[ Most Californian passenger rail operations (other than ACE)
depend on Amtrak. ACE does not depend on Amtrak. -YY]

Published Tuesday, June 25, 2002, in the Contra Contra Times

Amtrak may be forced to shutdown without loan

The company is trying to rally lawmakers to support the railroad

By John Simerman

Each time Michael Arent rides along the Capitol Corridor between
Berkeley and his job in San Jose, Amtrak pays $4 to get him there.

That pales to the subsidy that the nation's imperiled railroad pays
for long-distance routes -- the poster kids for a runaway deficit that
led Amtrak president David Gunn to threaten a shutdown this week
without a $200 million emergency loan.

California is paying $70 million this year to run the Capitol route
and two other popular intercity rail corridors. But that investment
could mean little if Amtrak steps on the fiscal third rail. An Amtrak
shutdown could send some 80,000 California riders back to the roads.

The threat eased Monday after Transportation Secretary Norm Mineta met
with Amtrak's governing board members, while elected leaders from
California and the rail-heavy Northeast prodded President Bush to
resolve the crisis.

"I am confident Amtrak will not shut down," Mineta said. "Everyone who
depends on this vital rail service needs to understand that this
administration and Amtrak will work together and with Congress to make
sure that passenger service continues."

Administration officials have said they would "work furiously" or
"make every effort" to prevent a shutdown.

Amtrak issued a statement that there is no agreement and the shutdown
looms.

The railroad has had trouble tapping its line of credit because
lenders are unsure how long it can remain in business. The Federal
Railroad Administration is reviewing Amtrak's request for a $200
million loan guarantee. If Amtrak does not qualify, the only options
would be a congressional appropriation or an order that the agency
grant one.

Gunn said that if Congress or the administration appeared near a
solution he could delay the shutdown for a few days.

"The entire system would be impacted if a shutdown were to occur,"
said Amtrak spokeswoman Vernae Graham.

While the focus has been on the long routes -- some of which cost
Amtrak hundreds of dollars per rider -- the impact on California's
intercity rail service could be severe.

The Capitol Corridor, the San Joaquins between Oakland and
Bakersfield, and the Pacific Surfliner between San Diego and San Luis
Obispo, -- and 3.5 million annual riders -- are tied to Amtrak's
viability.

Changing operators for the rail routes would be difficult. Federal law
gives Amtrak exclusive authority to operate on the freight railroad
tracks at an incremental cost. If the state wants to go it alone, it
would have to pay a price.

"We would have to negotiate with the railroads with no guarantee of
getting access, and if we do, paying whatever the market would
command," said Caltrans Director Jeff Morales.

Even commuter services such as Caltrain on the Peninsula could suffer
a temporary shutdown, officials said. Caltrain carries 30,000 weekday
riders and owns its own tracks and equipment. But it pays Amtrak for
labor. Caltrain could be left to find conductors and mechanics,
perhaps on two weeks notice.

"We just don't know yet," said Jayme Maltbie, a Caltrain spokeswoman.

Caltrain, the Metrolink in Los Angeles and the Coaster in San
Diego/Oceanside all are funded by regional and local agencies, with
Amtrak under contract.

California is second only to New York in Amtrak ridership, and Amtrak
employs 3,800 Californians. On Monday, U.S. Sens. Barbara Boxer and
Diane Feinstein called on President Bush to approve the loan
guarantee. Gov. Gray Davis also wrote Mineta to urge federal action.

The lawmakers argue that California's contributions make it a national
model. The state's three intercity rail corridors are among the top
five nationally in ridership. The Capitol Corridor was the
fastest-growing corridor service last year, according to Amtrak.

"We have a contract with a company that's overdrawn its
checkbook. Even though we're willing to pay, they can't continue,"
said Eugene Skoropowski, managing director of the Capital Corridor
Joint Powers Authority. "Everybody in the state has been in contact
with everybody. Even the riders are going berserk."

Michael Arent is not going berserk, but he is writing lawmakers,
fearing a return to ride-sharing.

"I've commuted every possible way you can, and Amtrak is far and above
the best form of public transportation I've commuted on," said Arent.

It may be inevitable that California would lose some of its four long
routes in an Amtrak overhaul, said Richard Silver, director of the
Rail Passengers Association of California. But the inter-city runs
"just cannot go out of business. There's just too many people who use
them."

If Amtrak shuts down, Ann O'Connell-Nye of Orinda will drive east to
visit her children or to board a cruise to Europe. Since fear of
flying grounded her 12 years ago, she has enjoyed the comforts, if not
punctuality, of Amtrak.

"Amtrak gets a bad name," she said. "It doesn't run poorly. The
problem is Congress. They somehow expect this system to run on
nothing."

Without a resolution soon, Skoropowski said the agency would put
together a "shut-down" plan. He chided the concept that Amtrak should
be self-sufficient.

"Congress pretended they could do it and whoever was in charge with
Amtrak at the time pretended they would go along with it," he
said. "Somebody was smoking something funny."


Associated Press and the Washington Post contributed to this story.