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Quarterly Report on Amtrak's FY 2008 Operational Reforms Savings and Financial Performance

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On August 7, 2008 as mandated by the House passed fiscal year (FY) 2008 Appropriations Act for the Department of Transportation, we issued our quarterly report to the House and Senate Appropriations Committees on Amtrak’s savings from operational reforms and year–to–date financial performance. Amtrak has realized $19.5 million of the $31.7 million in FY 2008 reform savings it originally anticipated. Over 65 percent ($12.7 million) of Amtrak’s cost savings were achieved from productivity savings in Amtrak’s core operating departments and reflect lower staffing requirements. These savings resulted from better business practices and management efficiency reforms undertaken in the prior 2 years. Amtrak’s operating loss through June was $294.1 million, $72.8 million less than budget due largely to better than expected revenues. Amtrak forecasts it will finish FY 2008 with an operating loss of $456 million, $19 million less than budgeted. This increase in Amtrak’s projected loss this quarter largely is a result of an accrual of $25.8 million in one–time costs related to Amtrak’s recent labor settlements and higher than budgeted fuel, power, and utility costs. Amtrak is in the process of developing a new 5–year strategic plan that it hopes to complete and begin implementing this fall. Along with the strategic plan, Amtrak needs to ensure the appropriate management structure to ensure adequate oversight, management, and reporting on its strategic reform initiatives. As required by Congress, reports requested by the House and Senate Appropriations Committees are subject to a 15 day hold before being publicly released. In compliance with that requirement, the report was withheld from public release until August 15.