[House Hearing, 110 Congress] [From the U.S. Government Publishing Office] AMTRAK'S FISCAL YEAR 2008 STRATEGIC PLAN ======================================================================= (110-51) HEARING BEFORE THE SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS OF THE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE HOUSE OF REPRESENTATIVES ONE HUNDRED TENTH CONGRESS FIRST SESSION __________ JUNE 12, 2007 __________ Printed for the use of the Committee on Transportation and Infrastructure ____ U.S. GOVERNMENT PRINTING OFFICE 36-682 WASHINGTON : 2007 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE JAMES L. OBERSTAR, Minnesota, Chairman NICK J. RAHALL, II, West Virginia JOHN L. MICA, Florida PETER A. DeFAZIO, Oregon DON YOUNG, Alaska JERRY F. COSTELLO, Illinois THOMAS E. PETRI, Wisconsin ELEANOR HOLMES NORTON, District of HOWARD COBLE, North Carolina Columbia JOHN J. DUNCAN, Jr., Tennessee JERROLD NADLER, New York WAYNE T. GILCHREST, Maryland CORRINE BROWN, Florida VERNON J. EHLERS, Michigan BOB FILNER, California STEVEN C. LaTOURETTE, Ohio EDDIE BERNICE JOHNSON, Texas RICHARD H. BAKER, Louisiana GENE TAYLOR, Mississippi FRANK A. LoBIONDO, New Jersey ELIJAH E. CUMMINGS, Maryland JERRY MORAN, Kansas ELLEN O. TAUSCHER, California GARY G. MILLER, California LEONARD L. BOSWELL, Iowa ROBIN HAYES, North Carolina TIM HOLDEN, Pennsylvania HENRY E. BROWN, Jr., South BRIAN BAIRD, Washington Carolina RICK LARSEN, Washington TIMOTHY V. JOHNSON, Illinois MICHAEL E. CAPUANO, Massachusetts TODD RUSSELL PLATTS, Pennsylvania JULIA CARSON, Indiana SAM GRAVES, Missouri TIMOTHY H. BISHOP, New York BILL SHUSTER, Pennsylvania MICHAEL H. MICHAUD, Maine JOHN BOOZMAN, Arkansas BRIAN HIGGINS, New York SHELLEY MOORE CAPITO, West RUSS CARNAHAN, Missouri Virginia JOHN T. SALAZAR, Colorado JIM GERLACH, Pennsylvania GRACE F. NAPOLITANO, California MARIO DIAZ-BALART, Florida DANIEL LIPINSKI, Illinois CHARLES W. DENT, Pennsylvania DORIS O. MATSUI, California TED POE, Texas NICK LAMPSON, Texas DAVID G. REICHERT, Washington ZACHARY T. SPACE, Ohio CONNIE MACK, Florida MAZIE K. HIRONO, Hawaii JOHN R. `RANDY' KUHL, Jr., New BRUCE L. BRALEY, Iowa York JASON ALTMIRE, Pennsylvania LYNN A WESTMORELAND, Georgia TIMOTHY J. WALZ, Minnesota CHARLES W. BOUSTANY, Jr., HEATH SHULER, North Carolina Louisiana MICHAEL A. ACURI, New York JEAN SCHMIDT, Ohio HARRY E. MITCHELL, Arizona CANDICE S. MILLER, Michigan CHRISTOPHER P. CARNEY, Pennsylvania THELMA D. DRAKE, Virginia JOHN J. HALL, New York MARY FALLIN, Oklahoma STEVE KAGEN, Wisconsin VERN BUCHANAN, Florida STEVE COHEN, Tennessee JERRY McNERNEY, California VACANCY (ii) ? SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS CORRINE BROWN, Florida Chairwoman JERROLD NADLER, New York BILL SHUSTER, Pennylvania LEONARD L. BOSWELL, Iowa THOMAS E. PETRI, Wisconsin JULIA CARSON, Indiana WAYNE T. GILCHREST, Maryland GRACE F. NAPOLITANO, California STEVEN C. LaTOURETTE, Ohio NICK LAMPSON, Texas JERRY MORAN, Kansas ZACHARY T. SPACE, Ohio GARY G. MILLER, California BRUCE L. BRALEY, Iowa HENRY E. BROWN, Jr., South TIMOTHY J. WALZ, Minnesota Carolina NICK J. RAHALL II, West Virginia TIMOTHY V. JOHNSON, Illinois PETER A. DeFAZIO, Oregon TODD RUSSELL PLATTS, Pennsylvania JERRY F. COSTELLO, Illinois SAM GRAVES, Missouri EDDIE BERNICE JOHNSON, Texas JIM GERLACH, Pennsylvania ELIJAH E. CUMMINGS, Maryland MARIO DIAZ-BALART, Florida MICHAEL H. MICHAUD, Maine LYNN A. WESTMORELND, Georgia DANIEL LIPINSKI, Illinois JOHN L. MICA, Florida JAMES L. OBERSTAR, Minnesota (ex officio) (ex officio) (iii) CONTENTS Page Summary of Subject Matter........................................ vi TESTIMONY Kummant, Alexander, President and Chief Executive Officer, Amtrak 3 Laney, David, Chairman, Amtrak Board of Directors................ 3 PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS Brown, Hon. Corrine, of Florida.................................. 31 Costello, Hon. Jerry F., of Illinois............................. 35 Cummings, Hon. Elijah E., of Maryland............................ 37 Mica, Hon. John L., of Florida................................... 43 Oberstar, Hon. James L., of Minnesota............................ 47 PREPARED STATEMENTS SUBMITTED BY WITNESSES Kummant, Alexander............................................... 51 Laney, David M................................................... 70 SUBMISSIONS FOR THE RECORD Kummant, Alexander, President and Chief Executive Officer, Amtrak, response to questions from the Subcommittee............ 