Thursday, April 10, 2003 (Washington, DC) In testimony before the Appropriations Subcommittee on Transportation, Treasury and Independent Agencies today, Deputy Secretary of Transportation Michael P. Jackson hailed the signing of an agreement between DOT and Amtrak as the first step toward a new era of accountability in the operation of a viable inter-city passenger rail service.

“I am pleased to report that yesterday the Department approved Amtrak’s business plan for the remainder of FY 2003 and executed the Amtrak grant agreements contemplated by the FY 2003 Appropriations Act,” said Jackson, who is Transportation Secretary Norman Y. Mineta’s delegate on the Amtrak board of directors. “In doing so, DOT unambiguously communicated to Amtrak and its Board the following requirements: this year there will be no federal loans or loan guarantees, no ‘creative financing’ by Amtrak, no gimmicks, no shutdown drama, no threat against commuter operations, and no kidding -- Amtrak will live within the budget that Congress appropriated.”

The 2003 appropriations law gives the DOT specific oversight of each phase of Amtrak spending and the authority to withhold grant payments until Amtrak agrees to spending parameters approved by DOT. The Federal Railroad Administration will be the DOT agency overseeing Amtrak’s financial performance.

“To that end, we will monitor Amtrak’s condition monthly, and will be working with Amtrak to help it meet the targets laid out in its business plan. DOT will provide monthly reports to you on Amtrak’s progress,” Jackson said. “We expect to provide Amtrak’s fourth quarter grant in early July, but if necessary at that point we can make partial disbursements on a monthly basis to ensure fidelity to the bottom line of Amtrak’s business plan. Let me be clear about DOT’s role under the law. Amtrak itself retains its daily management responsibilities; DOT will provide oversight and enforce accountability.”

Jackson praised the cooperation from Amtrak’s senior management that led to the first-ever agreement.

“David Gunn has worked with the Amtrak Board of Directors to reduce operating expenses, de-layer management, improve customer service, address the numerous material weaknesses identified by Amtrak’s auditors, instill financial discipline, and provide Congress and the Administration with more accurate and timely financial data.”

DOT Secretary Mineta last year spelled out five principles that he argues must form the core of any successful reform of intercity passenger rail service. His principles would:

• Create a system driven by sound economics.
• Require that Amtrak transition to a pure operating company.
• Introduce carefully managed competition to provide higher quality rail services at reasonable prices.
• Establish a long-term partnership between the states and the federal government to support intercity passenger rail service.
• Create an effective public partnership, after a reasonable transition, to manage the capital assets of the Northeast Corridor.