[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]

AMTRAK OPERATIONS: EXAMINING THE CHAL-
LENGES AND OPPORTUNITIES FOR IMPROVING
EFFICIENCY AND SERVICE

=======================================================================

(118-20)

HEARING

BEFORE THE

SUBCOMMITTEE ON RAILROADS, PIPELINES,
AND HAZARDOUS MATERIALS

OF THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTEENTH CONGRESS

FIRST SESSION

__________

JUNE 6, 2023

__________

Printed for the use of the
Committee on Transportation and Infrastructure

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation

__________

U.S. GOVERNMENT PUBLISHING OFFICE
53-969 PDF WASHINGTON : 2023

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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

Sam Graves, Missouri, Chairman

Rick Larsen, Washington, Eric A. ``Rick'' Crawford,
Ranking Member Arkansas
Eleanor Holmes Norton, Daniel Webster, Florida
District of Columbia Thomas Massie, Kentucky
Grace F. Napolitano, California Scott Perry, Pennsylvania
Steve Cohen, Tennessee Brian Babin, Texas
John Garamendi, California Garret Graves, Louisiana
Henry C. ``Hank'' Johnson, Jr., Georgiavid Rouzer, North Carolina
Andre Carson, Indiana Mike Bost, Illinois
Dina Titus, Nevada Doug LaMalfa, California
Jared Huffman, California Bruce Westerman, Arkansas
Julia Brownley, California Brian J. Mast, Florida
Frederica S. Wilson, Florida Jenniffer Gonzalez-Colon,
Donald M. Payne, Jr., New Jersey Puerto Rico
Mark DeSaulnier, California Pete Stauber, Minnesota
Salud O. Carbajal, California Tim Burchett, Tennessee
Greg Stanton, Arizona, Dusty Johnson, South Dakota
Vice Ranking Member Jefferson Van Drew, New Jersey,
Colin Z. Allred, Texas Vice Chairman
Sharice Davids, Kansas Troy E. Nehls, Texas
Jesus G. ``Chuy'' Garcia, Illinois Lance Gooden, Texas
Chris Pappas, New Hampshire Tracey Mann, Kansas
Seth Moulton, Massachusetts Burgess Owens, Utah
Jake Auchincloss, Massachusetts Rudy Yakym III, Indiana
Marilyn Strickland, Washington Lori Chavez-DeRemer, Oregon
Troy A. Carter, Louisiana Chuck Edwards, North Carolina
Patrick Ryan, New York Thomas H. Kean, Jr., New Jersey
Mary Sattler Peltola, Alaska Anthony D'Esposito, New York
Robert Menendez, New Jersey Eric Burlison, Missouri
Val T. Hoyle, Oregon John James, Michigan
Emilia Strong Sykes, Ohio Derrick Van Orden, Wisconsin
Hillary J. Scholten, Michigan Brandon Williams, New York
Valerie P. Foushee, North Carolina Marcus J. Molinaro, New York
Mike Collins, Georgia
Mike Ezell, Mississippi
John S. Duarte, California
Aaron Bean, Florida

Subcommittee on Railroads, Pipelines, and Hazardous Materials

Troy E. Nehls, Texas, Chairman
Donald M. Payne, Jr., New Jersey, Brian Babin, Texas
Ranking Member David Rouzer, North Carolina
Frederica S. Wilson, Florida Mike Bost, Illinois
Seth Moulton, Massachusetts Doug LaMalfa, California
Troy A. Carter, Louisiana Bruce Westerman, Arkansas
Andre Carson, Indiana Pete Stauber, Minnesota
Mark DeSaulnier, California Tim Burchett, Tennessee
Marilyn Strickland, Washington Dusty Johnson, South Dakota
Valerie P. Foushee, North Carolina, Lance Gooden, Texas
Vice Ranking Member Tracey Mann, Kansas
Grace F. Napolitano, California Rudy Yakym III, Indiana
Steve Cohen, Tennessee Thomas H. Kean, Jr., New Jersey
Henry C. ``Hank'' Johnson, Jr., Georgiaic Burlison, Missouri
Jared Huffman, California Brandon Williams, New York,
Jesus G. ``Chuy'' Garcia, Illinois Vice Chairman
Robert Menendez, New Jersey Marcus J. Molinaro, New York
Rick Larsen, Washington (Ex Officio) John S. Duarte, California
Sam Graves, Missouri (Ex Officio)

CONTENTS

Page

Summary of Subject Matter........................................ vii

STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Troy E. Nehls, a Representative in Congress from the State
of Texas, and Chairman, Subcommittee on Railroads, Pipelines,
and Hazardous Materials, opening statement..................... 1
Prepared statement........................................... 3
Hon. Donald M. Payne, Jr., a Representative in Congress from the
State of New Jersey, and Ranking Member, Subcommittee on
Railroads, Pipelines, and Hazardous Materials, opening
statement...................................................... 3
Prepared statement........................................... 5
Hon. Rick Larsen, a Representative in Congress from the State of
Washington, and Ranking Member, Committee on Transportation and
Infrastructure, opening statement.............................. 6
Prepared statement........................................... 8

WITNESSES

Stephen Gardner, Chief Executive Officer, National Railroad
Passenger Corporation (Amtrak), oral statement................. 9
Prepared statement........................................... 11
Mitch Warren, Executive Director, Northeast Corridor Commission,
oral statement................................................. 19
Prepared statement........................................... 20

SUBMISSIONS FOR THE RECORD

Submissions for the Record by Hon. Troy E. Nehls:
Statement of Ian Jefferies, President and Chief Executive
Officer, Association of American Railroads................. 22
Letter of May 30, 2023, to Hon. Pete Buttigieg, Secretary,
U.S. Department of Transportation, from the Coalition for
the Northeast Corridor..................................... 25
Statement of Jim Mathews, President and Chief Executive
Officer, Rail Passengers Association....................... 26
Statement of Scott R. Spencer, Chief Operating Officer,
AmeriStarRail LLC.......................................... 77
Statement of James Tilley, President, Florida Coalition of
Rail Passengers............................................ 79
Submissions for the Record by Hon. Marcus J. Molinaro:
Article entitled, ``G.O.P. Lawmakers Question Amtrak Over
Six-Figure Bonuses,'' by Mark Walker, New York Times,
November 4, 2022........................................... 59
Article entitled, ``Amtrak Rewarded Executives With Six-
Figure Bonuses as Rail Service Struggled,'' by Mark Walker
and Niraj Chokshi, New York Times, August 5, 2022.......... 84

APPENDIX

Questions to Stephen Gardner, Chief Executive Officer, National
Railroad Passenger Corporation (Amtrak), from:
Hon. Troy E. Nehls........................................... 87
Hon. Donald M. Payne, Jr..................................... 91
Hon. David Rouzer............................................ 92
Hon. Lance Gooden............................................ 94
Hon. Rudy Yakym III.......................................... 96
Questions to Mitch Warren, Executive Director, Northeast Corridor
Commission, from:
Hon. Troy E. Nehls........................................... 99
Hon. Donald M. Payne, Jr..................................... 99

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

June 2, 2023

SUMMARY OF SUBJECT MATTER

TO: LMembers, Subcommittee on Railroads, Pipelines,
and Hazardous Materials
FROM: LStaff, Subcommittee on Railroads, Pipelines, and
Hazardous Materials
RE: LSubcommittee Hearing on ``Amtrak Operations:
Examining the Challenges and Opportunities for Improving
Efficiency and Service.''
_______________________________________________________________________

I. PURPOSE

The Subcommittee on Railroads, Pipelines, and Hazardous
Materials of the Committee on Transportation and Infrastructure
will meet on Tuesday, June 6, 2023, at 10:00 a.m. ET in 2167
Rayburn House Office Building to hold a hearing entitled
``Amtrak Operations: Examining the Challenges and Opportunities
for Improving Efficiency and Service.'' At the hearing Members
will receive testimony from Stephen Gardner, Chief Executive
Officer (CEO), Amtrak, and Mitch Warren, Executive Director,
Northeast Corridor Commission. The hearing witnesses will
discuss the current state of Amtrak and plans for growth for
passenger rail.

II. BACKGROUND

Amtrak operates a National passenger rail system, which
includes the Northeast Corridor (NEC), long-distance routes,
and state-supported routes.\1\ Amtrak generally runs more than
300 trains per day, services more than 500 stations located in
46 states and Washington, D.C., and operates a network that
stretches more than 22,000 miles across the country.\2\ Of all
Amtrak passenger trips in 2022, approximately 40 percent were
taken on the NEC; 44 percent on state-supported routes; and 15
percent on long-distance routes.\3\ In Fiscal Year (FY) 2022,
Amtrak carried 22,930,499 riders (roughly 71 percent of FY
2019's total of 32,519,241 customers) and brought in a total
annual revenue of $2.8 billion, which remained roughly 15
percent below FY 2019 pre-pandemic revenue.\4\
---------------------------------------------------------------------------
\1\ 49 U.S.C. Sec. 24102.
\2\ Ben Goldman, Cong. Rsch. Serv. (R47260) Intercity Passenger
Rail: Fed. Policy and Programs, (Mar. 23, 2023), available at https://
crsreports.congress.gov/product/pdf/R/R47260 [hereinafter Intercity
Passenger Rail: Fed. Policy and Programs].
\3\ Amtrak, FY 22 Year End Revenue and Ridership, available at
https://media.amtrak.com/wp-content/uploads/2022/11/FY22-Year-End-
Revenue-and-Ridership.pdf.
\4\ See Amtrak, FY 19 Year End Revenue and Ridership, available at
http://media.amtrak.com/wp-content/uploads/2019/11/FY19-Year-End-
Ridership.pdf; see also Press Release, Amtrak, Amtrak Fiscal Year 2022:
The Beginning of a New Era of Rail, (Nov. 29, 2022), available at
https://media.amtrak.com/2022/11/amtrak-fiscal-year-2022-the-beginning-
of-a-new-era-of-rail/.
---------------------------------------------------------------------------
On November 15, 2021, President Biden signed the
Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58).
The bill authorizes and appropriates over five years an
unprecedented $100 billion for Amtrak and another at least $30
billion in discretionary multimodal grants for which Amtrak and
other intercity passenger rail projects are eligible.\5\
---------------------------------------------------------------------------
\5\ See e.g., 49 U.S.C. Sec. 6701 (noting the National
Infrastructure Project Assistance, authorized at $5 billion and
appropriated at $10 billion over five years); 49 U.S.C. Sec. 6702
(noting the Local and Regional Project Assistance, authorized at $7.5
billion and appropriated at $7.5 billion over five years); see also 23
U.S.C. Sec. 149; see also 49 U.S.C. Sec. 224, et seq.; 23 U.S.C. 601,
et seq. (describing two Federal loan programs that include this
eligibility, Railroad Rehabilitation and Improvement Financing and
Transportation Infrastructure Finance and Innovation Act).
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III. FEDERAL RAILROAD FUNDING

IIJA authorizes more than three times the amounts
authorized over the same period in the Fixing America's Surface
Transportation Act (FAST Act) (P.L. 114-94). Additionally, IIJA
appropriated more than $66 billion in supplemental funding for
Federal Railroad Administration (FRA) programs, including
nearly $22 billion in direct funding for Amtrak.\6\ Taken
together, the authorizations and supplemental appropriations
for FRA programs under IIJA exceed $100 billion.\7\ IIJA\\
authorizations\\ and supplemental\\ appropriations\\ are
outlined below along with the amounts authorized and
appropriated during the years of the FAST Act. Under the law,
the Amtrak Northeast Corridor and National Network grant
amounts are directed to Amtrak while the four competitive grant
programs are administered by the United States Department of
Transportation (DOT) and have multiple eligible applicants.
---------------------------------------------------------------------------
\6\ DOT, DOT Infrastructure Investment and Jobs Investment Act
Authorization Table, available at https://www.transportation.gov/sites/
dot.gov/files/2022-01/DOT_Infrastructure_Investment_
and_Jobs_Act_Authorization_Table_%28IIJA%29.pdf.
\7\ Id.
\8\ IIJA, Pub. L. No. 117-58, Division B, Title II, Subtitle A--
Authorization of Appropriations, 135 Stat. 429.
\9\ IIJA, Pub. L. No. 117-58, Division J--Appropriations, Title
VII, 135 Stat. 429.
\10\ FAST Act, Pub. L. No 114-94, Division A, Title XI, Subtitle
A--Authorizations, 129 Stat. 1312.
\11\ See e.g., Consolidated Appropriations Act, 2017, Pub. L. No.
115-31, 131 Stat. 135; Consolidated Appropriations Act, 2018, Pub. L.
No. 115-141, 132 Stat. 348; Consolidated Appropriations Act, 2019, Pub.
L. No. 116-6, 133 Stat. 13; Further Consolidated Appropriations Act,
2020, Pub. L. No. 116-94, 133 Stat. 2534; Consolidated Appropriations
Act, 2021, Pub. L. No. 116-260, 134 Stat. 1182 (comparing
appropriations, including the FY 2021 one-year FAST Act extension at FY
2020 authorized levels and noting FY 2016 appropriations are not
reflective of the FAST Act).

Comparison of IIJA to FAST Act Rail Funding
--------------------------------------------------------------------------------------------------------------------------------------------------------
IIJA FAST Act
------------------------------------------------------------------------------------
Program FY 17-21 Enacted
FY 22-26 FY 22-26 Enacted FY 16-20 Regular
Authorizations \8\ Appropriations \9\ Authorizations \10\ Appropriations \11\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Amtrak--Northeast Corridor......................................... $6.57 billion $6 billion $2.60 billion $3.03 billion
NEC Commission................................................... $30 million $30 million $25 million $25 million
Accessibility Upgrades........................................... $250 million - - $275 million
--------------------------------------------------------------------------------------------------------------------------------------------------------
Amtrak--National Network........................................... $12.65 billion $15.75 billion $5.45 billion $6.35 billion
Interstate Rail Compacts State-Amtrak Intercity.................. $15 million $15 million - -
Passenger Rail Comm.............................................. $15 million $15 million $10 million $10 million
Accessibility Upgrades........................................... $250 million - - -
Corridor Development............................................. $1.26 billion - - -
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal Amtrak................................................ $19.22 billion $21.75 billion $8.05 billion $9.38 billion
--------------------------------------------------------------------------------------------------------------------------------------------------------

Federal-State Partnership for Intercity Passenger Rail Grants \12\. $7.5 billion $36 billion $997 million $1.08 billion
Northeast Corridor............................................... Not less than 45 Not more than $24 - -
percent reserved for billion
NEC inventory
projects
National Network................................................. Not less than 45 - - -
percent reserved for
National Network of
which at least 20
percent for long-
distance routes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consolidated Rail Infrastructure and Safety Improvements Grants.... $5 billion $5 billion $1.10 billion $1.62 billion
--------------------------------------------------------------------------------------------------------------------------------------------------------
RR Crossing Elimination Program Grants............................. $2.5 billion $3 billion - -
Planning......................................................... $75 million - - -
Highway-Rail Grade Crossing...................................... $6.25 million - - -
--------------------------------------------------------------------------------------------------------------------------------------------------------
Restoration & Enhancement Grants................................... $250 million $250 million \13\ $100 million, or $37 million
$20 million/year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Competitive Grants Subtotal...................................... $15.25 billion $44.25 billion $2.2 billion $2.73 billion
------------------------------------------------------------------------------------
Five Year Total................................................ $34.47 billion $66 billion $10.25 billion $12.1 billion
--------------------------------------------------------------------------------------------------------------------------------------------------------

Additionally,\\ Congress\\ provided more than $3.7 billion
in Northeast Corridor and National Network Grants to Amtrak
during the COVID pandemic to offset revenue losses from
decreased ridership and to maintain employment levels.\14\
---------------------------------------------------------------------------
\12\ Re-named program in IIJA, formerly Federal-State Partnership
for State of Good Repair in FAST Act.
\13\ IIJA, Pub. L. No. 117-58, Division J, 135 Stat. 192
(describing amounts appropriated from Amtrak NN emergency-designated
supplemental appropriation provided in Division J of IIJA).
\14\ See CARES Act, Pub. L. No. 116-136, 134 Stat. 281;
Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat.
1182; American Rescue Plan Act, Pub. L. No. 117-2, 135 Stat. 4.
---------------------------------------------------------------------------
Passenger rail lines rarely generate an operating
profit.\15\ Recently, FY 2019 was one of the closest years that
Amtrak came to making an operating profit, when it registered a
net loss of $881 million and a net operating loss, after
adjustments, of $29 million for the year.\16\ Due to the COVID-
19 pandemic, Amtrak's FY 2020 revenues fell by 60 percent and
ridership plummeted.\17\ Amtrak's FY 2021 net loss was over $2
billion, which recovered somewhat in FY 2022, with a loss of
$1.825 billion.\18\ According to Amtrak's Five-Year Plans for
FY 2022-2027, Amtrak is projecting operating losses of at least
roughly $1 billion per year on its service.\19\
---------------------------------------------------------------------------
\15\ Intercity Passenger Rail: Federal Policy and Programs, supra
note 2.
\16\ Id.
\17\ Id.
\18\ Id.
\19\ Amtrak, Five-Year Plans, Historic Opportunities--Amtrak's FY
2022-2027 Service and Asset Line Plans, available at https://
www.amtrak.com/content/dam/projects/dotcom/english/public/documents/
corporate/businessplanning/Amtrak-Service-Asset-Line-Plans-FY22-27.pdf;
see also Jeff Davis, Amtrak Concedes Perpetual $1 Billion/Year
Operating, Eno Center for Transp., (Apr. 21, 2023), available at
https://www.enotrans.org/article/amtrak-concedes-perpetual-1-billion-
year-operating-losses/.
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IV. AMTRAK RIDERSHIP

In pre-pandemic FY 2019, Amtrak set a record of 32.5
million trips taken on its system.\20\ FY 2019 marked the
eighth straight year Amtrak ridership surpassed 30 million
trips.\21\ In FY 2020, following the onset of the pandemic,
ridership plummeted to roughly 16.8 million people.\22\ April
2020 saw ridership fall to nearly 95 percent of its total one
year prior.\23\ Demand bottomed out in FY 2021 when Amtrak
carried 12.166 million riders, representing a drop of 62.6
percent in ridership.\24\ In FY 2022, ridership increased as
the pandemic ended, but still only reached 68 percent of pre-
pandemic levels.\25\
---------------------------------------------------------------------------
\20\ Amtrak Route Ridership, FY19 vs FY18, https://
media.amtrak.com/wp-content/uploads/2019/11/FY19-Year-End-
Ridership.pdf.
\21\ Intercity Passenger Rail: Fed. Policy and Programs, supra note
2.
\22\ Amtrak, FY 20 Year End Revenue and Ridership, available at
https://media.amtrak.com/wp-content/uploads/2020/12/FY20-Year-End-
Ridership.pdf.
\23\ Intercity Passenger Rail: Fed. Policy and Programs, supra note
2.
\24\ Amtrak, FY 22 Year End Revenue and Ridership, available at
https://media.amtrak.com/wp-content/uploads/2021/12/FY21-Year-End-
Revenue-and-Ridership.pdf.
\25\ Intercity Passenger Rail: Fed. Policy and Programs, supra note
2.

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Source: Ben Goldman, Cong. Rsch. Serv. (R47260) Intercity Passenger
Rail: Federal Policy and Programs, (Mar. 23, 2023).

V. ILLUSTRATIVE CORRIDOR DEVELOPMENT PROPOSALS

FRA CORRIDOR IDENTIFICATION AND DEVELOPMENT PROGRAM

Established by IIJA, the FRA's Corridor ID program will
guide intercity passenger rail planning and development. It is
intended to become the primary means for directing Federal
investment and assistance for new and improved intercity
passenger rail routes.\26\ The Corridor ID program will support
the sustained long-term development of intercity passenger rail
and will create a capital project pipeline ready for Federal
(and other) funding.\27\
---------------------------------------------------------------------------
\26\ Notice of Proposed Rulemaking for FRA Corridor ID Program,
available at https://www.federalregister.gov/documents/2022/12/20/2022-
27559/notice-of-solicitation-of-corridor-proposals-and-funding-
opportunity-for-the-corridor-identification
\27\ Id.
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CONNECT NEC 2035

In July 2021, the Northeast Corridor Commission
(Commission) released CONNECT NEC 2035 (C35), a plan that
details the sequencing of infrastructure investments and
capital renewal projects to be made throughout the Northeast
Corridor (Corridor) over 15 years.\28\ The Commission is
comprised of 18 members, including representatives from each of
the eight Corridor states, the District of Columbia, Amtrak,
and the DOT.\29\ The NEC Project Inventory, established by the
IIJA, is a predictable pipeline of projects that will assist
Commission Members and the public with long-term capital
planning for the NEC.\30\ To be eligible for the Federal-State
Partnership for Intercity Passenger Rail Program, NEC projects
must be on the NEC Project Inventory.\31\
---------------------------------------------------------------------------
\28\ Northeast Corridor Commission, CONNECT 2035 (July 2021),
available at https://nec-commission.com/app/uploads/2021/08/CONNECT-
NEC-2035-Plan.pdf [hereinafter CONNECT 2035].
\29\ Commission, The Commission, available at https://nec-
commission.com/commission/.
\30\ 2022 Northeast Corridor Project Inventory, available at
https://railroads.dot.gov/sites/fra.dot.gov/files/2022-11/
NEC%20Project%20Inventory.pdf.
\31\ FRA Publishes Northeast Corridor Project Inventory, Laying Out
Priorities for Intercity Passenger Rail Development on the NEC,
available at https://www.transportation.gov/briefing-room/fra-
publishes-northeast-corridor-project-inventory-laying-out-priorities-
intercity.
---------------------------------------------------------------------------

CALIFORNIA

The California State Transportation Agency (CalSTA) is the
Nation's largest state transportation agency responsible for
maritime, highway, transit, and rail systems planning,
investment, and oversight.\32\ California has three long-
standing intercity passenger rail corridors currently led by
joint powers authorities serving markets in the San Diego-Los
Angeles area, the San Joaquin Valley to Bakersfield, and the
San Francisco Bay Area to Sacramento.\33\
---------------------------------------------------------------------------
\32\ See CalSTA, Home, available at https://calsta.ca.gov/.
\33\ CalSTA, California State Rail Plan, available at https://
dot.ca.gov/programs/rail-and-mass-transportation/california-state-rail-
plan.
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SOUTHEAST CORRIDOR COMMISSION

The Southeast Corridor Commission (SEC) consists of
departments of transportation from Florida, Georgia, North
Carolina, South Carolina, Tennessee, Virginia, and Washington,
DC.\34\ The SEC issued the Southeast Regional Rail Plan in
December 2020, which seeks to increase intercity passenger rail
service in the region.\35\
---------------------------------------------------------------------------
\34\ SRC, Partners, available at https://www.southeastcorridor-
commission.org/partners.
\35\ SRC, Southeast Rail Plan, Final Report, (Dec. 2020), available
at https://www.southeastcorridor-commission.org/copy-of-commission-
reports-1.
---------------------------------------------------------------------------

SOUTHERN RAIL COMMISSION

The Southern Rail Commission (SRC) is an interstate compact
approved in 1982 by the legislatures of Louisiana, Mississippi,
and Alabama. The SRC is composed of commissioners appointed by
their respective governors, with a mission to promote the safe,
reliable, and efficient movement of people and goods to enhance
economic development, provide transportation choices, and
facilitate emergency evacuation routes.\36\ Section 11304 of
the FAST Act directed the DOT Secretary to convene a working
group to evaluate the restoration of intercity rail passenger
service between New Orleans, Louisiana, and Orlando, Florida.
In July 2017, the Working Group reported that approximately 1/
20th of CSX's estimated required capital investment was needed
to start service.\37\ Following the conclusion of legal
proceedings before the Surface Transportation Board (STB),
Amtrak is expected to resume service later this year.\38\
---------------------------------------------------------------------------
\36\ SRC, Our Mission, available at https://
www.southernrailcommission.org/mission.
\37\ Gulf Coast Working Group, Gulf Coast Working Group Report to
Congress, Final Report, (July 2017), at 7, available at https://
railroads.dot.gov/elibrary/gulf-coast-working-group-report-congress.
\38\ See Application of the National Railroad Passenger Corporation
Under 49 U.S.C. 24308(e)--CSX Transportation, Inc., and Norfolk
Southern Railway Company, 87 Fed. Reg. 6644 (Feb. 4, 2022) available at
https://www.govinfo.gov/content/pkg/FR-2022-02-04/pdf/2022-02416.pdf;
see also John Sharp, Mobile's train stop `key element' for Amtrak's
return to Gulf Coast, AL.com, (Apr. 3, 2023), available at https://
www.al.com/news/2023/04/mobiles-train-stop-key-element-for-amtraks-
return-to-gulf-coast.html.
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VI. WITNESS LIST

Mr. Stephen Gardner, CEO, Amtrak
Mr. Mitch Warren, Executive Director, Northeast
Corridor Commission

AMTRAK OPERATIONS: EXAMINING THE CHALLENGES AND OPPORTUNITIES FOR
IMPROVING EFFICIENCY AND SERVICE

----------

TUESDAY, JUNE 6, 2023

House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous
Materials,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:01 a.m., in
room 2167 Rayburn House Office Building, Hon. Troy E. Nehls
(Chairman of the subcommittee) presiding.
Mr. Nehls. The Subcommittee on Railroads, Pipelines, and
Hazardous Materials will come to order.
I ask unanimous consent that the chairman be authorized to
declare a recess at any time during today's hearing.
Without objection, so ordered.
I also ask unanimous consent that the Members not on the
subcommittee be permitted to sit with the subcommittee at
today's hearing and ask questions.
Without objection, so ordered.
And as a reminder, if Members wish to insert a document
into the record, email me.
I now recognize myself for the purposes of an opening
statement for 5 minutes.

OPENING STATEMENT OF HON. TROY E. NEHLS OF TEXAS, CHAIRMAN,
SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

Mr. Nehls. Today's hearing examines the current and future
state of Amtrak. The Infrastructure Investment and Jobs Act, or
IIJA, gave historic funding to railroads, with a large portion
of that money going to Amtrak.
Amtrak is a federally chartered corporation with the
Federal Government as the majority stakeholder. Its Board of
Directors is appointed by the President and confirmed by the
Senate. Amtrak's funding largely comes from the Federal
Government versus from ticket revenue. Without significant
taxpayer support, we all know that Amtrak could not operate.
Since its creation in 1971, Amtrak has never made a profit.
Since 1971, Amtrak has never made a profit. Despite the funding
provided in IIJA, Amtrak predicts it will lose roughly $1
billion, with a ``B,'' per year, with those losses largely
covered by the taxpayers.
My Democratic colleagues like to note that highways and
airlines also rely on Government subsidies to operate. While
those modes receive Federal support, they are also essential
forms of transportation in high use and high demand by the
American people. Unlike Amtrak, Americans could not travel and
function as they do without the use of highways and airplanes.
And during the COVID-19 pandemic, Amtrak ridership and
revenues plummeted as commuters stayed home or chose to use
other modes of transportation. Ultimately, Amtrak received
billions of extra dollars in COVID relief to operate largely
empty trains for several months.
Today, we will examine the state of Amtrak's post-COVID
recovery. While Amtrak has regained some ridership in recent
months, we will hear about Amtrak's plans to continue boosting
demand and ticket revenue.
Amtrak's losses arise mostly entirely from its national
network and long-distance routes. Rather than focusing on
attracting riders to existing routes, Amtrak now seeks to
expand this network, risking a greater expense to the taxpayer.
Some of these new routes will even require the States to cover
costs and losses.
And in fairness to Amtrak, prior to the pandemic, it was on
a path to achieve profitability for the first time in roughly
50 years. This turnaround came as a result of tough decisions
by its leaders that prioritized service and shared sacrifices
with Amtrak employees.
While growth is a positive trend for a company, Amtrak must
prioritize improving its current network, including important
system maintenance and upgrades, and improving safety,
security, and customer satisfaction issues that have plagued
Amtrak for years over expansion ambitions.
In addition to spending and revenue issues, this committee
has questioned Amtrak about its compliance with the Americans
with Disabilities Act, rising crime in its stations and trains,
the potential transport of illegal migrants from the southern
border on its trains, and generous executive bonuses despite
losses and service problems.
Amtrak must work to attract customers and revenue and
operate as a reasonable steward of the taxpayers' dollars. It
should ensure that its network is safe and secure. Further, it
is necessary for Amtrak to strengthen its relationship with the
States, including through the development of a transparent and
fair cost allocation policy for State-supported Amtrak routes.
Finally, any potential expansion of Amtrak's system must
allow for freight railroads to provide input--to provide
input--on capacity and track sharing issues. The recent supply
chain crisis further emphasizes the value of freight railroads
in efficiently moving goods across the Nation. Amtrak's
passenger expansion efforts should not be allowed to obstruct
the critical movement of freight railroads.
[Mr. Nehls' prepared statement follows:]

Prepared Statement of Hon. Troy E. Nehls, a Representative in Congress
from the State of Texas, and Chairman, Subcommittee on Railroads,
Pipelines, and Hazardous Materials
Today's hearing examines the current and future state of Amtrak.
The Infrastructure Investment and Jobs Act (IIJA) gave historic funding
to railroads, with a large portion of that money going to Amtrak.
Amtrak is a federally chartered corporation with the federal
government as the majority stakeholder. Its Board of Directors is
appointed by the President and confirmed by the Senate. Amtrak's
funding largely comes from the federal government, versus from ticket
revenue. Without significant taxpayer support, Amtrak could not
operate.
Since its creation in 1971, Amtrak has never made a profit. Despite
the funding provided in IIJA, Amtrak predicts it will lose roughly $1
billion per year, with those losses largely covered by the taxpayers.
My Democrat colleagues like to note that highways and airlines also
rely on government subsidies to operate. While those modes receive
federal support, they are also essential forms of transportation, in
high use and high demand by the American people. Unlike Amtrak,
Americans could not travel and function as they do without the use of
highways and airplanes.
During the COVID-19 pandemic, Amtrak ridership and revenues
plummeted as commuters stayed home or chose to use other modes of
transportation. Ultimately, Amtrak received billions of extra dollars
in COVID relief to operate largely empty trains for several months.
Today, we will examine the state of Amtrak's post-COVID recovery.
While Amtrak has regained some ridership in recent months, we will hear
about Amtrak's plans to continue boosting demand and ticket revenue.
Amtrak's losses arise almost entirely from its National Network and
long-distance routes. Rather than focusing on attracting riders to
existing routes, Amtrak now seeks to expand this network, risking a
greater expense to the taxpayer. Some of these new routes will even
require the states to cover costs and losses.
In fairness to Amtrak, prior to the pandemic, it was on a path to
achieve profitability for the first time in roughly 50 years. This
turnaround came as the result of tough decisions by its leaders that
prioritized service and shared sacrifices with Amtrak employees.
While growth is a positive trend for a company, Amtrak must
prioritize improving its current network, including important system
maintenance and upgrades, and improving safety, security and customer
satisfaction issues that have plagued Amtrak for years over expansion
ambitions.
In addition to spending and revenue issues, this Committee has
questioned Amtrak about its compliance with the Americans with
Disabilities Act, rising crime in its stations and trains, the
potential transport of illegal migrants from the southern border on its
trains, and generous executive bonuses despite losses and service
problems.
Amtrak must work to attract customers and revenue and operate as a
responsible steward of taxpayer dollars. It should ensure its network
is safe and secure. Further, it is necessary for Amtrak to strengthen
its relationships with the states, including through the development of
a transparent and fair cost allocation policy for state-supported
Amtrak routes.
Finally, any potential expansion of Amtrak's system must allow for
freight railroads to provide input on capacity and track sharing
issues. The recent supply chain crisis further emphasizes the value of
freight railroads in efficiently moving goods across the Nation.
Amtrak's passenger expansion efforts should not be allowed to obstruct
the critical movement of freight railroads.

Mr. Nehls. I now recognize Ranking Member Payne for 5
minutes for an opening statement.

OPENING STATEMENT OF HON. DONALD M. PAYNE, Jr., OF NEW JERSEY,
RANKING MEMBER, SUBCOMMITTEE ON RAILROADS, PIPELINES, AND
HAZARDOUS MATERIALS

Mr. Payne. Thank you, Mr. Chairman. And to one of the major
points that you made, if there is an example of a passenger
entity somewhere in the world that is profitable on its own,
please, the committee would love to know.
So, with that, I want to thank you, Chairman Nehls,
Chairman Graves, Ranking Member Larsen, and our two witnesses,
for being here today.
We are here today during an exciting time for Amtrak, and
more broadly, intercity passenger rail across the country.
For the first time, this mode of transportation has
guaranteed funding for multiple years. The value of this
certainty is not to be understated. This is akin to the
beginning of the Interstate Highway System, which we continue
to support.
The Bipartisan Infrastructure Law, signed by President
Biden in November 2021, provides $22 billion in funding to
Amtrak through fiscal year 2026, $16 billion of which is to be
invested in the national network, while the remaining $6
billion goes towards infrastructure, and that is along the
Northeast Corridor. Another $19 billion is authorized for
Amtrak's capital investments nationwide.
The Bipartisan Infrastructure Law further invests $36
billion in the Federal-State Partnership for Intercity
Passenger Rail Program, with $24 billion allocated explicitly
to the Northeast Corridor. Another $7.5 billion in funding is
also authorized for this grant program.
Amtrak recently submitted grant applications for multiple
projects through this program totaling roughly $9 billion.
Together, these projects will assist in increasing rail
capacity while reducing service interruptions.
Projects like the Gateway Program in my home State of New
Jersey will improve the passenger experience along the
Northeast Corridor by digging a pair of new tunnels under the
Hudson River and replacing the Portal Bridge. Both of these
chokepoints are over 100 years old, and maintenance problems
here often cause delays for passengers riding Amtrak and New
Jersey Transit.
Other projects along the Northeast Corridor, such as the
Frederick Douglass Tunnel in Baltimore, need restoration. This
tunnel is 150 years old, the oldest along the corridor. Water
damage and tight curves force Acela trains to slow down to 30
miles an hour, adding precious minutes to trips for travelers
across Maryland and the rest of the corridor.
Similarly, there is much work to be done on intercity rail
projects across the country, including bringing stations into
compliance with the Americans with Disabilities Act, refreshing
Amtrak's fleet of aging railcars and locomotives, and replacing
older rail bridges like the 100-year-old San Luis Rey River
Bridge in San Diego County, California.
I look forward to new and improved corridors that can be
advanced with this funding.
The Federal Railroad Administration recently received
numerous proposals for the Corridor ID Program. This will be
the template for passenger rail expansion in the coming years.
Established corridors in North Carolina and California will
finally have a consistent Federal partner. New corridors are
ripe for development in Texas, Nevada, and the gulf coast.
I look forward to the Federal Railroad Administration's
project pipeline that will identify the capital projects needed
to develop these and other corridors.
All of this funding, all of these projects, and all the
benefits that future generations will enjoy would not be
possible without our efforts in the 117th Congress when it
passed the Bipartisan Infrastructure Law in this Chamber and
sent it to President Biden for signature.
The $100 billion in funding for rail projects included in
this monumental law is a game changer for communities
nationwide. I look forward to diving into some of the details
with our witnesses shortly.
And with that, Mr. Chairman, I yield back.
[Mr. Payne's prepared statement follows:]

Prepared Statement of Hon. Donald M. Payne, Jr., a Representative in
Congress from the State of New Jersey, and Ranking Member, Subcommittee
on Railroads, Pipelines, and Hazardous Materials
Good morning.
Thank you, Chairman Nehls, Chairman Graves, Ranking Member Larsen,
and our two witnesses for being with us today.
We are here today during an exciting time for Amtrak and, more
broadly, intercity passenger rail across the country.
For the first time, this mode of transportation has guaranteed
funding for multiple years. The value of this certainty is not to be
understated. This is akin to the beginning of the interstate highway
system, which we continue to support.
The Bipartisan Infrastructure Law, signed by President Biden in
November 2021, provides $22 billion in funding to Amtrak through Fiscal
Year 2026, $16 billion of which is to be invested in the national
network while the remaining $6 billion goes towards infrastructure
improvements along the Northeast Corridor. Another $19 billion is
authorized for Amtrak's capital investments nationwide.
The Bipartisan Infrastructure Law further invests $36 billion in
the Federal State Partnership for Intercity Passenger Rail Program,
with $24 billion allocated explicitly to the Northeast Corridor.
Another $7.5 billion in funding is also authorized for this grant
program.
Amtrak recently submitted grant applications for multiple projects
through this program totaling roughly $9 billion. Together, these
projects will assist in increasing rail capacity while reducing service
interruptions.
Projects like the Gateway Program in my home state of New Jersey
will improve the passenger experience along the Northeast corridor by
digging a new pair of tunnels under the Hudson River and replacing
Portal Bridge. Both of these chokepoints are over one hundred years
old, and maintenance problems here often cause delays for passengers
riding Amtrak and NJ Transit.
Other projects along the Northeast Corridor, such as the Frederick
Douglass tunnel in Baltimore, need restoration. This tunnel is 150
years old, the oldest along the corridor. Water damage, and tight
curves, force Acela trains to slow down to thirty miles per hour,
adding precious minutes to trips for travelers across Maryland and the
rest of the corridor.
Similarly, there is much work to be done on intercity rail projects
across the country including bringing stations into compliance with the
Americans with Disabilities Act, refreshing Amtrak's fleet of aging
railcars and locomotives, and replacing older rail bridges like the
100-year-old San Luis Rey River Bridge in San Diego County, California.
I look forward to new and improved corridors that can be advanced
with this funding. The Federal Railroad Administration recently
received numerous proposals for the Corridor ID program. This will be
the template for passenger rail expansion in the coming years.
Established corridors in North Carolina and California will finally
have a consistent federal partner. New corridors are ripe for
development in Texas, Nevada, and along the Gulf Coast.
I also look forward to the Federal Railroad Administration's
project pipeline that will identify the capital projects needed to
develop these, and other, corridors.
All of this funding, all of these projects, and all the benefits
that future generations will enjoy would not be possible without our
efforts in the 117th Congress when we passed the Bipartisan
Infrastructure Law in this chamber and sent it to President Biden for
his signature.
The $100 billion in funding for rail projects included in this
monumental law is a game changer for communities nationwide. I look
forward to diving into some details with our witnesses shortly.
I yield back.

Mr. Nehls. Mr. Payne yields.
I now recognize the ranking member of the full committee,
Mr. Larsen, for 5 minutes for an opening statement.

