on market oriented services Infrastructure –A separate federal government entity to own and manage the NEC infrastructure

6. Amtrak Reform Council The National Rail Passenger Corporation (NRPC) would be restructured as a small government entity –The NRPC would be modeled after USRA’s role monitoring Conrail to manage the intercity rail program –A board of directors representing states, the federal government, the freight railroads, and rail labor Federal Program Management and Oversight

7. Amtrak Reform Council Federal Program Management and Oversight The NRPC would: –Secure and administer federal funding –Approve business plans of the operating and infrastructure entities and monitor their implementation –Manage franchising of train services –Lead high-speed rail corridor development

8. Amtrak Reform Council Federal Program Management and Oversight The NRPC would: –Hold the statutory franchise to access freight railroad rights-of- way –Make insurance available to train operators –Divest non-NEC assets –Ensure the NEC infrastructure company is brought to a state of good repair –Preserve and improve a national reservations and ticketing system

9. Amtrak Reform Council The new train operating company would be a subsidiary of the NRPC –All services would be provided under contract with performance standards (similar to Amtrak’s commuter operations today) –All services would have separate, transparent accounting –A board of business professionals with expertise in transportation, operations and finance Train Operations

10. Amtrak Reform Council Optional Franchising of Train Operations The NRPC would evaluate the merits of franchising specific services during an initial transition period (2 to 5 years) Contracts would be let through a competitive bidding process for both profitable and unprofitable services The need for adequate track capacity would be taken into account in designing and awarding franchises

11. Amtrak Reform Council Optional Franchising of Train Operations If franchising is implemented, the Council also recommends that: –All franchisees be subject to the Railway Labor Act, Railroad Retirement and FELA –Existing Amtrak employees be given a right of preferential hiring with new train operators –Employees follow their work in seniority order with their collective bargaining agreements intact. Contracts could be renegotiated pursuant to the Railway Labor Act

12. Amtrak Reform Council NEC Infrastructure A new subsidiary of the NRPC would own, maintain, and upgrade the NEC –The board of directors would be made up of representatives of the NEC states, the federal government, freight carriers on the NEC and the train operator

13. Amtrak Reform Council An adequate and secure source of funding Even with reform, the cost of the intercity passenger rail program will be considerable –Current annual operating subsidies are about $600 million –About $100 billion of funding over 20 years to develop all high-speed corridors including returning the NEC to a state of good repair

14. Amtrak Reform Council Conclusion The Council’s Action Plan will provide: –An effective rail passenger program –More economical and higher quality services –The Congress with the confidence to fund the rail passenger program that the country wants and needs