WASHINGTON – Amtrak said Thursday it could shut down as early as next month unless it received more than $200 million in private financing, putting new pressure on Congress to approve a rail funding package.
In a written advisory to employees, Amtrak President David Gunn said the money must be obtained before the end of June in order to keep operations going through the summer. "As of today, we have not arranged financing," Gunn wrote.
The latest threat to Amtrak operations comes as Congress considers proposals to keep the only U.S. city-to-city passenger rail service on track for another year.
Separate plans making their way through the House and Senate would meet the $1.2 billion in aid requested by Amtrak earlier this year. Gunn said the $200 million needed immediately would be leveraged against that appropriation. Amtrak has used expected appropriations as collateral in the past.
"Progress is being made," Gunn told employees about the effort in Congress.
Amtrak has never made a profit in its 31-year history and is awash in red-ink. It lost $1.1 billion in 2001 and its debt tops $3 billion.
Gunn's predecessor, George Warrington, threatened earlier this year to halt all long-distance train service -- routes mainly outside the Northeast -- unless Congress approved the railroad's aid request by October.
But the sobering appraisal by Gunn in his first month on the job after stints running subway systems in New York, Toronto, and Washington, also included Amtrak's crown jewel -- the heavily traveled high-speed corridor between Boston and the nation's capital.
In a May 30 letter to Sen. John McCain, the ranking Republican on the Commerce Committee and frequent Amtrak critic, Gunn said Amtrak's failed drive for financial independence between 1997-2002 took an alarming toll on its infrastructure.
"Maintenance of the Northeast Corridor has been deferred to the point where there is a real risk of losing the ability to run marketable high-speed rail service," Gunn wrote.
The corridor is more valuable than ever for Amtrak as it siphons significant business from shuttles run by big airlines struggling to minimize post-Sept. 11 security hassles and delays for passengers.
One of those carriers, Delta Air Lines, has begun a high-profile advertising campaign promoting its service over Amtrak's high-speed Acela trains that are popular with business travelers.
In addition to maintenance shortfalls, Gunn called Amtrak's ill-fated effort for self-sufficiency a "myth" that led to damaging financial decisions.
"It took actions such as borrowing money through a variety of means, the primary example being the mortgage of (New York's Pennsylvania Station) last year, and now debt service is a huge cost," he wrote in his letter to McCain. "This is not a way to run a railroad and not the way I will run the railroad."
Gunn plans a massive reorganization of Amtrak management, including a separate business unit to run the Northeast Corridor, long-distance trains, and West Coast operations.