Amtrak could be facing the end of the line

Katherine Griffiths
Monday 21 March 2005 01:00

America's national rail operator is facing bankruptcy after the US Senate voted to scrap the $1.2bn subsidy it relies on to fund its network of lines across the country.

Amtrak, which has been struggling financially for some time, could run out of money this year or early 2006 if the controversial vote is upheld.

The move could force the closure of many routes, especially in rural areas, including some of America's most famous train lines to the west, such as Chicago-Los Angeles, which were built in the 19th century. The threat to the privately owned Amtrak, which was formed in 1971 to try to consolidate the country's rail network into one, arises from President George Bush's drive to slash the budget deficit. He wants to eliminate Amtrak's subsidy as part of his 2006 budget.

While the administration was boosted by the Senate vote last week, Democrats are likely to fight to save Amtrak in further negotiations about the budget. Amtrak will have a chance to fight its case in hearings before both the Senate and House of Representatives' appropriations committees. There will be a final decision later this year.

With its 22,000-mile network, Amtrak is America's only national rail network. Critics say Mr Bush's proposals will have a particularly strong effect on poor areas, where people still rely on subsidised train services.

Washington wants states to share responsibility for funding rail infrastructure. This would lead to Amtrak having to compete with private operators for contracts to run trains.

Norman Mineta, Mr Bush's Transport Secretary, said: "Everyone agrees that Amtrak is on financial life support. But the answer to the problem is not throwing more money into a system that is fundamentally flawed." Robert Bennett, a Republican senator from Utah who supports the budget cuts, said last week that the company must be forced to shut down sparsely travelled routes.

Amtrak would not comment.

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