55 Laney, David, Chairman, Amtrak Board of Directors, response to questions from the Subcommittee................................ 73 [GRAPHIC] [TIFF OMITTED] T6682.001 [GRAPHIC] [TIFF OMITTED] T6682.002 [GRAPHIC] [TIFF OMITTED] T6682.003 [GRAPHIC] [TIFF OMITTED] T6682.004 [GRAPHIC] [TIFF OMITTED] T6682.005 [GRAPHIC] [TIFF OMITTED] T6682.006 [GRAPHIC] [TIFF OMITTED] T6682.007 AMTRAK STRATEGIC INITIATIVES ---------- Tuesday, June 12, 2007 House of Representatives, Committee on Transportation and Infrastructure, Subcommittee on Railroads, Pipelines, and Hazardous Materials, Washington, DC. The Subcommittee met, pursuant to call, at 2:05 p.m., in Room 2167, Rayburn House Office Building, Hon. Corrine Brown [chairman of the Subcommittee] Presiding. Ms. Brown of Florida. Will the Subcommittee on Railroads, Pipelines and Hazardous Materials come to order. The Subcommittee is meeting today to hear testimony on Amtrak's Strategic Initiatives. Let me start by expressing my disappointment that the Board has not approved the Amtrak fiscal year 2008 strategic plan. I do not understand why Amtrak has not followed my newest request to have this plan ready. We were told in April that it was going to be approved in May, and we were told a few weeks ago that it was going to be approved prior to this hearing. We are now 8 months into the fiscal year 2007. If the Board drags this out any longer, there will be no point in approving the plan. You have to start setting the stage for the initiatives in 2007, and we want to see them succeed in 2008. At the rate that we are going, we will be in 2008 before we ever see a final plan. I did, however, review an earlier draft, and there is good news for Amtrak. Amtrak is projected to deliver the best ridership numbers and revenues in history with the projection of 25.3 million trips and $1.5 billion in revenues. Ridership in the first quarter of 2007 increased 7 percent over last year where ticket revenues were up 14 percent. Accelerated ridership alone was up 20 percent, and with the ever-increasing price of gas, ridership can only increase. I do not think there is a doubt that Amtrak has made significant improvements in the system over the last several years and has an ambitious agenda for future improvement, but Amtrak must also address some challenges before it can reach its full potential. It must improve its on-time performance on long-distance routes, replace aging rolling stock and infrastructure, improve safety and security, and resolve the longstanding disputes between management and labor. It is particularly important that Amtrak reach a labor agreement that is fair. Most of the Amtrak workforce has gone without a renewable contract for over 7 years. You cannot reach your ambitious goal of the company with employees who feel that they have been treated unfairly. The freights have made significant progress with their contracts, and I hope this inspires Amtrak to do the same. I look forward to hearing from Mr. Laney and Mr. Kummant today about these issues. Before I yield to Mr. Shuster, I ask that Members be given 14 days to revise and extend their remarks and to permit the submission of additional statements and material by Members and witnesses. Without objection, so ordered. I yield to Mr. Shuster for his opening statement. Mr. Shuster. I thank the Chairwoman for yielding and for holding the hearing today. It seems that Amtrak has always been a contentious issue since, I guess, it was formed in the 1970s. Arguments over funding levels, corporate mission, corporate structure, allegations of wasteful spending have always been out there, but there is no argument, I think, that this Nation needs a safer, faster, more efficient passenger rail system than we have today. The Acela, as Mr. Mica likes to point out, only averages 82 miles an hour. Wow. The intercity trains cannot even compete with the intercity bus service that we have in the country today, so Amtrak needs to be better managed, to manage better its resources than it has. I read through your plan that you put in place. It looks like a good plan, but historically as I look back through at Amtrak, it always has a good plan. It just does not seem to work out the way it should, and that is imperative that we do that. I know that Amtrak has brought in new management. I would like to welcome the new President and CEO--not new anymore--Mr. Kummant, who has been onboard now for several months or going on almost a year, I believe it is. I also welcome Chairman Laney for being here before us. I know you have also brought