OPENING STATEMENT OF HON. RICK LARSEN OF WASHINGTON, RANKING
MEMBER, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

Mr. Larsen of Washington. Thank you, Chairman Nehls and
Ranking Member Payne, for holding today's hearing on improving
Amtrak operations across the country.
The Bipartisan Infrastructure Law was a monumental
achievement that supercharged our Nation's investment in rail
with $100 billion in funding. The BIL provided bold, long-term
investments across transportation systems and infrastructure
that are creating jobs and benefiting our economy. Just last
week, the Bureau of Labor Stats reported that the economy added
339,000 jobs in May, including 25,000 construction jobs and
24,000 transportation and warehousing jobs, a sign that the
economy is on the move.
For intercity passenger rail specifically, the BIL
guaranteed multiyear funding for state-of-good-repair
investments and development. It makes possible, for the first
time ever, dedicated, reliable Federal funding, disbursed over
the next few years, to improve and expand intercity passenger
rail.
Just this week, the first round of competitive rail grant
funding from BIL was announced, and among the recipients was
the city of Burlington, Washington, in the Second Congressional
District, which was awarded a $2 million planning grant to
remove a grade crossing, which will, in turn, increase mobility
for all rail traffic.
Burlington Mayor Steve Sexton brought this idea to me
nearly a decade ago, and I am pleased to see this project
awarded the funding it needs to improve safety and reduce
congestion.
Projects like this are improving the quality of life and
creating jobs, and Washington State has led the way in
executing BIL funding so far. And I expect great results for
our communities that will come from this grant and the
additional rail funding to come, as well.
Amtrak and the FRA can now enact long-term plans for
passenger rail expansion and improvement, secure in the
knowledge that the funding will be there in future years. The
bipartisan budget agreement protected BIL funding from cuts,
including this vital rail funding, and demonstrated support on
both sides of the aisle to maintain these investments.
I look forward to hearing from both of our witnesses today
about the difference this budget certainty has made for them in
developing and sustaining programs, and how this will
ultimately improve service for rail passengers.
I want to apologize for Mr. Warren for missing our meeting
yesterday. It was an airplane issue and not a rail issue that
prevented me from getting here on time, so . . .
However, this funding is not only intended to improve rail
service, but to expand it. The demand for more frequent, more
reliable passenger rail service is real. Cities and counties
across the Nation want increased access to the national
passenger rail network. They know this will help their towns
grow and thrive and provide a greener way to move people. The
communities that have rail service want better service. The
communities that do not have service want service to start.
Communities in my district were frustrated that the COVID
pandemic shuttered State-supported Amtrak routes like the
Amtrak Cascades which connects communities like Everett,
Edmonds, Stanwood, Mount Vernon, and Bellingham in my district
to cities like Seattle, Spokane, Portland, Eugene, and
Vancouver, British Columbia. I celebrate the return of the
service and note, though, that it took 3 years to restore.
Mr. Payne referred to the gulf coast, where it took 17
years to get an agreement there to restart service after
Hurricane Katrina. To my colleagues on this committee
representing gulf communities, I share the frustration you and
your constituents have undoubtedly experienced.
As we did in fighting for rail funding in the BIL, this
committee is committed to helping communities get regular and
reliable passenger rail service.
Now, of the $100 billion provided for rail in the BIL, $66
billion was provided in the form of advance appropriations. The
remaining $34 billion is subject to future appropriations. So,
I think we should continue to push for Congress to fully fund
its intercity passenger rail commitments to create more jobs,
grow regional economies, reduce congestion and carbon
emissions, and build a cleaner, greener, safer, and more
accessible transportation network.
The BIL is also an investment in the workforce. This
funding will be used to grow a well-trained, diverse workforce
to build, operate, and maintain a national intercity passenger
rail network.
The transformational investment in the BIL is a great
start, but Congress needs to build on this by securing a
reliable funding stream for intercity passenger rail. Highways,
transit, airports, and harbors all have access to trust funds
enabling them to fund their long-term major capital projects
without having to wait for annual appropriations process. It is
past time to do this for rail.
This committee will have the opportunity today to hear from
two witnesses who are on the front lines, turning these
historic investments into tangible improvements to rail service
that our communities can rely on.
We will also have the opportunity to specifically examine
Amtrak's plans for service improvements and growth, and to hear
from one of Amtrak's key partners, the Northeast Corridor
Commission, on how the BIL will improve passenger rail in that
region.
So, I look forward to hearing from our witnesses about
their vision for the future of passenger rail.
And with that, I yield back.
[Mr. Larsen of Washington's prepared statement follows:]

Prepared Statement of Hon. Rick Larsen, a Representative in Congress
from the State of Washington, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you, Chairman Nehls and Ranking Member Payne, for holding
today's hearing on improving Amtrak operations across the country.
The Bipartisan Infrastructure Law (BIL) was a monumental
achievement that supercharged our nation's investment in rail with $100
billion in funding.
The BIL provided bold, long-term investments across transportation
systems and infrastructure that are creating jobs and benefiting our
economy.
Just last week, the Bureau of Labor Statistics reported that the
economy added 339,000 jobs in May, including 25,000 construction jobs
and 24,000 transportation and warehousing jobs--a sign that the economy
is on the move.
For intercity passenger rail specifically, the BIL guaranteed
multi-year funding for state of good repair investments and
development.
It makes possible, for the first time ever, dedicated, reliable
federal funding--disbursed over the next few years--to improve and
expand intercity passenger rail.
Just this week, the first round of competitive rail grant funding
from the BIL was announced.
Among the recipients was the City of Burlington, in Washington's
Second District, which was awarded a $2 million planning grant to
remove a grade crossing, which will in turn increase mobility for all
rail traffic.
Burlington Mayor Steve Sexton brought this idea to me nearly a
decade ago, and I am pleased to see the project awarded the funding it
needs to improve safety and reduce congestion.
Projects like this are improving quality of life and creating jobs,
and Washington state has led the way in executing BIL funding so far.
I expect great results for communities will come from this grant
and the additional rail funding to come, as well.
Amtrak and the Federal Railroad Administration can now enact long-
term plans for passenger rail expansion and improvement, secure in the
knowledge that the funding will be there in future years.
The Bipartisan Budget Agreement protected BIL funding from cuts,
including this vital rail funding, and demonstrated support on both
sides of the aisle to maintain these investments.
I'm looking forward to hearing from both our witnesses today about
the difference this budget certainty has made for them in developing
and sustaining programs, and how this will ultimately improve service
for rail passengers.
However, the funding is not only intended to improve rail service,
but to expand it. The demand for more frequent and more reliable
passenger rail is real. Cities and counties across the nation want
increased access to the national passenger rail network.
They know that this will help their towns grow and thrive and
provide a greener way to move people.
The communities that have rail service want better service. The
communities that do not, want service to start.
Communities in my district were frustrated that the COVID pandemic
shuttered state-supported Amtrak routes like Cascades, which connects
communities like Everett, Edmonds, Stanwood, Mount Vernon and
Bellingham in my district to cities like Seattle, Spokane, Portland,
Eugene, and Vancouver, British Columbia. I celebrate the return of this
service--and note that it took three years to restore.
Mr. Payne referred to the Gulf Coast--it took 17 years to get
agreement there to restart service after Hurricane Katrina.
To my colleagues on this Committee representing Gulf communities, I
share the frustration you and your constituents have undoubtedly
experienced.
As we did in fighting for rail funding in the BIL, this Committee
is committed to helping communities get regular and reliable passenger
rail service.
Of the $100 billion provided for rail in the BIL, $66 billion was
provided in the form of advance appropriations. The remaining $34
billion is subject to future appropriations legislation. I think we
should continue to push for Congress to fully fund its intercity
passenger rail commitments to create more jobs, grow regional
economies, reduce congestion and carbon emissions, and build a cleaner,
greener, safer and more accessible transportation network.
The BIL is also an investment in our workforce. The funding will be
used to grow a well-trained, diverse workforce to build, operate and
maintain a national intercity passenger rail network.
The transformational investment in the BIL is a great start, but
Congress needs to build on this by securing a reliable funding stream
for intercity passenger rail.
Highways, transit, airports and harbors all have access to trust
funds, enabling them to fund their long-term major capital projects
without having to wait for the annual appropriations process.
It's past time that intercity passenger rail was brought into
parity with the other modes.
Today, this Committee will have the opportunity to hear from two
witnesses who are on the front lines, turning historic investment into
tangible improvements to rail service that communities can rely on.
We will have the opportunity to specifically examine Amtrak's plans
for service improvements and growth.
We will also be able to hear from one of Amtrak's key partners, the
Northeast Corridor Commission, on how the BIL will improve passenger
rail nationwide.
I look forward to hearing from our witnesses today about their
vision for the future of passenger rail.

Mr. Nehls. Mr. Larsen yields.
I would like to now welcome our witnesses, and thank you
for being here. Mr. Gardner, Mr. Warren, I will take a minute
here to explain our lighting system to you. There are three
lights. Green means go; obviously, yellow, you are running out
of time; and then red means pump the brakes.
I ask unanimous consent that the witnesses' full statements
be included in the record.
Without objection, so ordered.
And as your written testimony has been made part of the
record, the subcommittee asks that you limit your oral remarks
to 5 minutes.
And with that, Mr. Gardner, you are recognized for those 5
minutes.

TESTIMONY OF STEPHEN GARDNER, CHIEF EXECUTIVE OFFICER, NATIONAL
RAILROAD PASSENGER CORPORATION (AMTRAK); AND MITCH WARREN,
EXECUTIVE DIRECTOR, NORTHEAST CORRIDOR COMMISSION

TESTIMONY OF STEPHEN GARDNER, CHIEF EXECUTIVE OFFICER, NATIONAL
RAILROAD PASSENGER CORPORATION (AMTRAK)

Mr. Gardner. Good morning, Chairman Nehls, Ranking Member
Payne, Ranking Member Larsen, and members of the subcommittee.
Thanks for having me here today.
Let me start with a brief update on the strong year Amtrak
is having so far in fiscal year 2023. Safety is our number one
priority, and its importance was highlighted this past weekend
by the tragic accident in India. Our heart goes out to those
impacted, and it is a solemn reminder that our work is never
done.
I am glad to report, however, that through March, Amtrak's
rate of reportable injuries was 20 percent better than our
annual goal, and we have not had a single NTSB-investigated
accident this year.
I am also proud to say that we have returned service to all
of our network. While several routes are still with less
frequency than pre-pandemic, we are progressing our plan to add
more service over the coming year. We also continue to upgrade
our customer experience, improve our facilities, and enhance
our food and beverage offerings.
Through April, our year-to-date ridership was 84 percent of
our pre-pandemic levels, and in April, it was 89 percent. By
next year, we expect to reach our overall fiscal year 2019
level of 32 million riders again. This is remarkable, and the
best post-pandemic performance of any U.S. passenger rail
operator.
However, ridership does remain impacted by some
insufficient equipment and reduced business travel. Both have
affected Acela revenues, in particular, making adequate funding
for the Northeast Corridor even more vital.
Speaking of financials, through April of fiscal year 2023,
our adjusted operating loss was $434 million, which is $53
million better than our plan, and our fare box recovery has
risen to 76 percent.
We are still a ways off from achieving break-even results,
as we were on track to do in fiscal year 2020, due to the more
than 3 years of significant cost increases and lost revenue
growth. But we see a path for our train operations business to
return there under an apples-to-apples comparison in about 5
years.
Let me also mention how the finances of the company have
changed dramatically due to the large influx in IIJA capital
funding. Amtrak is no longer simply a passenger rail operator,
but we are now a major construction company executing a massive
capital program. This creates additional operating expenses
that didn't exist before.
Regarding economics, Congress was clear in the IIJA that
Amtrak's statutory goal is to maximize public benefits from
Federal funding, not just minimize our need for them. You can
be sure we will continue to place a balance on pursuit of
improved financial performance with our other statutory goals.
Through the IIJA, for the first time in Amtrak's history,
Congress and the administration are now investing at the levels
needed to achieve these goals. Since I last appeared before the
subcommittee, Amtrak has begun to receive our IIJA funds from
the FRA and put them to good use.
With our partners, we have recently applied for about $10
billion in FRA and DOT grants, and we are advancing many key
projects, including construction of the new Hudson River Tunnel
and rehab of our East River Tunnels, both which will begin next
year; and construction of Portal North Bridge in New Jersey,
which is about 25 percent complete; advancing our B&P Tunnel
Replacement Program and vital bridge projects in Maryland and
Connecticut; manufacturing our new Airo train sets by Siemens
in Sacramento, California, and our new Acela trains by Alstom
in upstate New York, with support from hundreds of suppliers
all across America; procurement of our new fleet of long-
distance trains which we will put out to bid later this year;
completion of 112 ADA projects in stations all across our
network over the next 16 months; startup of two new State-
supported services between New Orleans and Mobile, and the Twin
Cities and Chicago later this year; grant applications to study
extensions for long-distance service between Meridian,
Mississippi, and Dallas-Fort Worth, and daily service on the
Cardinal and Sunset routes; and support for many of the more
than 90 applications by States and cities from across America
to the FRA's Corridor ID Program to develop new and enhanced
services.
We are excited by this progress, and it is important to
note, though, that it will take sustained Federal support to
develop a 21st-century passenger rail network.
In the near term, we need adequate appropriations to
maintain and operate our trains. In the long term, we need a
reliable funding mechanism, like other transportation modes
have, so we can efficiently plan and deliver our network.
Lastly, good on-time performance is fundamental to our
business, and we continue to face challenges with some of our
host railroad partners. I hope this subcommittee will work with
us on these issues so we can better serve the whole Nation and
your constituents.
Thank you for the opportunity to testify today and for your
time. I look forward to your questions.
[Mr. Gardner's prepared statement follows:]

Prepared Statement of Stephen Gardner, Chief Executive Officer,
National Railroad Passenger Corporation (Amtrak)
Good morning, Chairman Nehls, Ranking Member Payne, and Members of
the Subcommittee. My name is Stephen Gardner, and I am the Chief
Executive Officer of Amtrak. Thank you for inviting me to appear before
you today to discuss Amtrak's operations, and the challenges we face
and opportunities we have to improve our efficiency and service.
This hearing is very timely. The train called Amtrak is emerging
from the dark tunnel of the COVID-19 pandemic, poised to travel faster
than before. We are now just over two thirds of the way into Fiscal
Year 2023, the first year since pre-pandemic 2019 in which our
operations and demand for our services are finally returning to normal,
albeit in some respects a new normal. Our ridership, revenues, service
and workforce have recovered in ways that we could only have dreamed of
during the darkest hours of the pandemic, when virtually overnight our
ridership and revenue plunged by 97%.
Amtrak has come a long way since then. We have restored service to
all of our routes, are operating nearly all our pre-pandemic
frequencies, have regained most of our ridership and revenues, have
attracted many new customers, and have rebuilt our workforce. And for
the first time in Amtrak's 52-year history, the Infrastructure
Investment and Jobs Act, or IIJA, has provided us with substantial,
multi-year funding that will enable us to launch a new era for
intercity passenger rail in the United States.
I'd like to begin by talking about Amtrak's current performance
during Fiscal Year 2023 to date. I will then describe how we are
seizing the opportunities IIJA funding has provided, and finally turn
to the challenges we face and the actions we are taking to address
them.
The State of the Company
I will start with safety, where I am pleased to report that the
efforts of our teams across the company are producing extremely strong
results. We have experienced zero NTSB accidents in Fiscal Year 2023.
Through April, our rate of FRA reportable employee injuries per 200,000
hours was at historically low levels and 24% ahead of our FY23 goal.
I am also pleased to tell you that we have also restored nearly all
of the service we suspended or reduced during the COVID-19 pandemic.
With the recent resumption of our New York City to Montreal Adirondack
route and restoration of the second Amtrak Cascades round trip between
Seattle and Vancouver, British Columbia, we are back to running our
entire pre-pandemic network and have fully restored cross-border
service to Canada. All of our long-distance routes have been operating
at normal service frequency since October of last year and nearly all
Northeast Regional service on the Northeast Corridor has been restored.
The few remaining routes where service hasn't returned to full levels
are our high-speed Acela service on the Northeast Corridor, which is
still operating a reduced schedule due to equipment challenges, and
several state-supported routes where we have not restored all pre-
pandemic frequencies, in most cases because of the wishes of our state
partners.
Our fiscal-year-to-date total ridership through April was 84% and
our ticket revenues 95% of pre-pandemic levels. During April, ridership
was 89% and ticket revenues 96% of April 2019. For the week of May 22,
we achieved the same level of ridership we had in the same week in FY
2019. On some routes we are carrying more passengers than before the
pandemic. We expect to reach a ``normal'' level of ridership--the 32.3
million passengers we carried in Fiscal Year 2019--next year.
What is particularly encouraging is that we have achieved this
level of ridership return even though:
Ridership on several state-supported routes that carry
large numbers of work commuters remains significantly below pre-
pandemic levels;
Our Pacific Surfliner route from San Diego to Los Angeles
and San Luis Obispo, our highest ridership route outside of the
Northeast Corridor, pre-pandemic, has been severed twice in recent
months for extended periods due to erosion impacting tracks along the
Pacific Coast it follows; and
Passenger capacity, as measured by available seat miles,
on all three of our service lines is lower than it was pre-pandemic--
15% lower systemwide during April--due to fewer frequencies and a
shortage of certain equipment types.

We are also encouraged by the number of new passengers we are
seeing. Currently, about 30% of our passengers are new to Amtrak, up
from roughly 20% pre-pandemic, indicating that many new customers are
interested in trying the train. Changes in the trip purpose of new
Acela passengers bear this out. Pre-COVID, about half of them were
traveling for business. Today, it's only 20%. This illustrates both the
reduced demand for business travel, which is continuing to negatively
impact average fare per passenger on Acela, but also a new market of
leisure passengers willing to pay more for an upgraded experience. We
are endeavoring to capitalize on that opportunity through new marketing
and fare strategies, including our Amtrak BidUp program which invites
passenger who have reserved a coach seat to submit bids to upgrade to a
premium class of service.
Our Adjusted Operating Loss in Fiscal Year 2023 through April was
$433.7 million, $53.5 million better than our plan. When our ridership
and revenues evaporated in March 2020 at the onset of the COVID-19
pandemic, Amtrak was ahead of plan for achieving a major accomplishment
we had sought for three decades and no other U.S. passenger railroad
has accomplished in generations: break-even results, meaning that
revenues were set to equal or exceed operating expenses. Achieving
break-even results or better again for our passenger operations will
take time, because by the time our ridership and revenues return to
2019 levels we will have missed out on four years of typical revenue
growth and incurred a dramatic increase in our cost-base because of the
pandemic, due to inflation. Additionally, the finances of the company
are dramatically different because of the large influx in capital
funding we are receiving through the IIJA. The vital capital work that
this funding makes possible also comes with new levels of operating
expenses to support it and therefore, on a consolidated basis, will add
to our losses on top of the normal costs of running today's network for
a period of time as we deliver this work. If we exclude these new
capital-related operating costs, we believe that we can achieve break-
even results for our train operations once again within about five
years if Amtrak and the relevant FRA grant programs are funded at IIJA-
authorized levels so we can make investments that are necessary to
improve efficiency, facilitate growth, and improve our financial
performance.
Let me be clear, however, that we do not intend to pursue financial
results at the expense of meeting our other obligations under law.
Amtrak did that once in the late 1990s in an effort to fulfill an
unrealistic Congressional mandate, a course of action that contributed
to the company's near bankruptcy in 2002. Among our most important
statutory obligations are operating our current long-distance network,
a responsibility Congress codified in the IIJA; working with states to
expand Amtrak service on corridors throughout the United States, an
obligation reinforced by the IIJA; and collaborating with our state and
commuter partners to carry out the major capital projects included in
the 15-year CONNECT NEC plan the IIJA requires the NEC Commission to
develop and update.
Financial performance is not Amtrak's sole objective. If it were,
we would do what the Penn Central, the railroad that was the last
private owner of the Northeast Corridor, did: declare bankruptcy; get
rid of our obligations to maintain the infrastructure and operate
passenger trains; and go into the real estate business with the
property and assets we own along the corridor. Passenger rail is a
service, not a profit center, as every other country in the world
acknowledges. The IIJA made that clear by amending Amtrak's goals to
clarify that Amtrak was to use the federal funding it receives to
maximize public benefits rather than to minimize our need for federal
funding at the expense of our mission and goals. The biggest challenge
we faced when we came out of the pandemic was rebuilding our most
important asset: our workforce. We did everything we could to keep
employees on the payroll during the pandemic. We did not furlough a
single Mechanical or Engineering employee; we offered incentives to
employees already eligible to retire so that we could keep paying our
lower seniority workers--our workforce of the future--and we recalled
all furloughed employees, over 90% of whom returned, once we received
the funding we needed to pay them. Nonetheless, by the time we were
able to begin hiring and offering in-person training classes again, our
headcount was well below the level required even for our pre-pandemic
operations, to say nothing of what was needed to carry out projects
funded by the IIJA.
Rebuilding our workforce during a time of record low unemployment
was a major challenge--but we have met it. We hired 4,000 new employees
during Fiscal Year 2022 and have hired 2,700 more during the first
seven months of Fiscal Year 2023. We will continue our accelerated
hiring efforts until we have enough employees to ensure that we can
operate all of our trains at required staffing levels, maintain and
repair our equipment, perform work on major infrastructure projects and
meet our obligations to partners. Of particular importance is having
enough Amtrak employees to manage major capital projects so that we
don't have to rely on high-priced consultants.
We are also working to improve our customers' experience. We are
adding additional agents to minimize wait times for passengers who call
our contact center or communicate with us virtually. We are enhancing
food service on a number of routes. Coach passengers on our western
long-distance trains now have access to the dining car for meal
service; traditional dining is being introduced on our Silver Star and
Silver Meteor between New York City and Miami; and we have launched new
menus for First Class customers on our Acela trains in collaboration
with an award-winning restaurant group. The Food and Beverage Working
Group created by the IIJA, whose membership included representatives of
our employees, state partners, passenger rail users and Amtrak,
recently issued its report. We are reviewing its recommendations and
will report to you later this year on our response to them, as
contemplated by the IIJA.
Capitalizing on the Opportunities Provided by the IIJA
The IIJA provides the funding Amtrak, its partners and stakeholders
have long sought to make vital, once-in-a-generation investments in our
infrastructure along the Northeast Corridor; in Chicago, the hub of our
National Network; and on other Amtrak-owned infrastructure. I'm pleased
to report that, in the eight months since I last appeared before this
Subcommittee, Amtrak and its state and commuter railroad partners have
been making significant progress in advancing many major infrastructure
projects.
Construction on the Hudson Tunnel Project, the most important
component of the New York/New Jersey Gateway Program, is expected to
begin next year following execution of a full funding grant agreement.
We expect to begin construction this year on section 3 of the Hudson
Yards Concrete Casing that will preserve the underground right-of-way
for the tunnel, which was awarded a $292 million Mega grant in January.
The Portal North Bridge over the Hackensack River is now 25% complete.
We are also moving towards construction of two vital bridge
projects, the replacement of the 117-year-old Susquehanna River Bridge
in Maryland and the 116-year-old Connecticut River Bridge between Old
Saybrook and Old Lyme, Connecticut. We recently initiated a procurement
for a Construction Manager at Risk for the Susquehanna River Bridge and
issued a Request for Qualifications for a Construction Contractor for
the Connecticut River Bridge. We have submitted applications for
Federal-State Partnership grants for both projects and expect to begin
early work on the Susquehanna River Bridge Project and construction of
the Connecticut River Bridge during 2024.
The IIJA will also allow Amtrak to advance projects that will
increase speeds and reduce trip times. Amtrak has submitted Federal-
State Partnership grant applications for a New Haven to Providence
Capacity Planning Study and an Infrastructure Renewal and Speed
Improvement Program (IRSIP) Planning Study for the portion of the
Northeast Corridor between Northern New Jersey and Washington, D.C.
These studies will develop and evaluate alternatives to grow rail
capacity and improve performance on both segments of the Northeast
Corridor, including the potential creation of new rail alignment
segments on which trains could operate at higher speeds.
The biggest improvements in trip time and operational efficiency
often come from eliminating bottlenecks through which trains travel at
very slow speeds and are frequently delayed due to deteriorated
infrastructure condition and capacity limitations. Many of our major
NEC projects will do that. For example, the new Frederick Douglass
Tunnel in Baltimore, for which we began early construction activities
in March, will have triple the capacity of the 150-year-old B&P Tunnel,
the biggest bottleneck on the Northeast Corridor that it will replace.
Trains traveling through the new tunnel will reach speeds of over 100
miles per hour, more than three times faster than the 30 miles per hour
at which they crawl through the B&P Tunnel today. This will reduce trip
time between Washington to Baltimore to less than 30 minutes.
Because of the IIJA, Amtrak is no longer just a passenger rail
operator and infrastructure maintainer. We are also a major
construction company executing one of the largest capital programs in
the history of the United States. The investments we are making are
every bit as ambitious as the Pennsylvania Railroad's construction
during the first third of the 20th Century of the Northeast Corridor
stations, tunnels, bridges and electrification system we continue to
rely upon 100 years later.
To ensure we deliver on the construction program IIJA funding has
jumpstarted, we created a new Capital Delivery department in early 2022
that is responsible for the planning, design and construction of
Amtrak's critical infrastructure projects. That department has
attracted leading experts in rail infrastructure and transportation
project management from around the country who are excited to take part
in the most important U.S. railroad infrastructure construction project
in many generations. We're also hiring and training hundreds of
additional union employees in the electric, signal, and track fields to
work on capital projects.
We are not constructing these projects by ourselves. Rather, we are
working alongside our state and commuter rail partners and the railroad
supply industry to deliver these projects while maintaining Amtrak,
commuter and freight rail service on the Northeast Corridor, the
busiest and most complex rail corridor in the United States. This
requires close collaboration and planning, not only for projects Amtrak
is leading but also those led by our partners.
We are also moving forward with procurements for new equipment. The
new trainsets we are acquiring for operation in Northeast Regional
service along the Northeast Corridor and on many state-supported
routes, which we recently announced will be called Airo, are under
construction at the Siemens plant in Sacramento, California. The first
carshell has recently been completed. Last December, Amtrak issued a
Request for Information (RFI) to potential suppliers for the long
needed reequipping of our long-distance fleet. That procurement, for
which we expect to issue a Request for Proposals (RFP) later this year
and enter into a contract in 2024, represents the largest U.S. order
for long-distance equipment since the New York Central Railroad's
purchase of 721 passenger cars in the late 1940s.
We are making investments in stations throughout our network. One
of our most important station projects--the Washington Union Station
Expansion Project--achieved an important milestone last month with
FRA's issuance of a Supplemental Draft Environmental Impact Statement.
We are continuing to progress our program to bring into compliance with
the Americans with Disabilities Act, or ADA, all stations for which we
have ADA responsibility. We expect to spend over $1.3 billion in IIJA
funding to complete that task. During the remainder of Fiscal Year 2023
and in Fiscal Year 2024, we plan to complete ADA compliance work at 112
stations, most located on long-distance and state-supported routes.
We are also expanding our service with new state-supported trains.
Last November, we reached a tentative agreement with our host railroads
that will allow initiation of the two planned daily round trips between
New Orleans and Mobile. We are currently working with our state
partner, the Southern Rail Commission, and our host railroads on
preparations for initiating service and to secure IIJA funding for
capital investments. We have begun operating non-revenue trains over
the route to qualify engineers and conductors on its physical
characteristics.
I am particularly excited by the new New Orleans-to-Mobile service
because the only current Amtrak service in the Gulf Coast Region is
provided by three long-distance trains, one of which operates only
three days a week. We are also collaborating with our state partners to
advance plans for other new Amtrak services in that region. Last year,
I joined Louisiana's governor on an inspection train between New
Orleans and Baton Rouge, a route on which we are working with the
Louisiana Department of Transportation and Development to develop
service and have reached an agreement with the principal host railroad
that will enable us to operate it.
The IIJA also provides, for the first time in decades,
opportunities to consider increases to long-distance service and the
funding to potentially make them happen. We are participating in the
Long Distance Study the IIJA directed FRA to undertake that is
examining increases in long-distance service frequency and routes. We
recently submitted a joint application with the Southern Rail
Commission for a Federal-State Partnership grant to develop plans for a
Meridian, Mississippi to Dallas/Fort Worth extension of the New York-
to-New Orleans Crescent. We have also applied for planning grants under
FRA's Corridor ID program for increasing service frequency on our two
tri-weekly routes, the Cardinal and Sunset Limited, to daily.
We are seeking, in some cases jointly with state partners, seven
Federal-State Partnership grants to improve our long-distance services.
These grants would fund track improvements on the Empire Builder route
in Montana and the Silver Meteor, Silver Star and Palmetto routes in
South Carolina; a new signal system on the Southwest Chief's route in
New Mexico; planning and engineering work for track upgrades to
increase speeds and reduce trip time on the Cardinal route between
Chicago and Indianapolis; and planning for station improvements in
Florida and the return of Amtrak service to Phoenix.
Amtrak's Relevance Depends Upon Growth
Amtrak's goal is to double ridership by 2040. It's an ambitious
goal because it took us 35 years to double our ridership for the first
time, and now we're proposing to do it again in barely half the time.
It's also an essential goal if we are to become more relevant and more
efficient.
Growth is the key to making Amtrak more relevant. Amtrak is very
relevant along the Northeast Corridor. We play an important role in
meeting intercity transportation needs in a number of other regions and
states, as well as many individual communities. But in most of the
country we have barely begun to tap the potential of intercity
passenger rail.
Our route map looks little different than it did when we started
service in 1971. Where Amtrak service has increased since then, that
has been due to the willingness of individual states to provide funding
for Amtrak, in most cases without the federal match they would have
received had they chosen to invest in highway or transit projects. As a
result, Amtrak has little service in the many of the states and regions
that have grown fastest since 1971 and will continue to account for
most U.S. population growth in the years to come.
Many of the 46 states we serve have minimal Amtrak service. Half of
them, including some of our largest states like Florida, Ohio and
Arizona and entire regions such as the Mountain West and Gulf Coast,
are served only by long distance trains that provide one round trip a
day, and on two routes only three round trips a week. The only Amtrak
service in many large cities, including Atlanta, Minneapolis/St. Paul,
Denver and Houston, is a single Amtrak long-distance train, while
others such as Nashville, Columbus, Phoenix and Las Vegas have no
Amtrak service at all.
Long-distance trains serve many passengers for whom flying or
driving is not an option. They are incredibly important to many
communities throughout the United States in which they provide a vital,
and in many cases the only, intercity public transportation service.
But long-distance trains' overnight schedules, designed to provide
daytime arrivals and departures at endpoints and facilitate connections
to other Amtrak trains, mean that they serve many intermediate points
in the middle of the night. Their once-a-day at best service and often
unreliable on-time performance doesn't meet the needs of most
passengers, particularly those who are making short trips that account
for the vast majority of intercity travel.
Attracting more riders will require providing more service at times
when people want to travel, both along the routes we serve today and
along new routes in the regions and states where we presently have
little or no service. Most of the new riders we need to attract are
people who would otherwise drive, since driving accounts for the vast
majority of intercity trips under 400 miles for which rail is most
competitive with other modes.
The ``Amtrak Connects US'' report we released in 2021 described our
vision for expanding Amtrak service along unserved and underserved
corridors throughout the United States. The FRA-led Corridor ID program
created by the IIJA, in which Amtrak is actively participating,
provides a much-needed process for guiding and shaping an expanded
network to bring new and improved service, including high speed rail in
appropriate markets, to places where there is unmet demand for
intercity passenger rail. We are actively working with many state and
local partners throughout the country to help make the vision of
expanded and improved Amtrak service a reality.
So far, we are seeing unprecedented interest in developing new
Amtrak service in states that do not currently have Amtrak state-
supported services such as Colorado, Georgia, Idaho and Ohio, to name
just a few. Later this year, we plan to initiate a daily round-trip
between Chicago and St. Paul, Minnesota, to be called the Great River,
thanks to funding support from a current state partner, Wisconsin, and
a new state partner, Minnesota. Both houses of the Minnesota
legislature recently approved $195 million in state funding for multi-
frequency Amtrak service between Minneapolis and Duluth for which they
intend to seek IIJA grants.
Growth Will Make Amtrak More Efficient
For Amtrak to become more efficient, we must grow ridership and
increase service. It's a very simple equation: investments in intercity
passenger rail that improve service and increase ridership make the
service more efficient and enable it to produce more economic and
public benefits for each dollar of public investment.
Let me give you one example. Our state-supported Piedmont service
along the Piedmont Corridor between Raleigh and Charlotte, North
Carolina began in 1995 with one round trip a day. The trip took three
hours and 45 minutes, and during the first full year of service the
route carried only 29,000 passengers. Since then, the Piedmont Corridor
and the Amtrak service operating over it have been transformed as a
result of the investments North Carolina has made and the federal
grants the Corridor has received.
Piedmont ridership has increased tenfold to approximately
300,000 passengers annually.
Track and signal improvements have increased speeds and
reduced trip times, while adding capacity and improving reliability for
both Amtrak and freight operations.
Piedmont service has been increased to three round trips,
and a fourth round trip will be added in July. When that happens there
will be departures throughout the day, with one train in each direction
making the trip in less than three hours.
Safety has been enhanced through the creation of a sealed
corridor with state-of-the-art grade crossing warning devices.
Historic stations have been restored, and a new station
built in Raleigh that has sparked redevelopment in the surrounding
neighborhood. A new station planned in Charlotte will bring trains into
the city's downtown where connections with multiple local transit
services are available.
In addition to attracting more passengers, increased
train frequency service and shorter trip times have made the service
more efficient. Equipment utilization is 33% higher than at the
service's start because some trainsets can now make more than one round
trip a day. Adding trains also means that infrastructure and station
investments benefit more trains carrying many more passengers.

