A refinancing agreement between the U.S. government and Amtrak will save taxpayers approximately $162 million, the U.S. Departments of Transportation and Treasury announced today.
“This announcement is good for taxpayers and important for the future of rail service in America,” said U.S. 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 U.S. Transportation Secretary Ray LaHood. “These savings also represent funds that could be used to support the development of high-speed rail.”
Over the years, Amtrak has incurred a large amount of debt paid by the government through an annual appropriation to the 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. Today’s action is based on the government’s findings.
Under the terms of today’s Memorandum of Understanding, the government will exercise early buyout options on 13 existing high-cost leases over the next three years. The $420 million up-front cost will save approximately $582 million in future payments, in effect saving the taxpayer approximately $162 million.
During fiscal year 2010 the railroad’s revenue was 9 percent higher than during the previous 12 months and its ridership increased 5.7 percent.