in a new CFO and a new general counsel, so we are looking forward to that management team doing good things. We still have a long way to go, but it appears that we are hopefully beginning to see some progress even on the long- distance trains. The legacy of the 1950s was the interstate highway system, and I hope that our legacy in this new century will be a fast, efficient, high-speed rail system. It was about several months ago, maybe a year ago now--I think it was only several months ago--that we just passed in America the population threshold from 200 million to 300 million people, and it took 65 years. I was reading a newspaper and saw the projections. We are going to go to 400 million in just 35 years, and when you look at the math and look as the population grows across America, the density of the population in the corridors that Amtrak serves is going to remain dense, and so it is for the future extremely important that we have an efficient passenger rail system. It is going to be something that future generations are going to rely on. So I am looking forward to hearing from you today, and I am looking forward to working with you as we try to improve Amtrak and improve the transportation system in this country. I yield back. Ms. Brown of Florida. Thank you. Ms. Brown of Florida. I would like to welcome our witnesses today at the hearing. Our first witness is David Laney, who is the Chairman of Amtrak's Board of Directors. Our second witness is Mr. Alexander Kummant, who is the President and Chief Executive Officer of Amtrak. Let me remind the witnesses that under our Committee rules, they must limit their oral statements to 5 minutes but their entire statements will appear in the record. We will also allow the entire panel to testify before questions to the witnesses. STATEMENTS OF DAVID LANEY, CHAIRMAN, AMTRAK BOARD OF DIRECTORS; AND ALEXANDER KUMMANT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMTRAK Ms. Brown of Florida. I now recognize Mr. Laney for his testimony. Mr. Laney. Madam Chairwoman, thank you. Mr. Shuster, I appreciate your comments. I appreciate the---- Ms. Brown of Florida. Excuse me. Would you pull that mike-- yes, sir. Mr. Laney. Thank you for the invitation to appear before the Subcommittee today. I am glad to be back. I am glad to see you again, Madam Chairman. We are very glad that Congress is turning to Amtrak's reauthorization and hopeful that there will be a very constructive outcome. I will make my stated remarks very short, and you can use my written statement for reference and for questions if you would like. As you know, the last time Amtrak had an authorization was 10 years ago, and I believe it is now in everyone's interest that Congress has this discussion and, ultimately, adopts a reauthorization that provides a clearer direction for Amtrak and its role in shaping the future passenger rail in this country. It is worth reminding you that the talent and experience housed in Amtrak represent virtually all of the passenger rail expertise remaining in this country today. I believe that expertise is worth protecting and worth growing, but I know also that it will not survive unless we at Amtrak successfully continue to rebuild Amtrak's credibility with Congress and the administration, with the American public, and in the commercial marketplace in which we operate. That is our challenge. And afforded even the bare minimum of necessary operating support which we received during the last years, we are, I think, very successfully tackling that challenge; not as fast as I would like, but faster than I expected. We are nowhere near anything resembling what I would consider an end zone. Still, the progress is significant and tangible, thanks largely to the remarkable expertise and almost inconceivably steady commitment to Amtrak by its workforce. There are a number of challenges, Madam Chairwoman, as you mentioned, and I will highlight only a few. But one of the principal challenges is on-time performance, particularly of our long-distance and corridor operations on host or freight railroads. I would add, in response to your comment earlier about our tardiness in terms of the strategic plan, that apparently on-time performance has also affected the Board. My apologies. We will have a plan to you shortly, and I am glad you had a chance to see a draft. We also have a challenge with respect to our equipment. We need to replace a very old, and, some people might say, antiquated and deteriorating equipment fleet. We continue to have the challenge