Commuter Rail Issues Should Be Considered in Debate over Amtrak
GAO-06-470: Published: Apr 21, 2006. Publicly Released: May 22, 2006.
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Commuter rail agencies provide mobility to millions of people across the country, often using Amtrak infrastructure and services. Given these interactions, an abrupt Amtrak cessation could have a significant impact on commuter rail operations. Amtrak's chronic financial problems and recent budget proposals make such a cessation a possibility. GAO was asked to examine (1) the extent to which commuter rail agencies rely on Amtrak for access to infrastructure and services, (2) issues that commuter rail agencies would face if Amtrak abruptly ceased to provide them with services and infrastructure access, and (3) the options available to commuter rail agencies should Amtrak abruptly cease to provide them services and infrastructure access.
Most commuter rail agencies rely on the National Railroad Passenger Corporation (Amtrak) for some level of access to infrastructure and services, particularly those that operate over Amtrak-owned portions of the Northeast Corridor (NEC). This reliance includes the use of key stations, access to the NEC, and equipment maintenance services. Commuter rail agencies typically pay Amtrak for access to infrastructure and services, although their financial relationships with Amtrak vary and often lack clarity. Several issues contribute to the lack of clarity, including limitations in Amtrak's accounting practices, the lack of transparency in Amtrak's financial reports, and the structure of the financial arrangements between Amtrak and commuter rail agencies. This makes it difficult to fully understand the financial relationship between these agencies and Amtrak and whether they are contributing their fair share for improvements and maintenance of Amtrak's infrastructure. Also, this lack of clarity hinders Amtrak management's ability to make fully informed decisions about its commuter rail line-of-business. An abrupt Amtrak cessation would raise two critical operational issues for commuter rail agencies that rely on Amtrak. Specifically, agencies would face the potential loss of skilled Amtrak labor and access to Amtrak-owned infrastructure, which could make it difficult for some to avoid severe service disruptions. For example, agencies both on and off the NEC could not continue to fully operate their services without continued access to Amtrak-owned track and other facilities. Most commuter rail agencies that rely on Amtrak have identified ways to mitigate service disruptions in an abrupt Amtrak cessation. However, these options are largely dependent on retaining Amtrak employees and access to Amtrak's infrastructure. Federal agencies could provide short-term options to mitigate potential impacts on commuter rail agencies through their authority to order continued commuter service (called "directed service"), although federal officials stated that service disruptions are likely and the cost estimates are unreliable. Private transportation companies could provide options for commuter rail agencies in the long term; however, other issues would need to be addressed to ensure a smooth transition.
Recommendations for Executive Action
Status: Closed - Not Implemented
Comments: FRA officials reported that the agency has no plans to develop better cost estimates for direct service because there is currently no immediate risk of an Amtrak bankruptcy.
Recommendation: In order to provide more information to federal policy makers involved in the debate over Amtrak, the Secretary of Transportation should direct the Federal Railroad Administration, in consultation with the Surface Transportation Board and commuter rail agencies, to further refine cost estimates of commuter rail directed-service scenarios.
Agency Affected: Department of Transportation
Status: Closed - Implemented
Comments: Amtrak provides a wide range of services and access to its infrastructure for commuter railroads on the Northeast Corridor and across the country. These services include, among other things: operating commuter trains, providing electric power to commuter railroads, and providing station access in Amtrak-owned stations in cities such as New York City, Chicago and Seattle. Given these interactions, there was concern that if Amtrak abruptly ceased to provide services and infrastructure, commuter rail operations could be adversely affected. Amtrak's chronic financial problems and recent budget proposals make such a cessation a possibility. In 2006, GAO reported that commuter rail agencies typically pay Amtrak for access to infrastructure and services and that Amtrak's financial relationships with commuter railroads lacked clarity, making it difficult to determine if commuter railroads were paying their fair share for improvements and maintenance of Amtrak's infrastructure. Several issues contributed to the lack of clarity, including limitations in Amtrak's accounting practices, the lack of transparency in Amtrak's financial reports, and the structure of the financial arrangements between Amtrak and commuter rail agencies. This lack of clarity and transparency about the revenues and costs incurred as a result of Amtrak's commuter rail activities makes it difficult for Amtrak's management and external stakeholders (such as Congress and the Department of Transportation) to make fully informed decisions about Amtrak's commuter line-of-business. Therefore, GAO recommended that Amtrak should improve its accounting practices and financial reports to clearly show all revenues and expenses in providing services and access to commuter rail agencies to provide more information to Amtrak management, commuter rail agencies and Congress. Amtrak initiated a new accounting system in response to a requirement in the Passenger Rail Investment and Improvement Act of 2008, called the Amtrak Performance Tracking (APT) system. This system has gradually improved the direct allocation of its costs to different lines of business, such as commuter rail operations and infrastructure costs, increasing the accuracy of Amtrak's accounting practices. According to Amtrak officials, Amtrak's grant agreement with the Federal Railroad Administration (FRA) also requires Amtrak to submit a quarterly report on payments received and expended between Amtrak's intercity and commuter rail operations both on and off Amtrak's Northeast Corridor (NEC) to the FRA. In 2017, GAO confirmed that Amtrak had created a quarterly public report to FRA-which is also available to commuter rail agencies and Congress-showing Amtrak's revenues and expenses for its commuter rail operations and infrastructure access separate from Amtrak's intercity revenues and expenses. Additionally, commuter railroads have worked with Amtrak to allocate capital improvement and maintenance costs for commuter railroad use of the NEC under the Passenger Rail Investment and Improvement Act (PRIIA) of 2008 and the results are reported to Amtrak, FRA and the commuter railroads. By providing more clarity to Amtrak's revenues and expenses as well as allocating commuter railroad's capital improvement and maintenance costs for use of the NEC, Amtrak has provided more transparency to Amtrak's relationship with commuter railroads, allowing for more informed operations and capital investment decisions regarding Amtrak's commuter rail line of business and the NEC.
Recommendation: To ensure that Amtrak provides useful information to both its internal and external stakeholders, including commuter rail agencies that contract with Amtrak, the president of Amtrak should improve its accounting practices, as well as its financial reports, to clearly show all revenues earned and all costs incurred when providing services and infrastructure access to commuter rail agencies. This information could increase the clarity of Amtrak's costs for providing services and access to infrastructure to Amtrak management, commuter rail agencies, and Congress. It would also allow for a more informed debate about how commuter rail agencies interact with Amtrak and compensate it for access to critical infrastructure and services.
Agency Affected: National Railroad Passenger Corporation