WASHINGTON — Amtrak lost $1.1 billion in 2001, the most in its 30-year history, and has not made progress toward meeting Congress' goal of self-sufficiency, a new government report said.

        The report by Transportation Department Inspector General Kenneth Mead also bolsters Amtrak's perennial plea for a greater federal investment in rail.

        Mr. Mead's annual assessment of the nation's passenger railroad, released Friday, reported that Amtrak's 2001 cash loss was $585 million, $24 million worse than in 2000.

        The cash loss will determine whether Amtrak will meet a 1997 order from Congress to end its reliance on federal operating subsidies by Dec. 2.

        Mr. Mead, Transportation's internal watchdog, said Amtrak would have to reduce its cash loss by more than $300 million to meet the deadline and cannot do so without the “cannibalization” of the company.

        The Associated Press obtained a copy of the report Friday before its official release.

        Mr. Mead said Amtrak faces “a formidable challenge” this year just making ends meet without further borrowing. Last summer, Amtrak had to mortgage part of Penn Station in New York City — one of its most important assets — to raise $300 million to continue operating through Sept. 30, the end of the fiscal year.

        The report supports the longtime assertion by Amtrak leaders that, regardless of its self-sufficiency effort, the federal government needs to continue investing in tracks, rail yards, stations and other assets.

        Cincinnati financier Carl Lindner has a stake in the survival of Amtrak, although it is uncertain whether he will ever see a return.

        Mr. Lindner's American Financial Group owns about 55 percent of the common stock of Amtrak, and Amtrak is required to redeem those shares by October.

        The common stock does not control Amtrak and has no trading value. Through preferred shares, the federal government runs the passenger rail system.

        Mr. Lindner has contended that the common stock is worth much more than the 3 cents a share offered by Amtrak in 2000.

        Mr. Mead said Amtrak needs at least $1 billion a year for the foreseeable future to handle deteriorating conditions “that will need to be addressed if rail service is to continue, regardless of who operates that service.”
       “It is not clear whether Amtrak or any other entity could ever operate a linked national system such as that in place today without operating subsidies,” he warned.

        Enquirer reporter Cliff Peale contributed to this report.

Home sales set record for Tristate during '01
Barge company to leave port
Hoteliers to discuss tax plan
Retail vacancies shrink
Airlines call off alliance
Amtrak no closer to self-sufficiency, report says
Earnings
Kmart, SEC investigate questions about accounting
Business Digest
Tristate Summary
What's the Buzz?
HIGGINS: Enron lessons
Rate report
Savvy Strategies