of the rationalization of our long-distance routes, and we need to rebuild relationships with States, particularly as we focus our energies on State corridors for the future. Reauthorization is a critical need, and in that reauthorization, we sincerely hope that there is a Federal- State match without which there would not be a very robust future for passenger rail in the near term. You mentioned, Madam Chairwoman, our labor contracts. We are very sincerely and very actively trying to move forward, and there are at least some indications of positive movement with respect to a resolution on a number of different fronts in that regard. Passenger security, on a different note, remains front and center for all of us. Those are challenges, but we have a number of remarkable achievements as well. We have reduced Federal operating support consistently. Our revenue in ridership growth, as you mentioned, Madam Chairwoman, is extraordinary. We have on-time performance levels, really for the first time, in its history of the Acela, approaching 90 percent. And I think we will be targeting 90 percent as a minimum going forward. With respect to the reduction of Amtrak's debt, we reduced it by over $500 million over the last 4 years, and with respect to the success and the growth of our State corridors, I will refer only to the States of California, Washington, Illinois, Wisconsin, the Keystone Corridor in Pennsylvania, and the continued growth on the Northeast Corridor. The catalog of these positive results could continue, and there are a few more mentioned in my written statement. But let me close with a perspective on our employees, on our management team, on the working support we have had from the Department of Transportation, and now Secretary Peters, the Federal Railroad Administration, and Joe Boardman who is the head of that agency. All of these, I think, are in excellent shape, and that is at least some room for comfort that we will stay the course going forward. Finally, I believe you have a very independent, talented and proactive Board which continues to make a difference. I thank you for the invitation again, Madam Chairman, to be here today, and now I would like to answer any questions or to defer to our President and Chief Executive Officer, Alex Kummant. Ms. Brown of Florida. Mr. Kummant. Mr. Kummant. Thank you, Madam Chairwoman and Congressman Shuster. I will also try to keep my comments brief and not cover too much of the same ground. Again, it is a pleasure for us to be here and to engage in a very important topic here of the overall strategic future for Amtrak. First, on performance and key indicators, for another year--as has been mentioned in a couple of comments here already--Amtrak will set new ridership and revenue records. There are a number of contributing factors for this that I think we all understand quite well: the rising cost of gasoline; we have also added frequencies in a number of key States--California, Illinois, Pennsylvania--and there is clearly a shift in the ridership in terms of really looking for other modes. In the Northeast, the challenges of air travel combined with gas prices are clearly factors also as to why the Acela ridership has grown, as was referenced earlier, at 20 percent year over year. Another key ingredient which was referenced is the very strong, additional on-time performance of the Acela, reaching 88 percent, year to date, for this year with a target still of 90 percent. This improved on-time performance is a function of our investment in the Northeast Corridor infrastructure as well as sustained improvements in day-to-day operating efficiencies. Revenues for the year are 11 percent higher than last year for the total system. In addition, we continue to improve our safety numbers, and we are increasing our focus on passenger security. We have not assumed any new debt in 4 years, as Chairman Laney mentioned, and at the same time, we have also paid down, as was also referenced earlier. So, again, all of our indicators are moving in the right direction. Going forward, clearly we have challenges. All of this good news, again, does not mean that we do not have serious issues to tackle. It has become clear to me over the first months here at Amtrak that we are really at a crossroads. The company must do everything in its power today to position itself for the future. The decisions we make, the service we provide, the product we deliver today, will determine if Amtrak will truly play a key role as a provider of passenger rail