Amtrak refinancing plan promises savings

A refinancing agreement between the U.S. government and Amtrak will save taxpayers approximately $162 million, the U.S. Departments of Transportation and Treasury jointly announced Friday.

During the course of its 39-year existence, Amtrak has incurred a large amount of debt paid by the government through an annual appropriation to the national passenger railroad.  The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) permitted the Treasury Department to study ways to repay or restructure Amtrak’s debt that would save money for the taxpayer and the railroad, and to take action on its findings if this would produce substantial savings.

Friday’s announcement is based on the government’s findings. Under the terms of the Memorandum of Understanding, the government will exercise early buyout options on 13 existing high-cost leases during the next three years. The $420 million upfront cost will save approximately $582 million in future payments, in effect saving the taxpayer approximately $162 million.

“This announcement is good for taxpayers and important for the future of rail service in America,” said Treasury Secretary Tim Geithner. “Refinancing these leases will save taxpayers money while continuing the President’s vision of improving passenger rail service across the country at a lower cost."

“This is a great opportunity to help Amtrak and save money for the taxpayer,” said Transportation Secretary Ray LaHood (pictured at right). “These savings also represent funds that could be used to support the development of high speed rail,” he said, referring to U.S. HSR and higher speed rail (HrSR) efforts. 

Amtrak revenue increased 9% in fiscal year 2010, which ended Sept. 30, compared with the previous fiscal year. Ridership, up 5.7%, was 28.7 million, matching its FY08 total; ridership is up nearly 37% since fiscal year 2000.