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Summary

As part of the OIG's ongoing congressionally mandated assessment of Amtrak's financial needs and requirements, we reported to the Secretary of Transportation on several critical financial issues of concern. While Amtrak's revenues and ridership continued to grow in the first 6 months of 2001, the railroad is not reducing its annual cash losses. This puts Amtrak's ability to achieve operating self-sufficiency by 2003, as required by law, in jeopardy. Of immediate concern is Amtrak's cash flow shortfalls, exacerbated by additional delays in the delivery of Acela trainsets. Amtrak's solution to this shortfall, mortgaging Penn Station-New York, will allow the railroad to remain solvent in the short-term, but will add at least $27 million each year to its already significant interest debt service. Because of these factors, we endorse the Secretary's intent to request that Congress address the debate on the future of Amtrak and intercity passenger rail earlier, rather than later, in 2002.