service down the road. In order to realize the potential, we are developing a strategic plan, which we will have to you shortly, that focuses on continued companywide cost reduction initiatives that will help reduce Amtrak's reliance on Federal operating assistance. Increasing revenue is also, clearly, a key element of the plan and will hinge on Amtrak's ability to add frequencies and to improve revenue management. Our other key goals and objectives include containing cost growth, improving financial transparency, providing a safe environment for employees and passengers alike, improving the management of our human capital, and, finally, conserving natural resources. By increasing revenue and containing costs, it is our intent to reduce our dependence on Federal operating support over the next 5 years. Rail infrastructure continues to be a key issue, as you mentioned, of long-distance performance as well. America's rail infrastructure capacity is significantly stretched, particularly in those corridors that are most likely candidates for expansion. No matter what else is done, we will have to address capacity bottlenecks and shortfalls in many parts of our national rail system, most of which is not owned by Amtrak. Central to our strategy is to position ourselves to expand State corridor service where circumstances and resources permit. It is where the growth and ridership and revenue will lie in the years ahead. If you want to look at models of successful State programs, again as mentioned before, California, Washington and Illinois are great examples. Overall, our goal for our reauthorization bill is to solidify Amtrak's role in providing intercity passenger rail service. That includes a Federal policy for corridor development and for the improvement of our long-distance services so that they better link State and regional corridors and become a more relevant transportation alternative. Amtrak's reauthorization should also help us take advantage of opportunities to connect Amtrak's intercity trains with other modes of travel. For each of the strategic goals and objectives we are developing, we will outline a series of specific actions to be taken. It is clear to me that our future hinges on our ability to become more cost efficient and to develop a superior product for our passengers. As I have stated, the central part of our strategy is to focus our efforts on meeting the needs of States, but while we work with States to develop and to expand intercity corridors, we will not forget or overlook the importance of the Northeast Corridor. The Northeast Corridor is the realization of what a mature corridor should be. As future hearings will address Amtrak's specific capital needs, at that time we will talk more about what we need to do and would like to do in the Northeast Corridor. Again, in conclusion, it is remarkable that a few years ago, many felt Amtrak would continue moving into more and more serious difficulty. That is no longer the case. Reliability, mobility, and environment, these are things that consistently resonate with America's traveling public, particularly in an era of rising fuel prices, highway congestion, and heightened interest in environmental protection. Amtrak continues to be the most promising and welcomed alternative. Thank you for your time, and I will be happy to answer any questions. Ms. Brown of Florida. Thank you to both of you. You know, if you do not have a plan, then in the next 5, 10, or 15 years, we could end up anywhere. And so that is why the plan of having those benchmarks and of having that information is important for us as we develop our budget, as we develop how we can assist making sure that the infrastructure is in place. And so I would like for you all to explain to us when we get back--it's June 12th, 2007, and we have been asking for this since April-May. I mean we really started asking for it in January when we took over the House of Representatives, when we started a new direction for Amtrak. So as we leave--we are going to have to adjourn for about 45 minutes--perhaps that will be the first question that you could answer when we come back. We have three votes, and then we have got to take our class picture, so we will be back in about 45 minutes. Mr. Shuster. You are going to get plenty of time to think about it. Ms. Brown of Florida. Yes. Mr. Shuster, do you want to add anything to that? We will start off with that. Thank you. [Recess.] Ms. Brown of Florida. Okay. We can come back to order. I think I had given the first