More improvements and more service are planned along the Piedmont
Corridor and rail lines not presently served by Amtrak with which it
connects.
North Carolina is using a federal grant to acquire new
equipment that will be more energy efficient, increase passenger
capacity and provide an enhanced customer experience that will attract
new riders.
North Carolina is also planning new routes that would
connect with the Piedmont Corridor, including Wilmington to Raleigh and
Salisbury to Asheville, and has submitted applications for their
inclusion in FRA's Corridor ID program.
When the ``S Line''--the direct, rail line from Raleigh
to Petersburg, Virginia on which trains will operate up to 110 miles
per hour--is restored to service, the Piedmont Corridor and Virginia's
Petersburg-Richmond-Washington corridor will become part of a
continuous, fast, high-capacity passenger rail corridor from Charlotte
to Boston.
Capacity Is the Biggest Challenge to Amtrak Growth
Growing Amtrak ridership will require more equipment that will
allow us to carry more passengers. Equipment capacity is the biggest
challenge we face, both in the near term and in the future as we
approach 2040, the target year for our goal of doubling ridership.
Most of our current passenger car fleet--the Amfleet I cars we
operate on the Northeast Corridor and on many state-supported routes,
and the Amfleet II and Superliner I cars we use on long-distance
trains--was built between 1975 and 1983. Like old automobiles, 40- to
50-year-old passenger railcars are more likely to experience mechanical
problems as they age and require constant maintenance.
Our ridership grew 45% from 2003 to 2019, during which time we
added approximately ten million annual passengers. But our equipment
fleet didn't grow to accommodate them. Due to inadequate funding, we
acquired virtually no new equipment with passenger capacity during that
16-year period. By 2020, we had a very old equipment fleet with
inadequate capacity. And in March of that year, the pandemic hit and
made things much worse.
The urgent need to reduce expenses during the first year of the
pandemic, when Amtrak was experiencing huge financial losses with no
end in sight, had no idea when ridership and revenues would return, and
did not know whether it would receive additional COVID relief funding,
required us to reduce our headcount and the number of federally-
mandated overhauls performed at our maintenance facilities. After we
received additional COVID funding, it took time to hire and train new
employees.
We have rebuilt our Mechanical workforce: we now have approximately
250 more Mechanical employees than we did before the pandemic. We are
taking steps to increase our capacity to perform equipment overhauls
and have resumed making major repairs on damaged railcars. Nonetheless,
we are still catching up on work we were unable to do during the
pandemic. The resulting equipment shortage has meant we are operating
some amount of reduced capacity on all three of our service lines.
Our equipment shortage has been exacerbated by delays in delivery
and acceptance of the new Venture cars our state partners in the
Midwest and California are acquiring for their state-supported services
and the 28 high-speed trainsets that will replace the original Acela
trainsets. The Venture cars are currently entering service on
Midwestern routes, which will free up enough Horizon cars to allow us
to add two additional Amtrak Cascades frequencies between Seattle and
Portland later this year. We now anticipate the new Acela trainsets
will enter service in 2024, subject to the manufacturer's completion of
modeling and testing required by FRA regulations to demonstrate the
trainsets' ability to operate safely on the Northeast Corridor.
Delivery and acceptance of all of the Venture cars and the new
Acela trainsets will alleviate somewhat the equipment constraints on
our Northeast Corridor and State-Supported Services. Restoring
equipment capacity on our long-distance trains, particularly those
equipped with bi-level Superliner cars that operate primarily on our
western trains, will continue to be our biggest equipment challenge.
Since 2020, approximately 30 Superliner cars have been taken out of
service due to incidents in which they incurred significant damage,
including a 2021 derailment in Montana and a 2022 grade crossing
collision and derailment in Missouri in which 16 Superliner cars were
severely damaged. As I will discuss next, there are no off-the-shelf
replacements for this unique fleet of trains that Amtrak can access, so
losses like these will impair our capacity until new equipment can be
ordered and manufactured domestically.
As I mentioned, construction of new Airo trainsets for our
Northeast Regional and state-supported services is underway, and the
funding provide by the IIJA has allowed us to finally initiate the
procurement for new long-distance cars we began last year.
Unfortunately, one difference between old automobiles and old passenger
railcars is that you can't just go out and buy new passenger railcars
for these types of service from the dealer's lot when they need to be
replaced. The U.S. market for passenger rail vehicles is tiny compared
to the international market, and the number of passenger railcar
manufacturers with U.S. plants where equipment that complies with
stringent Buy America and U.S. safety requirements can be built is
limited. Designing, procuring and manufacturing passenger railcars, and
testing them before they enter revenue service, takes many years.
In the meantime, we are doing everything we can to maximize the
number of passengers we carry and attract new riders despite the
capacity constraints we face. We are increasing our capacity to perform
Superliner overhauls and major repairs at our Beech Grove, Indiana
shops by moving overhauls of other equipment previously performed there
to other facilities. In order to fill more available seats on off-peak
Northeast Corridor trains, we recently introduced ``Night Owl Fares''
of just $5 to $20 for trips within the Northeast Corridor on trains
departing from a passenger's station after 7pm or during very early
morning hours. We see this as a way not only to grow ridership but also
to encourage cost-conscious travelers to try our service.
The good news is that the new equipment we are acquiring will
increase capacity and enhance our efficiency in many respects when it
arrives. The new Acela trainsets will have about 25% more seats than
the trainsets they replace. The Airo trainsets we are buying for
Northeast Regional and state-supported services will be double-ended,
allowing them to reverse direction on the station platform between
trips rather than having to travel to a yard or a ``wye'' track so that
the train can be turned to position the locomotive in front.
Most of the Airo trainsets will also have dual-mode capability that
will allow them to utilize electric power while operating over the
Northeast Corridor from, for example, Boston to Washington, where they
can seamlessly switch to diesel mode for the remainder of their journey
to a final destination in Virginia. This will allow us to remove the
extra time built into schedules for engine changes, reducing trip time;
reduce congestion on the limited number of through tracks on the lower
level of Washington Union Station; and eliminate delays that can occur
when changing engines.
Operating an Efficient Amtrak Service Depends Upon Our Host Railroads
Another major challenge to improving the efficiency of Amtrak
operations is the delays we encounter when railroads fail to give
preference to Amtrak trains, as required by law. That problem has been
compounded by the adoption by many railroads of an operating philosophy
called, often euphemistically, ``Precision Scheduled Railroading'' that
has led them to operate very long freight trains on routes that lack
the capacity to accommodate them.
Freight railroads have operated long trains, not uncommonly trains
of approximately 8,000 feet, for some time. But what has changed in the
last few years is that most railroads are now operating very long
trains: trains that are over two and in some cases as much as three
miles long. These trains are too long to fit in passing sidings on
single track lines that allow trains traveling in opposite directions
to pass each other or faster passenger trains to overtake slower
freight trains. They often also too long to fit between grade
crossings. When they stop to allow another train to pass, or because of
congestion ahead or mechanical problems, they block every grade
crossing for miles.
Amtrak believes that one possible solution is to require freight
railroads operating very long trains to develop long-train operating
plans similar to the plans the FRA required railroads to develop during
the successful nationwide implementation of Positive Train Control. In
these plans, which would be developed with input from affected
communities, Amtrak, and other stakeholders and submitted to FRA for
approval, railroads would be required to demonstrate that there is
adequate infrastructure on the rail lines over which very long trains
operate to accommodate them, and that they have a plan for operating
those trains without causing delays to Amtrak trains or requiring
stopped freight trains to block grade crossings for extended periods.
Last December, we filed a petition with the Surface Transportation
Board, or STB, asking it to initiate an investigation into the
substandard on-time performance (OTP) of Amtrak's New Orleans-to-Los
Angeles Sunset Limited. During the 12-month period preceding the filing
of Amtrak's petition, more than four out of every five Sunset Limited
passengers arrived at their destination late, due primarily to freight
train interference. On average, each Sunset Limited train experienced
15 instances of freight train interference per trip on just the Union
Pacific Railroad's portion of the Sunset Limited's route, resulting in
more than four hours of delay per trip. We hope the STB will initiate
an investigation soon as we continue to evaluate other routes that fail
to meet FRA's OTP metrics and standards.
For Amtrak to fulfill its statutory obligation to provide high
quality, efficient service over the host railroad-owned and dispatched
rail lines that account for 95% of our route network, freight railroads
must fulfill their statutory obligation to give Amtrak trains priority
over freight trains. When they do not, Amtrak must have available a
remedy that provides prompt, effective relief to Amtrak and its
passengers, such as the right to bring an action in federal district
court to obtain an injunction against a host railroad's unlawful
violations of the preference statute.
Intercity Passenger Rail Needs Adequate, Assured, Multi-Year Funding
We are very grateful for the $58 billion in advance appropriations
for intercity passenger rail and the additional $8 billion for
passenger and freight rail the IIJA provided to the FRA, Amtrak and
others in our industry. But if the highway folks want to trade that $66
billion for the money the Highway Trust Fund gets every year, including
the $118 billion in the IIJA that brought the total the Highway Trust
Fund has received in appropriations from general tax revenues since it
became insolvent in 2008 to $275 billion, we'll take the deal in a
heartbeat. It is only through sustained and adequate Federal funding
that our nation--just like every other nation globally--is going to
develop the passenger rail network we need to support the mobility
needs of the future.
Continuing to advance the new era of passenger rail the IIJA has
jumpstarted depends upon two things. The first is adequate annual
appropriations, preferably at the full levels authorized in the IIJA.
The second is the establishment of a funding mechanism, like the
funding sources enjoyed by other transportation modes, that provides
adequate, assured, multi-year funding for intercity passenger rail.
Both of those things are essential if Amtrak is to maintain, improve
and expand service throughout the United States and provide the
infrastructure and equipment capacity needed to achieve our goal of
doubling ridership by 2040. I look forward to working with you to
achieve those objectives, and I will be happy to answer any questions
you have.

Mr. Nehls. Thank you, Mr. Gardner.
Mr. Warren, you are recognized for 5 minutes.

TESTIMONY OF MITCH WARREN, EXECUTIVE DIRECTOR, NORTHEAST
CORRIDOR COMMISSION

Mr. Warren. Good morning, Chairman Nehls, Ranking Member
Payne, Ranking Member Larsen. I am Mitch Warren, executive
director of the Northeast Corridor Commission. The Commission
was created by Congress to improve the corridor through better
coordination among Amtrak, States, commuter rail operators, and
the Federal Government.
Thank you for inviting me to discuss our work and the
renewal of America's oldest and busiest passenger rail system.
The Northeast Corridor brings hundreds of thousands of
intercity and commuter passengers to work, business meetings,
family visits, and leisure activities every day. However, these
riders rely on infrastructure with tens of billions of dollars
in state-of-good-repair needs, including 15 major bridges and
tunnels that are over 100 years old and in need of replacement.
Given these historic challenges, I cannot overstate what an
exciting time this is for the Northeast Corridor. After decades
of underinvestment, the NEC finally has the downpayment it
needs to rebuild infrastructure that dates back to the period
between the Civil War and World War II.
Thanks to the work of Congress and the Biden administration
on the Infrastructure Investment and Jobs Act, the NEC has its
first ever source of dedicated, multiyear funding, providing
exactly the kind of predictability needed to efficiently
deliver a major capital program.
The Commission's decade-long efforts to build a foundation
of trust, transparency, collaboration, and accountability have
put our members in position to invest this historic funding.
The Commission's 18 voting members represent USDOT, Amtrak,
Northeast States, and the District of Columbia. The Commission
was authorized in recognition of the complexities of a corridor
that has multiple right-of-way owners and rail operators and
which supports over 2,000 trains a day, including high-speed
Acela trains, Northeast regional and long-distance trains,
commuter trains, and freight trains.
In 2021, the Commission approved CONNECT NEC 2035, a
collaborative effort to define the corridor's state-of-good-
repair and improvement needs, and stage and sequence those
infrastructure investments over 15 years. CONNECT NEC, which
will be updated every 2 years, is the plan to rebuild and grow
the corridor.
Thanks to the funding provided through the Bipartisan
Infrastructure Law, these critical projects suddenly have a
path forward, promising more reliable, more frequent, and
faster service for the workers, travelers, and businesses that
depend on the corridor.
The Commission is now looking at the challenges our members
face in delivering these critical projects. To this end, we are
developing an Implementation Coordination Program that will
bring the project delivery the same kind of transparency,
collaboration, and accountability that the Commission has
brought to cost-sharing and planning.
This program will focus on improving the interagency
coordination needed among our members as they partner to
deliver projects. The ICP will track project progress and
provide an early warning system when projects threaten to go
off schedule due to coordination issues.
The challenges in front of us are formidable, but success
is critical to the region's vitality and growth. Essential to
this success is what it took to build the Interstate Highway
System and what the BIL delivered for passenger rail: a
dedicated multiyear funding source providing the predictability
needed to efficiently deliver a major capital program.
In fact, even more funding is necessary over the longer
term to address all of the corridor's state-of-good-repair and
improvement needs. The Federal Railroad Administration's NEC
project inventory includes projects that total over $100
billion. Notwithstanding these significant future funding
needs, the Bipartisan Infrastructure Law is a game changer for
the corridor.
After decades of falling further behind when it comes to
replacing aging infrastructure, a brighter future lies ahead.
We thank Congress and President Biden for this historic
investment that will benefit travelers for generations to come.
The Commission's members are eager to deliver these critical
rail projects that will generate meaningful economic,
transportation, and environmental benefits to the region and to
the Nation.
Thank you for inviting me to speak today on behalf of the
Commission. I look forward to answering your questions.
[Mr. Warren's prepared statement follows:]

Prepared Statement of Mitch Warren, Executive Director, Northeast
Corridor Commission
Good morning, Chairman Nehls, Ranking Member Payne, Chairman
Graves, Ranking Member Larsen, and members of the Committee.
I am Mitch Warren, Executive Director of the Northeast Corridor
Commission. Congress created the Commission to bring together Amtrak,
states, commuter rail operators, and the federal government. Kevin
Corbett, President of New Jersey Transit, and Federal Rail
Administrator Amit Bose are the Commission's Co-Chairs. My fellow
witness, Stephen Gardner, serves as its Vice-Chair.
Thank you for inviting me to discuss our work and the future of
America's busiest passenger rail system.
The Northeast Corridor brings hundreds of thousands of intercity
and commuter passengers to work, business meetings, family visits, and
leisure activities every day. However, these riders rely on
infrastructure with tens of billions of dollars in state-of-good-repair
needs, including 15 major bridges and tunnels that are over 100 years
old, beyond their useful life, and in need of replacement or major
rehabilitation.
Given these historic challenges, I cannot overstate what an
exciting time it is for the Northeast Corridor. After decades of false
starts, the NEC finally has the downpayment it needs to rebuild
infrastructure that dates back to the period between the Civil War and
World War II.
Thanks to the work of Congress and the Biden Administration on the
Infrastructure Investment and Jobs Act, the NEC has its first-ever
source of dedicated, multi-year funding, providing exactly the kind of
predictability needed to efficiently deliver a major capital program.
Part of what makes the NEC ready to invest this historic funding is
the work the Commission has done over the last decade to lay a
foundation of trust, transparency, collaboration, and accountability
among its members.
The Commission held its first meeting in 2010 and has eighteen
voting members: five representing USDOT, four from Amtrak, and nine
from Northeast Corridor states and the District of Columbia. The
Commission was authorized in recognition of the complexities of a
corridor that has four different right-of-way owners, passes through
eight states and the District of Columbia, has nine passenger rail
operators, and supports over 2,000 trains a day including high-speed
Acela trains, Northeast Regional and long-distance trains, commuter
trains, and freight trains.
Our small staff pulls together these various stakeholders to help
them row in the same direction and achieve outcomes greater than the
sum of their parts.
Our first statutory mandate was to create a formula to allocate
shared costs on the corridor. After four years of negotiations, the
Commission approved the first Northeast Corridor Commuter and Intercity
Rail Cost Allocation Policy in 2015. This Policy now allocates over
$1.3 billion per year in shared operating and normalized replacement
capital costs. In addition, the Commission has a project-based cost
allocation policy that provides guidance for allocating costs
associated with individual projects.
The Policy also includes provisions to ensure more collaboration
and accountability among Commission members on the planning and
delivery of capital programs.
In 2019, the Commission initiated CONNECT NEC 2035, an intensely
collaborative effort to define members' state-of-good-repair and
improvement needs, and stage and sequence those infrastructure
investments over 15 years. CONNECT NEC is the plan to rebuild and grow
the NEC for the future. The Commission unanimously approved this $117
billion plan in June 2021.
Thanks to the funding provided to the Federal-State Partnership for
Intercity Passenger Rail program, Amtrak's NEC Account, and numerous
other grant programs through the Bipartisan Infrastructure Law, these
critical projects suddenly have a path forward, giving the workers,
travelers, and businesses that depend on the corridor hope for a future
that promises more reliable, more frequent, and faster service.
While continuing its work on cost sharing and collaborative
planning, the Commission is now also turning its attention to the
challenges our members face in delivering these critical projects.
To this end, we are developing an Implementation Coordination
Program that will bring to project delivery the same kind of
transparency, collaboration, and accountability that the Commission
brings to cost sharing and planning.
This program will focus on improving the interagency coordination
needed between our members as they partner on projects, a frequent
occurrence on a corridor as complex as the NEC. We will track project
progress and provide an early warning system when projects threaten to
go off-schedule due to coordination issues such as delayed design
reviews, stalled project agreements, and differences over resource
allocation.
The challenges in front of us are formidable, but success is
essential. In addition to the need for effective coordination between
the corridor's owners, operators, project sponsors, and funders, our
members face workforce constraints, material and equipment needs,
rising costs, and organizational changes.
An essential prerequisite to solving these challenges is what it
took to build the Interstate Highway System and what IIJA delivered for
passenger rail: a dedicated, multi-year funding source providing the
predictability needed to efficiently deliver a major capital program.
The reality is that even more funding is required over the longer-
term to address all of the corridor's state-of-good-repair and
improvement needs. The total cost of projects included in the Federal
Railroad Administration's NEC Project Inventory exceeds $100 billion,
with $40 billion of that for major backlog projects alone.
Despite these significant future funding needs, the Bipartisan
Infrastructure Law is a game-changer for the corridor.
After decades of falling further behind when it comes to replacing
aging infrastructure, a better future lies ahead. We thank Congress and
President Biden for this historic investment that will benefit riders
for generations to come. The Commission's members are eager to get to
work to deliver these critical rail projects that will generate
significant economic, transportation, and environmental benefits to the
region and to the nation.
Thank you for inviting me to speak today on behalf of the
Commission. I look forward to answering your questions.

Mr. Nehls. Thank you, Mr. Warren.
I now ask unanimous consent to enter into the record the
following letters: from the Association of American Railroads
and the Coalition for the Northeast Corridor, as well as a
letter from the Rail Passengers Association CEO.
Without objection, so ordered.
[The information follows:]

Statement of Ian Jefferies, President and Chief Executive Officer,
Association of American Railroads, Submitted for the Record by Hon.
Troy E. Nehls
Introduction
On behalf of the members of the Association of American Railroads
(AAR), thank you for the opportunity to submit this testimony.
AAR's freight railroad members include the six U.S. Class I
railroads and approximately 200 U.S. short line and regional railroads
that together form the best freight rail system in the world. America's
privately-owned freight railroads operate almost exclusively on
infrastructure they own, build, maintain, and pay for themselves. Over
the last 15 years, freight railroads have invested, on average, $23.9
billion of their own capital into improving and maintaining their
networks every year. To put this in perspective, that is $1 billion
more than the historic investments Congress made this year in rail and
multimodal programs in the Infrastructure Investment and Jobs Act
(IIJA). America relies on best-in-the-world freight railroads to
prosper in the intensely competitive global marketplace.
Amtrak is also a member of AAR, as are several commuter railroads
that account for more than 70 percent of U.S. commuter rail trips. Like
freight railroads, passenger railroads play a key role in alleviating
highway and airport congestion, decreasing dependence on foreign oil,
reducing pollution, and enhancing mobility.
America can, and should, have a safe, efficient passenger rail
network and a safe, productive freight rail system. Mutual success for
passenger and freight railroads requires cooperation between
stakeholders and a recognition of the challenges that railroads face.
Policymakers should continue to recognize the country's need to move
both people and goods safely and efficiently.
Freight and Passenger Rail Partnerships: Decades in the Making
Well into the 20th century, railroads were the primary means to
transport people and freight throughout the United States. However, by
the late 1950s, the dramatic expansion of America's highway system and
the development of commercial aviation meant private railroads were
losing $750 million per year (about $5.8 billion in today's dollars) on
passenger service.\1\ At the time, a noted transportation scholar
wrote,``[I]t is no exaggeration to say that by 1958 railroad passenger
service had demonstrated itself to be the most uneconomic activity ever
carried on by private firms for a prolonged period.'' \2\ These massive
losses continued for many years largely because government regulators
made it extremely difficult for railroads to discontinue unprofitable
passenger rail service. The losses drained a rail system that was also
facing unrelenting pressure on its freight side from subsidized trucks
and barges.
---------------------------------------------------------------------------
\1\ Interstate Commerce Commission, ``Railroad Passenger Train
Deficit, Report Proposed by Howard Hosmer, Hearing Examiner, Assisted
by Robert A. Berrien, Fred A. Christoph, and Raymond C. Smith, attorney
advisers,'' Docket No. 31954, 1958.
\2\ George W. Hilton, The Transportation Act of 1958, Indiana
University Press, 1969, p. 13.
---------------------------------------------------------------------------
In 1970, Congress passed, and President Richard Nixon signed into
law, the Rail Passenger Service Act (RPSA), which created Amtrak. RPSA
aimed to preserve a basic level of intercity passenger rail service
while relieving private railroads of the obligation to provide money-
losing passenger service that threatened the viability of freight
railroading.
Given the huge financial drain of passenger rail, railroads
generally welcomed the opportunity to exit the business while providing
the backbone of the newly-formed Amtrak system. Freight railroads
initially helped capitalize Amtrak by providing cash, equipment, and
services; these payments to Amtrak totaled around $1.2 billion in
today's dollars. Freight railroads were also required to provide
``preference'' to Amtrak service on their lines, a right that exists to
this day but in a fundamentally different freight and passenger rail
landscape, as discussed below.
In turn, Amtrak was required to pay only incremental costs when
operating on a host railroad's tracks, with no requirement to support
capital investment for improving and expanding infrastructure
capacity.\3\ To this day, Amtrak's low track usage fees are a major
indirect subsidy provided by freight railroads rather than by taxpayers
or Amtrak riders.
---------------------------------------------------------------------------
\3\ Provisions in agreements between Amtrak and freight railroads
(discussed below) pertaining to financial incentives related to
performance can also count as being compensatory to the host freight
railroad.
---------------------------------------------------------------------------
Today, freight railroads still provide the foundation for most
passenger rail. Amtrak owns 623 route-miles (primarily in the
Northeast) and operates, maintains, and dispatches another 229 route-
miles in Michigan and New York. The vast majority of the remaining 96%
of Amtrak's more than 21,400-mile system consists of tracks owned and
maintained by freight railroads. More than 70% of the miles traveled by
Amtrak trains are on tracks owned by other railroads.

Approximately half of the nation's commuter rail systems also
operate at least partially on tracks owned by freight railroads, and
most of the higher speed and intercity passenger rail projects under
consideration nationwide rely on freight railroad-owned facilities.
Principles to Guide Passenger Rail Operations on Freight-Owned
Corridors
While each project involving passenger and freight railroads should
be evaluated on a case-by-case basis, certain overarching principles
must be followed to ensure both the long-term success of passenger rail
and a healthy freight rail system that shippers all over the country
can rely on every day.
First and foremost, safety is the industry's number one priority.
Railroads are an extremely safe way to move people and freight, and
freight railroads today utilize advanced technologies to maintain the
safest railroad network. Railroads are proud of their safety record.
The train accident rate in 2022 was down 26 percent from 2000, and the
employee injury was down 48 percent. Passenger rail projects must be
designed and executed around this first priority.
Second, current and future capacity needs of both freight and
passenger railroads must be properly protected. Today, freight
railroads carry far more freight on far fewer miles of track than they
did when Amtrak was created. This volume growth is the result of
significant investment--on average more than $23 billion per year over
the last 15 years--the freight railroads have poured back into their
networks. Rail capacity is not unlimited, and in some places, it is
tightly constrained. Plans to expand passenger railroad use of freight
rail corridors must be balanced with the needs of freight railroads to
provide safe, reliable, and cost-effective freight service to present
and future customers.
To ensure this balance, host freight railroads must be part of the
planning process for new or expanded passenger services from the very
beginning. This principle is especially important when considering
programs to identify and plan new intercity passenger rail corridors,
like the Corridor Identification and Development Program (CIDP) created
by the IIJA. Congress recognized the importance of including freight
railroads in the process and stipulated that consultation with host
railroads be considered when awarding grants under CIDP. In subsequent
notifications about the program, however, the Federal Railroad
Administration (FRA) did not include consultation with host railroads
in its initial plans. Thankfully, through productive conversations with
the FRA, going forward freight railroads expect to be more involved in
the planning and development of these new corridors, ensuring that the
program works for freight and passenger railroads and the communities
they serve.
Third, proper funding is necessary, especially as Amtrak looks to
improve or expand service offerings. The process of expanding existing
passenger service, or improving existing passenger service reliability,
is complex and requires detailed planning and significant additional
infrastructure capacity investment. Freight railroads should not be
expected to bear the costs of infrastructure necessary for additional
passenger trains. Nor is it reasonable to expect Amtrak to plan, build,
and maintain a network that provides optimal transportation mobility
and connectivity when it faces excessive uncertainty regarding its
funding from one year to the next. The IIJA includes $66 billion in
rail funding, the vast majority of which is for passenger rail and
Amtrak. This funding will go a long way to ensuring Amtrak can operate
safely and effectively. It is crucial that this funding be spent where
it has the largest positive impact, and freight railroads are committed
to working with Amtrak, state agencies, government officials, and
others to meet that goal.
Fourth, all parties must recognize that the preference given to
Amtrak's trains over freight trains does not mean delays to Amtrak
trains will never happen. Just as traveling in the HOV highway lane
does not guarantee you won't experience traffic, delays due to weather,
unexpectedly high freight volumes, or other issues throughout the
network may result in delays.
This is not an exhaustive list of principles that should be applied
to consideration of passenger rail projects; for example, liability and
tax issues will also come into play. However, as policymakers and
stakeholders consider the expansion and improvement of passenger rail
service on freight rail-owned infrastructure, it is important to keep
these priorities and issues in mind.
On-Time Performance (OTP) Metrics
Since its creation, Amtrak and freight railroads have worked
together to establish and implement the rules and procedures governing
how passenger and freight railroads interact. Most of these rules and
procedures are spelled out in formal bilateral operating agreements
negotiated between Amtrak and its host railroads. These agreements
often provide incentives and penalties for freight railroads to ensure
that Amtrak trains meet specified on-time targets. Some of these basic
operating agreements were entered into more than two decades ago,
making them outdated and, in some cases, no longer appropriate.
More specifically, some Amtrak long distance train schedules have
not been properly adjusted in response to the tremendous growth in the
U.S. economy and related freight volumes or other changes in the
operating environment. Outdated schedules that do not reflect or
respond to changing conditions (e.g., seasonality, necessary track
work, and ridership patterns or needs) can result in misleading
performance measurements or unrealistic expectations for on-time
performance.
AAR has long been a participant in the FRA's efforts to develop
appropriate metrics and standards for measuring Amtrak's performance.
This cooperative process was specifically envisioned in FRA's November
2020 final rule on metrics and minimum standards for measuring the
performance and service quality of intercity passenger train
operations. The rule established a customer OTP metric and customer OTP
standard, which are measured against published train schedules. The
rule also recognized that Amtrak's current schedules are not aligned
with the new metric or standard. FRA stated that, historically,
Amtrak's published train schedules have not been designed with a
customer OTP metric in mind, and that alignment may require additional
time as schedules will need to be adjusted. While many schedules have
been aligned with the new customer OTP metric, for those that are not,
it is crucial that Amtrak, host railroads, and other key stakeholders
work in good faith to design schedules that are realistic and
achievable and resolve differences to meet the shared goal of timely
service based on achievable schedules.
Keeping Amtrak, commuter, and freight trains running on time is
tremendously complex. When Amtrak was created, freight railroads had
significant excess capacity. Since then, the excess capacity has
disappeared, and the freight rail industry has invested over $780
billion of its own money to maintain and add new capacity in response
to that growth. While capital investments may be necessary to add
passenger capacity, improving on-time performance also will require
modifying Amtrak's schedules. Freight railroads and Amtrak, working
together, are in the best position to determine how these operating
agreements should be structured and evolve over time.
The day-to-day reality of safely operating and maintaining freight
railroads' nearly 140,000-mile network can also impact OTP. For
example, freight railroads temporarily reduce operating speeds on a
stretch of track when conditions call for it. These ``slow orders'' are
absolutely necessary for safety and can delay trains of all types,
including Amtrak trains. Similarly, necessary track and signal
maintenance may result in unavoidable, short-term delays for freight
and passenger trains but improves service reliability and enhances
safety in the long term. The application of OTP standards should not
make it more difficult or expensive for freight railroads to perform
necessary maintenance or take appropriate steps to ensure the safety of
crews and communities where they operate.
A one-size-fits-all solution will not work on a network as complex
and as crucial as our nation's rail system. Host railroads and Amtrak
must undertake periodic reviews of reasonable and realistic schedules
and of meaningful OTP metrics while complying with private, bilateral
contracts that consider the unique circumstances of particular routes.
Conclusion
Having safe, effective passenger railroads alongside safe,
productive freight railroads remains our shared goal, and we look
forward to working with policymakers and other stakeholders to achieve
it. I am confident that, together, freight railroads and Amtrak can
find common ground that benefits all parties.

Letter of May 30, 2023, to Hon. Pete Buttigieg, Secretary, U.S.
Department of Transportation, from the Coalition for the Northeast
Corridor, Submitted for the Record by Hon. Troy E. Nehls
May 30, 2023.
The Honorable Pete Buttigieg,
Secretary,
U.S. Department of Transportation, 1200 New Jersey Avenue SE,
Washington, DC 20590.
Dear Secretary Buttigieg,
We are writing on behalf of the Coalition for the Northeast
Corridor (CNEC), a group of organizations dedicated to promoting and
improving rail infrastructure along the Northeast Corridor. We want to
express our support of your efforts to improve the nineteenth-century
infrastructure on the Northeast Corridor. We believe the bi-partisan
efforts to increase funding through the Federal-State Partnership for
Intercity Passenger Rail grant program is sound policy, as it
appropriately directs funds to the region of the country most in need
and would ultimately yield the greatest cost-benefit following
investment.
While it is true that the heavily trafficked Northeast Corridor has
historically received a larger share of federal funding for passenger
rail service than other regions, this is due to the unique challenges
and demands of the corridor. We believe the grant program's stated
purpose and goal, to provide funding to states for the development and
improvement of intercity passenger rail service across the country,
should not only focus on location but where there is the greatest need.
The Northeast Corridor region is home to more than 51 million
people (almost one in six Americans) and four of the ten largest
metropolitan areas in the United States. It spans from D.C. to Boston
and includes Baltimore, Philadelphia, and New York, among other largely
populated areas, defined by the 2021 Census as a ``Megalopolis''. The
Northeast Corridor is the busiest and most heavily traveled rail route
in the country, responsible for moving a workforce that contributes
more than $50 billion annually to the national economy, and where its
residents use public transportation more often than the rest of the
U.S.
It is important to note that this highly utilized rail corridor,
responsible for an average of 800,000 daily trips pre-pandemic, is also
home to some of the oldest and most-used rail infrastructure in the
country, which requires significant investment to both maintain and
modernize for safety purposes. According to the Northeast Corridor
Commission, the loss of the NEC for a single day could cost the country
$100 million in added congestion, productivity losses, and other
transportation impacts. It is crucial that we maintain levels of
investment in the Northeast rail corridor in order to prevent a
catastrophic economic collapse that would impact not only the
communities spanning from D.C. to Boston but the entire U.S. economy.
The critical needs and demands of the Corridor are why the Fed-State
program was split and why a separate account was created for the
Northeast Corridor in the first place.
In conclusion, we urge you to continue to prioritize the
development and improvement of passenger rail service across the
country, including the Northeast Corridor, to support economic growth
and reduce congestion for all Americans.
Thank you for your attention to this important matter.
Sincerely,
The Coalition for the Northeast Corridor.

Statement of Jim Mathews, President and Chief Executive Officer, Rail
Passengers Association, Submitted for the Record by Hon. Troy E. Nehls
Introduction
We are pleased to submit this statement on behalf of the Rail
Passengers Association, a nonprofit organization established in 1967 to
preserve, improve, and expand intercity and regional passenger train
services, support higher speed rail initiatives, increase connectivity
among all forms of transportation and advocate for the safety of train
passengers. On behalf of our tens of thousands of members from all
across the United States, we would like to thank Chairman Nehls,
Ranking Member Payne, and the entire Subcommittee on Railroads,
Pipelines, and Hazardous Materials for holding this hearing at such a
crucial time, and for allowing us the opportunity to share the views of
America's passengers.
In many ways, the state of the American passenger is the same as it
was the last time I was asked to appear before this panel in 2019.
Fare-paying taxpayers face unprecedented challenges at the level of our
National Network of trains, but also see the promising early stages of
a passenger rail renaissance--the first since the ascendancy of the
federal highway program more than a half-century ago.
Rail Passengers Association strongly supports Amtrak's FY22-23
applications to the Federal-State Partnership for Intercity Passenger
Rail and Corridor Identification Programs. Amtrak's applications
include 16 proposed National Network projects worth $716 million and 14
proposed Northeast Corridor projects worth $7.3 billion. These projects
are vital and long-overdue investments in a connected America that
would produce immediate and noticeable benefits for passengers across
the U.S.
``National or Nothing''
When facing down cuts to Amtrak's National Network, former Senator
Kay Bailey Hutchison of Texas famously rallied her Republican
colleagues with the motto ``National or Nothing''. Thanks to strong
Congressional leadership and the long-term policy and financial
commitment expressed in the Investment in Infrastructure and Jobs Act
(IIJA), leaders from both sides of the aisle have outlined a vision for
growing our passenger rail network and ensuring this growth does not
require one American getting better service at the expense of another
American's train.
Congress has finally provided enough funds to do more than simply
study improvements. They wisely structured those rail investments to
ensure that the Federal Railroad Administration (FRA) and the states
are able to partner with Amtrak to meet locally identified needs. We
believe this will also ensure that Amtrak is focused on improving
efficiency and service in ways that states and localities believe is
best.
The need for more robust rail infrastructure is real. We have seen
an unprecedented response from local governments to the FRA's request
for submissions to the Corridor Identification Program--from coast to
coast, from America's Heartland, from Red States and Blue States. We
are particularly heartened by the response from the Southeastern U.S.
and Sunbelt, which has seen a disproportionate level of population
growth over the past 50 years. Texas, Oklahoma, Georgia, Florida, North
Carolina, and the Commonwealth of Virginia have all been active
participants in the IIJA's passenger rail programs, to name just a few.
Passenger trains have an important role to play in helping these
metropolitan regions accommodate economic and population growth, while
simultaneously ensuring that rural Americans continue to have access to
essential services.
Amtrak was conceived as a service to the nation, not just a train
in one part of the country. This is why Amtrak's National Network, with
its 15 long-distance routes connecting a series of state-supported
services, is such an essential transportation service to the 40 percent
of the nation's small and rural communities that it serves,
establishing a vital link between Small Town and Big City America.
Essential Economic Connection
Over 62 million Americans live in what many derogatorily refer to
as ``flyover country,'' a quarter of whom are veterans, while another
quarter are senior citizens over the age 65. With few alternatives,
driving plays an outsized role, and it does so at a cost: despite
making up only 19% of the population, accidents on rural road networks
account for 49% of the total number of traffic fatalities nationwide.
Intercity rail plays an important role in these rural communities;
almost one-fifth of Amtrak's passengers travel to or from a rural
station with no access to air service, and private-sector airlines are
abandoning huge parts of the U.S. that include those communities,
making these citizens even more reliant on the service that Amtrak
provides.
That reliance makes Amtrak essential, not optional. Passenger rail
service is an economic engine in the communities it serves, returning
many multiples of what is spent on it back to the cities, counties, and
states where the trains run. This ``return on taxpayer's equity''
represents the true value of our national investment in Amtrak, and
that steady stream of returns is tangible to rural communities who rely
on not just the train but on the wealth it creates.
Just one example of a relatively simple improvement in the pipeline
made possible by the IIJA's vision and commitment: increasing service
from the current three times weekly to a daily train on the route of
the Sunset Limited and Texas Eagle between California and Illinois.
This simple step is among several Amtrak is proposing in the first
round of IIJA-enabled service improvements, and our economic-benefits
modeling suggests just including those additional trains could generate
as much as $2.4 billion over 10 years in visitor spending in hotels,
restaurants, and retail, avoided road maintenance, and supported jobs--
$144 million each year in Texas alone, and some $239 million each year
to the eight states served. That's at least four times as much as we
would spend each year to operate it.

Fig. 1: Annual Economic Benefits of Daily Sunset/Eagle Service

\*\ includes Labor Income and Value Added values

Source: Rail Passengers Railway Benefits Calculator, IMPLAN Economic
Modeling Tool

Fig. 2: Annual Tax Revenues Created By Daily Sunset/Eagle Service

Source: Rail Passengers Railway Benefits Calculator, IMPLAN Economic
Modeling Tool

The Need for a Growing Rail Network
For the past two decades, the U.S. rail network has been doing more
with less. In 2019, the year before the pandemic hit, Amtrak carried
32.5 million passenger trips nationwide, a record ridership year for
the railroad. Amtrak was able to do this with minimal public investment
and in an operating environment that featured a steadily shrinking
freight railroad network combined with longer freight trains.
Railroads are the safest, most energy efficient surface
transportation mode. U.S. freight railroads can move one ton of freight
nearly 500 miles per gallon of fuel. When looking at freight accidents
per 10 billion ton-miles, fatal accidents involving freight rail take
place at less than one third the rate of truck accidents. Moving more
freight to rail will reduce shipping costs for consumers and help
reduce the more than 42,700 deaths that occur on U.S. highways each
year.
Rail Passengers Association believes that IIJA investment provides
a solution to improve both the passenger and freight rail network in
the U.S. By leveraging public dollars to upgrade freight-owned rail
corridors, we can create a more productive transportation network for
passengers and shippers.
Thank you again for your work on this important issue. We stand
ready to work with Congress to advance these exciting programs.

