Amtrak to receive COVID-19 financial support from USDOT through FRA

Posted: 14 April 2020 | | No comments yet

Over $1 billion in funding from the U.S. CARES Act will be made available to Amtrak to limit the impact of COVID-19 on the railroad.

Amtrak to receive COVID-19 financial support from USDOT

Elaine L. Chao, the U.S. Secretary of Transportation, has announced that the U.S. Department of Transportation’s (USDOT) Federal Railroad Administration (FRA) is making over $1 billion available – under the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act – to the National Railroad Passenger Corporation (Amtrak) to support the railroad’s activities to prevent, prepare for and respond to the spread of the COVID-19 pandemic in the U.S., as well as limit its impacts on operations and business. 

As a result of the pandemic, Amtrak has experienced an unprecedented decline of over 90 per cent in ridership in recent weeks, as well as a decline in future ticket purchases for the coming months, forcing the railroad company to pull certain routes out of service. Elaine said: “This $1 billion in federal emergency assistance to Amtrak will help maintain service for its passengers when the economy recovers.”

The CARES Act funding will be used to offset the loss of ticket revenue – which is used to pay Amtrak’s employees – buy fuel for its operations and construction materials for its projects, as well as maintain Amtrak’s robust network of intercity passenger routes, including routes in rural areas that have seen total cancellation in service.  Ticket revenues also fund track and infrastructure maintenance programmes on Amtrak’s Northeast Corridor, which millions of Americans use to commute to their jobs every day.

Ronald L. Batory, the FRA’s Administrator, said: “This funding will help to ensure that Amtrak is able to quickly return to service, supporting both the public’s transportation mobility needs and America’s economic recovery from the COVID-19 public health emergency. We are committed to transparency and are requiring enhanced reporting from Amtrak to show how the CARES Act funding is being efficiently and effectively used to respond to present challenges.”

Under the CARES Act, the FRA will make or amend existing grants to Amtrak to provide a total of approximately $1.02 billion – $492 million for the Northeast Corridor and $526 million in National Network Grants, as authorised by sections 11101(a) and 11101(b) of the Fixing America’s Surface Transportation Act, the multimodal surface transportation legislation that provides statutory parameters for the FRA’s execution and oversight of grant agreements with Amtrak for federal funds appropriated by Congress.

Amtrak‘s Senior Executive Vice President, Stephen Gardner, said: “After Amtrak’s best year ever in 2019, this essential funding will help to keep our people working during this unprecedented reduction in travel demand. We thank Secretary Chao and Administrator Batory for their leadership and, with this necessary financial support, we will come out of this crisis ready to continue growing ridership and improving our performance.”

In addition, the USDOT’s investment will help to mitigate the cost impact on America’s 28 state-supported intercity passenger rail routes, where state governments would otherwise be required to make up ticket revenue shortfalls. At least $239 million of the funds provided will be used in lieu of any increase in states’ payments. 

Each year, the FRA executes and oversees grant agreements with Amtrak for the federal funds appropriated by Congress. In conjunction with operating revenues and funds from states, local governments, and other entities, Amtrak uses federal funds for a wide range of its operating and capital activities, including a portion of its operating expenses, capital maintenance of fleet and infrastructure, capital expansion and investment programmes and capital debt repayment.