question, so you have had plenty of time to tell us what the status is and to explain for us why we have not gotten the information we requested and how we are going to move forward. Mr. Laney. Let me answer that question, Madam Chairman, if I may. We have, as you know, a new President and Chief Executive Officer. We have a virtually entirely new management team, senior management team. We have three of five Board members who are relatively new. And I guess I will assume the responsibility for the delay because it has been my job, as best I can, to align what amounts to very independent, very involved opinions, all very focused on the future of Amtrak. And we have been at this process longer than I would like. I think we are all a little weary of it. And we have known, at the same time, that you and your staff have been very anxious to have a copy of a final, publishable version of this plan. As you know and I know, you have a draft, and with that draft came a little bit of a cautionary note that the front end, first few pages of that, would change fairly dramatically or might change fairly dramatically; and in fact, they have changed very dramatically. But the financial piece of that, as well as the strategic targets and actions over the next 18 months and beyond to deliver the results that we have focused on, are there very clearly delineated in the draft that you have. You should have the final copy, I believe, of the plan no later than midweek next week. And in fact, I would be able to deliver one to you today, but there are a couple of outstanding issues that are very material that need slightly more refinement and resolution. And part and parcel of the challenge is we have Board members who are scattered to the winds and who have their own independent lives and livelihoods they need to take care of, and it is hard to get everyone at the same place at the same time. It is no excuse. It has been my decision to slow it down for quality's sake. I would much rather deliver something of higher quality than of higher speed, so we will have it to you shortly. My regrets. Ms. Brown of Florida. Well, let me ask one other follow-up question here. Mr. Kummant has been the Amtrak President and CEO since September 2006. How would you rate his performance? Mr. Laney. Well, he probably cringes as I punch my talk button and begin the discussion here, but Mr. Kummant has stepped into a whirlwind of activity, and has been on a very steep learning curve, and has learned and has understood this business, principally I think because of his background and his training, faster than I could have imagined. I expected that at the time we hired him, and he has done a superb job of assembling a senior management staff, and has in effect taken control of an organization that was already moving fairly quickly forward in a direction. He picked up on that direction and gave it a little more shape and direction, and worked very carefully with the Board to try to deliver what you are about to see next week. So I give Mr. Kummant a very strong "A" for performance over the last few months. Now, that could slip, of course---- Ms. Brown of Florida. Of course. Mr. Laney. --but so far so good. Ms. Brown of Florida. So far, that is good. That is very good to hear, too. Mr. Shuster. Mr. Shuster. Thank you. I mentioned in my opening statement the importance of some of these high-density corridors, the Northeast Corridor I think being the number one corridor in the country for your train service. And I see you have had some significant improvements there, not only in ridership but in improved revenues. Have the folks at Amtrak done any recent studies on the price tag of what it would cost to make the Northeast Corridor a truly high-speed rail corridor where you could have a train getting speeds up to 180 miles/200 miles an hour? Mr. Kummant. Let me answer that in a general case. First, what we have looked at is a gradual increase of velocity and, really, of the reduction of trip time and of the reduction of slow orders. The notion of even taking that corridor to sort of a European high-speed standard is really, frankly, very remote, given the commuter traffic on that line as well. And we do run in a mixed mode. There are something like 50 freight trains on that lane as well. So the notion that it is going to be a true, dedicated high-speed line is probably not in the cards for a long time. What we are looking at and, in fact, are in the process of launching--we are meeting, in fact tomorrow, with very high- level