Mr. Nehls. I would like to thank you all, thank you both
for your testimony. We will now turn to questions from the
panel, and I will recognize myself for 5 minutes.
I appreciate you, Mr. Gardner. It is good to see you. I see
you got the chief behind you there. Thank you for coming.
I want to bring to your attention--I am sure you are
familiar with the Office of the Inspector General--this report
that talked a little bit about ``Safety and Security: Amtrak
Has Opportunities To Strengthen Controls Over High-Security
Keys.''
Are both you gentlemen familiar with this report?
Mr. Gardner. Yes, Mr. Chairman.
Mr. Nehls. Mr. Warren, familiar with the report?
Mr. Warren. I have not had a chance to read it yet.
Mr. Nehls. OK. Mr. Gardner is familiar with the report.
I am trying to read this, and there are so many redactions.
I am trying to put this puzzle together, but they obviously
redacted so much here. Obviously, some type of a safety or
security concern.
Can you assure the members of this committee that Amtrak is
doing everything it possibly can with the employees that are
authorized to have a key or employees that are no longer
working, either resigned or terminated, that they don't keep
their keys, to some of these high-risk security areas? What are
you doing to make sure that we can protect Amtrak?
Mr. Gardner. Thank you, Mr. Chairman. Yes, absolutely. We,
as a result of the good work of the inspector general, we are
revamping our key control process. I can tell you, for a long
time, these kind of switch keys have been around in sort of
collectors' hands, and when I was on the freight railroad side
as a switchman, had access to many of them. Those days are over
now. We are controlling these tightly, and we appreciate the
OIG's work there.
Mr. Nehls. Well, I think it is--obviously it is very
damaging, in my humble opinion. I think the gentleman sitting
behind you, between you two, maybe he will be able to help you
with that, trying to get some of these keys back from
individuals that no longer should have them.
And I believe there was a report out there that some
knucklehead or former employee was selling these things,
putting them on the internet. It could become a big, big
problem for all of us.
Mr. Gardner, how much money will Amtrak receive through
IIJA over the next 5 years? How much money?
Mr. Gardner. Mr. Chairman, it is--$22 billion is the
advance appropriation funding to Amtrak directly. The other
portions go to the Department of Transportation.
Mr. Nehls. $22 billion. That is a lot of money.
Mr. Gardner. Absolutely, Mr. Chairman.
Mr. Nehls. All right. I want to spend just a moment here
and talk a little bit about CRISI and CRISI grants. With the
enormous amount of money that Amtrak is getting from the
American taxpayers, I am recommending suggesting that Amtrak
should not be allowed any more CRISI grant funding over the
next 5 years while you are receiving tens of billions of
dollars over the next 5 years.
I mean, when you look at the CRISI grants, I think in 2022
it was about $1.4 billion. For those of you that don't know
what CRISI stands for, it is Consolidated Rail Infrastructure
and Safety Improvements Program.
And by hearing the testimony from the minority and hearing
testimony, you are getting billions and billions of dollars to
help with your infrastructure, your improvements. And CRISI
grant funding, in my humble opinion, should be set aside for
the Class II's and the Class III's.
So, I am just letting you know that it would be my intent,
while you are receiving billions and billions of taxpayer
dollars over the next 5 years, that Amtrak should not be
allowed to participate in the CRISI grant program.
You stated that security in 2023--and I appreciate the fact
84 percent ridership. I think you are going to get to 89. And,
eventually, maybe by the end of the year, you will get to the
2019 levels, which would be 30-something million passengers.
Mr. Gardner. Next year, we will achieve 32 million riders.
Mr. Nehls. Fantastic. I think that is great. And I think,
while you did state that safety is your number one priority, I
can certainly appreciate that.
Mr. Warren, I have had the chief in my office before. We
were talking a little bit about safety on traveling on a train.
I mean, I was an old law man for several years. Understand a
little bit about safety and security.
And I was always puzzled by the fact that I can jump on
that train outside of Washington, DC, here. I can go up and buy
a ticket. I don't have to provide any ID. I can pay for cash.
You can take that ticket, give it to the guy, and he could give
it to someone else.
There is no matching bags or anything. You can just carry a
couple suitcases on a train, right? You don't have any
detectors or anything to go through to get on that train.
How is Amtrak--what are you doing to make sure that you
don't get some individual that has bad intentions, someone
carrying a firearm from getting on a train, when you--I mean, I
can't get on an airplane with a bottle of water. I can't get on
an airplane even having a glass of water.
But it appears to me that to get on an Amtrak train, you
don't have to have any ID. Your bags don't have to match the
manifest. They are not inspected. You've got puppies out there
sniffing. I support all that, but what are you doing in the
rural areas to make sure that you can keep those passengers as
safe as possible?
Mr. Warren. Certainly for each of our individual railroads,
safety and security are the foundation of everything. You can't
have riders if you are not promising and guaranteeing their
safety and security.
As a Commission, we have focused on the infrastructure, so,
it is an issue more for our individual members than we have
addressed as a Commission. When we were created, there was
actually a separate safety committee that was created separate
from us that was to look at those issues, and we were to focus
on the infrastructure, cost-sharing, and coordinated planning.
So, those are critical issues for our members and our
riders, but as a Commission itself, it is not something that we
have addressed directly.
Mr. Nehls. Well, I just--I find it kind of disturbing in
many ways that this is public transportation, billions of
dollars going to it. Obviously we had tragedies on 9/11 with an
aircraft, right? And look at what we did. We created a whole
new organization and put billions of dollars into it, still
today, to make sure that the people traveling on airplanes
across the country are safe.
And then you look at Amtrak's operations. And I know the
chief behind you, he is eyeballing me right now. He is
thinking, I am doing everything I can. But you have billions of
dollars now. I think you need to try to, not convince me, but
show me that safety--safety, Mr. Gardner--is an actual
priority, that you are doing everything you possibly can.
I am going to finish it up with this, and that is, I read
some stuff here about the board meetings. You have these board
meetings. I don't think those board meetings are open to the
public. I don't think they are part of the public record. I
think transparency is so important, and bonuses.
Mr. Gardner, would you care to share with me what your
salary is every year? What is your salary, your annual salary?
Mr. Gardner. The annual salary is a matter of record. We
have disclosed it. Currently, for my position, it is a little
bit less than $500,000 a year.
Mr. Nehls. $500,000. And I appreciate you just willing to
share that. I think the American people have a right to know.
It is the taxpayers paying it. I will tell you what mine is,
$174,000, just with everybody else up here, too. I can tell you
every salary of every person serving in our United States
military. I mean, it is pretty much public record.
So, it is an annual salary of $500,000.
And so, when you have these meetings and they are not
accessed--they are not open to the public when it talks about
bonuses--did you receive a bonus last year? Did you take a
bonus?
Mr. Gardner. For fiscal year 2022, yes.
Mr. Nehls. Can I ask you how much that bonus was?
Mr. Gardner. I would have to get you the specific numbers,
but it is a portion of the salary based on the company's
performance. So, as I am sure you know, the Congress had passed
a law encouraging us to develop a pay-for-performance system.
The inspector general recommended, the GAO recommended one.
We use this in order to entice great employees to the
company and retain them. The salaries that we provide at Amtrak
pale in comparison to our freight railroad counterparts from
which many of our employees come. It is essential that we have
the best employees to be doing the public's work and delivering
on this incredible investment plan. We use this as a retention
tool, and it is very consistent with the private sector,
business everywhere.
Mr. Nehls. I appreciate that. I am just saying, Mr.
Gardner, I think when it is taxpayers' money, I think
transparency is so important. It should be transparent, and
there should be no reason why you wouldn't be willing to share
with--and you did share your salary----
Mr. Gardner [interposing]. Absolutely.
Mr. Nehls [continuing]. But the bonus, whether it is 25
percent or 50 percent, I think the American taxpayer has a
right to know what they are paying their leaders at Amtrak.
Mr. Gardner. Understood.
Mr. Nehls. With that, sir, I will now yield 5 minutes to
Ranking Member Larsen for his questions--oh, wait--oh, Mr.
Payne. I am sorry. Mr. Payne.
Mr. Payne. Thank you.
In reference to the question asked of Mr. Gardner in terms
of his salary and bonuses, I think it pales in comparison to
freight rail's compensation on the other side, which is not
open to the public. So, we know that their compensation over
the past several years has been in the millions. So, I think
we--thank you, Mr. Gardner, for working at a bargain basement
salary.
And, Mr. Gardner, while some parts of the country are
slowly recovering from COVID in intercity rail ridership,
others have almost fully recovered. An excellent example can be
found in the ridership numbers and investments made in North
Carolina and Virginia.
Please tell us what the State transportation agencies are
doing differently to drive an increase in the intercity rail
passengers and what Amtrak is doing to assist these State
transportation agencies in fulfilling these goals.
Mr. Gardner. Thank you for the question, Ranking Member
Payne. You are right, North Carolina and Virginia service is
really exceptional, and I think the key is really three things.
One, a sustained program of investment and leadership within
the State. The States have excellent rail departments that
really focus on their programs in partnership with us and with
their host railroads. And they have been willing to invest
significantly.
While I agree with the chairman that our focus has to be on
improving the network we have and rebuilding our assets, and
that is what the IIJA funds allows us to do, recapitalize our
assets. What it doesn't allow us to do necessarily is focus on
improvements in different areas, and that is why other funding
is necessary.
But the dollars here that are provided for the State
expansion are really coming from the State. And Virginia has
invested over roughly $4 billion to upgrade the infrastructure
between Washington and Richmond in partnership with CSX and
with Amtrak.
So, that investment has been critical. Their leadership at
the State level has been critical, and their focus on
connecting markets and building station investments that
support connectivity to rail. So, there is a great new station
in Raleigh, a new station coming in Charlotte, and a real focus
on providing frequency.
For instance, North Carolina is about to add a fourth
Piedmont frequency. So, creating enough utilities so that
passengers have trains they can take at the right times of day,
at the right trip time, to connect to those markets.
So, we see Virginia, through its service to the south in
Roanoke, Newport News, Norfolk, and Richmond, really exceeding
their goals in terms of ridership growth, coming back from the
pandemic, and a great opportunity long term to further connect
the Northeast Corridor to the Southeast and really build a
coastal connection of high-quality frequent service.
Mr. Payne. Thank you. Thank you.
Mr. Warren, one of the many benefits of the rail service
across the Northeast Corridor is getting cars off the roads and
preventing additional air traffic in our already congested
airspace. Can you please elaborate on how proposed
infrastructure projects across the Northeast Corridor and the
goal to reduce the state-of-good-repair backlog will benefit
the communities in the region economically and how these
impacts will impact the global fight against climate change?
Mr. Warren. Yes, thank you. Transportation is the sector
that emits the highest level of greenhouse gases, so, the more
we can do to attract riders to Northeast Corridor trains, most
of which are electrified, the more we can reduce greenhouse gas
emissions.
It also has the added benefit of reducing automobile
congestion. I just rode down much of the corridor from Vermont,
Massachusetts, Connecticut, through New York, New Jersey,
Delaware, this weekend, and I sure wish more people, including
myself, were taking the train for that trip.
So, a lot of the work we are doing to create more reliable
service, more frequent service, faster service, is going to
bring more riders, and it is going to take riders from
automobiles, take riders from airplanes, both of which emit
significantly more greenhouse gas emissions and also add to
congestion on our roads, I-95 and other roads, and the aviation
system.
So, the more we can implement our CONNECT NEC plan, bring
more riders to the Amtrak and commuter trains on the corridor,
the better off we will be both from a congestion perspective
and a climate perspective.
Mr. Payne. Thank you. The few times that I don't use Amtrak
to come to work, I drive down, and I have to leave between
midnight and 4 o'clock in the morning in order to bypass all
that traffic between New Jersey and Washington, DC. So, thank
you for that.
This question is for both of our witnesses. I will continue
to work on the disadvantaged business enterprise requirement
for the FRA funding, but in the meantime, could you share what
efforts you are making to ensure contracts are going to help
create a level playing field for small businesses owned and
controlled by socially and economically disadvantaged
individuals?
Mr. Gardner. Ranking Member Payne, I am pleased to report
we have made a lot of progress on supplier diversity and DBEs.
As you know, we have got a supplier diversity program which
includes minority- and women-owned business enterprises,
veterans and service-disabled veteran-owned businesses,
disadvantaged business enterprises, small businesses, et
cetera. And we set a goal of 15 percent of our contracting and
procurement from these entities. And in 2022, in fiscal year
2022, we exceeded that goal, achieving 25 percent, roughly $484
million in spend with diverse suppliers. So, we have been
working really hard to do that. In 2023 so far, we are at 27.8
percent of our spend through diverse suppliers.
And we have a new upgraded supplier diversity office which
is doing 27 outreach events throughout this year, and a new
small business resource center, because there are many small
businesses of all types that are out there that have important
capabilities to offer at Amtrak and the rail industry,
particularly as we are growing, and we are working hard to
create a bigger supply base, both so we can get better quality
but also better pricing and ensure redundancy in terms of
supply. Because as we all saw during the pandemic, supply chain
challenges certainly impacted us, and we want to make sure we
have a robust base of potential suppliers.
Mr. Payne. Thank you.
Mr. Gardner. So, this is good business to invest in a
diverse range of suppliers who can meet our needs from all
across America and really allow us to succeed.
Mr. Payne. Thank you.
Mr. Warren?
Mr. Warren. The Commission doesn't do contracting. Our
members contract for the major construction projects. They are
the project managers. One related opportunity I might point out
is just in workforce development.
The workforce needs along the corridor are tremendous to
try and invest these new funds, and we need to go out and find
new workers, not the traditional workers we have always had; we
have to go out and do more job training and do this in
nontraditional places.
So, I think that is a major potential opportunity to
diversify the workforce, expand the workforce. It creates jobs,
it creates equitable jobs, and it helps us deliver----
Mr. Payne [interrupting]. Thank you.
Mr. Warren [continuing]. These significant projects that
need to be delivered.
Mr. Payne. Thank you.
And thank you, Mr. Chairman, for your consideration. I
yield back.
Mr. Nehls. Mr. Payne yields.
I now recognize my colleague from the great State of Texas,
Mr. Babin, for 5 minutes.
Dr. Babin. Thank you, Mr. Chairman.
And I appreciate you, Mr. Gardner and Mr. Warren, for being
here today.
The chairman, to follow up some of his line of questioning
a while ago, is it legal to carry a firearm or any weapon on
Amtrak by passengers?
Mr. Gardner. No, Congressman. So, we do not permit firearms
on board, other than in a locked--you can transport your
firearm. We carry it in a locked facility.
Dr. Babin. Even if you have got a permit for the States it
is traveling through?
Mr. Gardner. I am sorry, I didn't hear you.
Dr. Babin. Even if you have a permit to carry it through
the States you are traveling on?
Mr. Gardner. That is right, yes, we do not allow firearms
on board.
Dr. Babin. OK. Well, passenger screening protections on
Amtrak are nothing like on air travel or even what the public
must go through to enter into this very building here.
The Brightline intercity passenger rail system in Florida
has implemented screening technologies to help prevent persons
from bringing dangerous weapons on its trains. It is not as
comprehensive as the airport technology, but it is better than
nothing. And if you are sitting there and someone has broken
the law and has a weapon and you are totally defenseless, you
are pretty much up the creek.
So, why hasn't Amtrak invested in similar screening
technologies to protect the passengers of Amtrak?
Mr. Gardner. Thank you for your question. So, we take
security very seriously, and we are using a multilayered system
to protect our passengers and broadly have very good results.
Incidents are quite rare on Amtrak. But I share your concern
that, as we continue, opportunities to increase security are
really important.
First, a couple of things that we do today already. We have
random screening together with TSA. We have a large fleet of
trained dogs for both explosives and other interdiction. We
partner with DHS for our VIPR teams to do inspection and then
response. Federal Air Marshals, we are in partnership with them
to be able to be part of our security forces on our trains. We
have increased our APD workforce, and we have put many more
officers on trains in the field.
We are looking at the kind of technology that you discussed
that Brightline is using, Smithsonian similarly, and many
stadiums and others are using, relatively unintrusive but
potentially effective materials and methods to further screen.
And as you mentioned, we have a big network, about 500 stations
across America, some huge, handling hundreds of thousands of
people, including commuter passengers, and some quite small.
Trying to think about how we can embed technology into our
trains, in addition at stations, to increase security.
One thing I will note is that Amtrak receives relatively
little funding from TSA, and TSA's own program has relatively
very little. So, for us to increase significantly in this, we
do need and will need greater partnerships and support. But we
are interested in this and taking it very seriously because we
agree we need to strengthen.
Dr. Babin. Well, I certainly hope so, because if you are
not allowing private, law-abiding citizen passengers to protect
themselves, then you have to protect them, and keep bad actors
from bringing weapons aboard.
Last Congress, the infrastructure law gave Amtrak a
tremendous amount of funding. In addition to that, Amtrak may
apply, itself, for other Federal funding programs and grants,
including CRISI grants that the chairman mentioned and Federal-
State partnerships.
CRISI grants are well oversubscribed already, and countless
more rail safety projects are in need of funding. There are
already over 95 applications for the Fed-State program, but
only 30 or so will be funded.
In Amtrak's annual legislative report, you seek to get
greater permission to use Federal funds that you receive from
the IIJA to serve as your matching contribution for these other
grants. Do you feel that it is appropriate for other
stakeholders, such as State and local governments or short line
railroads, to have to compete against Amtrak for these very
limited funds?
Mr. Gardner. Well, first, Congressman, let me say, we
certainly support the CRISI Program. We support our Class II
and Class III partners and the broad eligibility of CRISI. It
is, I think, important to understand that the dollars that have
come to Amtrak are for a very specific set of purposes. We
can't use them for many of the activities that we might need to
for improving the railroad. They are focused on really state-
of-good-repair/replacement activities for our fleet and our
stations and our infrastructure. So, those dollars aren't
eligible for every activity.
And the safety focus of CRISI is really unique. That is
what we fundamentally seek to partner almost always with host
railroads, States, and localities, other carriers, to find
opportunities for improvement. For instance, further
investments in our Positive Train Control system where if the
system is not required but where we think it is appropriate,
track upgrades with host railroads where the track is falling
below standards for Amtrak service.
So, these are things that we think are good uses of
dollars, they are not things we could use our funds from the
IIJA to otherwise accomplish, and Amtrak is a relatively small
portion of the total CRISI pot. Most of the dollars are going
to freight railroads and for safety programs, and we support
that.
Dr. Babin. I am out of time. Thank you, and I yield back,
Mr. Chairman.
Mr. Nehls. Mr. Babin yields.
I now recognize Ranking Member Larsen for 5 minutes.
Mr. Larsen of Washington. Thank you, Mr. Chair.
Mr. Gardner, we had our last hearing on the topic in
December of 2021 just after the BIL had passed. One of the
challenges raised was making sure there were enough people
hired to implement the funding, both at FRA and at Amtrak.
Can you update us on what your people plan looks like and
where you are in achieving that?
Mr. Gardner. Yes, sir, Ranking Member Larsen. Appreciate
the question.
Mr. Larsen of Washington. Sir is fine, but, yes.
Mr. Gardner. We have had great results so far in our hiring
efforts. As you say, we are really changing the whole scale of
the company, and last year, we hired about 3,700 people.
Already this year, we have hired 2,700 folks. By the end of the
year, we will have hired about 5,000 additional employees. Some
of that is to fill attrition, the normal retirements and so
forth, and some of it is to create more capacity.
And those jobs are across America. We have a 46-State, 3-
Province network, and focused all across our different
functions. So, a significant portion of those are craft hires,
folks who are out there running the trains, maintaining the
infrastructure. But we have also really invested in our program
management, design capacity, all of the really professionals
that are out there to help us build new projects and update our
infrastructure and procure this new fleet.
Mr. Larsen of Washington. Are there areas during the
pandemic where you lost people proportionally in a function and
you are having to build that back up in particular?
Mr. Gardner. Yes. Notably, our mechanical forces--and I am
glad to say we are well above now some of our levels that we
had even pre-pandemic to create the capacity we need to
maintain our equipment. And that is mostly driven by the fact
that there is huge demand for skilled workers in this area--
electricians, welders, machinists--massive demand, and being
competitive has been hard for us in certain regions of the
country. So, we have really worked hard.
We have also created a new apprenticeship program, and this
is a program that is supported through grant funds with our
various unions, and they are rolling out across our mechanical
facilities so that we can train folks and give them the
capabilities they need to serve Amtrak but also lifelong
skills. So, it has really been a good partnership.
Mr. Larsen of Washington. So, BIL was a historic investment
in passenger rail, but it really means a historic investment in
hiring people in order to have passenger rail, it seems.
Mr. Gardner. Absolutely. We are doing hiring that Amtrak
would do in a year now that we would take a half a decade to
have done previously because of this new capacity we need to
build. And it is a chance to build a whole new generation of
rail workers. It is one of the most exciting things, I think,
about this time, is we are building a new generation of skilled
employees who are here to contribute to the mission.
Mr. Larsen of Washington. Thanks.
Mr. Warren, at the Commission, you mentioned you focus on
infrastructure. Do you have--even with your partners, do you
have a similar set of issues in hiring people to make these
projects work--to make these projects happen? I apologize.
Mr. Warren. Yes. One of the biggest challenges to
implementing all of these projects, spending the money from the
infrastructure bill, is hiring workers. Every one of our
members--and Stephen talked about the hiring they are doing. It
is critical, and it is not easy. It is a tight labor market.
But that hiring has to be done. It is creating a lot of good
jobs, but it is essential if these projects are going to move
forward.
There is a lot of work that needs to be done on the
corridor and nationwide, but our focus is certainly the
corridor, and you have to have the workforce, both management
and labor, to make it happen.
And without the funding certainty of the infrastructure
bill, Amtrak wouldn't be hiring as much as it is right now. The
funding certainty is critical to giving our members the
confidence to go out and hire and train, because everyone you
hire, you are training sometimes for a year or more.
Mr. Larsen of Washington. Yes, thanks. A second point I
wanted to make, I made in my opening statement, was that
passengers and States want more rail service.
And maybe, Mr. Gardner, this is not for you to say how
great Washington State and the Northwest is. We tend to be more
ahead than other areas in the State-supported system, but who
is in second place and who is in last generally? What kind of
work needs to take place in different areas of the country to
get caught up on the State-supported systems?
Mr. Gardner. Well, thank you, sir. We have generally
restored frequencies to all of our routes across the United
States, but you are right that we have a strong program in the
Pacific Northwest. The Cascades service and Washington State's
leadership there has been tremendous.
The goal later this fall will be to introduce a fifth and
sixth round trip, so to increase service still, and I know this
is very important to you that we were able to go back to
Vancouver and have two round trips there.
And when you look at the current State-supported system, we
have seen really a lot of enthusiasm from all over. I think it
is really important to note that this drive to grow and improve
service has really stayed community driven. Amtrak is their
partner, but fundamentally this is the decision that States
make to decide to expand or invest in service.
Part of the big challenge for the current network----
Mr. Larsen of Washington [interrupting]. You have to wrap
up and go on--for the record.
Mr. Gardner [continuing]. Is that we have a lot of places
that don't have passenger rail service today at the levels that
exist like in the Cascades--the Southeast, the Mountain West--
and we see a lot of interest from communities there right now.
Mr. Larsen of Washington. OK. Thanks a lot.
Thank you, Mr. Chair.
Mr. Nehls. Mr. Larsen yields.
I now recognize Mr. Stauber for 5 minutes.
Mr. Stauber. Thank you very much, Mr. Chair.
Mr. Gardner, I want to talk about safety and security.
Between 2019 and 2021, the Amtrak Police Department received
over 400,000 emergency calls annually. This is over double what
APD received in previous years. What is the current size of the
Amtrak police force?
Mr. Gardner. Thank you for the question, sir. And our
current workforce is about 406, 407 APD----
Mr. Stauber [interrupting]. Would you consider that fully
staffed?
Mr. Gardner [continuing]. Officers.
Our goal to be fully staffed is 431, which we believe we
will achieve by the end of this fiscal year. We have a lot of
folks in training. And as you know, it is a competitive
environment to get qualified law enforcement folks. So, we are
working to achieve that.
Mr. Stauber. You had mentioned--I am very glad you said
this in your opening statement--safety is the number one
priority at Amtrak. APD strategic plan suggests that you are,
quote, ``restructuring and modernizing,'' end quote, training.
What does that restructuring and modernized training look
like?
Mr. Gardner. Well, I think that the core of our strategy is
to deploy our resources across our network where they can be
most effective. So, we are a very data-driven organization. And
the chief who is behind me here leads our efforts to prioritize
our response across the network, make sure we have the right
assets in the right space.
And then, to create the right sort of modern training
methods and the right force philosophy so that we can serve our
communities well. That, of course, means right now more riders,
more train rides----
Mr. Stauber [interrupting]. Did you say force philosophy?
Force?
Mr. Gardner. Yes. The----
Mr. Stauber [interrupting]. What does that mean?
Mr. Gardner. I mean our APD force.
Mr. Stauber. OK.
Mr. Gardner. The policing philosophy and how we integrate
with our partners. As you know, we are across the Nation, and
we have to partner with local police forces plus the FBI and
TSA and others. And that is a key to the way that we ensure
security is by this relationship of partners across the
network.
Mr. Stauber. All right. And APD is a priority for Amtrak,
correct?
Mr. Gardner. APD is an absolute priority for Amtrak.
Mr. Stauber. I want to get back to what Chairman Nehls was
talking about. Your salary is $500,000, and you received a
bonus. And you said to keep, in your words, great employees and
retain them, you need bonuses.
Did any members of the APD receive bonuses?
Mr. Gardner. Our management workforce is part of our
program. The----
Mr. Stauber [interrupting]. Yes, sir. No. Did the Amtrak
police force, did any Amtrak police force members on the line,
did they receive bonuses equivalent to your percentage of a
bonus?
Mr. Gardner. Those management employees who are not
agreement employees in the APD force did. The other employees
are covered by a collective bargaining agreement, which we
negotiate.
Mr. Stauber. Did they receive bonuses?
Mr. Gardner. No, not per their contract. Yes.
Mr. Stauber. And moments ago, you said that it is a high
priority, and to give bonuses, you want to--you need--in order
to keep great employees and retain them, bonuses were part of
that.
So, it seems at this moment, APD, those boots on the ground
or boots on the train that keep the passengers safe, which is
your priority, they didn't receive a dime. Nothing extra.
Nothing extra. And you had executives that received bonuses of
$200,000 a year, paid primarily by the American taxpayer.
Mr. Gardner, I represent the Eighth Congressional District
of Minnesota. The median income there is $55,000. You received
a bonus almost four times what the hard-working men and women
that I represent, and some of that tax money went to your
bonus.
Do you think that is fair?
Mr. Gardner. So, I would say that the representative
members of the APD receive a variety of benefits associated
with their collective bargaining agreement. So, we negotiate
that, as we do with all of our unions.
And in the Amtrak management case, we traded off a pension
about 10 years ago almost, and put less compensation as
guaranteed for employees and made it at----
Mr. Stauber [interrupting]. With just 15 seconds left, I am
just concerned that Amtrak is prioritizing growth over customer
safety. Those police officers see that you are getting bonuses,
and your executive board are getting bonuses, primarily paid by
the American taxpayer, and you can't help those police
officers? As a former police officer, I find that extremely
offensive.
And I yield back.
Mr. Nehls. Mr. Stauber yields.
I now recognize Mr. Moulton for 5 minutes.
Mr. Moulton. Thank you, Mr. Chairman.
Mr. Gardner, if the Amtrak police officers want to
negotiate for bonuses in their contract, are they allowed to
take that into the next collective bargaining negotiations?
Mr. Gardner. Absolutely, Congressman Moulton.
Mr. Moulton. Thank you very much.
I would just like to get back to a conversation that you
and I have had about efforts to decrease trip times. We talk a
lot about speeds in the railroad industry. We probably don't
focus enough on how we get people faster to where they need to
go.
You recently raised speeds on the Chicago to St. Louis
corridor by 20 miles per hour to 110 miles per hour. Why did it
take so long to get to 110 miles per hour?
Mr. Gardner. Well, thank you, Congressman, for the
question. And trip time is a very important key piece of what
is attractive about rails when we can be competitive with
driving.
This was a program led by the Illinois State DOT, together
with Union Pacific, and funded by the FRA. So, Amtrak was a
supporter, but it is a State-led project.
And it took a long time to rebuild the railway, which is
what was essentially necessary, and upgrade the signal system
there to handle 110-miles-an-hour service. It is great that we
have achieved it, and it is an important outcome, and it is
going to be a big game changer for service in Illinois.
Mr. Moulton. So, back in the 1930s, we had a lot of trains
in America going 100 miles an hour. This is a 10-mile-per-hour
improvement over what was fairly common in the 1930s.
Are there any plans to get Chicago to St. Louis to standard
international high-speed standards, like 200 miles per hour? In
other words, about twice as fast as trains are going on that
corridor today?
Mr. Gardner. Currently, the plan is 110 miles an hour. To
go above 110 miles an hour, you need to have a sealed corridor,
a corridor in which all the grade crossings are eliminated. And
there would need to be changes probably in the alignment on
some of those routes.
So, in certain corridors, those kind of investments I think
are appropriate. What I think we have achieved here in
Illinois, what Illinois has achieved is to really achieve the
kind of standard level of intercity service we should be aiming
for, 110-miles-an-hour service, which does allow trip time
competitiveness. And where there is demand and opportunity, I
think pursuing high speed does make sense on top of that base.
Mr. Moulton. I would just point out that regular old
commuters just taking trains in and out of London have been
going 125 miles per hour for a few decades now. So, I just
think we could set our sights a bit higher.
With regards to trip time, checking the Amtrak website
yesterday, it looks like the trip times haven't decreased
despite the increase in speed.
Mr. Gardner. Well currently, we are in the production
season of the major capital work that is occurring on the
Northeast Corridor. So, we have added some time to certain
trains to reflect the fact that there likely----
Mr. Moulton [interrupting]. Specific to Chicago to St.
Louis.
Mr. Gardner. Oh, in the Chicago-St. Louis, sir, the
schedule change has not yet taken place. So, we are in testing
of the new speeds, but the upcoming schedule change will occur
here soon.
So, even though the trains are operating faster, the
schedules remain at the current speeds until we have validated
everything, and that will happen soon.
Mr. Moulton. So, there are a lot of places on the Northeast
Corridor where we also have to straighten curves to improve
trip times and speeds. We have talked about this in the past. I
sent a letter in August of 2022 on this issue.
Have we made any improvements in trip times on the
Northeast Corridor?
Mr. Gardner. We have a lot of work underway, Congressman,
to do that. These major capital programs that we have discussed
are going to be the way that we can change some of the trip
time. It is the constraints. For instance, the Baltimore and
Potomac Tunnel, as we will advance that program, will take a
railroad that today is constrained to 30 miles an hour and make
that 100-mile-an-hour alignment. As you know, a number of
bridges also, as we replace them, will give us faster speeds.
And as we bundle with those improvements upgrades to our
infrastructure, we are looking to shorten curves to create
faster speeds as we also replace the overhead electric lines.
So, we put the newer lines in the right alignment to maximize
speed.
Our goal is to get 160 miles an hour everywhere the
railroad permits it today with the geometry and upgrade the
infrastructure to support that, both signal and power.
Mr. Moulton. Mr. Warren, when do you think we can actually
see timetables improve on the Northeast Corridor?
Mr. Warren. The CONNECT NEC plan that we are working on
updating, we are very focused on improving trip time with
projects within the existing right-of-way that you can do while
you are doing basic state of good repair and modernization. You
can straighten curves. You can replace signal systems. You can
replace the overhead----
Mr. Moulton [interrupting]. I just want to know the next
time I go to New York, it's faster than it is today. When is
that going to happen?
Mr. Warren. Unfortunately, it is going to take some time
for--each of these things----
Mr. Moulton [interrupting]. Are we talking about a year, 2
years, 5 years?
Mr. Warren [continuing]. It's seconds here and there. I
couldn't give you an exact trip time, but it will take a number
of years for these to start to add up. When you get the 3
minutes from B&P Tunnel, you get 30 seconds here, 30 seconds
there.
There are also studies that are going to be going on to
look at new right-of-way, where you can get significant trip
time improvements. Those are, obviously, longer term projects.
Mr. Moulton. I am out of time, but I think the American
people want to see those returns so we can actually say, we
invested billions of dollars here, and this is what we got.
Thank you, Mr. Chairman.
Mr. Nehls. Mr. Moulton yields.
I now recognize Mr. Burchett for 5 minutes.
Mr. Burchett. Thank you, Mr. Chairman, Members.
Amtrak has awarded six-figure executive bonuses despite
huge losses. You have attempted to take over Union Station's
lease at a cost of hundreds of millions of dollars with respect
to benefits returns. You have forced unwanted routes on your
national network with questionable customer demands and
guaranteed annual losses.
What is your all's projected annual operating loss, Mr.
Gardner?
Mr. Gardner. For this year, a little bit more than $800
million. That is down significantly from the prior year and the
year before.
Mr. Burchett. Yes, sir. According to Amtrak's 5-year plan
for fiscal years 2022 through 2027, Amtrak expects to lose at
least $1 billion per year.
Do you think Amtrak will be cutting expenses or increasing
ticket prices to address its operating losses?
Mr. Gardner. We have been doing both. So, already, our 5-
year plan has been updated for 2023. And you can see where
almost, anticipating a little bit more than $800 million. So,
we have significantly improved those numbers since our 2022 5-
year plan.
And we are doing it on both ends, as you suggest. We have
got to maintain and reduce costs where we can. That is
difficult in this high inflationary environment. We are about
30 percent higher in prices than we were in 2019. So, as we
come back to revenues of 2019, you can see there is a big gap.
At the same time, we are trying to build revenues and are
doing quite a good job at that. But we are still just about to
get to 2019 revenue levels. And it is going to take a
combination of both to maintain improving trajectory.
As I said, our hope is on the train operation side of the
business, to get back to that break-even process. I have been
at Amtrak for 14 years. It took us a lot of work to get to
break-even in 2020 before the pandemic. I know we can do it
again, but it is going to take a while to overcome this
complete----
Mr. Burchett [interrupting]. When you say break even,
though, that is with the influx of tax dollars, correct?
Mr. Gardner. So, yes----
Mr. Burchett [interrupting]. Yes or no, that is fine. I
mean, I am not--you don't need to--I appreciate it. I am going
to run out of time.
In your written testimony, you stated that you all expect
additional losses the next few years due to the capital-related
operating cost. Projected funds by the Infrastructure
Investment and Jobs Act.
How much do you expect these capital-related operating
costs to be?
Mr. Gardner. Well, several hundred million dollars, because
we have to train the workforce and hire the workforce that is
necessary to implement this program. There is a whole series of
costs that are associated with the capital work that we have to
bear as upfront expense. Particularly all of the training cost
we cannot capitalize, and they hit the P&L.
So, we have to double the amount of workers, for instance,
on the Northeast Corridor that are rebuilding track and
signals. To go from about 4,000 employees to about 8,000
employees takes up to 2 years to train those folks. And while
we are training them, they are expense, not capital. And so,
those are the kind of extraordinary costs we have to take for a
bit that are in support of the capital work.
Mr. Burchett. It is not in my notes, but memory serves me
that there has been several, I guess, exposes or whatever. I
don't really like that term, because you never know what is
behind it. But your commissary continues to lose money. Is that
still a problem?
Mr. Gardner. Did you say commissary, sir?
Mr. Burchett. Yes, sir.
Mr. Gardner. So, the food and beverage. Food and beverage--
--
Mr. Burchett [interrupting]. I could have said food and
beverage.
Mr. Gardner. No, absolutely. I know what you mean. The food
and beverage service is an important part of the Amtrak
product. The IIJA require the establishment of a new Food and
Beverage Working Group, and we just received their report. We
owe Congress back our response to the food and beverage report
here this fall.
In general, the food service is there as a part of the
amenities that we offer. So, much of the ticket price is
covering the cost. And then people also fund through cash
purchases, depending on which level of service.
We are continuing to upgrade quality. We certainly have
heard from many Members that they want to see better quality,
and we have heard that from our customers in terms of the food
offerings on board. So, we are focused on doing that, but doing
that in a way that is fiscally responsible.
Mr. Burchett. I would hope that you would be fiscally
responsible. By that, I mean at least paying for the food. I
think that would be a fiscally responsible move, and I think
Congress would probably smile upon that if we were able to
smile.
I have got no time left. I am just going to yield.
Mr. Cohen. Would the gentleman yield?
Mr. Burchett. I would yield to Congressman Cohen if I
could, please, because he is my spiritual mentor in this
committee. Go ahead.
Mr. Cohen. Thank you.
I would just like to ask you a question. I am sure you
heard about his salary being $500,000. Compared to the TVA
chairman's salary, isn't it cheap?
Mr. Burchett. Yes, I would gladly pay our TVA chairman
about a half a million dollars----
Mr. Cohen [interposing]. Thank you.
Mr. Burchett [continuing]. Over his $8 million plus bonus.
But I am not bitter about that nor are you, Mr. Cohen.
Mr. Nehls. Mr. Burchett yields.
I now recognize Ms. Strickland for 5 minutes.
Ms. Strickland. Thank you, Chairman Nehls and Ranking
Member Payne.
My home State of Washington has been a long-time supporter
and investor in intercity passenger rail. During my time as
mayor of Tacoma from 2010 to 2017, I was proud to play an
integral role in the development of a new Tacoma station in our
region.
Because of that experience, I know how critical it is to
ensure that local, State, and Federal governments all work
together to put these critical investments into improving our
Nation's rail infrastructure, building up our workforce. And I
am pleased to hear about the work that you all are doing at
Amtrak.
I look forward to strengthening this Federal partnership
and making sure that when we put these dollars to use in
communities that they are doing exactly what they intended.
Mr. Gardner, I know that Ranking Member Larsen touched on
the strong Pacific Northwest network, and I would like to start
there. As you know, the Washington State Department of
Transportation and Amtrak are currently working on the Amtrak
Cascades Service Development Plan with improving service over
20 years, and specifically adding two more routes--adding two
more times that they are going to go between Seattle and
Portland.
Can you talk more about this timeline and when you think we
can expect these two frequencies--that is the word I was
looking for--to become available to the public?
Mr. Gardner. Well, thank you for the question, and
congratulations on the great station in Tacoma. It is
fantastic. As part of the bypass, it is a real improvement.
And you are right, the Cascades is a great service. We
anticipate two additional frequencies in October of this year.
Again, the States dictate when we bring service in and how much
service we upgrade and the pricing philosophy, and so, we work
with our partners in Washington and Oregon on that schedule.
Ms. Strickland. Excellent. And then can you talk about some
of the challenges you may face in making this reality,
including equipment shortages, delivery delays, and acquiring
the Venture cars that you need by California and the Midwest to
State-supported services.
You had also stated that adding these two new frequencies
between Seattle and Portland is going to depend on having
enough cars available as those are being phased out. So, talk a
bit about some of the challenges we face in making this a
reality with the supply chain.
Mr. Gardner. Well, thank you. And this is a major topic for
us. As you I am sure know, the Cascades service retired the--we
retired the Talgo VI train sets that were in service there and
we replaced those with a fleet of cars from Amtrak's national
pool, our Horizon and Amfleet equipment.
And as you mentioned, the additional cars necessary for the
service, for the additional frequencies, are coming from our
Midwest pool that are, in fact, waiting on the delivery of the
Siemens Venture cars to the States.
So, there, the States procured equipment directly, with
funding from the Federal Government. And Amtrak is the operator
of that equipment, but it is a delivery between Siemens and the
States.
We were supposed to start this year with 60 new cars as
part of this program in service, but, in fact, those were
delayed. And they are still coming into service now. I think we
have about 50 in service.
Our goal, again, is to have 60 in service. So, we are
making good progress. And the manufacturer and the State are
working well together to deliver this equipment and get it in
service. But that is why we have had a shortage of equipment in
the Midwest, and that has cascaded across the rest of the
network.
So, we are anxious to continue those deliveries, get the
equipment into service, and then be able to deploy equipment to
support the additional frequencies in Washington and Oregon.
Ms. Strickland. Is there anything else that my colleagues
and I can do in the Northwest to better support your efforts to
expand this service?
Mr. Gardner. Well, as you said, the leadership in
Washington and Oregon and the long-term relationship and
planning activities really have set the service up for success,
because there is a strong vision of the service and how it can
progress.
Certainly, partnership with the two host railroads there,
the primary host railroads, Burlington Northern Santa Fe and
Union Pacific, are key. And working with them to get better on-
time performance, and to continue the opportunities to expand
cooperatively with the host railroads is key. I think that is
the main challenge in addition to equipment.
I will say that our new Airo trains, the first place that
they arrive is the Cascades service. So, we are excited for
those, and Cascades will be really the testbed for our new
trains, and it is going to be a great experience, I think.
Ms. Strickland. All right. Thank you. And just as editorial
here, as we look at passenger rail service, with an aging
population, fewer people wanting to drive, and a growing
population, we know that eventually, these things will become
more highly used, more ridership and, therefore, more revenue.
But it is going to take time, because the United States is not
as densely populated as some of the other places where they
have more frequent service and more ridership.
Thank you very much for being here today.
Mr. Nehls. Ms. Strickland yields.
I now recognize Mr. Yakym for 5 minutes.
Mr. Yakym. Thank you, Mr. Chairman. And thank you to our
witnesses for being here today.
Mr. Gardner, I appreciate that you are constantly
evaluating new routes and new service options for Amtrak and
for your riders, but it has come to my attention that Amtrak is
eyeing the use of the South Shore Line in my district, which
runs through north central and then ultimately over to the west
and northwest Indiana.
It is a well-established and recently upgraded commuter
rail service line that is going through a double-track addition
right now with the Michigan City area in order to speed up the
rail line service between South Bend and Chicago.
One of the things that I am concerned about is if Amtrak
were to assert authority and come in on that line, what I would
like to know from you and my real question is, would you commit
to working with the South Shore to ensure that it would not
face any undue scheduling or burden cost should you come in and
use that line?
Mr. Gardner. Thank you for the question, Congressman. And
you are right, we are looking at a variety of options. No
decision is made yet about how we improve our service from
Chicago south of the lake. This is vital to our service to
Michigan, vital for our long-distance trains, vital for the
number of trains that we hope in the future can operate in the
Midwest.
So, the South Shore route is one potential route. As you
said, it is recently double-tracked, gone through a
comprehensive upgrading, and is a great passenger-controlled
route. We run into significant problems on the freight lines
that are parallel to the South Shore, and it impacts on-time
performance for all these trains. Certainly, we would do so
cooperatively with the South Shore.
Our conversations with them have always been about looking
to see if there is an opportunity for a partnership. The
frequency per hour is relatively low. I mean, for instance, we
have 24 trains an hour on a two-track railroad in the
Northeast. I think there is lots of capacity there, but we
would have to make sure it can be utilized in a way that
doesn't take away from the South Shore's business and I think
would be actually a net benefit, because you would have another
railroad that could come.
We would contribute as necessary, as we do under our access
rights under law, and be able to be a partner for the South
Shore and to serve the communities that are today served by the
South Shore with intercity service, which today they aren't
all.
Mr. Yakym. Thank you, Mr. Gardner. And my hope is that it
would be collaborative in a way that doesn't negatively affect
the times of the South Shore or put any undue cost burden on
them. So, thank you for that commitment, and I will be
continuing to watch this as we go forward.
I want to shift gears and understand how Amtrak makes
decisions on new service. You indicated in your opening
statement that Amtrak is starting the new Great River route
this year. It is a daily trip between Chicago and Saint Paul,
Minnesota.
Can you tell us how long will it take for that train? What
is the total commute time between Chicago and Minneapolis--
excuse me, Saint Paul?
Mr. Gardner. If my memory serves me, it is about 6 hours on
the current route of the Empire Builder. So, this is a service
we have today, a long-distance train that goes from Chicago to
Seattle and Portland.
And what we are able to do with this service, a partnership
between the three States involved here--Minnesota, Wisconsin,
and Illinois--is take an existing frequency of the Hiawatha
Service, which goes to Milwaukee, and run that service west
across the current route to the Twin Cities. So, it adds a
second----
Mr. Yakym [interrupting]. On this new service route, I am
showing--my data shows that you are looking at about 7\1/2\
hours of total time between Chicago and Saint Paul along that
route.
I would like to unpack the financials a little bit. How
much Federal and taxpayer subsidies do you expect on an annual
basis for this route to get it up and running?
Mr. Gardner. Well, the Federal taxpayer subsidy will be
fairly limited. As you probably know----
Mr. Yakym [interrupting]. Total taxpayer money.
Mr. Gardner [continuing]. The State-supported services--
yes, I would have to get back to you on the specifics for this
route, but the States pay the operating subsidy. That is sort
of the deal under this State-supported partnership.
Mr. Yakym. Which is still taxpayer money.
Mr. Gardner. It is.
Mr. Yakym. So, the total number here is about $7 million
per year to get that route up and running. And so, on 7\1/2\-
hour commute, you can drive it in 6 hours.
We also checked flights going from Chicago up to
Minneapolis. And we just picked a random day, August 8th. We
found that there are 18 nonstop flights per day between Chicago
and the Minneapolis-Saint Paul area, and those run from 6 a.m.
all the way through 10 p.m., at a cost of--the lowest cost of
$84 per ticket on just picking a random day.
And so, what we are trying to understand is--what I am
trying to understand is, how is this a good business and
financial decision for Amtrak, given those facts and $7 million
a year of taxpayer money?
Mr. Gardner. So, again, the primary financial costs are
borne by the States, and they elect to do this because they see
value. Today, the origin-destination pair between the Twin
Cities and Chicago is one of our strongest pairs on the Empire
Builder.
But, of course, this is a train that comes once a day.
There are many travelers who don't find the schedule convenient
for the Empire Builder. So, this provides a second frequency at
a different time of day that allows folks to use the train.
We see people like the train all the time for many reasons.
Many are too old to drive or they dislike driving. Air service,
of course, is not always reliable, particularly in bad weather.
And this creates redundancy in the modes and gives us more
options and more folks a chance to travel. So, we anticipate
strong demand.
Mr. Nehls. The gentleman's time is expired.
Mr. Yakym. Thank you, Mr. Gardner.
Mr. Chairman, I yield back.
Mr. Nehls. Thank you.
I now recognize Mrs. Napolitano for 5 minutes.
Mrs. Napolitano. Thank you, Mr. Chairman.
Gentlemen, I have several comments and I have a question,
so, bear with me.
I have served in the California Transportation Commission
and my years here. I have never found that rail completely pays
for itself. It is almost always subsidized. Is that true?
Mr. Gardner. Yes.
Mrs. Napolitano. Well, for how long has Amtrak been
requesting funding for state of good repair and infrastructure
due to deterioration of the infrastructure and the major
backlogged projects?
Mr. Gardner. Congresswoman, essentially, our entire history
has been a source to try and upgrade the old assets that we
inherited in 1971.
Mrs. Napolitano. Well, Mr. Warren, I see in your report
that you say there the total cost of projects included in the
Federal Railroad Administration's NEC Project Inventory exceeds
$100 billion, with $40 billion just for major backlog. Is that
true?
Mr. Warren. That is correct. The $40 billion is just for
the 15 major backlog projects, bridges and tunnels----
Mrs. Napolitano [interrupting]. And we have only given you
$22 billion?
Mr. Warren. Excuse me?
Mrs. Napolitano. We have only given Amtrak $22 billion?
Mr. Warren. That is correct.
Mrs. Napolitano. Not quite make sense.
I have been on trains in China and France, and they have
up-to-date equipment. So, somehow, we have got to speed up our
system so that we can provide essentially good service since we
have the best Nation in the world. Am I correct?
Mr. Warren. Absolutely. The foundation for all the service
is having a modern reliable infrastructure, and you can't do
that with bridges and tunnels that were built when Teddy
Roosevelt was President and Ulysses S. Grant was President and
William Howard Taft was President.
Mrs. Napolitano. Very good. Now, how are you increasing
ridership, Mr. Gardner?
Mr. Gardner. We are working really hard to increase
ridership. And we are seeing some great response. In fact,
about one-third of all of our passengers on Amtrak today are
new passengers, riders who have never ridden Amtrak before.
There is strong demand for leisure travel in particular.
Business travel is down about 30 percent, and with it,
revenues. But we are able to backfill a lot of that demand by
creating a reliable product and really using fare in promotions
and price to get new passengers to take a chance on the train.
Mrs. Napolitano. The question I would have is, how is the
cost to travel on Amtrak, and how are you attracting new
ridership in California specifically?
Mr. Gardner. So, in California, really the State leads the
program. The three JPAs establish the fare policy and the
approach to how we market those services, how they market the
services.
And I think, as you know, I am sure, unfortunately, the
LOSSAN Corridor and Pacific Surfliner has been very
significantly impacted by now three different events. A
blocking event yesterday severed the route. So, that has been a
major impact and really disconnecting San Diego from Los
Angeles, but we are working hard with the host railroads who
are responsible for maintaining that to bring the service back.
And I think when you do, there is still a lot of frequency
in California, and part of this needs to adjust the service to
the new demands in terms of work from home, but we think there
is a really strong future.
Mrs. Napolitano. How about the cost?
Mr. Gardner. The cost as it relates to passengers, the
State's policy is to keep the fares very affordable on the
State-supported service so that more people can use the train.
The philosophy there is----
Mrs. Napolitano [interrupting]. How many people know that?
Mr. Gardner. Pardon me?
Mrs. Napolitano. How many people know that?
Mr. Warren. Well, in the State I think it is a pretty well-
known bargain, but I do think that there is--and, in fact, you
see lots of demand in various corridors, but I think there is
even more we can do to get the word out.
Mrs. Napolitano. Well, also time delay affected by the
railroad's preferential treatment not given you, where does
that play in California specifically?
Mr. Gardner. Well, we work closely with our host partners
all over America to try and achieve great results for the
passenger trains, respecting the freight railroad's duty to
serve shippers.
And we see some difficulties, though, particularly in
California on our route of the Sunset--this is the route going
east and then across the Southwest--and in our service both
from Sacramento north and between the bay area and Los Angeles
on the coastline.
So, those are areas where we have had some delays. Some are
infrastructure-related and some are related to congestion from
the freight railroads.
Mrs. Napolitano. Thank you.
Mr. Chairman, I yield back.
Mr. Nehls. Mrs. Napolitano yields.
I now recognize Mr. Burlison for 5 minutes.
Mr. Burlison. Thank you, Mr. Chairman.
Mr. Gardner, I was an investment adviser prior to joining
this circus. But I wanted to ask you, if I were your adviser
and I brought forward a business that I wanted to recommend
investing in, and that business lost $1 billion every year
since its inception--which you guys are older than I have been
alive. Has your company ever made a profit in any single year?
Mr. Gardner. No.
Mr. Burlison. OK. So, if I brought that turd of an
investment to you, would you consider me a good investment
adviser?
Mr. Gardner. Well, Congressman, I think the purpose of
Amtrak's creation was not to create a dividend for the Treasury
or to create sort of an investment vehicle. It was to maintain
and enhance passenger rail service as a fundamental piece of
the mobility picture in the United States.
And so, I think Congress has been pretty clear that it is a
service that requires investment, just like public transit
service everywhere or rural roads. These are things that need
to exist to support commerce, to support our culture, support
connectivity.
Mr. Burlison. Right. OK. I am going to get back some of my
time here.
The question I think most Americans ask and I think people
in my district, as has been said before, is that when you have
a business that cannot operate and operates at a deficit such
as yours, how do you justify giving bonuses in the amount of
$200,000 to yourself and other executives?
Mr. Gardner. Well, again, I would say that Amtrak's mission
is to connect America. Congress has been quite clear about
their expectations about our route service, about all the
operations that we made. And we do so trying to balance the
need of service and our finances and be good stewards of the
taxpayer money. To do that, we have to have an excellent----
Mr. Burlison [interrupting]. Who owns most of the rails
that Amtrak uses?
Mr. Gardner. Ninety-seven percent of our route-miles are
owned by another railway. We are a tenant.
Mr. Burlison. So, you are a tenant. Do you pay them?
Mr. Gardner. We do.
Mr. Burlison. How much?
Mr. Gardner. Incremental cost by statute. So, it depends on
the route. But this is set by----
Mr. Burlison [interrupting]. And they are required to have
you as a tenant?
Mr. Gardner. Yes, because, remember, they have the
obligation to run passenger trains by law. And the Government
relieved them of that obligation and created a Federal
corporation to take it on.
Mr. Burlison. If I were to ask them if they were here, with
you as a client, are you a net loser for them? Are you a
liability?
Mr. Gardner. No. We have an incremental cost structure,
which means we pay for the incremental cost associated with our
use. Our trains are very light. We use very little of the sort
of consumables of a railroad. And then we provide incentives
for good on-time performance.
So, some carriers view us as a source of profit and are
very focused on getting the incentive pay for good performance.
Mr. Burlison. So, one of the questions I have is, we just
went through this pandemic. And one of the key issues for my
constituents coming up here was: Do something about the supply
chain. Your trains, on average, what percentage are they full?
Mr. Gardner. Right now, we are in the--we have load factors
in the high sixties. So, it is quite good. So, 60 percent. I
mean----
Mr. Burlison. So, about a little over half full.
Mr. Gardner. Yes. But at peak periods, somewhere in the 90
percent. So, in those segments--again, it is very different
than an airline because we are serving many communities.
Mr. Burlison. Let me ask this question: When my
constituents are trying to get goods and services timely into
my district, do those freight trains have to give preference to
these 50 percent or 60 percent occupied passenger trains?
Mr. Gardner. By law, they have to give preference. But I
should say that we run a triweekly train across various parts
of our network. One train a day, seven cars, ten cars, these
are not in a position to being able to deliver freight service.
I am a former train dispatcher. I certainly know that there
is ample capacity, and you can run an efficient freight
operation with passenger trains.
Mr. Burlison. I just want to impress on you the impact that
you have on the taxpayers. When I calculate per taxpayer in my
district your impact, just your deficit alone costs every
taxpayer in my district at least $7, OK?
Now, that may not be a lot of money to you, but to people
back home, they debate whether or not they are going to have
Netflix or Amazon Prime or if they are going to pay the cable
bill, right?
And you are draining from every taxpayer $7 for a service
that most of them, the vast majority of them, will never use.
And so, I am asking you to reconsider your operation and try to
become at least somewhat profitable.
Mr. Gardner. Congressman, I appreciate that. We take very
seriously our role and the stewardship of Federal funds. We
recognize that all of America pays for this service, as it does
a variety of things the Federal Government invests in.
We are looking to achieve, again, break-even. We were at
break-even, essentially, in 2020. We would have ended with a
net surplus had the pandemic not occurred. It is going to take
a while to get back there, but we are focused on improving the
financials and giving the most value for the Federal investment
that we get, and that Congress sets in terms of our route
network.
Mr. Nehls. The gentleman's time is expired.
I now recognize Mr. Menendez for 5 minutes.
Mr. Menendez. Thank you, Chairman and Ranking Member Payne,
my fellow New Jerseyan who cares about rail and is a great
advocate, as well. Thank you both for coming in. You can
imagine, serving the Eighth Congressional District in New
Jersey, this is an important issue for me.
I appreciate what you are doing to bring Amtrak Northeast
Corridor into the 21st century, continuing to find ways to
bring Amtrak to new riders, to create greater capacity,
ridership, and do things that continue to grow Amtrak.
I mean, we have talked about how there is an increased
demand for funding, demand outpacing supply. I can tell you
that at the consumer level, that is the same case. People want
more options for rail, definitely in New Jersey, definitely in
the Greater tristate region, and along the entire Northeast
Corridor. And I imagine when people have access to Amtrak, to
rail in other parts of the country, that demand is going to
quickly increase there as well in addition to the trends that
you are already seeing. So, I thank you for that.
Mr. Gardner, your testimony describes some of the key
projects for which the Bipartisan Infrastructure Law has
provided funding. Specifically, your testimony highlights
several critical pieces of the Gateway Project in my district,
New Jersey's Eighth. I want to take a moment to highlight the
importance of these projects for my district and the entire
region.
About how many passenger trips pass through the 10-mile
stretch between Newark, New Jersey, and Penn Station in New
York City just on an annual basis?
Mr. Gardner. Well, Congressman, thank you for the question
and for your interest in this program. Pre-pandemic, it was
about 200,000 trips a day between New Jersey Transit and
Amtrak.
The majority of those trips, of course, were New Jersey
transit commuters. And it is a vital lifeline, both for the
region but also for our whole system, because this is the
linchpin between New York and points north and west and all of
our service to the south and southwest.
Mr. Menendez. Well, I appreciate that. About 200,000. I
agree it is the linchpin. How many tracks does this stretch
have?
Mr. Gardner. Two tracks, Congressman. And between Newark
and the interlocking at Penn Station, which is where it opens
up to the station tracks.
Mr. Menendez. Right. And that compares to the rest of the
Northeast Corridor how?
Mr. Gardner. Most of the Northeast Corridor is three
tracks, four tracks. So, it is somewhat of a contradiction. It
is the place where we have our most number of trains coming
together, and, in fact, from Newark proceed from five tracks
down to three, and then two.
So, we have to funnel 24 trains an hour in each direction
across this segment of railroad, and I believe it is the
busiest mainline in North America by far.
Mr. Menendez. Absolutely, extremely complicated. And what
would happen if the Hudson Tunnel closes?
Mr. Gardner. Traffic meltdown. I think there is no doubt
that if we were to lose this connection--and when disruptions,
unfortunately, occasionally happen today, you can see this in
real life. There are huge impacts across the region, because
there is insufficient tunnel and bridge capacity, as you know
well, to get into New York City and to cross the Hudson, and
many, many residents and travelers rely on this connection.
Mr. Menendez. And the tunnel was severely impacted by
Superstorm Sandy. Is that correct?
Mr. Gardner. That is correct. The North River Tubes, which
is the name of the current Hudson River Tunnel that was built
well over 100 years ago now, were impacted in Sandy. There were
about 3 million gallons of brackish water that got into the
tunnels, having flooded in from the Hudson River.
And while they were able to, obviously, remove all of the
water, they have left a collection of chlorides and salts that
are degrading both the concrete and metal elements of the
interior of the tunnel.
Mr. Menendez. So, the integrity of an old asset was further
diminished because of Superstorm Sandy, which gets to my next
question: How important is the Gateway Project to ensure future
viability of the Northeast Corridor?
Mr. Gardner. Well, it is essential to the future of the
Northeast Corridor, future rail transportation for passengers
really across the entire east coast and our connections to the
west. So, it is essential.
And, as you said, the core element here is to build a new
tunnel which allows us to repair and rehabilitate the existing
tunnel and gives us redundancy and resiliency into this vital
connection.
Mr. Menendez. Exactly right. So, we would be strengthening/
expanding the linchpin to the entire Northeast Corridor, and
that is why this project is so important. And I appreciate
Amtrak's leadership in making sure that we continue to make
progress on this vitally important project.
That is one of the most important, if not the most
important, infrastructure projects in the country. I assure
you, you have my support, Ranking Member Payne's support, the
entire delegation's support. We want to get this done and look
forward to working with you a long time to support Amtrak.
Thank you so much for coming here today.
Mr. Nehls. Mr. Menendez yields.
I now recognize Mr. Kean for 5 minutes.
Mr. Kean of New Jersey. Thank you, Mr. Chairman.
I would like to thank the witnesses for being here today.
This is a crucial hearing because many of my constituents and
all New Jerseyans understand that Amtrak service is critical to
our economy and to our livelihood. It plays a critical role in
connecting communities and driving economic growth in the
Northeast region and beyond.
With the outline of CONNECT NEC 2023 in place, my
constituents are enthusiastic about the Hunter Flyover that
constructs a flyover south of Newark Penn Station, to eliminate
at-grade crossings to reduce conflicts between trains and to
increase capacity for NJ Transit and Amtrak, enabling NJ
Transit to improve the Raritan Valley Line service.
That is why I introduced the One-Seat-Ride Act, to direct
the Secretary of Transportation to conduct a cost-benefit
analysis of a one-seat-ride trip versus a transfer trip option
during peak hours on New Jersey Transit's Raritan Valley Line.
I am eager to hear from our two witnesses and to gain
insight into the challenges and the opportunities facing our
passenger rail system. And I will remain ready, willing, and
able to make sure that Amtrak is a reliable and efficient mode
of transportation for all, and I am supportive of all of your
funding requests.
Mr. Gardner, it is good to see you again, both at the State
level as well as now at the Federal level. As you know, the
Hunter Flyover is extraordinarily important, and there is
actually not now a space reserved for it.
Can I, again, have your commitment in public that that
space is reserved for that flyover to hit at pace so we can
ensure that the one-seat-ride is successful on the Raritan
Valley Line?
Mr. Gardner. Yes, Congressman. And I appreciate your
leadership, both at the State level in New Jersey advocating
for a strong Northeast Corridor, and now here in Congress.
We are supportive of this program. New Jersey Transit is
taking a lead and working hard to seek funding and advance the
program. And we are preserving the right-of-way capabilities so
that the flyover can be built.
As you and I have discussed, it does create opportunity for
one-seat-ride for the Raritan Valley passengers, and it ensures
that we deconflict the crossing on the Northeast Corridor so it
doesn't interfere with other New Jersey Transit and Amtrak
service at that junction.
Mr. Kean of New Jersey. Thank you. One of the other things
that I have talked to you about is both Trenton and Metropark.
While neither are in my district, the fact that I believe right
now there is no Acela service into Trenton, New Jersey's State
capital, at all, as well as infrequent stops at Metropark, can
you please talk to me about how we are going to have more
opportunities into both Trenton as well as Metropark for not
only access to our State's capital, but also the innovation
centers and communities around Metropark as well?
Mr. Gardner. Yes, Congressman. And you are right that we
have reduced some service at Metropark and Trenton, in part
primarily because there has been reduction in ridership in
those stations post-pandemic, and we are working to rebuild
ridership there.
We do know we need to add more service there. As you know,
we are a little bit down in our Acela capacity with our current
train sets, which are quite old, and we are keeping them in
service.
As we receive our new train sets and are able to expand the
fleet of Acela, we will be able to ramp up service across the
corridor and include more service there. We know it is
important to Metropark and Trenton both.
And we will be looking--and I will follow up with you on
our schedule for being able to potentially reintroduce service
there for Acela. We continue to have lots of regional service
at both stops.
Mr. Kean of New Jersey. It just seems to me that if people
know there was predictable and efficient service at both those
stops more frequently, obviously more people would come and
utilize those services as opposed to looking to alternate
routes and things that add time and inconvenience to commuters
and families and businesses alike.
One of the other issues that many people are commuting
north and south, it seems to me for the last 15, 20 years, the
cell service always goes out in certain parts of the line. Can
you talk to me about how--it should seem an easy thing to fix
over the course of a line and over the course of 1\1/2\ decades
of service there. Can you walk me through why that is not
happening?
Mr. Gardner. Sure. Thanks, Congressman. So, the cellular
service along the route is really the responsibility of the
various cell carriers. We have been working with the various
carriers to give them the data so that they can see the demand
needs across the route.
And we are in active conversations with them. We have had
some carriers improve or increase capacity along the route in
certain dead spots. And you are right, there are still some
remainders out there. We are also partnering to increase
capacity in the tunnels from another carrier, but this is an
area where we could use support.
In some countries, it is a requirement that the cellular
carriers provide adequate coverage for rail routes. We don't
have that here, and we would like to see----
Mr. Kean of New Jersey [interrupting]. If I may also--if I
may for one quick second, Mr. Chairman, with your support, I
also want to emphasize my strong support for the Gateway
Program. It is the most efficient, effective for New Jersey,
New York.
It is a time-sensitive and important project. Anything that
I can do to ensure that that project is completed on time and
with full funding, I am an ally. Thank you.
Mr. Nehls. The gentleman's time is expired.
I now recognize Mr. DeSaulnier for 5 minutes.
Mr. DeSaulnier. Thank you, Mr. Chairman. Thank you both,
Mr. Chairman and Ranking Member, for this hearing.
And to both of you, as someone from a long way away, a
district a long way away from the Northeast Corridor, although
I am a native of Massachusetts, your success is so important
for the whole country.
The San Francisco Bay area, where I have been involved in
transportation for a long time, sometimes we compete for
Federal funds with you and California, but we know how
important it is that you are successful.
So, in that context, first I want to talk, Mr. Gardner,
about this investment is the largest investment since the
Eisenhower administration for transportation and
infrastructure. The Biden administration has been very
focused--and I appreciate this as a member of this committee
and as a senior member of the Education and the Workforce
Committee--on expanding the middle class.
We have the largest disparity between wealth inequality in
the history of this country right now, at least competitive.
This investment is the single biggest thing economists tell us
we can do to expand the middle class and give opportunity to
poor people to move up.
So, you doing a good job--sorry to put more responsibility
on, but given the comments about compensation--is extremely
important.
You mentioned Siemens in Sacramento. We have some
challenges with Siemens in California, because they are
manufacturing product for the Capitol Corridor and Amtrak on
the west coast as well as here. They have a long history of
being very successful in procurement, but also an unfortunate
history about pushing limits.
They were part of the largest settlement with the U.S. and
the EU on foreign corruption charges not that long ago. They
are aggressive when it comes to global market. They are being
aggressive right now in California about the procurement
requirements under the infrastructure bill to make sure that
there is a livable wage.
I wonder if you could speak to that to make sure that we
have people who are going to make money--and we value them
competing for it--strictly adhere to the requirements in this
law, and starting in Sacramento, that middle-class Americans
and working Americans benefit from this infrastructure, and we
are very careful about adhering to the requirement for a
livable wage when they build this product.
Mr. Gardner. Thank you, Congressman, for your remarks and
for your support. As you say, this is not just an investment in
mobility. It is really an investment in a new generation of
worker skills and a new workforce. So, we are really focused on
creating that capacity to serve the needs of the Nation and to
serve the needs of our network.
And, as you rightfully say, this is a big increase in
available funding for Amtrak and our other partners, State
partners, et cetera, and we are all gearing up with greater
expertise to be able to manage the dollars well. Part of that
is managing our contracts well, being able to oversee those
many, many private-sector partners.
And to be clear, the vast majority of the dollars here
spent are going to go from Amtrak to a private-sector partner,
to a big construction firm or to a manufacturer who are going
to build or deliver great things for us. And so, a key aspect
of our capacity is creating the expertise, the knowledge to be
able to effectively manage our contractors, ensure we get good
value out of them.
So, I can assure you, we are working very hard to pass on
all the requirements that we receive from the Federal funding
and the requirements that Amtrak ourselves have both in policy
and in law and make sure that we get good followthrough and
compliance from all of our entities. And we will do that.
I can assure you we are about to go into the market again.
It will be the first time we are purchasing since the IIJA has
been impacted--or been enacted, excuse me--for our big fleet of
long-distance equipment. This is going to be the largest order
of passenger equipment since the 1940s acquisition by the New
York Central. So, it is a huge opportunity, and we are going to
be working really hard to make sure we get good value.
Mr. DeSaulnier. So, I am going to hold you to that,
specifically on the issue in California. We need you to make
sure that that investment goes back to the people it was
intended to--working Americans--not to companies with
questionable track records, in terms of ethics, and to their
investors offshore.
Mr. Warren, just the importance of connectivity, you have a
lot of MPOs and other governing agencies. We know in successful
countries like Japan, the connectivity between intercity
transit, and intracity and commuter.
Talk to your challenges briefly about working with your
partners along the corridor.
Mr. Warren. Thank you, Congressman. One of the reasons we
were created was because of the complexity, the fact that there
are so many different owners and operators on the corridor in
the intercity and the commuter services, a lot of tension,
natural tension between priorities that Amtrak might have for
intercity service, and priorities commuter railroads might have
for commuter service.
So, it has been an important forum to be able to bring
people together to work through those issues, to determine how
to share costs. We share about $1.3 billion a year in operating
and capital costs, and we have a formula that does it. We have
a policy that does it. And it saves Amtrak from doing a lot of
one-off negotiations with every different railroad and to make
sure all those railroads are on an equal fair footing when it
comes to paying their shared cost for the use of the corridor.
So, it has been very valuable, both in getting everybody on
the same page when it comes to planning and paying for the
corridor, because there is just a lot of natural tension when
you have commuter and intercity----
Mr. Nehls [interrupting]. The gentleman's time has expired.
I now recognize Mr. Williams for 5 minutes.
Mr. Williams of New York. Thank you, Mr. Chairman.
You may have noticed that we have had a recent discussion
about spending in this country. And looking at the numbers, it
looks like that Amtrak relies on the credit card of the
American taxpayers in order to stay in business, and that seems
like increasingly an unviable path.
The Amtrak Board awarded millions of dollars in performance
bonuses to yourselves and others in fiscal year 2021. These
bonuses were paid despite Amtrak losing more than $1 billion in
fiscal year 2021 and is projected to lose $1 billion a year for
the foreseeable future. That is a lot of credit card debt.
The head of the Transport Workers Union even described
these bonuses as an affront to Amtrak workers, and further
stated that every taxpayer should be livid. And based on the
conversation that we had in the House floor last week, I think
taxpayers are livid. And the credit card days are coming to an
end.
You mentioned in your testimony to take seriously the use
of public funds, and yet, you continue to pay out what the New
York Post calls a gravy train of performance bonuses.
Mr. Gardner, have you ever worked in the private sector?
Mr. Gardner. Yes, sir.
Mr. Williams of New York. In what capacity, please, and
what timeframe?
Mr. Gardner. So, as a railroader, I worked a variety of
functions: trackman, brakeman, train dispatcher.
Mr. Williams of New York. And when was that?
Mr. Gardner. This was in the late nineties. And prior to
that, I had a number of retail jobs, other things throughout my
history.
Mr. Williams of New York. In the last 25 years, and I
suspect before that, there is a strong correlation in the
private sector between actual financial performance and bonuses
paid to the people responsible for that financial performance.
And I find it unacceptable that your organization is paying
out these lavish bonuses even in the face and to the criticism
of your own workforce. Many other Members have pointed out that
the operating losses, customer satisfaction, and overall
service is not doing so well. And I live in the Northeast
Corridor. I actually like traveling on Amtrak, but I do find
that this is unsustainable.
Going forward, do you think executives in companies that
operate at a severe loss and declining customer satisfaction
should or would typically receive bonuses in our economy?
Mr. Gardner. Congressman, so, first off, the incentive
program, again, encouraged by Congress and all the entities
that provided us guidance here, the GAO, the OIG, are triggered
to improvements. So, we are improving financial performance. We
are improving customer service scores and improving Amtrak-
controlled delays. That is how we achieve benefits.
And in fact, just, again, our losses are coming down
compared to the numbers you quoted. We worked over a decade to
achieve a break-even result, something the company had never
been able to do for 50 years, but I and my colleagues worked
hard to do this. And we did that, in part, because we used
incentives to align the workforce and achieve improved
financial performance, which is what I think companies do all
over America. And, in fact, sort of our peer group of
railroads, absolutely.
So, I think that it has been working to get better
performance. Our customer satisfaction numbers are actually
quite good compared to pre-pandemic, and we are achieving
better financial results this year than planned, in part,
because we are using tools to keep us all aligned and to make
sure we have the high-quality talent available.
Again, professional railroads, we are a 21,000-mile
network, similar size of any of the freight railroads, several
of the freight railroads, and the same kind of basic number
employees. We are competing against them for talent. We need to
be able to provide reasonable compensation and incentives. We
can't give stock----
Mr. Williams of New York [interrupting]. It sounds like a
really attractive job, because, as I understand by your
criteria, that so long as you tried, you received your bonuses.
And going back to my original question about working in the
private sector, talking about 10 years of efforts to achieve
break-even and mentioning the 50 years of loss before that, I
can assure you, having been in the private sector, that that is
not how bonuses are paid. That is not how other workers are
measured. And just trying is not enough. The credit card is
coming to an end. Thank you for your time.
I yield back.
Mr. Nehls. Mr. Williams yields.
I now recognize Mr. Carson for 5 minutes.
Mr. Carson. Thank you, Chairman. I represent Beech Grove,
Indiana, which is one of the most important rail maintenance
facilities in the country. Now, unfortunately, there have been
some efforts to downsize, or even outsource, the work at Beech
Grove, which has caused some concern amongst Hoosiers.
I think if we are going to improve our supply chain in rail
service, we have to expand opportunities for talented workers
and experienced rail maintenance personnel to build up the
quality of service and safety.
Do you think it is important to strengthen our rail yards
and maintenance facilities? If so, what does this look like?
Mr. Gardner. Thank you, Congressman Carson. I know Beech
Grove is an important facility to you, and it is, of course,
important to Amtrak. It is the vital hub for the maintenance of
much of our long-distance fleet and locomotive fleet. So, it is
a critical location at Amtrak.
One of the really great things that is coming as a result
of the IIJA investments is that we now have the dollars to
invest in state-of-good-repair needs at some of our major
facilities. And we are, of course, as I mentioned, doing lots
of hiring in the mechanical shop.
So, building up that workforce in Beech Grove is something
we have been doing. There is lots of work underway. And it is a
critical facility for Amtrak. Similarly, facilities in other
parts of the country are also going to receive investment and
are having more workers there, because we have got to get all
our equipment back in shape and keep it maintained.
Mr. Carson. Secondly, I am a big supporter of Amtrak's
national network, especially the Cardinal line, which connects
Northeastern cities like New York to Midwestern cities like
Indianapolis and Chicago. And, unfortunately, with the loss of
the Hoosier State line, we lost daily service from Indianapolis
to Chicago, which was critically important, though slow. These
important connections, I think they need to be restored to
daily service and made more consistent and reliably on
schedule.
Mr. Gardner, is Amtrak under your leadership, sir,
committed to strengthening long-distance service on the
national network? And are you committed, sir, to improving the
Cardinal line's reliability and restoring daily service from
Chi-town to Naptown?
Mr. Gardner. Well, thank you for the question, Congressman.
I actually just rode the Cardinal 3 weeks ago, it was a great
trip. And we do believe there is an opportunity for two things.
One is potentially providing daily service on the Cardinal
between the Northeast via West Virginia and Ohio and Indiana,
and also to work with the State on opportunities for corridor
service between Indianapolis and Chicago. And there is, of
course, service potential to the east, to Cincinnati, et
cetera. So, those are going to be decisions that are driven by
the State.
As I have mentioned a couple times today, the growth of
this network is a decision that State partners make together
with the USDOT and the FRA funding. Similarly, long distance is
really a network we operate on your behalf. It is a network
that Congress and the administration essentially set for us and
set for us in the IIJA.
And as part of the IIJA, the FRA has been charged with
undertaking a study to look at expansions and improvements and
restorations to the long-distance network. So, this is a great
process that the FRA is leading. Amtrak is certainly involved
and will be providing information and input.
So, the work we have applied for funding to look at daily
service on the Cardinal and also daily service on the Sunset
Limited, which goes between New Orleans via Houston, all the
way to Los Angeles, and that would allow us to do some
preparatory work. And then the FRA will ultimately decide what
the future of the long-distance network could be, and
recommend, I believe, to Congress, what those changes would
need to be.
We really operate that service, again, on your behalf, and
so, it is the FRA's role to look at those options and then
Congress to consider them.
Mr. Carson. Thank you.
I yield back, Chairman.
Mr. Nehls. The gentleman yields.
I now recognize Mr. Molinaro for 5 minutes.
Mr. Molinaro. Thank you, Mr. Chairman.
Mr. Gardner, could you tell me how much the average Amtrak
ticket is subsidized?
Mr. Gardner. Well, it depends on the----
Mr. Molinaro [interrupting]. How about we use----
Mr. Gardner [continuing]. Route, but in--for instance, on
the Northeast Corridor, there is about a net operating surplus
of about $10 per passenger. On State-supported, it is a subsidy
of about $16 per passenger, and on long distance, it is about
$148 per passenger.
Mr. Molinaro. And so, I just want to offer, in 2019 on a
per-passenger mile, it is 35.6 cents--35.6 cents--subsidized. I
am not familiar with many of those freight industries, freight
rails, that are equally subsidized by taxpayers.
But, Mr. Gardner, I am going to quote a New York Times
article that, Mr. Chairman, I would like to submit for the
record and seek unanimous consent to enter into the record.
Mr. Nehls. No problem. Without objection.
[The information follows:]

