President Obama devoted a portion of his January State of the Union address to the subject of high-speed rail transport, and the following month Vice President Biden announced a 6-year, $53 billion plan to invest in it. The Administration’s long-term goal is to make high-speed rail service available to 80% of the nation’s population within 25 years.
While cheered by rail enthusiasts and mass-transit advocates, this vision faces a funding battle in a Congress desperate to show voters that it can rein in government spending. Some states are rebelling, too; governors in Florida, Wisconsin, and Ohio have rejected $3.6 billion in federal funding for new passenger-rail lines, precipitating a scramble among other state governors eager to take their share.
Amtrak, the $2.5 billion government-owned railroad that carries the bulk of the nation’s rail passengers, faces multiple battles of its own, including aging cars and infrastructure, and a continuing reliance on government subsidies. Despite these challenges, Amtrak finance chief D.J. Stadtler, who assumed the post in February 2009 after a career divided between government service and his family’s central Virginia engineering firm, says good things are happening at the nation’s passenger-rail company.
Amtrak is used to being in the spotlight, but not always in a good way. Do you think things will get better?
We are really excited about the [renewed] focus on rail. We have always felt that rail is the most efficient way to travel. In 2008, when gas prices skyrocketed, people flocked to the trains and we had what at that time was record ridership. Through the downturn in the economy we were able to hold on to that ridership, and in 2010 we had our biggest year ever. So we feel very good about the renaissance of rail.
Also in 2010, because our revenue was higher than expected and we were able to keep our operating costs down, we made the first payment on 130 long-distance, single-level cars that will replace heritage cars that are over 60 years old. This will allow us to add more revenue by carrying more passengers.
From a financial point of view, we’ve done a good job of becoming more transparent. We’re much more open with Congress and the public in terms of how we’ve performed and what our needs are. For the past two years we’ve had clean audits — no material weaknesses — an achievement that Amtrak has not been especially known for. So we’re proud of that. We think we’re moving in the right direction.
What is Amtrak’s biggest financial challenge?
Our biggest financial challenge is the deferred maintenance we have in the Northeast Corridor. We run trains every day with equipment that in many cases is older and run harder than any other similar equipment in the country. The older the cars get and the more we run them, the more expensive they are to keep up and maintain. We’ve got to start replacing that equipment and addressing some of the maintenance we’ve ignored for years because funding was such a challenge.