Rail passenger group blasts Amtrak accounting practices as 'fatally flawed'

RELATED TOPICS: PASSENGER | AMTRAK
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WASHINGTON — The way Amtrak measures and allocates its revenues and costs is “catastrophically flawed” and does the American public a disservice, the Rail Passengers Association argues in a white paper released Thursday.

The report calls out Amtrak Performance Tracking, the information technology system used by the national passenger carrier, as having four fatal flaws. Among them is that it reports “fully allocated costs” in a way that inaccurately portrays the economics affecting each part of the system without reporting avoidable costs, as required by statute. It also omits all costs of capital consumption and uses imprecise or inadequate data, according to the association.

“The upshot is that APT exaggerates the cost of operating the national passenger train system, overstates the costs of expanding it, and trivializes the effects of killing it, because it fails to consider the benefits accruing to the communities it serves,” the report maintains. “In short, it radically undercuts the ability of Congress and Amtrak to plan wisely.”

The organization termed as “absurd” practices including allocation of track maintenance costs to routes that do not use the given tracks; allocation of Acela equipment maintenance costs to non-Acela routes; failure to determine each route’s fuel cost; and failure to produce reliable station cost data for stations that Amtrak owns or maintains. The latter includes failing to accurately count commuter rail passengers using Amtrak-owned stations, thus overcharging the Amtrak trains that use them.

These practices, the association contends, lead to figures that make the Northeast Corridor system appear less costly than it is, while making the long-distance trains appear more costly than they are. The notion that eliminating long-distance routes would significantly reduce the carrier’s subsidy requirement  is “simply false. The taxpayer-funded burdens of the Northeast Corridor dwarf those of the rest of the system, where the majority of infrastructure costs are born [sic] by the railroads,” the report concludes.

APT was created by the Volpe National Transportation Systems Center in 2005 in response to a congressional mandate to replace the previous profitability reporting system, which also failed to calculate avoidable costs. Amtrak created each of APT’s 60,000 rules manually using “professional judgment,” leaving it prone to human error and manipulation and failing to consider the effect of Amtrak’s network functioning as a whole, according to Volpe. In response to a 2009 review by Amtrak’s inspector general, the Federal Railroad Administration agreed a new avoidable-cost calculation metholodogy was needed, but the agency and Amtrak have yet to follow through.

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