folks from all of the Departments of Transportation, the States, and the high-speed corridor--is to really create a capital master plan looking out over the next 10 to 20 years in order to identify what really needs to be done on capacity overall. So that is: What do we need to do with bridges? What do we need to do with tunnels? How do we get through New York City faster? How do we get through Baltimore faster? How do we expand slots for commuters? How do we increase overall train miles for Amtrak? So that work will be going on here very seriously over the next year. But as to the notion of pure velocity, I would say it is highly unlikely you will see much more than what we see at our peak in Connecticut and in Rhode Island of 150 miles an hour. Mr. Shuster. And unlikely unless we build a dedicated line? Mr. Kummant. Yes. It would have to be, really, a dramatically new structure. And in fact, you would have to decouple the commuter network from our network because it is unlikely that you would really mix those two modes. Mr. Shuster. Would you have to put a 100 percent dedicated rail or---- Mr. Kummant. Yes. I mean that would be the extreme. I would imagine, you know, you might have to put some sort of--and I am just making this up, and there are probably people cringing in the audience, but I mean you would have to put major bypasses around cities in order to do that---- Mr. Shuster. Right. Mr. Kummant. --of probably large sections that would be completely new at a very high cost. I would say there is a great deal that we think we can do with the existing structure, and the real trick here is not so much reaching higher speeds, but it is reducing disruptions. Again, an example is we drop down to 20, 25 miles an hour for a pretty long stretch through Baltimore. So if you would eliminate that, you would get a whole lot more out of that than if I took 150 miles an hour to 160 miles an hour through some of the wide open stretches. So it is really reducing those rail delays that is key. Mr. Shuster. Do you think you can get the Acela up to the speed of 110 miles an hour? Mr. Kummant. Well, on an average basis, I would have to talk to the engineers about that sort of calculation, but we do hit 135 south of New York, and we do hit 150, again, north of New York, and I think we can certainly--south of New York, there are a lot of projects. The quality of the catenary, the actual conductive wires that run over the track, is something that we will be gradually renewing south of New York, and that is very much a determining factor as well on velocity. So there is a lot we can do. Mr. Shuster. I know the Keystone Corridor has been very successful--Harrisburg to Philadelphia. The average speed is 110; is that correct? Mr. Kummant. Yes, I think we get up to that. And you know, we cut--I do not know--something like over a half an hour in travel time, and we are up to 85 percent on-time almost. So---- Mr. Shuster. It has been very, very successful. Are you going to be able to use that as a model or to duplicate that in other places in the country? Mr. Kummant. Yes. I think there are some unique issues there. One is that there are very few highway crossings and very few road crossings there. It was a very well-engineered railroad to start with. It was originally electrified. I think there are a couple of other areas around the country we would like to look at, but I think one of the more interesting things as well is to look at some of the bigger corridors between population centers where, nevertheless, we could cooperate with the freight railroads and perhaps with major capital infusion. If you look within Florida, Florida certainly has a great population center, opportunities out of Miami. D.C. south to Richmond is very congested. There are very big needs. If you look at L.A. North to the Bay Area, there would be opportunities there. You know, you are talking about significant capital, but you are also talking about significant population centers. Detroit to Chicago would be an example. There is a 35-mile stretch across Indiana that is very difficult to get across, but we actually own almost 100 miles of track into Michigan where we run almost 100 miles an hour, 95 miles an hour. So there is a lot, I think, around the country that could be done. Mr. Shuster. I have one last question. I see my time has expired. Are we going to get another opportunity? Ms. Brown of Florida. Yes. Mr. Shuster. Okay. Just really quickly, how many high-density corridors are there in the country? I