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CED-78-86 1 (1978-05-11)

handle is hein.gao/gaobaaxwa0001 and id is 1 raw text is: DOCU~TnNT BESU'E 07018 - [B22672961 Amtrak's Subsidy Needs Cannot Be Reauced without Reducing Service. CED-78-86; B-175155. May 11, 1978. 55 pp. + 5 appendices (11 pp.). Report to the Congress; by Elmer a. Staats, Comptroller General. Isseue Area: Transportation Systems and Policies: Intercity Rail Passenger Service (2412). Contact: Comminity and Economic Derelopment Div. Budget Functioz: Commerce and Transportation: Ground Transportation (404). Organization Concerned: Department of Commerce; Department of the Treasury; National Railroad Passenger Corp. Conqressional Relevance: House Committee on Interstate and Foreign Commerce; Senate Committee en Ccmmerce, Science: and Transportation; Congress. Authority: Rail Passenger Service Act of 1970 (45 U.S.C. 501). Federal Employer's Liability Act (45 U.S.C. 51). Amtrak's operating costs have outstripped its revenues, and increasing Federal subsidies are required for ccatinaed operations. Amtrak planned service reductions because it had receiv. less money froa the Congress than It Lad requested in 1977. The Congress provided some additional funding, but Amtrak stated that it was stAIl not adequate and that substantial service curtailments will be needed if additional funding is not approved. Findings/Conclusions: Amtrak can improve its operating efficiency but this would not substantially reduce its subsidy need. The following areas require uttenticn: direct labor costs are high because of certain union work rules; maintenance costs are the largest single area of expense and could be better controlled; and losses on food rnd beverage service are substantial. Amtrak's route profitability system (RPS) provides reasonable estimatec of its route-by-route revenue and costs, but it could be further improved. Amtrak~s classification of its costs as avoidaleU or unavcidable is reasonable. Its 1977 5-year plan contained improved estimates, but the improve methods were not explained. Imtrak's ridership and revenues have not kept pace with its growth. It has not been permitted to exercise the route and service criteria the Congress appruved as a method of evaluating and eliminating routes if necessary. Since Artrah cannot operate its present route system for much less than it has xequested, the Ccngress can give Amtrak what it has asked and allow it to continue the present system, give it less than it asked for and illcu the system to be reduced, or 'ive it oore money to allo erpanded srvice. Recommendations: The Congress should: require Amtrak to provide information that better exrlains its operating and capital plans for improving the quality of dining services and for bringing its cost and revenues closer together; consider a more rapid debt retirement program or relieve Amtrak of the debt

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