Article entitled, ``G.O.P. Lawmakers Question Amtrak Over Six-Figure
Bonuses,'' by Mark Walker, New York Times, November 4, 2022, Submitted
for the Record by Hon. Marcus J. Molinaro
G.O.P. Lawmakers Question Amtrak Over Six-Figure Bonuses
Two Republicans on the House Transportation Committee asked the rail
service to explain how it awards bonuses after top executives received
payouts of more than $200,000 each last year.

by Mark Walker

New York Times, November 4, 2022
https://www.nytimes.com/2022/11/04/us/politics/amtrak-executive-
bonuses.html

Washington.--House Republicans are pressing Amtrak to answer questions
about six-figure bonuses that top executives received last year despite
the rail service's poor financial performance and low ridership during
the coronavirus pandemic.
In a letter to the chairman of Amtrak's board of directors, two
Republicans on the House Transportation and Infrastructure Committee
asked the company to explain how it awards bonuses, saying that the
payouts to executives seemed to be ``inappropriate'' and ``wasteful.''
The letter was sent after a report by The New York Times in August
revealing that Amtrak paid out $2.3 million in short-term incentive
bonuses to top executives in the 2021 fiscal year despite reporting its
lowest revenue and biggest losses in more than a decade. Nine
executives received bonuses exceeding $200,000.
The letter, dated on Thursday, was signed by Representatives Sam
Graves of Missouri, the top Republican on the Transportation and
Infrastructure Committee, and Rick Crawford of Arkansas, the top
Republican on the panel's railroads subcommittee.
Republicans are favored to take back the House in the midterm
elections on Tuesday, and with it, the party would also gain control of
committees like the transportation panel. Winning the majority would
increase the party's power to conduct oversight and investigations,
including placing new scrutiny on how federal dollars are spent.
``Payment of lavish executive bonuses when Amtrak services and
revenues remain below prepandemic levels, and financial losses appear
permanent, seem inappropriate, wasteful and disrespectful to Amtrak's
nonexecutive frontline employees and taxpayers,'' Mr. Graves and Mr.
Crawford wrote in the letter.
They noted that Amtrak lost $789 million in the 2020 fiscal year
and $1 billion the next year, and that ridership fell by nearly 63
percent from 2019 to 2021, a period that includes the onset of the
pandemic.
Christina Leeds, a spokeswoman for Amtrak, said in a statement that
the company welcomed the opportunity to brief the lawmakers. She said
that businesses commonly used employee incentive plans and that
Congress had recommended them to the rail service.
``We are pleased to offer these incentives as part of our
competitive compensation package, helping us attract and retain talent
who have the amazing opportunity to rebuild and expand passenger
rail,'' Ms. Leeds said. ``To earn incentives, Amtrak must achieve a
high level of corporate performance in support of our company's
strategic plan--and employees must also meet their individual
performance goals.''
The Times reported in August that Stephen J. Gardner, an Amtrak
executive who became the chief executive this year, received more than
$766,000 in short-term incentive bonuses from 2016 to 2021, more than
any other executive. Eleanor D. Acheson, the company's general counsel,
received about $727,000 over that period.
Amtrak has said that it increased its short-term incentive bonuses
for managers across the company in 2019 to try to counter retention and
hiring issues. The company said it created the bonus program in 2013
after modifying its pension program and closing it off to newly hired
employees.
The rail service is still struggling with the effects of the
pandemic. Its ridership remains below prepandemic levels as it tries to
find ways to attract new customers. But it stands to benefit from a
major infusion of federal cash after passage last year of the
bipartisan infrastructure package, which included $66 billion in new
spending on rail.

