US may close Amtrack railroad as cash runs out

Long-distance train services in the United States could be halted as early as next month because Amtrak, the state-supported company that runs them, has run out of cash.

The warning has come from David Gunn, the new president of Amtrak, who is expected to appear in Congress today to plead the network's case for survival. He will tell a hearing of the Senate Appropriations Committee he needs long-term guarantees to enable him to raise $200m (about £130m) to keep the trains running.

"We are running out of time," Mr Gunn said this week. He added that America's passenger train system needed a "loan guarantee, a grant, an appropriation" at once. Meanwhile, plans to cancel all services in July were already being made, he said.

Amtrak, which was formed by Congress in 1971, has been struggling with a financial crisis for years. But it has never been so desperate. Last year, the company was forced to mortgage Pennsylvania Station in New York to keep going. Now, even those funds have been exhausted.

A suspension of Amtrak services would be a sad moment for a nation that built itself on train tracks. But nostalgia alone cannot keep it alive. Today, 99.8 per cent of travel between cities in the United States is by car, bus or plane. Trains account for only 0.2 per cent, so losing them overnight would barely alter the economy.

What would be missed, however, is Amtrak's service linking Washington, New York and Boston, including its new high-speed train, the Acela, introduced in 2000. (This service reaches 150mph but only for a stretch of only 18 miles.)

The number of train passengers in the north-east is up, partly because internal flights have become less popular since the 11 September attacks.

But Amtrak's general state is dire. In the company's 31 years it has never made a profit, in spite of the efforts of successive presidents to reassure Congress that one day it would. The company, which runs 265 trains a day, lost $1.1bn last year and has debts of about $3bn. Much of its shrinking income goes to servicing that debt.

Customer service and the condition of the stock and infrastructure have gone from bad to worse. Train crashes are not uncommon. Lines and tunnels are not maintained properly and most of the carriages are shabby and creaking.

The punctuality of trains in most regions is shocking. The Sunset Limited service between Florida and California runs late 70 per cent of the time and Amtrak loses $347 for every passenger that takes that train.

Mr Gunn, who has a reputation for salvaging dying transport systems, was hired by Amtrak a month ago. One of his first moves was to cancel or undermine several initiatives taken by his predecessor, including a much-ballyhooed "satisfaction guarantee" that promised passengers free tickets if everything about their journey was not up to scratch.

"If you look at our on-time performances and the condition of our equipment, 'satisfaction guaranteed' is not a particularly good slogan for us at this point in our history," Mr Gunn said.

Congress is already considering two sets of proposals to provide the rail company with between $2bn and $4bn to keep it going for one more year after the start of its new financial year on 1 October. At the very least, Amtrak's president hopes he will receive reassurances today that he will be given the money, so that he can try to raise the $200m needed until then on the private markets.

Critics of the proposals say it is time to break up Amtrak and allow commercial companies or regional transport authorities to bid for control of the shorter routes, which could one day become profitable. But if that were to happen, the long-distance services, such as Sunset Limited, would vanish for ever.