DOT Proposes Another Loan to Amtrak
The loan would be the second stage of a bailout plan approved in late June by the White House. The bailout averted a threatened shutdown this month of all Amtrak trains, which carry 5 percent of the U.S. Postal Service's mail in addition to providing passenger service.
The first stage of the agreement was a $100 million loan from the U.S. Treasury earlier this month to keep Amtrak service intact into August. The second stage, as proposed in a letter dated July 11 from Transportation Secretary Norman Y. Mineta to congressional leaders, would involve another direct federal loan of up to $170 million to carry Amtrak through the end of the fiscal year. The administration is seeking congressional approval of its most recent loan plan.
The proposed loan would have to be paid back by Jan. 1, and Amtrak would have to adhere to conditions that require the railroad to cut costs and get better control of its finances. The loan agreement also would require management reforms and bookkeeping changes.
Amtrak has never made money in its 31-year history and lost $1.2 billion last year.