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Amtrak subsidies in jeopardy, Shelby says

WASHINGTON, D.C. -- Subsidies for Amtrak will not be a priority when the Senate Appropriations subcommittee on transportation meets later this month to plan 1999 transportation spending, according to Sen. Richard Shelby (R-Ala.), chairman of the panel.

Shelby said the $621 million Amtrak is requesting for next year cannot be granted unless there are cutbacks in such areas as aviation, highway safety, Coast Guard search-and-rescue operations, and drug interdiction.

"Funding Amtrak to the exclusion of these other priorities is simply not an appropriate use of our subcommittee’s budget and does not serve the average American’s best interests," Shelby said in a prepared statement.

Shelby said the highway measure enacted by Congress in May earmarks substantially more money for highways and mass transit than in the past, giving his panel less discretion in dividing the funds available for next year’s budget.

The federal share of Amtrak operating subsidies has been cut significantly since 1994. Last year, Congress dictated that the carrier must become self-sufficient by 2002, and it granted Amtrak a one-time $2.2-billion infusion of capital to help it meet the deadline.

Amtrak officials say $1.8 billion more is needed over the next five years, including the $621 million requested for 1999, if the carrier is to be weaned off federal subsidies.

Meanwhile, the Amtrak Reform Council, headed by New Jersey Gov. Christie Whitman, held its second meeting on Monday, despite the fact that President Clinton has yet to appoint the two members who will represent rail labor and rail management on the 11-member panel.

Under its mandate, the council will have 90 days to develop a restructuring plan for Amtrak if it concludes the passenger carrier will not be self-sufficient by the end of 2002.

Analysts see railroad earnings down due to merger problems

WOODSTOCK, Vt. -- U.S. railroads as a group will see earnings decline by as much as 30% during the second fiscal quarter due to continuing problems at Union Pacific (UP) and lackluster results elsewhere, according to a First Call Corp. survey of analysts.

The exception, the analysts said, will likely be the Burlington Northern Santa Fe, which continues to log good performance.

Those surveyed said that despite generally strong demand for freight, merger problems and service woes have hurt the railroads during the current fiscal quarter.

"Railroads expected the best of times following the mergers," said PaineWebber analyst Scott Flower. "But the path has been longer and harder than they anticipated."

Analysts said UP’s losses include extra operating expenses and lost revenue from traffic back-ups, as well as significant costs to settle claims filed by customers.

They also said service and merger issues have taken a toll on CSX and Norfolk Southern.

Rivals to pressure UP, but railroad claims progress

WASHINGTON, D.C. -- Various railroads are expected to file proposals tomorrow with the federal Surface Transportation Board (STB) aimed at taking over some of Union Pacific’s (UP) service in the Houston area, but UP continues to claim in its second annual filing with the agency that its recent merger is producing benefits for shippers.

UP’s rivals say they are seeking to provide relief to the congested Houston rail center, but UP counters they are simply trying to snatch away business.

If approved, the proposals to alter UP’s service network in the wake of its takeover of Southern Pacific could open to competition freight business in the area worth hundreds of millions of dollars.

Subject to five years of oversight, UP has enjoyed limited success in easing the traffic tie-ups in the Houston area, but is experiencing logjams in other areas.

Burlington Northern Santa Fe (BNSF) is expected to seek greater access to UP routes and more coordinated dispatching of train operations in the Gulf Coast region. BNSF is also expected to ask for rights to use UP track between San Antonio and Laredo, Texas, to reach Mexico.

At the same time, a coalition of rail customers, smaller railroads and the Texas Railroad Commission is pushing its own plan that would result in wider access to rail routes and freight yards in Houston.

In its second annual report to the STB, UP said single-line service is expanding, routes are shorter, and switching charges are declining.

UP’s report also says it will hire 4,700 union workers this year, more than twice as many as initially planned. The carrier said it has already hired 2,284 brakemen, conductors, engineers and other employees during a year in which it expected to hire only 2,200 new employees.

TWU establishes food bank to aid strikers

PHILADELPHIA -- Leaders of Transportation Workers Union (TWU) Local 234 met with TWU President Sonny Hall and other national TWU leaders yesterday to discuss strategies for helping workers survive a long strike against the Southeastern Pennsylvania Transportation Authority (SEPTA).

The meeting coincided with the establishment of a TWU food bank at the local union hall.

The work stoppage, now in its sixth week, is the second-longest in SEPTA’s history and has idled some 5,500 workers. TWU struck the agency for 44 days in 1977.

The meeting between Steve Brookens, president of Local 234, and TWU’s President Hall ended with a commitment from Hall to solicit contributions from TWU locals nationwide.

Meanwhile, TWU has filed papers with the state Labor Department arguing that its members are eligible for unemployment benefits because they are willing to return to work but are victims of a lockout by SEPTA.

A TWU spokesman said the union offered several weeks ago to return to work immediately if SEPTA agreed to settle the dispute through binding arbitration. Because SEPTA refused, he said, the move effectively blocked workers from ending the strike.

No talks are scheduled, and TWU planned to hold a noon rally today at City Hall.