Mr. Molinaro. ``The Times reported in August that Stephen
J. Gardner, an Amtrak executive who became the chief executive
this year, received more than $766,000 in short-term incentive
bonuses from 2016 to 2021, more than any other executive.
Eleanor D. Acheson, the company's general counsel, received
about $727,000 over that period.'' End of quote.
We have been discussing the bonuses received during this
hearing. What I would like to know, because you talked about
metrics and incentivizing, what I would like to know is what
metrics you are measured against to consistently receive the
bonuses that Amtrak, subsidized by taxpayers, is giving
consistent with failure to turn a profit? Where is the New York
Times wrong?
Mr. Gardner. Well, first off, just to answer the question
of consistency, the program, of course, isn't consistent. We
have not received bonuses many of the years they were available
because we failed to----
Mr. Molinaro [interrupting]. Yes, but, Mr. Gardner, I am
speaking about 2016 to 2021. In 2021, during the height of
COVID, when thousands of families were either unemployed or,
sadly, lost lives, like mine, what metric would you use to
determine a $200,000 bonus is sufficiently acceptable for an
industry subsidized by taxpayers?
Mr. Gardner. In 2020, we suspended our bonus program.
Executives like myself took a 22-percent pay cut for the entire
year to cover----
Mr. Molinaro [interrupting]. And so, your answer is--Mr.
Gardner, I have 5 minutes. Your answer is, in 2021, since you
sacrificed in 2020, 2021, $200,000 is sufficient?
Mr. Gardner. No. The basis for the 2021 award was our
financial performance which beat our anticipated levels by
working hard to do that in--and----
Mr. Molinaro [interrupting]. Lowest ridership, lowest point
of Amtrak's ridership----
Mr. Gardner [interposing]. Absolutely.
Mr. Molinaro [continuing]. Massive folks left sitting on
the sidelines while many of your employees were working damn
hard. I want to turn, because that, to me, frames my next line
of questioning.
Mr. Gardner. OK.
Mr. Molinaro. In 2022, Amtrak's 2022 ``ADA Progress
Report,'' Amtrak has fully managed to address its ADA
responsibility at only 90 of the 387 stations where it is
responsible for implementation.
So, as you know, in 1990, the Americans with Disabilities
Act was established, and established a 20-year timeframe for
intercity rail stations to be fully accessible for those with
disabilities. Amtrak is appropriated $275 million for
accessibility upgrades. And yet in the Northeast Corridor, I
can tell you my own experience in Dutchess County, Rhinecliff,
New York, Amtrak should be ashamed of its lack of ADA
compliance. In Hudson, New York, Northeast Corridor, Amtrak
should be ashamed of its consistent failure to meet ADA
compliance. If you think this doesn't frustrate folks like us,
it does.
What commitment is Amtrak able to make today to fully
fulfill the ADA requirement adopted in 1990, knowing that, at
the very least in the Northeast Corridor, in my part of the
country, we have, for now, two generations been left with
individuals in wheelchairs trying to find their way over active
tracks?
Mr. Gardner. Congressman, I share your passion for
compliance with the ADA. We are working----
Mr. Molinaro [interrupting]. But not the outcomes, Mr.
Gardner.
Mr. Gardner. We have been working hard, and we have
achieved significantly more progress than you have noted. So,
there are 110 fully compliant stations and 69 additional
compliant stations with the exception of platform work.
Much of the work that has been done to date was retarded by
a lack of funding. That is now solved with the IIJA, which
provides $1.2 billion for us to bring all of the facilities
that we are responsible for, the roughly 380 you mentioned,
into compliance. We will do that.
The last project will begin in 2028. We are working hard to
achieve really good results. We will have 39 additional
projects completed by the end of this fiscal year. So, we are
on path to address this.
One of the main issues is also the various ownership of
these stations. We own a very small percentage of the
stations----
Mr. Molinaro [interposing]. I understand.
Mr. Gardner [continuing]. And we have to get----
Mr. Molinaro [interrupting]. Sir, I appreciate it. My time
is up.
Mr. Chairman, I just would say, I was quoting from your IG
report, and I would like to see the same kind of commitment to
achieve the ADA compliance as you suggest.
Mr. Gardner. OK.
Mr. Nehls. Mr. Molinaro yields.
I now recognize Mr. Cohen for 5 minutes.
Mr. Cohen. Thank you, Mr. Chair.
Mr. Gardner, I am a big supporter, as you know, of Amtrak
and passenger rail service throughout this country, and of
course I also have an interest in my area, Memphis, which has
New Orleans and Chicago via City of New Orleans, but also wants
to expand to Little Rock and/or Nashville.
Can you give me an assessment of where those possible
expansions of service out of Memphis stand at the present time?
Mr. Gardner. Thank you, Congressman, and thanks for your
support and leadership on passenger rail issues.
I know that the State has submitted a corridor
identification application to the Federal Railroad
Administration for service from Memphis east to Nashville, on
to Chattanooga and to Atlanta. So, that is a very interesting
corridor, one that holds a lot of promise. And the process now
will be for the FRA to consider those applications for the
Corridor Development Program and to make their selections. And
then that will provide some initial seed funding to be able to
begin the planning work. So, that is a great step and one that
we have supported.
Mr. Cohen. Could the State do more or is the State doing
what is necessary?
Mr. Gardner. I think this is the first critical step, is to
get in the program, to make the submission and to express their
interest. And once the FRA has made their decisions, then there
will be a process to further study and work, of course, with
host railroads and work with operators like ourselves to plan
out a service. But this was a critical step that was necessary
by the State.
Mr. Cohen. That route could be, I think, very important
because Ford is opening a major plant about 40 to 50 miles out
of Memphis. So, rail getting people to and from that facility,
and also further into middle Tennessee, would be important.
But the Memphis to Nashville area is not served by air
transportation--commercial air. There would be, and I have
heard, a great amount of support in Memphis and Nashville.
People in Memphis want to go to Nashville, the State capital,
for all kind of reasons, and people in Nashville have even more
reasons to leave and come to Memphis. So, there is this great
synergy of energy there that would be important, so, I would
urge you to look at that carefully.
Also, Little Rock. Has the Governor of Arkansas or the
State of Arkansas done anything to get that Memphis to Little
Rock route that would go on to Dallas?
Mr. Gardner. Well, I think there are a lot of
opportunities. I just was on the City of New Orleans several
months ago and had a chance to see the great station in Memphis
and the development happening there, and basically, late at
night, the amount of demand there is. Similar to Little Rock: I
was recently on the Texas Eagle at 3:15 a.m., and 30 or 40
passengers lining up to take the train.
So, if we could serve those markets during the day with
reliable service to connect these city pairs, we think there is
a real opportunity for rail to play a bigger role.
Mr. Cohen. Is Arkansas doing anything to help that? Because
the State is real involved. Is it not necessary?
Mr. Gardner. Yes. So, I think--I am not sure that that
corridor has been submitted for the Corridor ID Program, but
the good news is that that is a rolling process, so, there will
be more opportunities for States to put forward other
opportunities and interests.
Mr. Cohen. I presume you heard about it, the Gannett
newspapers ran a section on summer travel this past weekend, in
Memphis at least, and one of the highlights was rail. It said
rail was a great way to go, and it talked about all the routes,
but there were two criticisms. One was you always have to wait,
just get used to it, and the other was dining.
You know that I have been concerned about the dining
experience which I experienced as a child. I think it is part
of the romance of train travel. What is going to be done with
the Amtrak Food and Beverage Working Group report on improving
dining and making it more available, which enhances the
consumers' enjoyment of the Amtrak experience?
Mr. Gardner. Yes. Thanks for that question. So, we have
worked hard to restore traditional dining and had great results
as a result of that on our Western trains. We are bringing
traditional dining back to our Silver service in the East.
And we are looking at the--as I mentioned, we just got the
food and beverage recommendations here recently. We are working
on going through those. Amtrak was a part of that, but it is a
big group of folks from the culinary world, from our riders,
from our labor partners, coming together to give us great
recommendations about how to improve the service.
So, we will be back to Congress with our take on that
report and the different efforts that are underway, but we are
committed to improving the experience, and also making, as we
have done in certain instances, making the dining car available
to coach passengers where we have capacity.
Mr. Cohen. Thank you. I look forward to traveling in one of
those longer trains between Chicago and Los Angeles or Frisco.
They certainly give you the opportunity to see the country and
enjoy it.
Last question--and I don't want to harp on this at all--but
did Richard Anderson start the bonus program or was it before
him?
Mr. Gardner. Say it again, please.
Mr. Cohen. Richard Anderson, did he start the idea of the
bonuses at Amtrak or did it predate him?
Mr. Gardner. No. It began actually under CEO Joe Boardman.
And, again, it was a response to the PRIIA, Passenger Rail
Investment and Improvement Act of 2008, which encouraged that
Amtrak adopt a program that was performance based. Because
based on the kind of long history of Amtrak, a lot of the
compensation was deferred compensation in the form of pension.
This took away that and actually saved taxpayers hundreds
of millions, billion dollars of future exposure, and traded
that for performance-based compensation, so that Amtrak's
employees would be tied to the goals and metrics that we set.
And that, as I mentioned, has not been something that simply is
awarded. It is earned, and oftentimes the company has not
achieved its goals.
Mr. Cohen. Thank you very much. I yield back the balance of
my time, and I look forward to my ham and eggs in Carolina.
Mr. Nehls. Mr. Cohen yields. I now recognize Mr. LaMalfa
for 5 minutes.
Mr. LaMalfa. Thank you, Mr. Chairman.
Mr. Gardner, first, I want to harken back a little bit to
when we were talking about the bonuses, then I will leave it
be. But it is just not a good look when things are going so
badly for the country during the COVID era that even though
maybe the expectations of the rail were a little better than
low-ball hopes, that that shouldn't kick in big bonuses like
that. It is about as popular as Congress getting pay raises or
something like that.
That all said, you had one of your stats here that says
that ridership has returned to pre-COVID levels. But how can
that be when ridership in fiscal year 2022 was seen as about 85
percent overall in the final 6 months, and overall for the year
was 68 percent? How do we say that we are at pre-COVID levels
when you can really see it is two-thirds of that?
Mr. Gardner. Congressman, thanks for the question. So, as
of April, we were at 89 percent of our pre-pandemic demand, and
that is essentially on roughly 85 percent of our capacity. So,
we don't have as many trains in the marketplace, and we don't
have as long a consist.
So, we actually have sort of more demand against the
available capacity than we did in pre-pandemic. We are working
hard to restore that capacity. We will have--essentially be
back to capacity levels in 2024. That is why we are confident
we can reach the 32 million riders we had prior then.
Mr. LaMalfa. A number like 100 percent in 2024?
Mr. Gardner. Yes, we anticipate to be back in 2024. About
28.5 million is our expectation for 2023, and we are 32 million
for 2024.
Mr. LaMalfa. Got to keep moving, I am sorry. OK. Has it
been evenly distributed along the long-distance routes or State
routes or the Northwest Corridor, or they have different
performances?
Mr. Gardner. Different performance. So, we have had some
routes that have actually exceeded their pre-pandemic levels,
some routes that are less. I would say that the routes that are
having less ridership are those routes that are more subject to
the impact of work from home and were more subject to daily
commute. Most Amtrak----
Mr. LaMalfa [interrupting]. The Northeast Corridor
specifically----
Mr. Gardner [interrupting]. Excuse me?
Mr. LaMalfa. Probably the most important one, my guess,
would be the Northeast Corridor. What is its number?
Mr. Gardner. The Northeast Corridor is doing well. We are
basically back to--when I looked at the last week of April, we
were at 1 percent below riders for that same week in 2019. So,
there is plenty of demand on the Northeast Corridor, and our
long-distance trains. There is really strong demand in a number
of them, particularly for our sleeping-class product.
Mr. LaMalfa. OK. Sorry, I have three committees at the same
time, so, I haven't had the benefit of hearing the whole
committee today.
I have a reference here to what was known as the train ride
from hell in January of this year from Virginia to Florida. A
normally 17-hour ride from Virginia to Florida added an
additional 20 hours. I guess there was a derailment. I
understand that is a problem, big time. But several delays made
it a really terrible ride for the passengers.
So, the problem I have with it is that people are not
allowed to have the options to get off the train and move
around or maybe just jump off if someone comes to pick them up
or they get an alternate. Of course, they seemed to run out of
food during the time on the train, so--and then just a lack of
knowledge of what is going on so people can maybe exercise
options.
So, what is being done--you hear that with airlines
sometimes too, with not leaving the gate. So, what is being
done to give passengers a little more respect or options on
letting them get off the darn train if they need to, just to
stretch? Is there ability to be able to reverse to the previous
train station or an appropriate area, even a good crossing,
people could get off and--what do you think about that?
Mr. Gardner. So, you are right that this was a very
difficult trip. We certainly apologized and refunded all our
customers. This was driven by a grade crossing accident of CSX
between a CSX freight train and a vehicle that essentially
blocked the route. And our train--this is a special train. This
is the auto train, so, this a train where we have a number of
cars that are carrying passengers and then a number of auto
racks that are carrying their vehicles. So, it is a very
unusual train.
We had already departed the terminal, and because of the
configuration and length of this train, it was not possible to
reverse it or to turn it anywhere en route. CSX gave us the
information--I think the best information they had at the time,
which was to reroute this train, but it turned out that that
routing took much, much longer than CSX had expected it, and
they were required to produce additional crew to help us
navigate the portion of the route we don't normally use----
Mr. LaMalfa [interrupting]. OK. I've got to cut in here.
Mr. Gardner. Our goal is to let folks get off at stations,
of course, and to always, if we have a problem, to come to a
stop at a station and to let folks go. In this case, the
problem was separating people from their cars----
Mr. LaMalfa [interposing]. Yes.
Mr. Gardner [continuing]. Because if we got them off, they
couldn't get their cars, because the cars would still be stuck,
and we had to get them to the final station.
Mr. LaMalfa. OK.
Mr. Gardner. So, it was difficult. We did provide food and
water throughout the trip. There were times later when
passengers could get off, but it was in the middle of the
night. So, it was an unfortunate experience. We are spending a
lot of time and effort increasing our communication----
Mr. LaMalfa [interrupting]. OK, indeed a very tough deal, I
get you on that. But I guess with the ride of the future, you
have got to give people opportunities to--and other situations
and when--I was even involved in one when we went on a trip
then. You've got to give people options to be able to at least
get out, move around, and get better service that way.
So, my time flew by.
Mr. Gardner. Thank you.
Mr. LaMalfa. I will yield back, Mr. Chairman. Thank you.
Mr. Nehls. Mr. LaMalfa yields.
I now recognize Mr. Carter for 5 minutes.
Mr. Carter of Louisiana. Mr. Chairman, Ranking Member,
thank you very much.
Mr. Gardner, for the people of Louisiana who have been very
patient and waiting for rail between New Orleans, Baton Rouge,
and Mobile, here is your shot. Give them the shot in the arm of
confidence that this is actually going to happen.
Mr. Gardner. Well, thank you, Mr. Carter. And we are very
confident about bringing service to the gulf coast, and we have
reached a settlement with our partners, and our hope is that
that could commence by the end of the year. We will see. It
could be pushed on a little longer, depending on some
construction work that is happening in Mobile, the station
there, some other things. But we are working hard.
There is strong support from the States and the Southern
Rail Commission, as you know, and we are really just at this
point, got to get all the elements in place. But Amtrak is
committed, has been long committed to this service and to be a
partner to the Southern Rail Commission.
As it relates to Baton Rouge, we supported certainly the
Louisiana and Southern Rail Commission efforts there and have a
strong partnership with Canadian Pacific, now CPKC, to permit
us to operate trains over that route. There is going to be some
investment required, particularly to deal with the spillway
there, to be able to facilitate the service. But a good plan,
both ourselves and CP are soon to be in receipt of the
preliminary engineering work, a sort of report, that is
necessary for us to look at those opportunities. But we see
that service there could happen in several years.
And on Mobile to New Orleans, that should be within the
year.
Mr. Carter of Louisiana. Fantastic. Thank you very much. I
know how hard you guys worked on it, but I want to emphasize
the importance it is for the people of New Orleans, for the
region. And it is something that has been long awaited, and we
are very excited about the movement.
In the 2017 ``Gulf Coast Working Group Report to
Congress,'' they wrote: ``In the more than 10 years since
Hurricane Katrina struck, gulf coast leaders and residents have
made great strides in rebuilding businesses, communities, and
infrastructure that connect cities across the region. In the
last 5 years, more than $3 billion in private funds were
invested in industrial, medical, IT, and aerospace sectors.
``As mentioned earlier in this report, during the next 30
years, the gulf coast and Florida megaregion's populations are
expected to increase by 10 million and 13.8 million,
respectively. For the region to harness this projected
population growth, it needs a multimodal transportation system
that provides transportation alternatives.''
Do you believe that this route serves as the multimodal
transportation system that was called for 5 years ago?
Mr. Gardner. I think it is the beginning of that service,
absolutely. There is going to be the initial corridor service
and then certainly opportunities to strengthen connectivity
between the intercity passenger rail service and local transit,
because as the report says, it is really critical that we
create a network of operations that can support people
traveling without their cars.
But we think this initial service is a great start. We are
excited for it and think there is a lot of support amongst----
Mr. Carter of Louisiana [interrupting]. Do you see this
being useful for commuters as well as vacationers?
Mr. Gardner. Absolutely. We see there is a strong
international visitor component in New Orleans that will find
rail service, I think, attractive. And then we see a lot of
opportunity along the gulf coast there for many of the towns
that have things to offer visitors and for workers who need to
travel between the various cities for jobs.
Mr. Carter of Louisiana. And we find ourselves now in
hurricane season. Share with me your view on it being able to
be utilized as a mode of transportation for disasters and
evacuations.
Mr. Gardner. Well, we have had some experience with this in
the past, and I think that the difficulty typically with using
passenger trains for evacuation, unless it is well in advance,
is that our host railroads, the freight railroads, often
curtail their own operations in advance of a hurricane. So, if
they have shut down the railroad, we can't operate over it.
Having said that, certainly we endeavor to work with FEMA
and work with the State emergency management folks about
creating opportunities for service when there is a need. But it
is difficult where we don't control the railroad.
Mr. Carter of Louisiana. OK. I've got a few seconds left. I
want to go back to these CRISI grants that were mentioned
earlier. CRISI grants, share with us and the public, the public
benefit of your having access to CRISI grants.
Mr. Gardner. Well, CRISI really is a unique program in that
it is available to a broad set of eligible participants to
cover a variety of rail improvements. Most of the CRISI grants
we have ever been involved with are at the request of States or
railroads who seek to gain safety investments or other
improvements in their properties that----
Mr. Carter of Louisiana [interrupting]. Go back for a
second. Safety. Safety.
Mr. Gardner. Absolutely,
Mr. Carter of Louisiana. Safety. One of the most
significant things that we can do with transportation going
through communities is making sure the communities are safe. Is
that correct?
Mr. Gardner. Absolutely.
Mr. Carter of Louisiana. I yield back.
Mr. Nehls. The gentleman yields.
I now recognize Mr. Mann for 5 minutes.
Mr. Mann. Thank you, Chairman Nehls.
I represent the Big First District of Kansas, which is 60
primarily rural counties in western, central, and a few in the
eastern part of the State of Kansas. Transportation and
infrastructure is very, very important to us.
The Southwest Chief route runs through the State of Kansas
where 53 percent of residents live within 25 miles of a
passenger rail station and 75 percent within 50 miles. Kansas
is also home, at the same time, to 4,600 miles of active rail
which Amtrak utilizes for its passenger rail service.
Mr. Gardner, the Southwest Chief route runs right through
my district and makes several stops each night and early
morning. I am just wanting to confirm that you, as the CEO, and
Amtrak, are supportive of long-distance passenger rail routes
like Southwest Chief.
Mr. Gardner. Yes, sir, we are. We are supportive of the
Southwest Chief, and we are looking to hopefully connect the
Southwest Chief with the leadership of the two States, of
Oklahoma and Kansas, potentially to the Heartland Flyer in
Newton.
Mr. Mann. I appreciate that. I have heard that Amtrak has
planned on reducing the sleeper car capacity of the Southwest
Chief route. This seems a little contradictory seeing that I
know you support it. Is this true and can you provide an
explanation?
Mr. Gardner. No. I will get back to you on the specific
details, but our goal here is to, in fact, put as much sleeper
capacity as we can on routes with strong demand. The western
routes have particularly strong demand. The issue has been we
have been working through some of the overhauls that come due
and need to get done by our mechanical shops and the impacts of
a number of equipment pieces that we have lost in recent
incidents.
So, we have a smaller fleet today because we have roughly
30 or so wrecked vehicles that can't be repaired, and we are
working hard to get more capacity back out into all of our
long-distance routes because we see success occurring on routes
like the Southwest Chief.
Mr. Mann. OK. Thank you. And as you know, next question,
our country has faced significant supply chain issues over the
past few years. The freight rail and short line rail have been
some of the major industries that have been affected.
The railroad, of course, owns the track that Amtrak uses.
And what assurances can you give our Nation's freight and short
line railroads, as Amtrak looks to expand, that Amtrak will be
a good negotiating partner in the development of future
passenger rail service?
Mr. Gardner. Well, it is absolutely required that we be a
good partner. We try and find productive, mutually beneficial
outcomes to both support the service we have today and achieve
the kind of results that I think you expect in terms of on-time
performance and to permit growth where it is appropriate. And
that, again, is a calculus that is developed by us, our State
partners, the FRA, et cetera, but then we seek to negotiate and
come up with a collaborative solution, and generally we have
been supportive of that.
I would point to our agreements with Canadian Pacific as a
great example of two railroads working together. We have a
great relationship there, and that is going to be always our
goal, is to find a mutually beneficial solution, but also one
that respects the rights that the public was given and that
Amtrak was given, through its creation, to utilize the Nation's
rail system.
But we don't do that in a way, we believe, that
significantly negatively impacts freight railroads. And there
is a safeguard method essentially that ensures that our
additional service does not come at the expense of the ability
to move goods and services in the United States.
Mr. Mann. I think that is incredibly important.
Thank you, Mr. Chairman. With that, I yield back.
Mr. Nehls. Thank you. The gentleman yields.
I now recognize Mr. Stanton for 5 minutes.
Mr. Stanton. Thank you very much, Mr. Chairman. Thank you
for the opportunity to join the subcommittee for today's
hearing on a topic of great interest to the people of my State
in Arizona.
I wanted to be here because Phoenix is the largest city in
the United States without access to passenger rail service. As
other communities have gained access to passenger rail, they
have experienced significant new economic opportunities, but
Arizona, thus far, has missed out.
I am hopeful that will change, and there is reason for
optimism. Amtrak has applied for funds under the Bipartisan
Infrastructure Law to restore long-distance train service to
Phoenix via the Sunset Limited, and Arizona has submitted a
proposal to the Federal Railroad Administration's Corridor ID
Program to advance frequent and reliable passenger rail service
between our two large and fast-growing metropolitan areas,
Phoenix and Tucson.
Arizonans have wanted passenger train service between
Phoenix and Tucson for decades, so, it is no surprise that this
effort has significant local and State support. The mayors of
Phoenix and Tucson and other communities along the proposed
lines are on board, and the State of Arizona is behind it and
has provided $3\1/2\ million in State funds for the planning
effort.
What does this all mean for Arizona? It means opportunity:
opportunity to connect our communities, make them more
accessible and productive and more internationally competitive;
opportunity to boost our regional economies with better access
to jobs and more private investment along the route; and
opportunity to ease congestion along Interstate 10 to help
reduce air pollution.
Mr. Gardner, if Amtrak is successful in its application for
Federal funds through the Bipartisan Infrastructure Law to
restore long-distance train service to Phoenix, how
specifically will these resources be invested, and how will
these investments help advance and accelerate the development
of the Tucson-Phoenix-West Valley intercity passenger rail
line?
Mr. Gardner. Well, thank you very much for the question.
And I just had the pleasure of seeing the mayor of Phoenix and
the mayor of Mesa recently and heard their strong interest and
support in this.
And as you said, it is really a pretty remarkable corridor.
Very, very strong local support, bipartisan support, for
bringing service back there.
As we mentioned, Arizona DOT will be the lead. They have
submitted corridor identification applications to consider
service between Phoenix and Tucson. And what we are also trying
to start is the work to connect Phoenix to the West back to the
UP main line, the Southern Pacific Sunset route. That portion
of the route was severed.
Today, our service, the Sunset Limited, goes to Maricopa,
about 40 miles or so, I think, south of Phoenix, so, it really
misses the mark. And as you said, Phoenix's growth has been
huge, and it is really a, frankly, an embarrassment that we
don't serve such a major and prominent city. And I would say
that about many other cities--Nashville included, Columbus, et
cetera--cities that are obviously the right size.
So, we think that the market in Arizona is great for
intercity passenger rail and are partnering with the State to
support that, and we are looking to undertake potentially that
initial work to understand what it will take to restore the
service back from Phoenix west and route our long-distance
train that way.
Mr. Stanton. I appreciate it. It is time. You said the word
``embarrassment.'' I mean, Phoenix is the fifth most populous
city in the United States of America and it does not have
access to intercity rail service.
I talked a little bit about the opportunities that will
come with new passenger rail between Tucson and Phoenix. Could
you talk about some of the benefits Amtrak has seen in other
communities that get new intercity rail service and what
ridership has looked like?
Mr. Gardner. Well, we are really excited for this new
service, of course, in the gulf coast coming. I would say that,
in general, we see very strong adoption when we introduce new
service.
Everywhere I go across America, communities small and big,
the common refrain I get is, how come we don't have more
trains, how come we don't have faster trains, how come we don't
have more service in my community. I really, literally, never
met anyone who wasn't interested in more trains to their
locations. And when we see new service introduced, we get
really a initial period, of course, of introduction, but we
have seen very strong results.
We just extended, for instance, the service to Burlington,
Vermont, up from Rutland, which has been a long time coming,
and we have already exceeded our expectations there in terms of
the ramp-up of the service. We anticipate--again, where we can
produce a reliable, frequent, and competitive option, that
passengers will come and that the State will see real value for
its investment.
I think this is clear because States continue to maintain
this service year after year after year. Once it is installed,
it becomes an integral part of the community, and they elect to
continue those investments to preserve the service.
Mr. Stanton. Thank you very much. My time is up. I yield
back. Thank you.
Mr. Nehls. Thank you. The gentleman yields.
And, gentlemen, I appreciate that you are very engaging in
sharing your thoughts and your insight into Amtrak. We have a
couple of Members that would like to go into a second round of
questioning. So, I would like to yield 5 more minutes to Mr.
LaMalfa.
Mr. LaMalfa. Thank you again, Mr. Chairman. I appreciate
the second round here.
Mr. Warren, I wanted to ask you about, on your Northeast
Corridor there, do you find at this point that your passengers
are utilizing all or most of the tickets for either the
conventional or the Acela high-speed line? How is that
performing?
Mr. Warren. I am sorry. Passengers are utilizing the Amtrak
regional and Amtrak----
Mr. LaMalfa [interrupting]. How are ticket sales for the
high-speed line basically, yes? Are they selling out or are
they----
Mr. Warren [interrupting]. Well, Acela has struggled some
because they have had a shortage of trains and have just been
replacing them. The regional trains have been doing very well
on the corridor, the leisure travel.
Mr. LaMalfa. Are the high-speed Acela trains selling out?
Mr. Warren. I might turn to Stephen for that. I know there
has been--the trains I have taken have been very busy, partly
because there have been very fewer of them, but they have also
been getting more leisure travelers on the Acela trains to make
up for some of the loss of business travelers.
So, overall, the ridership, as Stephen mentioned before, on
the corridor, is very strong, particularly Amtrak. The commuter
railroads are----
Mr. LaMalfa [interrupting]. Well, I am trying to parallel
this with the prospects of a high-speed rail in California. Of
course, it is going to be four times more the cost that was
sold to the voters back 10, 12 years ago, whatever it was. And
so, I want to see the performance on a dense route like--so, I
will ask it again.
Do you believe Acela, the high-speed trains in and of
themselves, are they performing well on tickets, on sales, or
are they half full? How does it look?
Mr. Warren. Yes. Well, before COVID, they were making a
significant profit, an operating profit. That was largely
driven by the Acela trains and the sales made for tickets on
the Acela trains. I believe the profits were in the
neighborhood of $300 million, $400 million a year on the
operating side on the Northeast Corridor pre-COVID.
Obviously, since COVID, they have been down, but the Acela
trains have been very successful and have driven significant
operating profits on the corridor.
Mr. LaMalfa. OK. Thank you.
Mr. Gardner, what do you anticipate that Amtrak's
relationship will be with California with the high-speed rail
line, whatever portion that may be completed of that? Right
now, it is going to start in an almond orchard somewhere around
Bakersfield and be completed somewhere around Madera. It is
just the first segment. There is going to be two more giant
segments needed after that.
What you do think Amtrak's role will be with whatever that
is going to be?
Mr. Gardner. Well, Congressman, thanks for the question. I
think that, first off, the State and the authority and our
partners, JPA as well, will decide exactly how the service is
going to progress. My understanding is that there will be a
connection between the San Joaquins service to the new high-
speed service, and we will see if Amtrak is the operator there.
Mr. LaMalfa. Yes, I know----
Mr. Gardner [interrupting]. We are really the partner, we
are the provider of service, so, it is really the State and the
authorities that are going to decide how the service operates,
but we will connect wherever we can with our long-distance
service, of course, to create opportunities for riders to
connect to the service.
Mr. LaMalfa. Yes. OK. Thank you.
When we are talking in general about expansion of service
or lines, are we talking building new tracks somewhere for
Amtrak?
Mr. Gardner. Most often not. So, most of the expansion
opportunities that we see and that many folks have applied for
through this Corridor Development Program are to take existing
railway lines and upgrade them in some instances or use them if
they are already at the right class of track.
Mr. LaMalfa. And for the most part, so, there might be
areas where you are adding more parallel track or even making
brandnew--breaking ground on new routes?
Mr. Gardner. There will be instances where additional track
is necessary, often within an existing right-of-way, because
many rights-of-way used to have more track than they do today
and were downsized by the freight railroads, so--but in some
cases, there may be a need for some additional track or new
routes, but much of the proposed expansion of service is on
existing rail lines.
Mr. LaMalfa. OK. How do you expect that--and I am not
trying to be a mean guy here on this. I like passenger rail,
and I enjoy it on the times I get to run up and down the
corridor here and such, but it has got to be in the ballpark of
at least breaking even or profitable.
So, how does adding more to a situation that is not
profitable or break even going to help the bottom line to not
take that even in a deeper spiral?
Mr. Gardner. Well, Congressman, I would say that most of
the--really all of the States who decide to get into this
business of supporting passenger rail do so for broader
mobility goals, the same way that public transit operates,
right? Public transit is not profitable. It comes with
significant investments that are required, but it creates value
by providing mobility that then enables more economic activity,
enables development in cities and towns.
So, I think that is the rationale on which folks invest in
passenger rail, because transportation in and of itself is
often unprofitable if you add all the cost of the aviation
system to what the carriers pay, you don't, I think, in the way
see a net profit. Similar on the highway system, it is that
the--it is a means to create value in these transportation
systems. And so, States elect to start new service or fund the
service they have because they get value for their citizens in
doing so.
Mr. LaMalfa. I get you. I am going to have to yield the
time here, so, thank you.
Mr. Gardner. Thank you.
Mr. LaMalfa. But it sounds like the bottom line is that
indeed it will add more negative costs that Federal Government
will have to cover since there doesn't seem to be the ability
to have profit.
So, thank you again for your indulgence, Mr. Chairman.
Mr. Nehls. Yes. Mr. LaMalfa yields.
I now recognize Ranking Member Payne for 5 minutes.
Mr. Payne. Thank you, Mr. Chairman.
And we have heard a lot about Amtrak not turning a profit
today. Last month, we heard from the very profitable freight
railroads and from their customers about their ongoing supply
chain challenges and how the freight rail customers are still
not getting adequate service.
Mr. Gardner, what would happen to Amtrak's service if you
adopted a single-minded focus on profitability?
Mr. Gardner. Congressman, I think essentially none of the
national network trains that are long distance would still be
in operation. They all require significant investments.
And the State-supported routes are, by and large, funded by
the States. There is a little bit of Federal investment there,
and under the new policy we developed, Amtrak is providing some
of the core security and insurance costs, but those routes
would be at risk if the States elected not to continue to fund
them.
The Northeast Corridor, to just go to the earlier
conversation, pre-pandemic, was creating about $500 million or
$550 million in net operating surplus, but of course that
relies on a very significant investment in capital to bring the
assets up to a state of good repair.
So, Federal funding is required for this network. It always
has been. It likely always will be. Our goal is to try and get
as much value for the American taxpayer out of that and run the
network that you all as our owners tell us that you want for
the Nation.
This is similar for every passenger rail operator around
the world, and we take our stewardship responsibilities
seriously, and we are trying to always balance that connection
between sort of quality of service and level of service with
expense. And, of course, we still have to live every year with
the dollars that are provided to us in annual appropriations.
Mr. Payne. So, the railroad entities around the world have
the same challenges as Amtrak does?
Mr. Gardner. They do, except they receive significantly
more funding typically than Amtrak does.
Mr. Payne. Thank you.
Mr. Gardner. Yes.
Mr. Payne. That is what I wanted to hear.
Mr. Warren, how would passengers along the Northeast
Corridor react to these changes to services?
Mr. Warren. The improvements that are going to be funded
through the infrastructure bill are going to have significant
benefits to service, going to have more reliable service, more
frequent service, and faster service. So, we are expecting to
track significant new passengers over the course of the 15
years of this plan as we are able to improve the service and
build new capacity.
In the NEC 2035 plan, we estimate about 60 million new
riders over 15 years. So, our expectation--as you note, the
ridership in the Northeast Corridor is already strong, and it
is just going to get stronger as we can improve the reliability
of the trains and the frequency.
Mr. Payne. Thank you.
Mr. Gardner, now that the funding is at least taken care of
for the immediate future, what are some of the major obstacles
to enhancing and developing rail service?
Mr. Gardner. Thank you, Representative Payne. There are, on
the Northeast Corridor, and broadly, several challenges. First,
of course, is workforce. We have talked about the need to ramp
up the workforce and train the workforce. That is a big
challenge. We are working hard on that.
Two, the supply chain is a challenge, finding adequate
vendors and suppliers with a domestic supply chain, because, of
course, Amtrak, 97 percent of our purchases are with firms here
in the United States, and getting the robust supply we need for
not only things like rolling stock, but just simple amounts of
concrete, steel, copper, et cetera, to build all these new big
programs is going to be a challenge and dealing with
inflationary costs there.
The coordination amongst the operators--and let me just
sort of thank Mitch Warren here who has been an incredible
leader of the Commission, came to the Commission really in its
inception and works hard to bring all of the entities together
to come up with a common plan.
We have a common plan, but it is not easy to execute. We
have 12 different railway operators over four owners in the
Northeast Corridor, and trying to get coordinated and balance
construction work against service is a real challenge.
In order to rebuild the railroad, we have to take it out of
service. Similar to on interstate highways, we all hate it in
the summer. They close down a bunch of lanes to do work. We all
sit in traffic. That kind of problem faces us on the corridor
as well, because we have got to rebuild the railroad while it
is still under load, and balance the different needs of
operations against construction.
And then, finally, the partnerships for funding are
required. Amtrak is an investor of much of the Northeast
Corridor projects but certainly not the only investor. And in
something like the Gateway, we are the minority investor. We
need the States to come up with their local matches and their
transit partners to have the dollars they need to be able to
partner with us on these shared benefit projects.
Mr. Payne. Thank you. I appreciate both of you gentlemen
staying here and--well, Chairman, as I look at both sides of
the aisle, it looks like it is just you and me.
Mr. Nehls. I guess so.
Mr. Payne. With that, I will yield back.
Mr. Nehls. Thank you. The ranking member yields.
Are there any further questions from any other members on
the subcommittee?
I see none.
This concludes our hearing today. And I would like to thank
each of our witnesses for their testimony.
I ask unanimous consent that the record of today's hearing
remain open until such time as our witnesses have provided
answers to any questions that may be submitted to them in
writing.
Without objection, so ordered.
I also ask unanimous consent that the record remain open
for 15 days for any additional comments and information
submitted by Members and witnesses to be included in the record
of today's hearing.
Without objection, so ordered.
The subcommittee stands adjourned.
[Whereupon, at 12:47 p.m., the subcommittee was adjourned.]

