Amtrak’s own financial statements conclusively demonstrate that pouring money into Amtrak is throwing it down a sewer.
Amtrak’s Consolidated Statements of Operations for the Fiscal Year Ending Sept. 30, 2022, show a “loss from operations” of $1,830,051,000.
Amtrak’s Consolidated Statements of Operations for the Fiscal Year Ending Sept. 30, 2022, show “revenues from contacts with customers,” $2,448,357,000. “Total Operating Expenses:” $4,827,545,000. That produced a “Loss from operations” of $1,830,051,000.
For the prior Fiscal Year (ending Sept. 30, 2021), Amtrak’s “loss from operations was $1,983,997,000.
Amtrak states that 2022 was a good year for Amtrak revenues. They were up 47.8% — “driven by higher ticket revenues” — this, as the result of the upturn of the nation’s economy as our country came out of the shutdowns of the pandemic.
However, on the expense side of the “P & L,” all expenses, save one minor one, were up substantially: Salaries, 26.7%; wages and overtime, 17.3%; employee benefits, 26.2%; employee related, 79.5%; train operations, 33%; fuel, power and utilities, 60.5%; materials, 25.7%; facility, communication & office, 20.7%; advertising and sales, 55.4%, etc.
But can a 47.8% revenue increase be reasonably expected for FY 2023? Once the country comes out of the shutdown, can it do it again? And again? Amtrak doesn’t think so. Amtrak predicts that gross ticket revenues will be back to the pre-COVID annual level by FY 2024.
On the other hand, given the inflation, created by our political geniuses, is there any reason to believe that Amtrak’s loses will not recur year after year?
The people supporting the coming of “high speed rail” between Chicago and Moline blather that “the money will be well-spent.” Really?
If this is such a good investment of $400,000,000, why don’t those who want “high-speed passenger service invest their own personal savings? Why are the taxpayers being asked to come up with the $400 million?
Imagine that you are a business man. You have $100,000 to invest. Would you decide to invest your own $100K in a new high-speed railroad? If it were possible, would you invest your $100K in “Amtrak common stock?” What if you knew that it would take 400 years for you to recoup your investment? 100 years? You, of course, would not begin to “make a profit” until you have recovered all of your $100K initial investment.
The point is this: You will never recover your investment in any company that loses money year after year. The only Amtrak routes that have ever made money are in Amtrak’s “Northeast Corridor.” And the Chicago-to-Moline route would be nearly 1,000 miles from the “Northeast Corridor.”
If this is such a good investment of $400,000,000, why don’t those who want “high-speed passenger service invest their own personal savings? Why are the taxpayers being asked to come up with the $400 million?
Imagine that you are a business man. You have $100,000 to invest. Would you decide to invest your own $100K in a new high-speed railroad? If it were possible, would you invest your $100K in “Amtrak common stock?” What if you knew that it would take 400 years for you to recoup your investment? 100 years? You, of course, would not begin to “make a profit” until you have recovered all of your $100K initial investment.
The point is this: You will never recover your investment in any company that loses money year after year. The only Amtrak routes that have ever made money are in Amtrak’s “Northeast Corridor.” And the Chicago-to-Moline route would be nearly 1,000 miles from the “Northeast Corridor.”
In FY23, Amtrak projects its “Long-Distance Routes” will lose $709,000,000. Its “State Supported Routes” will lose another $110,000,000.
So, what would be a reasonable time for the taxpayers to recoup their $400,000,000 investment in high speed-rail between Chicago and Moline? If the route can generate a net profit of $1,000,000 per year, the taxpayers would recoup their investment in a mere 400 years. If the route can net $4 million a year, the taxpayers would recover their investment in just 100 years!
One other thought. A car, a van or a limousine can provide regular, daily ground-passenger transport to and from Chicago. I-80, I-88 and even I-90 connect Moline and Chicago. Such services would not require the acquisition of new train depots, right-of-way, the co-operation of any railroad, the tearing up of old tracks, the laying of new high-speed tracks, the purchase of new train engines, and/or modern passenger cars. And we already have limousine companies in the area. Do you suppose that they would provide regular twice-a day service, if they were subsidized? Would a subsidy of $1million per year do it? If so, we could have service for 400 years before we expended the $400,000,000.
The time has come for those who claim that this is a “good investment of taxpayer funds” to set out in detail their projections of (1) Revenues, (2) Expenses, (3) Expected ridership, (2) and Ticket prices.
Unless full and fair — open disclosure is made to the people of the Quad-Cities, this “project” has all the hallmarks of a boondoggle, and the $400,000,000, the appearance of a slush-fund.
Everybody leading the charge here should fully and fairly disclose their financial interest or potential financial interest in the project.
The Rock Island ended its intercity passenger operations to this area on December 31, 1978. That service ended because it could not profitably compete with other modes of transport. Where is the evidence that that is no longer true?
Full Disclosure: I have no financial interest in any limousine-type business. I do own some Lionel trains.
So, what would be a reasonable time for the taxpayers to recoup their $400,000,000 investment in high speed-rail between Chicago and Moline? If the route can generate a net profit of $1,000,000 per year, the taxpayers would recoup their investment in a mere 400 years. If the route can net $4 million a year, the taxpayers would recover their investment in just 100 years!
One other thought. A car, a van or a limousine can provide regular, daily ground-passenger transport to and from Chicago. I-80, I-88 and even I-90 connect Moline and Chicago. Such services would not require the acquisition of new train depots, right-of-way, the co-operation of any railroad, the tearing up of old tracks, the laying of new high-speed tracks, the purchase of new train engines, and/or modern passenger cars. And we already have limousine companies in the area. Do you suppose that they would provide regular twice-a day service, if they were subsidized? Would a subsidy of $1million per year do it? If so, we could have service for 400 years before we expended the $400,000,000.
The time has come for those who claim that this is a “good investment of taxpayer funds” to set out in detail their projections of (1) Revenues, (2) Expenses, (3) Expected ridership, (2) and Ticket prices.
Unless full and fair — open disclosure is made to the people of the Quad-Cities, this “project” has all the hallmarks of a boondoggle, and the $400,000,000, the appearance of a slush-fund.
Everybody leading the charge here should fully and fairly disclose their financial interest or potential financial interest in the project.
The Rock Island ended its intercity passenger operations to this area on December 31, 1978. That service ended because it could not profitably compete with other modes of transport. Where is the evidence that that is no longer true?
Full Disclosure: I have no financial interest in any limousine-type business. I do own some Lionel trains.
First Published in the Moline Dispatch and Rock Island Argus on March 19, 2023.
Copyright 2023, John Donald O'Shea
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