Amtrak Warns About Looming Shutdown

 By Laurence Arnold

Associated Press Writer

Saturday, June 22, 2002 ;4:11AM

WASHINGTON –– Amtrak warned Friday that a shutdown of its passenger trains also could hit commuter railroads serving hundreds of thousands of people.

Some lawmakers and transportation officials in the Northeast, which would be hit hardest by a shutdown, began preparing even as they urged the federal government to step in.

"The operational chaos that will result from this is incalculable at this point. It's a disaster," said New Jersey Transportation Commissioner James P. Fox.

Unable to close a $200 million budget shortfall without government help, Amtrak says it has only enough cash to operate a normal schedule for several more days.

Amtrak President David Gunn says he will start turning away passengers and moving trains to storage next week unless it gets a grant or a loan. Amtrak's next step after shutting down would be to file for bankruptcy protection, he said.

"Time is of the essence, and we still do not a resolution of this issue," Gunn said Friday.

In a message to Amtrak employees on Friday, Gunn wrote, "You will hear mention of bankruptcy and cessation of service. These are real possibilities. I still believe wisdom will prevail and we will be allowed to operate. ... But as I said, time is running out."

The Federal Railroad Administration is reviewing Amtrak's request for a loan guarantee to help it borrow the needed $200 million. Amtrak has had trouble tapping its existing line of credit because lenders are unsure how long it can remain in business.

Standard and Poor's downgraded Amtrak's credit rating Friday to the lowest investment grade status, citing the agency's financial troubles and the looming shutdown. Moody's placed Amtrak on a watch list for a possible credit rating downgrade.

If the FRA deems Amtrak unqualified for a loan guarantee, the only options would be a congressional directive for the FRA to grant one, or an emergency appropriation from Congress.

Sen. Robert Byrd, D-W.Va., chairman of the Senate Appropriations Committee, said Friday that he proposed that $200 million for Amtrak be included in the anti-terrorism bill that is the subject of negotiations between the Senate and the White House.

Senators from New Jersey , New York , Massachusetts , Delaware , Maryland and Rhode Island signed a letter urging Transportation Secretary Norman Y. Mineta to "act now."

Amtrak trains carry about 60,000 riders per day. About 35,000 of those ride in the Boston - New York -Washington Northeast Corridor.

Amtrak owns tracks and tunnels in the Northeast that are also used by commuter rail services in New Jersey , New York and Massachusetts . An Amtrak shutdown could force those services to cease as well, Amtrak spokesman Bill Schulz said.

"We do all the dispatching, we do all the track inspections, the signals. All the tunnels in and out of New York are Amtrak," Schulz said.

But Tom Kelly, a spokesman for the Metropolitan Transportation Authority, which operates the Long Island Railroad, said a shuttered Amtrak would have no claim on the tunnels and other property that the LIRR uses. He said he is confident a shutdown "would have no effect on us."

Under contracts with state and regional authorities, Amtrak also operates or maintains eight commuter railroads in California , Connecticut , Maryland , Massachusetts , Virginia and Washington . Those services, too, could be hit.

Michael Mulhern, general manager of the Massachusetts Bay Transportation Authority, a commuter rail network that serves 140,000 people a day, expressed worry Friday that Amtrak's cash crunch could affect his riders since Amtrak provides 1,500 employees for the MBTA network.

Amtrak officials "insist on dragging the MBTA's commuter rail situation into a national debate," Mulhern said. "We believe their intentions are to inflict as much pain as possible."

Schulz said an Amtrak shutdown necessarily will carry widespread consequences with it. "If we shut down, this will impact every Amtrak employee," he said.

Amtrak has never had a prolonged systemwide shutdown in its 31-year history. Amtrak service was suspended briefly in the hours after the Sept. 11 terror attacks but resumed later that day.

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On the Net: Amtrak: http://www.amtrak.com/

Massachusetts Bay Transportation Authority: http://www.mbta.com/

The Associated Press