Submissions for the Record

----------

Statement of Scott R. Spencer, Chief Operating Officer, AmeriStarRail
LLC, Submitted for the Record by Hon. Troy E. Nehls
Dear Chairman Nehls, Ranking Member Payne and Members of the
Subcommittee,
I appreciate the opportunity to provide the subcommittee with this
statement regarding the private sector proposal of AmeriStarRail to
partner with Amtrak to help improve safety, service, ridership,
revenues and reliability on the Northeast Corridor without the use of
additional government funds.
AmeriStarRail (www.AmeriStarRail.com) is a private sector company,
planning the most dramatic transformation of Amtrak's Northeast
Corridor service since America's first high speed trains, The
Metroliners, in 1969.
In this partnership, AmeriStarRail is proposing to privately
finance, operate and maintain a fleet of high-speed trains, branded as
Amtrak trains using union employees in the same way private airlines
operate connecting United Airlines and American Airlines flights as
affiliated carriers. As a valuable public asset, the Northeast Corridor
infrastructure will still be owned, controlled and maintained by Amtrak
with continued support by Congress and the U.S. Department of
Transportation.
Under this transformative business model, based only on the costs
``above the rail'', AmeriStarRail will pay Amtrak hundreds of millions
of dollars annually in user fees and monthly performance incentives to
use its tracks and stations.
Key to this transformation is implementing innovation in four key
areas: service, marketing, technology and the organization. Most of
these innovative solutions were devised to help Amtrak confront a
number of challenges and create opportunities to improve efficiency and
service.
Multiple challenges that Amtrak faces on the Northeast Corridor
include:
Low market share among all rail, car, bus and air trips
Poor utilization of the federal investment in high-speed
rail
Most of the Northeast Corridor (NEC) trains (Amfleet) are
nearly 50 years old
NEC congestion contributes to poor on-time performance
High speed track standards are not maintained as
rigorously as those in Europe and Asia
Unsecured right-of-way is a major factor in train delays
due to trespassers deaths and debris collisions on the Northeast
Corridor
Amtrak's Low Market Share for All Trip Modes on the Northeast Corridor
AmeriStarRail and our private investors believe that one of the
greatest challenges facing Amtrak is its low market share of rail, car,
bus and air trips after over 50 years of operation on the Northeast
Corridor. According to 2019 and 2022 data from the National Household
Travel Survey, conducted annually by the Federal Highway
Administration, Amtrak has only a single digit marketshare of all rail,
car, bus and air Northeast Corridor intercity trips. For some city
pairs Amtrak's marketshare is just 3%. These results indicate Amtrak
significantly underperforms its market potential to reduce energy
consumption, pollution and traffic/airport congestion.
To confront this challenge and significantly improve ridership and
Amtrak's marketshare, AmeriStarRail is proposing a partnership with
Amtrak to implement the following private sector initiatives, vision
and innovation:
1. Eliminate costly, time consuming terminal operations at New
York, Philadelphia and Washington.
2. Operate more frequent service, including hourly nonstops, at
higher speeds up to 160 mph with a standard high-speed trainset fleet
offering food service and Triple-Class service for Coach, Business and
First Class passengers on every Northeast Corridor train.
3. Operation of a standard high-speed fleet will improve on-time
performance, reliability and dramatically reduce trainset maintenance
costs with the centralized efficiency of the Northeast Corridor's first
Trainset Maintenance Center (TMC).
4. Extend direct Amtrak Northeast Corridor service to over 30 new
stations including Amtrak trains serving stations in Center City
Philadelphia, Hoboken Terminal and Long Island.
Poor Utilization of the Federal Investment in High-Speed Rail
According to Amtrak's ridership reports, although Amtrak carried
12.5 million passengers on the Northeast Corridor between Boston and
Washington in 2019, less than 30%, or only 3.6 million passengers could
afford to ride on high-speed Acela trains. AmeriStarRail's solution,
offering Triple-Class service of Coach, Business and First Class on a
standardized Northeast Corridor fleet of 160 mph high-speed trains
means 100% of Amtrak passengers and 100% of Amtrak trains will utilize
the federal investment in the high-speed rail infrastructure from
Boston to Washington.
Amtrak's current $7.3 billion plan to buy slower trains for
Northeast Corridor coach passengers from Siemens would still go forward
but these trainsets can be reassigned to Amtrak's new routes
nationwide.
All high-speed trains in Europe and Asia serve Coach passengers.
All airlines offering First Class and Business Class seating also serve
Coach passengers on the same aircraft on every flight. AmeriStarRail
wants to implement a privately funded solution that will allow Amtrak
to improve utilization of its high-speed rail investments. Our goal is
for Amtrak conductors to announce ``All Aboard'' Amtrak's fastest
trains for all passengers.
Most of the Northeast Corridor (NEC) Trains (Amfleet) are Nearly 50
Years Old
On January 4, 2023, AmeriStarRail's Senior Advisor, Paul Reistrup
(former President of Amtrak) sent a letter to Federal Railroad
Administrator Amit Bose expressing safety concerns for continuing to
operate the aging Amfleet cars at speeds up to 125 mph on the Northeast
Corridor since ``no rail passenger service in North American railroad
history has operated passenger train cars so old, so fast.''
AmeriStarRail's privately funded solution, if implemented, will begin
to replace the Amfleet cars next year and replace all of these cars
before they turn 50 years old in 2025. Amtrak's current plan will not
replace all of the Amfleet until sometime after the Year 2030.
AmeriStarRail is proposing to replace the Amfleet cars with an
additional order of the Alstom Avelia Liberty trainsets, currently
being built in Hornell, NY, to offer ``Triple-Class service'' for
Coach, Business and First Class passengers on every Northeast Corridor
train. This is the fastest way to replace the Amfleet cars with
trainsets that are equipped with safety features that do not exist on
the Amfleet cars.
Although Amfleet cars, built in the 1970s, meet grandfathered FRA
safety requirements, they do not have the structural materials, safety
features, technology and crash energy management systems found in the
current Acela fleet or the next generation Alstom built Acela fleet. In
case of an emergency, Amfleet windows are too small for first
responders to evacuate injured passengers on stretchers. AmeriStarRail
believes the safest course of action is to remove the Amfleet cars from
high-speed Northeast Corridor service as soon as possible and replace
them with newer, safer trainsets.
NEC Congestion Contributes to Poor On-Time Performance
AmeriStarRail's plans to eliminate terminal operations at
Washington, Philadelphia and New York City will significantly reduce
Northeast Corridor station congestion. Operation of a standardized
fleet of 160 mph high-speed trainsets will also allow synchronization
of operating speeds of all Northeast Corridor Amtrak trains for the
first time in Amtrak's history. This will reduce the operating costs
and inefficiencies of train overtakes, congestion, delays and
dispatching complexities, and improve Northeast Corridor capacity. NEC
on-time performance in recent years has averaged less than 85%.
There are also a number of opportunities to reduce and eliminate
conflicts and congestion with freight trains along the corridor to
improve on-time performance.
Amtrak's NEC High-Speed Track Standards are not Maintained as
Rigorously as Those in Europe and Asia
The tracks on the Northeast Corridor are not maintained to the more
rigorous and precise standards of high-speed tracks in Europe and Asia.
This is a key reason for the delay in completing the testing and
certification of the new Alstom Acela trainsets which are not expected
to enter service until sometime in 2024.
Although Amtrak conducts regular track inspections, at frequent
intervals throughout the year, the world class standard of daily track
inspections requires a special inspection train that conducts
measurements of track defects and variations in the precise track
geometry required to maintain safe and smooth train operations at high
speeds. Around the world these dedicated inspection trains are known as
``doctor trains'' and conduct inspections of both the track and
catenary at top speeds up to 220 mph. Amtrak, to date, has not utilized
this readily-available technology to maintain the Northeast Corridor.
With the use of private financing, AmeriStarRail will provide
Amtrak with access, for the first time, to a dedicated ``doctor train''
that will be a critical tool for improving and maintaining the highest
track standards on the Northeast Corridor to improve safety, ride
quality and service reliability. This high-speed inspection train will
be a new Alstom Avelia Liberty trainset, built without passenger
seating, equipped with track and catenary inspection systems designed
to perform daily inspections at speeds up to 160 mph.
Deconflicting and reducing the operation of freight trains on
tracks dedicated for high-speed operations will also be essential to
maintaining precise track standards for high-speed trains.
Unsecured Right-of-Way is a Major Factor in Train Delays Due to
Trespassers Deaths and Debris Collisions on the Northeast Corridor
Some of the most significant train delays on the Northeast
Corridors are the result of service being stopped for several hours due
to the tragic accidental or suicide death of a trespasser on the
tracks. Other service disruptions are the result of trains colliding
with debris such as water heaters, bicycles, tires, shopping carts and
other debris which are dumped along the tracks in major cities along
the Northeast Corridor.
Unsecured right-of-way has existed since the Northeast Corridor
route was built in the 19th Century. With trains operating at speeds up
to 160 mph in the 21st Century this poses an unacceptable risk to
safety and service reliability.
In the airline industry it would be unacceptable to operate
unsecured airports with people crossing runways as a shortcut between
neighborhoods or planes striking debris on the runway due to illegal
dumping. Just as airport perimeters are fenced in and interstate
highways have fencing to deter trespassing, AmeriStarRail is proposing
that the multi-billion dollar investment in improving the Northeast
Corridor also include a project to seal the corridor to prevent
trespassers and illegal dumping of debris from disrupting train
operations. This innovative safety project will include right-of-way
fencing and walls and setback platform screens on Amtrak and commuter
rail station platforms as is used to seal high-speed rail corridors in
Japan and other countries.
We at AmeriStarRail look forward to having an opportunity to
partner with Amtrak and work with Congress to implement our proposed
solutions to confront Amtrak's challenges and create opportunities to
improve its efficiency and service.

Statement of James Tilley, President, Florida Coalition of Rail
Passengers, Submitted for the Record by Hon. Troy E. Nehls
Introduction
My name is James Tilley. I am President of the Florida Coalition of
Rail Passengers. The Coalition is a 501(c)3 and was formed in 1983 to
preserve and to improve passenger rail service for Floridians and
visitors to our state. Since FCRP's inception, we have been an all-
volunteer organization made up entirely of citizen rail advocates.
I am also a member of the Rail Passenger Association's national
Council of Representatives which advocates for passenger rail
nationwide.
Prior to my retirement I held several positions dealing with
railroad equipment including Vice President-Sales & Marketing for
Bombardier's railcar financing affiliate. Additionally, I served as
Vice President-Car Management for Genesee & Wyoming, an international
holding company owning and operating more than 100 railroads. Finally,
I was responsible for CSX Transportation's railcar leasing program as
Assistant Treasurer.
Amtrak Appears To Be Positioning Itself in Order To Avoid Re-Fleeting
Its Severely Aged Long-Distance Fleet
Amtrak's March 2023 Congressional grant request fails to include
any requests to fund replacement of overage long-distance passenger
cars \1\.
---------------------------------------------------------------------------
\1\ Amtrak, ``General and Legislative Annual Report & Fiscal Year
2024 Grant Request'', www.amtrak.com, page 49.
---------------------------------------------------------------------------
On-going delays in procuring new equipment suggest a pressing need
for an accelerated state of good repair plan for the existing long-
distance fleet. Bi-level overhauls in FY22 totaled $44.2 million--a
record low \2\. Congress reduced the FY23 National Network Grant by $1
billion suggesting overhaul spending may be low again this year \3\.
---------------------------------------------------------------------------
\2\ Amtrak, ``Management's Discussion and Analysis of Financial
Condition and Results of Operations and Consolidated Financial
Statements With Report of Independent Auditors (Overview of Contractual
Obligations and Capital Expenditures)'', FY14 to FY22, various pages.
\3\ Amtrak, ``General and Legislative Annual Report & Fiscal Year
2023 Grant Request'', www.amtrak.com, page 6 ($2.2 bil. National
Network request) & House Committee on Appropriations, ``Consolidated
Appropriations Act, 2023: Summary of Appropriations Provisions by
Subcommittee'', page 45 ($1.2 bil. National Network Appropriation).
---------------------------------------------------------------------------
Amtrak management reporting, dated April 21, 2023, confirms that
active bi-level and single level long distance fleet counts continue to
decline \4\.
---------------------------------------------------------------------------
\4\ Amtrak, ``Amtrak Equipment Inventory (Detailed), April 21,
2023; Furnished via Freedom of Information Act request & Amtrak,
``Equipment Appendices Historic Opportunities--Amtrak's FY 2022-2027
Service and Asset Line Plans'', Appendix B.
---------------------------------------------------------------------------
Concerns are heightened by the following statement in the FY24
Grant Request (page 12) that ``if Congress provides less than the base
funding need for the NEC account, Amtrak will need to take action by
either reducing / delaying necessary maintenance and capital work along
the NEC, or else transferring funds between the NEC and National
Network accounts, as permitted under 49 U.S.C. Sec. 2431 \5\.
---------------------------------------------------------------------------
\5\ Amtrak, ``General and Legislative Annual Report & Fiscal Year
2024 Grant Request'', www.amtrak.com, page 12.
---------------------------------------------------------------------------
Clearly, NEC concerns appear to be receiving priority and if
sufficient funding were not to be appropriated a permitted
``reprogramming'' of spending authority between the NEC and the NN is a
real possibility.
Amtrak may never order new equipment due to
Escalating Gateway Project costs \6\.
---------------------------------------------------------------------------
\6\ Rubinstein, Dana ``Commuter Tunnel Under the Hudson Won't Be
Finished Until 2035'', www.nytimes.com, August 31, 2022.
---------------------------------------------------------------------------
Federal budget deficit concerns \7\.
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\7\ Epp, Henry ``Amtrak wants $3.6 billion in subsidies. It
probably won't get all of that'', www.marketplace.org, March 31, 2023.

To ``stay in business'' in the long-distance market an accelerated
effort to rebuild and modernize the long-distance fleet will be
necessary just as Via Rail Canada has invested capital to renew its
1954 built stainless steel fleet \8\.
---------------------------------------------------------------------------
\8\ Johnston, Bob ``On VIA's 40th anniversary, `Canadian' still
shines'', https://www.trains.com/trn/news-reviews/news-wire/29-on-vias-
40th-anniversary-canadian-still-shines/, October 28, 2018.
---------------------------------------------------------------------------
A Congressional Directive Specifically Aimed at Repairing and Replacing
Long-Distance Equipment Is Needed
Congress must enhance its oversight of Amtrak.
Congress must legislate a directive to ensure that Amtrak
accelerates heavy repairs and rebuilds of long-distance equipment.
The Congress must also direct acceleration of an order
for replacement long-distance equipment.
A New Board of Directors With a Different Skill Set Is Required
Amtrak requires a representative Board which complies
with the law.
The railroad requires a ``working board'' willing and
able to provide aggressive managerial oversight.
The board needs to ensure that management is committed to
the long-distance network.
A Board possessing transportation & hospitality industry
expertise.
Internal Amtrak Sources Report That Field Personnel Are Hamstrung and
That Industry Is Slow in Delivering Current and Prospective Rail Car
Orders
Work orders and internal approvals that are needed to get
work into and out of the shops are profoundly delayed.
Too many layers of managers and supervisors combined with
a deeply broken set of processes for identifying problems and getting
them fixed.
Industry is telling Amtrak, in general terms, that they
might be able to begin fielding the first batch of new long-distance
equipment in eight to 10 years.
Alstom is completely failing in delivering the new ACELA
II train sets.
Mechanical Personnel on the Ground Express Views That far More Bi-Level
Superliners Can Be Repaired/Rebuilt and Returned to the Active Fleet
From 2008 to 2012 Beech Grove rebuilt heavily damaged long-distance
passenger cars \9\.
---------------------------------------------------------------------------
\9\ https://www.milman.ca/projects/listing/17/Amtrak-Superliner-I-
Remanufacture/
---------------------------------------------------------------------------
Modular interior components installed.
External surfaces were renewed or replaced.
Mechanical upgrades installed.
Time Is of the Essence as Train Delay due to Passenger car Mechanical
Failure Is Escallating
The FRA reports that car delay minutes for long-distance
trains were 2.8 times higher than total minutes incurred on the
Northeast Corridor during the 4th calendar quarter of 2022 \10\.
---------------------------------------------------------------------------
\10\ Federal Railroad Administration, ``Intercity Passenger Rail
Service Quality and Performance Reports: FY23 Q1 Delay Metrics'',
https://railroads.dot.gov/rail-network-development/passenger-rail/
amtrak/intercity-passenger-rail-service-quality-and .
---------------------------------------------------------------------------
The difference is even more dramatic when one considers
that there are between 2 and 3 dozen Northeast Corridor departures in
each direction per day and the long-distance trains operate once per
day.
Amtrak bi-level fleet counts have now dropped below
minimum thresholds required to support the operating plan \11\.
---------------------------------------------------------------------------
\11\ Comati, Byron ``Strategic Fleet Planning Amtrak's Approach to
Re-fleeting--Planning for the next generation of State Service
Corridors'', September 2018, page 11 (outlines daily fleet needs) &
Amtrak, ``Amtrak Equipment Inventory (Detailed), April 21, 2023;
Furnished via Freedom of Information Act request & Amtrak, ``Equipment
Appendices Historic Opportunities--Amtrak's FY 2022-2027 Service and
Asset Line Plans'', Appendix B (outlines active fleet counts which are
lower than daily needs).
---------------------------------------------------------------------------
Mechanical Department Staffing Shortages Were Self-Inflicted
The issues of staffing issues at Beech Grove and other
locations were clearly self-imposed.
Mechanical employment has declined each year since 2014
with the rate of decline accelerating after 2018 \12\.
---------------------------------------------------------------------------
\12\ Surface Transportation Board ``Employment Data'', https://
www.stb.gov/reports-data/economic-data/employment-data/ (monthly
reporting of employment levels by craft and carrier).
---------------------------------------------------------------------------
Only in the past few months has the employee count been
restored to pre-pandemic levels.
During the pandemic Amtrak offered financial incentives
for mechanical personnel to sever their employment despite emergency
Congressional funding established to avoid such an outcome \13\.
---------------------------------------------------------------------------
\13\ National Railroad Passenger Corporation ``Board of Directors;
Minutes of Meeting; September 25, 2020'' page 7 (Engineering and
Mechanical Plan Review).
---------------------------------------------------------------------------
The Record Demonstrates That Amtrak Was Sufficiently Liquid To Avoid
Furloughs and Early Retirement Buyouts \14\
---------------------------------------------------------------------------
\14\ Amtrak, ``Management's Discussion and Analysis of Financial
Condition and Results of Operations and Consolidated Financial
Statements With Report of Independent Auditors (Consolidated Balance
Sheets)'', FY19 to FY21, various pages.
---------------------------------------------------------------------------
At the end of FY19 (before the pandemic) Amtrak reported
cash, cash equivalents, short term investments and securities available
for sale of $2.4 billion.
At the end of FY20 the equivalent reporting totaled $3
billion.
C.A.R.E.S. Act funding of $1 billion bolstered Amtrak's
cash position.
Additional covid related funding enabled Amtrak to
increase these key measures of liquidity to $4.2 billion by the end of
FY21.
Amtrak Received a Congressional Scolding for Delaying the Submission of
Its Supplemental Budget Request
Congressman Daniel Lipinski admonished Amtrak management
in September 2020.
As reported in the September 9, 2020 issue of Roll Call
``he expressed frustration that Amtrak didn't submit its supplemental
spending request until 10 days after the House passed a $3.4 trillion
coronavirus spending bill in May. And it submitted its $4.9 billion
request, he said, just one month before the current fiscal year
expires''.
``Lipinski also questioned the passenger railroad's
decision to temporarily reduce service on most long-distance routes
from daily to three times a week. He argued that such cuts were
``misguided'' and would weaken the rail service''.
``Too often it feels like Amtrak is happy to take money
from Congress and then ignore Congress' directives,'' he said.

Rather than aggressively pursuing additional covid assistance, as
Chair Lipinski pointed out, Amtrak appears to have deferred the request
while concurrently ``setting the table'' for 3 day a week long-distance
service (not daily) and storing rail cars and pausing all but essential
maintenance.
Both former Amtrak CEO's David Gunn and Tom Downs publicly warned
that reducing daily service to tri-weekly was a fool's errand--the cost
savings imaginary. Moreover, Mr. Gunn correctly concluded that once
equipment and locomotives were placed into storage it would be
difficult to return them to service given Amtrak's propensity to
cannibalize idle equipment \15\.
---------------------------------------------------------------------------
\15\ Johnston, Bob ``Former Amtrak president revisits previous move
to triweekly service'', https://www.trains.com/trn/news-reviews/news-
wire/former-amtrak-president-revisits-previous-move-to-triweekly-
service/, August 3, 2020.
Johnston, Bob ``Making the case for daily operation'', https://
www.trains.com/trn/news-reviews/news-wire/making-the-case-for-daily-
operation/, August 6, 2020.
Johnston, Bob ``Former Amtrak president Gunn sees perils in service
cuts'', https://www.trains.com/trn/news-reviews/news-wire/former-
amtrak-president-gunn-sees-perils-in-service-cuts/, September 8, 2020.
---------------------------------------------------------------------------
A Freedom of Information Act request I submitted revealed that
Amtrak fully utilized its Northeast Corridor covid funding but, as of
February 28, 2023, the railroad had unused covid funding exceeding $200
million that was targeted for the National Network which may need to be
returned to the U.S. Treasury as appears to be required by the pending
debt-ceiling legislation.
This unspent and, at risk, funding could very well have been used
to bolster the long-distance network but clearly was not.
Amtrak Spent $41 Million During the Height of the Pandemic for an
Office Building for Which, Three Years Later, Remains Notably Empty
Nevertheless, Amtrak pushed forward with the purchase of the
Renaissance Center in Wilmington for $41 million. DOT had advised
Amtrak a month earlier that it was receiving $1 billion in covid relief
as provided for by the C.A.R.E.S. Act. At the same time the Renaissance
Center transaction closed Amtrak requested even more emergency funding
in a supplemental grant request to Congress.
OIG observations regarding the process followed to support the
buildings purchase are all but damning (it is important to note that no
one at Amtrak disputed the findings of the OIG in its final report).
Moreover, media coverage revealed other aspects of this transaction:
This acquisition was rushed and it failed to follow
corporate processes and procedures (Amtrak OIG)
After purchase, the structure was found to be unsuited
for the purpose it was intended to serve (Amtrak OIG).
In April 2023, the structure remains largely empty. I was
there and visited each floor.
The Board approved the purchase approved despite being
advised that the 30th Station (an Amtrak owned facility in
Philadelphia) was the ``ideal'' solution (March 2019 Board minutes).
Amtrak agreed to pay a premium price for this distressed
property (Delaware on-line).

In March 2019 Amtrak's OIG had issued a report sharply critical of
the realty management function, ``In the absence of detailed
information about real property costs and use, (Amtrak) manages space
in an ad hoc manner''. Despite the OIG March 2019 realty evaluation,
the Renaissance Center acquisition proceeded and the transaction closed
in May 2020 as Mechanical forces were being targeted for covid-related
headcount reductions.
Amtrak Paid Tens of Millions of Dollars To Buyout the Leases of the
Acela I Fleet and the HHP8 Locomotives All of Which Are Targeted for
Retirement
In similar fashion, during covid Amtrak was forced to expend many
tens of millions of dollars to purchase the HHP8 electric locomotives
as well as most of the original Acela trainsets that had either been
removed from service or would be shortly. Amtrak was cannibalizing and
otherwise not maintaining the HHP8 locomotives triggering a default on
this particular transaction.
Amtrak did not own these assets and the railroad defaulted when it
failed to maintain the equipment (all the legal filings pertaining to
this litigation are available on the federal PACER website). It is
important to note that the commuter railroad serving Maryland (MARC)
experienced the same reliability issues but did in fact return their
units to service after a mechanical assessment and follow-up upgrades.
The HHP8 locomotives were co-mingled with the legacy Acela
trainsets in multiple financings the largest being the one subject to
the Philip Morris litigation (Amtrak Trust HS-EDC-1) which governed
eight Acela trainsets and six HHP8 Locomotives.
Concluding Comments
Moving forward, I strongly believe that Amtrak must aggressively
accelerate maintenance and rebuilding of the bi-level fleet.
The active bi-level fleet continues to shrink and is now clearly
below thresholds articulated by Amtrak Corporate Planning in 2018.
Moreover, in connection with recapitalizing the long-distance
fleet, one of the Fleet Strategy Principles outlined in the 2018
presentation by Amtrak Corporate Planning was ``Maximize off-the-shelf,
proven products; minimize customization''.
In fact, Amtrak has not adhered to this principle given that the
new Acela II trainsets are severely delayed due to being an over-
engineered design more suitable for operation in Europe than in the
United States.
Likewise, the Aero Intercity trainsets, which will largely operate
on the Northeast Corridor, are based upon a design that minimizes
``fungibility''--the equipment is not at all suitable for operation on
the long-distance network. Each trainset comes equipped with a
locomotive which, when delivered, will result in the retirement of the
ACS-64 Siemens Sprinter electric locomotives. These existing
locomotives represent a $700 million dollar investment and will be
surplus after service of less than 15 years. The ACS-64 units will
represent what the utility industry refers to as ``stranded
investment''.
The Renaissance Center and lease buyouts demonstrate that many tens
of millions of dollars were expended on real estate and equipment that
is generating no incremental benefits--no return on investment. If the
funds had been invested in railcar repairs those assets would be in
service today generating sales revenue.
In closing, I appreciate the opportunity to submit this written
testimony.

Article entitled, ``Amtrak Rewarded Executives With Six-Figure Bonuses
as Rail Service Struggled,'' by Mark Walker and Niraj Chokshi, New York
Times, August 5, 2022, Submitted for the Record by Hon. Marcus J.
Molinaro
Amtrak Rewarded Executives With Six-Figure Bonuses as Rail Service
Struggled
Most of the top leaders received bonuses above $200,000 in the last
fiscal year, as Amtrak worked to recover from the coronavirus pandemic.

by Mark Walker and Niraj Chokshi

New York Times, August 5, 2022
https://www.nytimes.com/2022/08/05/us/politics/amtrak-executive-pay-
bonus.html

Amtrak's top executives received six-figure incentive bonuses in
2021, their biggest payouts in years, despite the service's lackluster
financial performance and weak ridership caused by the pandemic,
according to data obtained by The New York Times.
The compensation data, obtained through the Freedom of Information
Act, showed that annual incentive payouts made to Amtrak's senior
leaders have grown significantly in recent years. Nine top executives
received bonuses exceeding $200,000 in the 2021 fiscal year, up from
six executives in 2019. Far smaller bonuses were awarded in 2016, 2017
and 2018, and none were given in 2015 or 2020.
Last year's payouts came as the federal government made its largest
investment in passenger rail since Amtrak started operating in 1971. As
part of the $1 trillion infrastructure bill that passed in November,
Congress set aside $66 billion for the rail sector, a third of it
specifically for Amtrak, which has for years called for greater
investment to update, modernize and expand passenger rail service in
the United States.
Amtrak has lost money ever since Congress created it a half-century
ago to serve as the nation's passenger rail operator. The service
appeared to be on the verge of breaking that losing streak in late
2019, but the coronavirus erased that hope.
As ridership plunged early in the pandemic, lawmakers provided
Amtrak with $3.7 billion in emergency relief. The rail service
furloughed more than 1,200 workers, encouraged others to leave with
buyout offers and paused hiring for 16 months.
Last fall, its work force was still 1,500 employees--or more than 8
percent--smaller than it was before the pandemic. The service has been
hiring rapidly, but ridership this year through May was still down more
than a third from the same period in 2019.
Amtrak said the executive bonuses were based on metrics such as
ridership, customer satisfaction and financial performance.
Qiana Spain, Amtrak's executive vice president and chief human
resources officer, said in a statement that the incentive payments were
aimed at helping the rail service ``attract and retain talent.''
In order to earn incentive compensation, ``Amtrak must achieve a
high level of corporate performance, in support of our company's
strategic plan--and employees must also meet their individual
performance goals,'' she said. ``The company has not made any incentive
payments without first meeting its financial target.''
John Samuelsen, the president of the Transport Workers Union, whose
members include nearly 1,500 service workers, mechanics and inspectors
at Amtrak, said he was disgusted by the payouts.
``They gave themselves nice fat bonuses off the backs of workers
that were exposed to harm's way,'' he said. ``It just underscores the
reason why there should be worker representatives on the Amtrak
board.''
No bonuses were given in 2015, but in 2016 the rail service awarded
some incentive pay to top executives. It spent no more than $500,000
annually on payouts in 2016, 2017 and 2018 as it narrowed its losses.
That changed in 2019. With Amtrak getting close to breaking even,
the size of the bonus payouts to top executives nearly quadrupled,
rising to a total of nearly $1.8 million, from just over $480,000 the
year before. Amtrak paid no bonuses again in 2020, as the virus brought
travel to a near standstill. But in 2021, it paid out $2.3 million,
despite reporting its lowest revenue and biggest losses in more than a
decade.
Stephen Gardner, who became Amtrak's chief executive this year, has
received more than $766,000 in short-term incentive bonuses since 2016,
more than any other executive. Eleanor Acheson, the service's general
counsel and corporate secretary, was close behind, having received
nearly $727,000 over that period. Amtrak declined to provide a fuller
picture of how its executives are compensated, including salaries.
Of the dozen members of Amtrak's current leadership team, all but
three received bonuses of more than $200,000 last year, ranging from
about $230,000 to more than $293,000 for Mr. Gardner, who was president
at the time.
A spokesperson said the service increased short-term incentive
payouts for managers throughout the company in 2019 to make jobs more
competitive and desirable. Amtrak has no private sector counterpart,
though the bonuses paid last year pale in comparison with what
transportation industry executives earn. The chief executives of
freight railroads, which are profitable, received millions in bonus and
incentive payments last year, for example.
``I know that in all markets everyone is looking to recruit good
people, but this is a bit surprising,'' Patricia Quinn, the executive
director of the Northern New England Passenger Rail Authority, one of
Amtrak's state partners, said of the bonuses. ``I would hope that these
are conversations, as state partners, we could have going forward
because we all want to align our goals with Amtrak.''
Ms. Quinn said Amtrak did not discuss goal-setting and incentive
payouts with its partners. And, in a January audit, Amtrak's inspector
general reported that about a third of the company's state partners had
``low trust'' in Amtrak on cost-sharing issues.
The company said it created the short-term incentive program in
2013 after making changes to its pension program and closing it off for
new employees joining the company.
In the 2019 fiscal year, ending in September, Amtrak customers took
nearly 33 million trips with the company, a slight increase from the
year before. Revenue was also up slightly, while customer satisfaction
fell just shy of a goal for the year. In 2021, however, Amtrak reported
only about 12 million customer trips, well below the number the year
before. The service also reported its worst revenue and losses in more
than a decade. Customer satisfaction was well below where it stood
before the pandemic, though it surpassed a goal set for the year.
Jim Mathews, the president and chief executive of the Rail
Passengers Association, said Amtrak put a lot of stock into its
customer satisfaction index, a measurement he takes issue with because
it does not capture the full scope of the company's performance.
Mr. Mathews said he would like to see incentive compensation tied
to bringing the company back to its prepandemic level and building up
from there.
``They don't have the same tools to hand out incentives--they don't
have stock or options to make these jobs more attractive,'' he said.
``That said, I think these are all good jobs, and as an advocate I
would really like to see these payouts not only tied to the customer
satisfaction index but to the recovery scores.''
The executives have their work cut out for them. Not only is Amtrak
still working to recover from the pandemic, but it also needs to
prepare to put the influx of congressional funding to good use.
The company said in a report this year that the money was an
``unprecedented level of funding for capital projects'' and would help
to modernize its fleet and stations, replace major bridges, improve
reliability, expand service and replace old equipment. Rail advocates
and insiders welcomed the federal spending, saying it will help to
address longstanding problems and priorities for passenger rail in the
United States, too.
But Amtrak's inspector general has raised concerns about the
company's ability to hire the workers it needs to spend the new funds
wisely. In a December report, it concluded that Amtrak's human
resources department lacked the leadership and staff it needed to
``effectively recruit, screen, hire and onboard new employees.''
In an update last month, the inspector general said Amtrak was
making progress, including by reviewing compensation companywide to
ensure that salaries are competitive, but added that there was more
work to do.

Appendix

----------

Questions from Hon. Troy E. Nehls to Stephen Gardner, Chief Executive
Officer, National Railroad Passenger Corporation (Amtrak)

Question 1. The commuter rail system in the United States has been
a more diverse market than the intercity passenger rail system, with
various state and local transit agencies using private contractors to
conduct rail operations, as well as numerous publicly operated systems.
With the prospect of new and expanded intercity passenger rail services
coming online in the next decade, having a competitive rail operator
market might offer benefits to the states, the passengers and
taxpayers. In the 2022 annual and legislative report, Amtrak cited as
evidence that it is an ``ever more efficient rail operator'' \1\ the
fact that it had ``recently won competitive open bids to provide
operations services to commuter railroads (Metrolink and MARC Penn
Line).'' \2\
---------------------------------------------------------------------------
\1\ AMTRAK, General and Legislative Annual Report at 45 (Apr. 27,
2021), available at https://www.amtrak.com/content/dam/projects/dotcom/
english/public/documents/corporate/reports/Amtrak-General-Legislative-
Annual-Report-FY2022-Grant-Request.pdf.
\2\ Id.
---------------------------------------------------------------------------
Question 1.a. What are your thoughts about more involvement of
private contractors entering the passenger rail market and competing
alongside Amtrak to provide these state-supported rail operations?
Question 1.b. How would a competitive operator market affect
Amtrak?
Question 1.c. Should new and expanded passenger rail services be
subject to Federal competitive open bidding procedures?
Answers to Question 1.a.-1.c. Amtrak believes that a strong
national intercity passenger railway--the model used by nearly all
nations across the globe to deliver intercity services--is the most
efficient way to provide an interconnected network of services across
the nation. Economies of scale and the ability to utilize common assets
for a variety of services, including ticketing and reservations, fleet,
and maintenance facilities, allow the high fixed costs of the business
to be shared across the network and our Capital assets to be utilized
more productively. Additionally, a national carrier can focus on the
interstate needs, looking beyond state borders, to ensure that the
overall passenger transportation needs of the nation are met.
However, Amtrak's role as the national carrier doesn't preclude
others from entering the market or from working with Amtrak and our
partners as part of an integrated network. In fact, Amtrak already
faces competition in the provision of the various services required for
operation of state-supported routes. A number of states contract with
private companies for maintenance of equipment, on-board food service,
customer information service, and marketing. Amtrak is happy to work
with states that choose to use other companies to provide services for
state-supported routes.
As for attempts to competitively bid out the operation of various
Amtrak service, this has been tried unsuccessfully several times, and
any consideration of competitive bidding for Amtrak-operated services
must take into account several myths regarding that topic.
The first myth is that there are numerous U.S. companies qualified
to operate passenger rail services and eager to do so. That is not the
case.
Few private U.S. rail operators--and none of the major
U.S. railroads--have shown any interest in operating Amtrak or other
intercity passenger rail services, even with government subsidies.
Since 2010, four of the five Class I railroads that had been operating
commuter rail services under contracts with public authorities have
decided to get out of that business. A 2017 Federal Railroad
Administration solicitation of bidders to take over the operation of
one or more Amtrak long-distance routes, with government subsidies, did
not attract a single proposal.
Most of the companies that operate commuter rail services
in the United States or have expressed interest in operating U.S.
intercity passenger rail services are not really ``private companies''
and are not based in the United States. Rather, they are subsidiaries
of national railroads controlled by the governments of China, Japan and
European countries.

The second myth is that competitive bidding will invariably produce
a lower price and better service. That has not been the case with
respect to intercity passenger rail services in the United States.
A 2021 Congressional Research Service report concluded
that past efforts to foster competition for services provided by Amtrak
have not resulted in improvements in intercity passenger rail
service.\3\
---------------------------------------------------------------------------
\3\ Improving Intercity Passenger Rail Service in the United
States, p. 25. (2021, February 8). Congressional Research Service.
Retrieved July 14, 2023 from https://sgp.fas.org/crs/misc/R45783.pdf
---------------------------------------------------------------------------
Ridership fell 10% and mechanical delays increased 35%
during the first year after a Midwestern state contracted with a
private company for provision and maintenance of equipment, food
service and marketing for an Amtrak state-supported route following a
competitive procurement. After just 17 months, the state's contractor
ceased providing services when the state declined its request for a
large increase in payments.

Other countries have had similar experiences. Franchising of train
operations in Great Britain resulted in increases in government
subsidies, higher fares, service deterioration and a pattern of
contractors submitting low bids to secure contracts and then walking
away from their obligations. The British government recently abandoned
franchising and has resumed direct operation of many train routes.
The third myth is that there is a level playing field among Amtrak
and potential competitors. That does not exist today for state-
supported services because Amtrak is subject to many statutory
requirements that do not apply to other parties. Among other things,
Amtrak must price the services it provides in accord with a
statutorily-mandated costing methodology; must ensure that the customer
service, professional and IT services it utilizes are performed in the
United States; and must maintain specified levels of liability
insurance. Some operators of intrastate passenger rail services are not
subject to the Railroad Retirement Tax Act and other federal laws that
apply to Amtrak, which gives them an additional cost advantage. All of
these issues would have to be addressed through legislative changes in
order to create fair competition among Amtrak and other potential
operators.
The fourth myth is that privately-owned freight railroads would be
willing to allow non-Amtrak passenger trains to operate over their
lines on reasonable terms. That is often not the case. Proposed
commuter rail services in Charlotte and Atlanta have been stymied by
the refusal of the railroad that owns the lines over which they would
operate to even consider operation of passenger trains. Because
Amtrak's unique statutory access rights to operate existing or new
services over freight railroad-owned lines are not transferable to
states or other parties, a state that selected a non-Amtrak operator
would have no recourse if a freight railroad demanded unreasonable
investments or compensation for operation of passenger trains over its
lines, or simply refused to allow them to operate or to continue to
operate.
A fifth myth is that state-supported Amtrak services are, like most
commuter rail services, isolated operations that could easily be
provided by different operators without harm to passengers or negative
impacts on ridership and revenues. Amtrak's state-supported services
are part of an interconnected national network serving 46 states. Many
of their passengers are connecting to or from other Amtrak routes with
which those services share stations, equipment maintenance facilities
and employees. Any consideration of competitive bidding must take into
account the inefficiencies of having multiple operators; the increased
costs resulting from them; and the impact on ridership, revenues and
customer satisfaction if travelers are required to deal with more than
one operator and use multiple websites, apps or 800 numbers to obtain
information about schedules and book travel.

Question 2. Last March, the Amtrak OIG issued a report about
challenges that Amtrak might face implementing the Infrastructure
Investment and Jobs Act (IIJA).\4\ Among the challenges cited was
Amtrak's workforce and your ability to build and maintain a sufficient
number of employees with the right skills.
---------------------------------------------------------------------------
\4\ See AMTRAK, Office of Inspector General, OIG-SP-2022-008,
AMTRAK: Areas for Management Focus in Advance of Infrastructure
Investment and Jobs Act Funding, (Mar. 31, 2022), available at https://
amtrakoig.gov/sites/default/files/reports/OIG-SP-2022-008.pdf.
---------------------------------------------------------------------------
Question 2.a. What is the current status of your workforce and
ability to retain workers and fulfill your staffing needs?
Answer. As of June 30, 2023, Amtrak's current workforce stands at
21,032 active employees. We continue to develop and expand our
workforce to execute on the investments made by Congress in the IIJA,
and to support our new and improving services nationwide.
To minimize employee turnover and boost employee engagement,
organizations develop retention strategies, which aim to reduce
attrition and increase retention rates. Although some turnover is
unavoidable, a sound retention strategy can save time and resources for
Amtrak. Retaining current employees is less costly and less time-
consuming than constantly hiring new ones. Therefore, it is crucial to
focus on attrition to gauge the organization's health and capacity to
deliver.
Some of the initiatives planned or deployed to support workplace
fulfillment and retain employees include flexible paid time off,
enhanced benefits, retention awards for key crafts and skills,
incentive programs, and student loan support.

Question 2.b. Have any passenger rail services been impacted by
Amtrak's hiring challenges? If so, please describe the impacts.
Answer. Challenges in hiring employees impacted restoration of some
train frequencies and routes as travel demand recovered from the COVID-
19 pandemic, required limitations in food service on some routes, and
impacted our ability to perform overhauls and repairs on out-of-service
equipment to provide sufficient capacity to meet passenger demand. We
completed restoration of service on all routes suspended during the
pandemic at our state partners' request in April; have restored pre-
pandemic service frequency on nearly all routes and pre-pandemic food
service on all routes; and have increased mechanical staffing above
pre-pandemic levels to enable us to accelerate overhauls and repairs to
return equipment to service. Some isolated trained employee shortages
exist today which reduce our ability to cover vacations and employee
illness; trainees currently qualifying will soon bring staffing levels
across the system to levels that allow us to better cover all the
services in these cases.

Question 2.c. Are you confident in Amtrak's ability to staff and
crew its current and proposed future passenger rail services,
especially the state-supported routes?
Answer. Yes, based on current forecast and hiring run rate we are
very confident in our ability to staff and crew current and proposed
future rail services including state-supported routes. However, our
ability to retain employees and staff and operate current and proposed
routes will continue to depend on the receipt of adequate federal
funding through the annual appropriations process.

Question 2.d. What external factors may affect Amtrak's hiring and
workforce sustainment capability?
Answer. For certain parts of our workforce, there are some
challenges to hiring. For example, there are often difficulties in
certain geographic regions for hiring onboard service roles on our
trains (such as conductors and service attendants, among others) due to
a narrow candidate pool. Increased demand for skilled critical trades
workers in our Agreement Workforce generally outpaces graduation from
trade schools, requiring higher compensation in more competitive labor
markets.
In terms of broader trends, as the youngest of the ``Baby Boomer''
generation (those aged 57 to 75 at present) reach retirement age, we
anticipate an increasing workforce need approaching 2031. Coupled with
lagging rates of trade school graduates and workforce entrants, this
demographic shift may pose a substantial challenge for sustaining our
Agreement Workforce.
We are working to prepare for this challenge by devoting resources
to the development of a pipeline of qualified applicants. For example,
Talent Acquisition is working to establish deeper relationships with
specific universities, colleges and tech schools with curriculum in the
Transportation and Rail industry while providing information to
students and career service centers about employment opportunities
available at Amtrak. Our newly, rebranded Future Careers Program will
offer internship opportunities in the Fall/Spring and the Summer. These
sessions are longer and offer the intern additional experience working
with Amtrak.
In addition to our efforts with educational institutions and our
internship program, and in addition to the strategies outlined in the
response to Nehls Question 2 (a), we are also adopting the following
practices as part of our long-term workforce strategy:
Implementing targeted recruitment marketing campaigns and
hiring events segmented by both key critical positions and geographies/
markets;
Continuing to partner with Union leaders during Quarterly
Labor Leadership meetings to inform Union members about hiring
initiatives and progress and partnering with Union leaders to promote
Amtrak hiring events;
Upskilling our current workforce to expand capabilities
in alignment with future business needs;
Reskilling our workforce to develop cross-functional
skillsets and enhance organizational readiness

Question 3. Amtrak was provided a privately financed proposal
Amtrak was provided a privately financed proposal to improve Amtrak's
single digit market share on the Northeast Corridor with more
frequencies, faster service, new routes and stations.
Why is Amtrak ignoring this joint venture proposal which will not
cost taxpayers anything and will generate more ridership and revenue
for Amtrak?
Answer. Amtrak did not ignore the proposal your question
references. Senior Amtrak officials met numerous times with the
proponent of the proposal and determined that it was not viable. The
proposal is also inconsistent with the NEC FUTURE Plan developed by the
Federal Railroad Administration, which had rejected the same proposal.

Question 4. Amtrak was also provided a private sector proposal to
offer equitable and affordable Coach accommodations on Amtrak's
publicly supported high-speed trains.
Why can Amtrak not utilize this private sector initiative to
operate with the same efficiency as high-speed rail in Europe and Asia
who serve Coach passengers on all high-speed trains?
Answer. Amtrak officials met numerous times with the proponent of
this proposal and determined that it was not credible or feasible.
Additionally, like passenger railroads in Germany, Japan, and other
countries, Amtrak operates premium service trains along the Northeast
Corridor--the Acelas--that make fewer stops and generally charge higher
fares, and other trains--the Northeast Regionals--that operate at
slightly slower speeds (maximum of 125 mph), serve more communities,
and generally have lower fares. Private companies in virtually every
industry offer a range of services to customers and charge more to
those who choose premium or faster services (such as non-stop flights).
If Amtrak did not do that, it would generate less revenue and require
additional federal funding. Finally, Amtrak has already purchased a
fleet of 83 new, modern, domestically built trainsets to replace our
aging Amfleet equipment used on our Northeast Regional and other
corridor services. These trains are anticipated to be in service
starting in 2026.

Question 5. The Amfleet cars are nearly 50 years old.
Question 5.a. Does Amtrak have a privately funded proposal to
replace the Amfleet cars by 2025 on the Northeast Corridor by adding
onto the Alstom Avelia Liberty high-speed trainset order now being
built? If so, please provide further details about this proposal.
Answer. No proposal of any type could enable the replacement of the
Amfleet cars Amtrak operates on Northeast Regional trains on the
Northeast Corridor by 2025. Intercity passenger railcars compliant with
U.S. safety standards and Buy America laws cannot be bought off the lot
like a new automobile. Designing, procuring, manufacturing and testing
them takes years. The Avelia Liberty trainsets the question refers to
are only capable of operating on electrified rail lines like the
Northeast Corridor. They would not be able to operate on Northeast
Regional trains, which operate over both the Northeast Corridor and
unelectrified lines connected to it.

Question 5.b. Is including Coach seating on these new trainsets the
fastest way to provide all passengers on the Northeast Corridor with
the highest level of safety with these new trainsets?
Answer. Amtrak has already purchased new Airo trainsets capable of
operating over both electrified and non-electrified lines, and this is
the fastest way to acquire modern replacement equipment for the Amfleet
cars. The Airo procurement is well advanced: Amtrak selected an
experienced passenger rail manufacturer more than two years ago; the
first carshell has already been manufactured; and the first trainset is
expected to enter service in 2026. Canceling the multi-billion-dollar
contract for the Airo trainsets without cause and restarting the
process of procuring new equipment would delay the replacement of the
Amfleet cars by many years and greatly increase the costs of acquiring
new equipment even if there was a bona fide alternative proposal.

Questions from Hon. Donald M. Payne, Jr., to Stephen Gardner, Chief
Executive Officer, National Railroad Passenger Corporation (Amtrak)

Question 1. What percentage of stations across the Amtrak network
are currently ADA compliant? Is there a discrepancy in percentages for
stations that are owned by Amtrak and those that are owned by an entity
other than Amtrak? Could you confirm that all the stations Amtrak
serves will be fully ADA compliant by the end of 2028?
Answer. Amtrak has primary or shared ADA responsibility for 385
stations. We expect nearly all of the stations for which Amtrak has
primary responsibility, and the elements at shared responsibility
stations for which Amtrak is responsible, to be compliant by 2028, and
the remainder of Amtrak-responsible stations/elements to be compliant
by 2029. Amtrak cannot confirm what the 2028 level of compliance will
be at the 130 stations for which other parties have ADA responsibility,
or for third party-responsible elements of stations for which Amtrak
has shared responsibility, but we will continue to work with these
entities to advocate for full compliance.

Question 2. Newark Liberty Airport, located in my district, is one
of a few airports in the United States served by passenger rail. How
many, and which, other airports around the country have Amtrak or other
passenger rail services? Does Amtrak have plans to partner with air
carriers?
Answer. Amtrak currently serves five airport stations, all of which
are located at or adjacent to an airport to which they are connected by
a fixed guideway system such as a monorail or frequent shuttle service:
BWI Thurgood Marshall Airport (Baltimore)
General Mitchell International Airport (Milwaukee)
Hollywood Burbank Airport
Newark Liberty International Airport
Oakland International Airport

Amtrak is also in negotiations to relocate its Miami, Florida
station to the Miami Intermodal Center at Miami International Airport,
and recently submitted an application for a Federal-State Partnership
for a National Network grant for a planned station at Crystal City in
Arlington, Virginia that would be located adjacent to Ronald Reagan
Washington National Airport and connected to it via a pedestrian
bridge.
The only other U.S. intercity passenger rail station at an airport,
located at Ted Stevens International Airport in Anchorage, is served
only by Alaska Railroad charter trains. Brightline, a private intercity
passenger rail operator, plans to begin service to Orlando
International Airport later this year.
All of the Amtrak airport stations identified above, with the
exception of General Mitchell and Oakland, are also served or would be
served by commuter rail. Other commuter rail lines, all but one of
which Amtrak connects with, serve stations at the following airports:
Dallas Fort Worth International Airport
Denver International Airport
Fort Lauderdale International Airport
O'Hare Airport (Chicago--limited rail service)
Philadelphia International Airport
Rhode Island T.F. Green International Airport
(Providence)
South Bend International Airport (no Amtrak connection)

Many other airports are served by subways and light rail lines.
Codeshares allow airlines to sell tickets to passengers whose trip
includes both a flight on the airline and a connecting flight, train or
bus trip on another carrier. Amtrak has had codeshare agreements with
airlines, most notably a codeshare agreement at Liberty Newark
International Airport with United Airlines (and its predecessor
Continental Airlines) that ended several years ago. Amtrak is
continually having conversations about other potential codeshare
agreements with airlines and would welcome a partnership that was
mutually beneficial to Amtrak and the partner.
Challenges to establishing such partnerships include:
The limited number of airports located near Amtrak lines
with the frequent train service that is necessary for viable air-rail
connections (so that passengers arriving at the airport by train will
not have unduly long waits before their flight, and will be able to
travel on a later train if they miss their train connection because
their arriving flight is late).
Federal Aviation Administration regulations that prohibit
use of federal Airline Improvement Program (AIP) grants and Passenger
Facility Charges (PFCs) collected from air travelers, a primary source
of funding for construction of airport parking garages and other
airport facilities, for rail stations at airports unless the station is
actually located on airport property. Since most railroad lines do not
pass through or terminate at airports, this effectively precludes use
of AIPs and PFCs to build or improve rail stations at most airports
that are located near existing or proposed Amtrak routes. Amtrak has
proposed that this impediment to developing more air-rail connections
be removed via modification of these regulations or a statutory
amendment.
Consolidation of the U.S. airline industry, which has
reduced the number of potential airline partners and created large
airlines that have less interest in developing codeshares with
connecting carriers.

Question 3. The Federal Railroad Administration's Corridor ID
program provides an opportunity for Amtrak to operate new intercity
passenger rail corridors. How will Amtrak work with freight or other
host railroads to create potential new corridors or expand existing
ones?
Answer. The FRA-led Corridor ID program is the primary vehicle for
securing Federal financial support for new or improved intercity
passenger rail services throughout the United States. The Corridor ID
multi-step process, which includes the development of a Service
Development Plan (SDP), Preliminary Engineering, and environmental
clearance, will include FRA-led host railroad engagement to facilitate
early and consistent communication. For those corridors that select
Amtrak as the operator, Amtrak will provide technical resources to the
corridor sponsors and will actively participate and support FRA's host
railroad engagement process.

Questions from Hon. David Rouzer to Stephen Gardner, Chief Executive
Officer, National Railroad Passenger Corporation (Amtrak)

Question 1. Amtrak uses requests for proposals and other
competitive bidding procedures to procure goods and services, both
because it is a common requirement of federal law and procurement
regulations, but also because it generally assures the best value for
the taxpayer and prevents fraud and abuse.
In North Carolina, there are two state-supported routes, the
Piedmont (between Raleigh and Charlotte) and the Carolinian (between
Richmond to Raleigh). The state contracts with Amtrak to operate these
trains, as well as to handle the mechanical work for one of these
routes (the other is handled by a private contractor). North Carolina
is also exploring expanded passenger rail services, including new
passenger rail lines to locations like Asheville, Greenville and
Wilmington.
Question 1.a. Should the operation of these passenger rail services
be subject to competitive bidding procedures--specifically, should the
current routes that Amtrak operates, or any future routes that North
Carolina proceeds with, be subject to open competition, where private
companies can offer proposals to handle operations or other work,
alongside Amtrak's proposals, and allow the state to determine what is
the best offer and value?
Answer. Amtrak already faces competition in the provision of
services required for operation of state-supported routes. As your
question notes, North Carolina contracts with a private contractor for
maintenance of the equipment operated on the Piedmont. Other states
that fund Amtrak state-supported services utilize non-Amtrak
contractors for on-board food service, customer information services,
and marketing. Amtrak is happy to work with states that choose to use
other companies to provide services for state-supported routes.
Any consideration of competitive bidding for Amtrak-operated
services must take into account several myths regarding that topic.
The first myth is that there are numerous U.S. companies qualified
to operate passenger rail services and eager to do so. That is not the
case.
Few private U.S. rail operators--and none of the major
U.S. railroads--have shown any interest in operating Amtrak or other
passenger rail services, even with government subsidies. Since 2010,
four of the five Class I railroads that had been operating commuter
rail services under contracts with public authorities have decided to
get out of that business. A 2017 Federal Railroad Administration
solicitation of bidders to take over the operation of one or more
Amtrak long-distance routes, with government subsidies, did not attract
a single proposal.
Most of the companies that operate commuter rail services
in the United States or have expressed interest in operating intercity
passenger rail services are not really ``private companies'' and are
not based in the United States. Rather, they are subsidiaries of
national railroads controlled by the governments of China, Japan and
European countries.

The second myth is that competitive bidding will invariably produce
a lower price and better service. That has not been the case with
respect to intercity passenger rail services in the United States.
A 2021 Congressional Research Service report concluded
that past efforts to foster competition for services provided by Amtrak
have not resulted in improvements in intercity passenger rail
service.\5\
---------------------------------------------------------------------------
\5\ Improving Intercity Passenger Rail Service in the United
States, p. 25. (2021, February 8). Congressional Research Service.
Retrieved July 14, 2023 from https://sgp.fas.org/crs/misc/R45783.pdf
---------------------------------------------------------------------------
Ridership fell 10% and mechanical delays increased 35%
during the first year after a Midwestern state contracted with a
private company for provision and maintenance of equipment, food
service and marketing for an Amtrak state-supported route following a
competitive procurement. After just 17 months, the state's contractor
ceased providing services when the state declined its request for a
large increase in payments.

Other countries have had similar experiences. Franchising of train
operations in Great Britain resulted in increases in government
subsidies, higher fares, service deterioration and a pattern of
contractors submitting low bids to secure contracts and then walking
away from their obligations. The British government recently abandoned
franchising and has resumed direct operation of many train routes.
The third myth is that there is a level playing field among Amtrak
and potential competitors. That does not exist today for state-
supported services because Amtrak is subject to many statutory
requirements that do not apply to other parties. Among other things,
Amtrak must price the services it provides in accord with a statutorily
mandated costing methodology; must ensure that the customer service,
professional and IT services it utilizes are performed in the United
States; and must maintain specified levels of liability insurance. Some
operators of intrastate passenger rail services are not subject to the
Railroad Retirement Tax Act and other federal laws that apply to
Amtrak, which gives them an additional cost advantage. All of these
issues would have to be addressed through legislative changes in order
to create fair competition among Amtrak and other potential operators.
The fourth myth is that privately-owned freight railroads would be
willing to allow non-Amtrak passenger trains to operate over their
lines on reasonable terms. That is often not the case. Proposed
commuter rail services in Charlotte and Atlanta have been stymied by
the refusal of the railroad that owns the lines over which they would
operate to even consider operation of passenger trains. Because
Amtrak's unique statutory access rights to operate existing or new
services over freight railroad-owned lines are not transferable to
states or other parties, a state that selected a non-Amtrak operator
would have no recourse if a freight railroad demanded unreasonable
investments or compensation for operation of passenger trains over its
lines, or simply refused to allow them to operate or to continue to
operate.
A fifth myth is that state-supported Amtrak services are, like most
commuter rail services, isolated operations that could easily be
provided by different operators without harm to passengers or negative
impacts on ridership and revenues. Amtrak's state-supported services
are part of an interconnected national network serving 46 states. Many
of their passengers are connecting to or from other Amtrak routes with
which those services share stations, equipment maintenance facilities
and employees. Any consideration of competitive bidding must take into
account the inefficiencies of having multiple operators; the increased
costs resulting from those inefficiencies; and the impact on ridership,
revenues and customer satisfaction if travelers are required to deal
with more than one operator and use multiple websites, apps or 800
numbers to obtain information about schedules and book travel.

Question 1.b. While this may be a procurement decision led by the
State of North Carolina, what are Amtrak's views of competing with the
private sector to provide these passenger rail operation services?
Answer. Please refer to my response to Rouzer Question 1.a.

Question 1.c. Are there any reasons why competitive bidding would
not work in these settings?
Answer. Please refer to my response to Rouzer Question 1.a.

Questions from Hon. Lance Gooden to Stephen Gardner, Chief Executive
Officer, National Railroad Passenger Corporation (Amtrak)

High Speed Rail:
Question 1. According to emails obtained through an open records
request, the North Central Texas Council of Governments and Amtrak were
actively trying to conceal their relationship with Texas Central from
the public. Why would Amtrak want to conceal that relationship?
Question 2. Is it Amtrak's goal to take over the right-of-way for
the Dallas to Houston high-speed rail line?
Question 3. Please explain, in detail, Amtrak's involvement with
the Texas High Speed Rail Project, including Amtrak's expectations for
having a future role in the project.
Question 4. Please provide a detailed timeline of Amtrak's
involvement with the Texas High Speed Rail project, including how
Amtrak became involved in the project. Additionally, please list all
entities, including Texas Central Railway and any federal, state, and
local governments, and any private entities that Amtrak has interacted
with regarding the TXHSR project.
Question 5. Please discuss any federal funding, including grants,
that Amtrak plans to use or apply for or has used or applied for
related to the construction and/or operation of the TXHSR. Please list
all grant programs Amtrak plans to use to obtain any funding for the
project.
Question 6. Is it Amtrak's goal to take over the right-of-way for
the Dallas to Houston high-speed rail line?
Answers to Questions 1-6. Amtrak exists to provide high quality,
safe and efficient rail services to America, thereby connecting people
and communities. It does this via a complex mix of services, including
those on the Northeast Corridor, through State supported services, and
on its long-distance routes. Amtrak's five-year vision is to
progressively build ridership and expand service, while maintaining the
existing system in a state of good repair. Key to everything is
ongoing, sustainable and sufficient funding to enable Amtrak to
succeed.
As part of its current work, and consistent with the policy and new
funding opportunities created by the Infrastructure Investment and Jobs
Act, Amtrak is exploring the potential for new services in two ways.
The first is via the Corridor Identification and Development Program
(CIDP) in partnership with the Federal Railroad Administration,
individual states and local/regional governmental entities with a view
to introduction of new service where this does not currently exist,
reinstatement of discontinued services or enhancement of existing
service. In Texas, Amtrak supports the consideration and potential
development of up to 5 new or enhanced conventional intercity corridor
services, with new corridor train service connecting the ``Texas
Triangle'' cities, added frequencies to the Heartland Flyer route and
possible Long Distance service connecting Dallas-Fort Worth to the
east.
The second area being explored relates to potential new routes
utilizing high speed train technology and dedicated new infrastructure.
To facilitate this review, Amtrak has set up a High-Speed Rail Program
to review a number of discrete, potential corridors of which Dallas to
Houston is one because, at face value, it meets the criteria for viable
high-speed operation. In the case of Dallas to Houston, Amtrak has held
discussions with Texas Central to assess whether Amtrak wishes to play
a role in its existing project going forward.
A timeline of Amtrak's engagement with Texas Central may be found
below and is followed by a list of entities Amtrak has interacted with
on this initiative.
June 2016: At Texas Central's request, Amtrak met with
its representatives and attorneys and submitted a letter to the Surface
Transportation Board (STB) advising that it was open to exploring
opportunities to develop connections with Texas Central.
August 2016-December 2016: After Texas Central confirmed
that it was interested in developing connections with Amtrak, Amtrak
and Texas Central negotiated and entered into a Voluntary Coordination
Agreement providing for through ticketing and provision of Amtrak
services to Texas Central.
January 2017-June 2017: Amtrak and Texas Central had
communications and an in-person meeting to discuss implementation and
announcement of the Voluntary Coordination Agreement.
July 2017-October 2017: Amtrak and Texas Central
negotiated and entered into a Reservation and Ticketing Agreement.
April 2018-June 2018: Amtrak communicated with Texas
Central and its attorneys in connection with a Texas Central press
release and filings that Texas Central and Amtrak submitted to the STB
regarding the agreements between Amtrak and Texas Central.
June 2019-October 2019: Following an STB request for
additional information about projected connecting ridership between
Amtrak and Texas Central trains, Amtrak communicated with Texas Central
and its attorneys regarding STB filings and data and information
provided by Amtrak that was included in Texas Central's filing.
March 2022-July 2023: Amtrak has been engaged in
discussions with Texas Central and the various entities that have been
working with or for Texas Central to undertake a due diligence analysis
regarding ways the two companies could potentially further work
together to advance a high-speed rail corridor between Dallas and
Houston and the grant applications identified below.

Entities with which Amtrak Has Interacted Regarding the Texas Central
Project

Bechtel
Citibank
Federal Railroad Administration
Hatch LTK
Hitachi
HTeC
JR-Central
Kiewit Corporation
L.E.K. Consulting
Mass. Electric Construction Co.
Mitsubishi
NEC
Renfe
Sidley & Austin
Suffolk Construction
Texas Central
The Shinkansen United (TSU)
Toshiba
Venable LLP
WeBuild Group

Grant applications under the Consolidated Rail Infrastructure and
Safety Improvements Program (CRISI), Corridor Identification and
Development Program (Corridor ID) and Federal-State Partnership for
Intercity Passenger Rail-National Network Program (FSP-National) have
been developed to support further developmental work on the project.
The outcome of these applications is expected to be known in Fall 2023.
It is premature to predict the result of Amtrak's review of the
project, or what role Amtrak might play in the development of the
project or any future operation. Amtrak will only proceed to a
developmental phase following completion of its current due diligence
work, and only then if grant funding is forthcoming.
I-20 Corridor:
Question 7. The proposed I-20 Corridor project would pass through
North and East Texas and have a significant impact on my district. I
sent a letter to FRA Administrator Bose in support of Amtrak's plan to
implement the project, which has the ability to provide vigorous
economic and quality-of-life benefits to Mineola, Dallas, and other
communities in Texas' Congressional District 5. Mr. Gardner, how will
the I-20 Corridor revitalize cities and towns in Texas and provide more
work opportunities for my constituents?
Answer. Amtrak has applied for an FTA Federal-State Partnership
grant for the I-20 Amtrak Crescent Extension from Meridian to Dallas-
Fort Worth. This new corridor will connect 6.5 million people in the
Dallas-Fort Worth Metroplex with millions more in Atlanta and across
the Southern and Mid-Atlantic Regions of the United States. The route
would fill an important gap in Amtrak's National Network along the I-20
corridor through Mississippi, northern Louisiana, and Texas and would
provide connection opportunities to existing services such as the Texas
Eagle, City of New Orleans, Crescent, and Heartland Flyer.
Construction activities and ongoing operations will generate jobs
and investment. The assessment estimates the new service will add or
support 661 permanent jobs across all industries, including 224
directly connected to the new service. Results from the 2023 Economic
Benefits Assessment IMPLAN model show that new induced visitor spending
on lodging, restaurants, entertainment, shopping and local
transportation, combined with the stimulus effects of savings from
reduced vehicle miles traveled (VMTs) and spending on the rail
operation itself, can be expected to support an additional labor income
increment of $46.5 million and value-added effects--i.e., incremental
contribution to Gross Domestic Product from industry-to-industry
transactions--of $91.8 million annually.
The service will connect Texas communities with the economic
epicenters of the region. These direct connections strengthen the
ability for smaller communities to attract and retain businesses, jobs,
employees, residents, and visitors. Additional service at stations or
new stations can also generate economic development around the station
areas.
Border Crisis:
Question 8. An existing contract with ICE allows Amtrak to
transport undocumented immigrants across the country to detention
facilities or deliver them to immigration hearings or court
appearances. Are there any limitations or restrictions on Amtrak's
involvement in transporting migrants, such as in regard to the types of
individuals or locations that can be transported?
Answer. Amtrak has not engaged in any organized transport of
undocumented migrants with any entity, including ICE. Amtrak and the
Amtrak Police Department (APD) do have policies governing the
transportation of prisoners by law enforcement agencies using Amtrak
services, but there are no specific allotments or provisions pertaining
to the transportation of undocumented migrants.

Question 9. Is Amtrak currently or have they ever entered a
contract of any kind with a non-profit charitable organization or non-
governmental organization to transport migrants throughout the United
States? If so, please provide any existing contracts and list of any
NGOs using Amtrak trains to transport migrants.
Answer. Amtrak has never been, and is not currently, under contract
of any kind with any organization to transport migrants. In the months
prior to the discontinuation of Title 42, Amtrak engaged with non-
governmental organizations and charities to provide a dedicated
customer service telephone line for organizations seeking to buy
tickets. This service received extremely limited use and was eventually
folded into our general reservation system.

Question 10. Is Amtrak currently or have they ever entered a
contract of any kind with a local, state, or federal entity for the
purpose of transporting migrants throughout the United States? If so,
please provide a list of any NGOs using Amtrak trains to transport
migrants. For example, has Amtrak received money from the Federal
Emergency Management Agency to transport an undocumented immigrant?
Answer. Amtrak is not currently and has not previously been under
contract with any local, state, or federal entity for the purpose of
transporting migrants in the United States, nor has Amtrak received
funding from any government institution for that purpose.

Questions from Hon. Rudy Yakym III to Stephen Gardner, Chief Executive
Officer, National Railroad Passenger Corporation (Amtrak)

Question 1. Mr. Gardner, you testified that Amtrak's starting up
the Great River route this year, with a daily roundtrip train between
Chicago and St. Paul, Minnesota.
The trip is projected to be seven and a half hours.\6\ You can
drive from Union Station in Chicago to Union Depot in St. Paul in under
six hours. You can fly from Chicago-O'Hare to Minneapolis-St. Paul in
an hour and a half, and the route is well-served, with my staff
identifying 26 nonstop flights on four major airlines on a day picked
at random.
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\6\ https://wisconsindot.gov/Documents/projects/multimodal/rail/
TCMC-booklet20210526.pdf
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Can you please describe the market research that was undertaken
before deciding to establish this route, as well as the key facts and
figures that contributed to the decision?
Question 1.a. What is the target demographic that Amtrak
anticipates riding the Great River?
Question 1.b. Was the market research Amtrak conducted ahead of the
Great River route in line with the typical market research it conducts
as it evaluates new service?
Question 1.c. What is the overriding factor as Amtrak considers a
new service? Is it profitability, ridership, or something else?
Answers to Questions 1, 1.a., 1.b., & 1.c. Like airlines, Amtrak
uses ridership and revenue forecasting models to project future
ridership and revenues on all of its existing and proposed routes,
including the Great River. These models incorporate a large number of
different demographic inputs that affect travel demand and historical
data on demand for Amtrak services.
Under Section 209 of the Passenger Rail Investment and Improvement
Act of 2008 (Section 209) and 49 U.S.C. 24712, it is up to states to
decide whether they wish Amtrak to operate routes of 750 miles or less
outside of the Northeast Corridor, such as the planned Great River
route. On these routes, which are referred to as ``state-supported
routes,'' states--Minnesota, Wisconsin and Illinois in the case of the
Great River, which will be a Milwaukee-to-St. Paul extension of
existing state-supported Chicago-to-Milwaukee trains--are responsible
for funding or securing funding for most operating costs that are not
covered by passenger revenues, and for certain capital costs.
In advancing new routes, Amtrak considers many factors, including
current market conditions; the existence and performance of current
intercity service; and changing demographic, economic development and
growth patterns, along with current and anticipated congestion and
reliability conditions of other modes. Of course, Amtrak must also
consider all the operational factors, including feasibility, host
railroad access and the availability of equipment (for which states pay
a capital charge) and other necessary resources in evaluating any
service. When good candidate routes are identified, the overriding
factor that Amtrak considers regarding whether to operate a new state-
supported route is whether a state or states is prepared to provide or
secure funding for the necessary costs. While different states have a
variety of reasons for funding state-supported routes, the primary one
is usually to provide more mobility options for their residents.
Like Amtrak's other services, the Great River service is not
targeted at one particular market segment or demographic. Similar
state-supported services carry significant numbers of college students;
passengers traveling to visit family members; travelers making personal
business trips (e.g., for medical appointments, weddings and funerals);
and passengers making leisure trips. (Chicago, Milwaukee and
Minneapolis/St. Paul are all significant leisure destinations with
multiple attractions and major league sports teams, and Wisconsin Dells
attracts approximately four million annual visitors.) Many of these
travelers prefer the experience of rail travel or are unable to drive
or fly, and in many cases flying is not an option between the points
they are traveling.
As you point out, there is frequent airline service between the two
large metropolitan areas--Chicago and Minneapolis/St. Paul--the Great
River will connect. However, there is no air service in most of the
communities along the Great River route. Of the seven planned stops
between Milwaukee and St. Paul, only one--La Crosse, Wisconsin--has any
scheduled air service, and the only destination to which one can fly
directly from La Crosse is Chicago. Airfares for passengers who are not
traveling between major airline hubs or are unable to book tickets in
advance are often prohibitively expensive. The lowest airfare for the
215-mile flight between Chicago and La Crosse is $259, and passengers
booking same- or next-day flights between Chicago and Minneapolis/St.
Paul can expect to pay a similar fare. While Amtrak's long-distance
Chicago to Seattle/Portland Empire Builder serves the same stations the
Great River will serve, it operates at different times of day than the
Great River will; is frequently sold out between Chicago and St. Paul;
and is often late eastbound because of delays encountered while
operating over host railroad lines west of St. Paul.

Question 2. Amtrak projects annual ridership of 124,000 for the
Great River in a ``travelshed'' that sees 10 million annual trips
across car, plane, bus, and train.\7\
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\7\ Ibid.
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Question 2.a. How did Amtrak arrive at this ridership estimate?
Question 2.b. When was the estimate released in relation to the
COVID-19 pandemic? If it was before the COVID-19 pandemic, why did
Amtrak not update the figure to account for the new ridership
realities?
Question 2.c. If ridership comes in below the projected level, what
steps does Amtrak plan to take to increase ridership?
Question 2.d. If ridership comes in below the projected level, are
the additional financial losses borne by Amtrak, the Federal
Restoration and Enhancement Grant, or the state partners?
Question 2.e. What ridership does Amtrak project for this route in
fiscal year 2029?
Question 2.f. Amtrak projects revenue growth for the Great River
route to be about 4.5% between fiscal year 2024 and 2029--an average of
0.9% annual growth.\8\ On a one-for-one basis of ridership to revenue,
this appears to mean that Amtrak anticipates attracting only about 5800
additional riders in six years. Given the 10 million-trip travelshed,
why does Amtrak not project more robust growth in ridership?
---------------------------------------------------------------------------
\8\ Ibid.
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Answers to Questions 2.a.-2.f. The manner in which Amtrak ridership
estimates are developed is described in the response to Yakym Question
1 above. Amtrak has recently updated its ridership estimates for the
Great River. The updated projections take into account changes in the
operating plan for the service, which is now planned to operate as an
extension of an existing Chicago-Milwaukee state-supported train. They
also reflect changes in demand for Amtrak services since the onset of
the COVID-19 pandemic and during the ongoing recovery from the decrease
in travel demand it triggered. Amtrak's growing ridership now
approximates or exceeds pre-pandemic ridership on most state-supported
routes.
In conjunction with its state partners, Amtrak uses a variety of
methods to attract and grow ridership on its state-supported services,
including pricing actions and marketing campaigns. Under the state-
supported service cost allocation methodology adopted pursuant to
Section 209, if revenues for a state-supported service are less than
projected, states are responsible for making up the difference.
Restoration and Enhancement grants are awarded in fixed amounts.
Amtrak has not yet developed 2029 ridership projections that
reflect the revised operating plan.

Question 3. Amtrak projects an operating cost for the Great River
route of around $12.3 million, revenue around $5.0 million, and a
federal and state subsidy of about $7.2 million, with the federal
government shouldering the lion's share in the early years and
transitioning fully to the state partners in fiscal year 2027.\9\
---------------------------------------------------------------------------
\9\ Ibid.
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Question 3.a. Does Amtrak project that the Great River service will
ever be profitable?
Question 3.b. Does Amtrak consider a route whose revenue only
covers 40% of operating costs to be a valuable use of limited
resources?
Question 3.c. Is a route whose revenue only covers 40% of operating
costs sustainable? If so, for how long?
Answers to Questions 3.a.-3.c. Amtrak has recently updated its
forecasts for the Great River to reflect changes in travel demand,
operating plans and inflation since previous forecasts were prepared.
The updated forecasts project that, in Fiscal Year 2024, the Great
River will have ridership of 231,900 passengers, including passengers
traveling between Chicago and Milwaukee since the train is now planned
to operate as an extension of an existing Chicago-to-Milwaukee state-
supported train. Projected revenues are $10.2 million, and the
projected annual state payment will be $6.1 million under the Section
209 methodology. We project a farebox recovery of approximately 57%.
While Amtrak does not expect the Great River to be profitable, its
projected financial performance compares favorably to that of other
U.S. publicly-funded transportation services. The Northern Indiana
Commuter Transportation District's South Shore Line you asked me about
at the hearing, which prior to the COVID-19 pandemic had one of the
best financial performances among U.S. passenger railroads, covered 48%
of its operating costs from farebox revenues in 2019. Likewise, airline
and highway services, particularly in less populated communities like
those the Great River will serve, receive both direct and indirect
public subsidies. Among other things, Congress provided $61 billion in
funding to sustain the airline industry during the COVID-19 pandemic
and has appropriated $275 billion in general taxpayer revenues to the
Highway Trust Fund since it became insolvent in 2008.
The Great River and Amtrak's other state-supported services are
sustainable. As with commuter trains, airline services and federal
highways, the federal, state and local governments that fund them
recognize that they are essential to mobility and national and local
economic prosperity. Despite the funding challenges states face, and
lack of federal funding to match state investments in Amtrak state-
supported services until the enactment of the Infrastructure Investment
and Jobs Act, Amtrak's state-supported services and their ridership
have grown significantly in recent decades. In the past 25 years, only
one state has ceased providing funding support for a state-supported
route. Given the mobility, economic and other benefits passenger rail
provides, and growing travel demand that already congested highways and
airports will be unable to accommodate, Amtrak believes that the
funding federal and state governments provide to Amtrak and its state-
supported services is a necessary and very prudent use of limited
public funding.

Questions from Hon. Troy E. Nehls to Mitch Warren, Executive Director,
Northeast Corridor Commission

Question 1. In the Northeast, there is a diverse approach to
passenger rail operations. This currently includes both publicly and
privately operated commuter rail lines, as well as intercity passenger
rail operated by Amtrak and a privately-operated, competitively-
selected service, the CTRail.
Question 1.a. With a number of new routes under consideration in
New England, as well as the rest of the country, please describe your
views on whether Amtrak should be the sole rail operator providing
intercity passenger rail services, or whether there are benefits to
having private operators as well?
Question 1.b. Do you think competitive bidding between private
operators and Amtrak would have benefits for these routes and their
state sponsors? Please explain your answer.
Answers to Questions 1.a. & 1.b. You are correct about the diverse
approach to passenger rail operations on the corridor. Most agencies
run their own services, although Amtrak operates MARC Penn Line service
for Maryland and Shore Line East service for Connecticut, and MBTA and
CTrail Hartford Line services are operated on behalf of the agencies by
private contract operators based on competitive bidding. Amtrak runs
intercity services on the corridor.
Intercity routes outside the Northeast Corridor are outside of the
Commission's purview, although our state members appreciate the
flexibility to bid out their commuter service operations when
appropriate and believe that flexibility to competitively bid passenger
rail operations helps to maximize public benefit. Of course, there are
added complexities in privatizing intercity operations outside the NEC,
such as the rights to operate on freight railroads. In many cases, due
to its access rights on freight railroad lines and other advantages
such as the efficiencies gained when operating multiple services within
a geographic area, Amtrak may be the best operator of intercity routes.

Questions from Hon. Donald M. Payne, Jr., to Mitch Warren, Executive
Director, Northeast Corridor Commission

Question 1. The Northeast Corridor is unique as it is one of the
few electrified rail corridors in the country. This means that as the
country moves towards greener energy sources, communities along the
corridor stand to benefit greatly. What are partner agencies on the
commission doing to facilitate greater use of the corridor's
electrification?
Answer. Rail travel produces up to 83 percent fewer greenhouse gas
emissions than driving and up to 73 percent fewer than flying, and
electric rail service is cleaner than diesel service. In addition to
its climate benefits, electric rail service also does not emit
particulate matter and helps to promote cleaner air.
The vast majority of trains on the Northeast Corridor are
electrified. This includes all Amtrak Acela, Regional, and Keystone
trains, all Metro North and Long Island Rail Road trains, all New
Jersey Transit trains, and all SEPTA trains.
Last year, Connecticut electrified all Shore Line East trains and
realized the benefits of faster acceleration and deceleration compared
to the diesel sets they replaced. As a result, CTDOT and Amtrak worked
to develop new schedules that saved up to ten minutes in travel time.
These new, electrified trains also reduce air pollution, resulting in
improved air quality for the surrounding communities, and are quieter,
resulting in less noise pollution. CTDOT has initiated an
electrification feasibility study as part of the department's goal to
fully electrify the CTrail network. The study will focus on the
feasibility of electrification on the Danbury, Waterbury, and Hartford
lines.
Massachusetts and Rhode Island have submitted a CRISI application
to study electrification of MBTA's highest ridership service, the
Providence Line. The NEC mainline tracks between Boston and Wickford
Junction are already electrified and Amtrak runs dozens of daily
Regional and Acela trains over those tracks. However, MBTA's trains are
currently powered by diesel locomotives and some station platforms are
only accessible via non-electrified tracks. The expectation is that by
shifting MBTA's Providence Line to electric service, the faster
acceleration and deceleration will allow for improved trip times and
reduce conflicts with Amtrak's higher speed intercity trains. Faster,
cleaner electric train service on the Providence line will not only
reduce greenhouse gas emissions directly, but the hope is that improved
rail service will encourage mode shift from cars to trains and further
reduce greenhouse gas emissions and promote cleaner air.
Maryland MTA plans to return to electric service on the MARC Penn
Line upon completion of the Frederick Douglass Tunnel. Penn Line
service accounts for 68 percent of MARC's weekday trains and 100
percent of weekend service. In addition to cleaner air and reduced
greenhouse gas emissions, Maryland expects that faster acceleration
between stations, higher maximum speeds, and faster schedule recovery
will allow for reduced trip times on the Penn Line.

Question 2. What are Northeast Corridor Commission members doing to
ensure bipartisan infrastructure funding will help create a level
playing field for socially and economically disadvantaged individuals?
Answer. Investments in new and upgraded stations provide access to
opportunity for socially and economically disadvantaged individuals.
Improvements to the existing station in Coatesville, Pennsylvania
provide ADA access and multimodal connections that will boost economic
development, serving a community that is 80 percent nonwhite and for
which, among the population that commutes by public transportation, 78
percent are 60 years and over. ADA improvements at the West Baltimore
MARC station will serve a community that is 12 percent 65 years and
older, and 73 percent Black or African American. The Penn Station
Access project will result in four new stations served by Metro North
Railroad in majority nonwhite neighborhoods in the Bronx, bringing new
service to Penn Station in New York City.
Nearly 30 projects in the Commission's 15-year CONNECT NEC 2037
plan incorporate ADA accessibility improvements. This work will ensure
that riders with disabilities have safe access to passenger rail
service along the corridor. Amtrak also is advancing numerous ADA
accessibility projects across the country with its supplemental IIJA
appropriations.
Investments along the corridor create direct, indirect, and induced
jobs. Direct job creation refers to jobs that are required to deliver
rail investments, such as project planners, designers, engineers, and
construction workers. The latter are typically union jobs that do not
require college degrees. Indirect jobs include non-construction jobs at
suppliers of materials generated to support infrastructure investment,
such as steel, concrete, wood, and specialized railroad equipment.
Induced jobs are those created by the spending of monies such as
project salaries for items such as groceries, gas, and entertainment.
Amtrak's workforce development initiatives within its B&P Tunnel
Replacement project in Baltimore will include a jobs center in West
Baltimore and partnerships with local universities and technology
programs.
Many NEC agencies are also already implementing or planning
adjustments to schedules that spread train service more evenly
throughout the day. This method of delivering service will benefit
those with travel needs outside of morning and evening peak periods. In
addition, increases in commuter service will allow those living in less
expensive housing to access opportunities in economic centers.

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