think I read somewhere there are 17. Does that sound right? Mr. Kummant. Forgive me, I would have to ask. There are designated corridors--I can look over my shoulder here. There are 13 designated corridors. Mr. Shuster. All right. Thank you. Mr. Kummant. Sure. Ms. Brown of Florida. The Chairman of the Full Committee has joined us, Mr. Oberstar. First of all, let me just thank you for conducting the last two hearings when I had to be in Florida with family obligations, but I know no one missed me because the transportation guru was here. And I am just really pleased with the leadership that you have provided for our Committee, and we are moving forward. I will turn it over to you at this time for any comments and questions that you may have of our panel. Mr. Oberstar. Thank you, Madam Chair. On the contrary, you were very much missed. Your insight and your driving force and your commitment to Amtrak and to passenger rail service and to the whole issue of freight rail is well-known and greatly appreciated. And we missed you, and we certainly hope your family, your mother and grandmother, are doing well. Ms. Brown of Florida. Yes. Mr. Oberstar. That is reassuring. That is wonderful. Mr. Kummant, you come to us, for once, with some good news about Amtrak. It is not a surprise because those of us on the Committee have been following things very closely. And I liked Mr. Shuster's question, but I did not like the answer. When are you going to get up to speeds of 185 to 200 miles an hour as they do in Europe? It is a good question. The answer is, as you said, not for a very long time, maybe not at all. I cannot accept that answer, because we can achieve those speeds. We can improve. It is a matter of priorities. It is a matter of capital investment. It is a matter of the mechanics of the operation of our passenger rail system, and whether this Nation--it is not whether Amtrak is willing but whether this Congress, speaking for the people of the country, is willing to prioritize and to make the investment that we need to make in the capital account to make Amtrak the best that it can be, the best that we know it can be. You cited a moment ago the need for improvement in the catenaries. That is just one of the capital investment needs of Amtrak not only in the Northeast Corridor, but it is one of many capital investment needs across the country. I have to tell you that I am disappointed that 3 months ago I asked for a listing of the capital investment needs of Amtrak in a meeting that we had in my office, and it took 2-1/2 months to get a document. Now, if Amtrak is serious--and you know what your needs are; you know what the requirements are; this was not a list that I asked for as an endorsement by Amtrak, but as simply a listing of all of the capital account requirements that then we could evaluate and prioritize and decide which ones we were going to fund first and which ones we could get money through the Appropriations Committee for, those for which we could bring the administration along, but it did not need to go before the Amtrak Management Board to be reviewed. I have to tell you that. I am very, very disappointed about that attitude. I have said many times how my own experience with passenger rail deteriorated over the years. I have seen it unfold before my eyes. When I was on my way to graduate studies in Europe in 1956, I went by train from Minneapolis to the East Coast. The first leg was on the Milwaukee 400-- 400 miles in 400 minutes. That was the premiere passenger service of its time; at least we thought so in the Midwest. Now you can hardly get to Chicago by air in 400 minutes. By the time you drive to the airport, park your car, go through security, have a ground stop and an air hold and a weather problem, you cannot even do it by air. But we can do that by rail if we ignite the Midwest Rail Initiative, which was one of the projects recommended in the study of passenger rail initiatives, corridors, in pursuance of the direction and the funding for it in ISTEA of 1991. I was the author of that language. So of nine of your studies, six were recommended. The Midwest Rail Initiative was the primary hope for success. Let me ask you and Mr. Laney: What does it take, now going forward, to sort of inspire the Midwest Rail Initiative to get started? Mr. Kummant. Well, I think--well, what we are working very hard at, as I have alluded to in the past, is in pivoting our whole organization to face the States. So as we engage with the State DOTs and with the States and with the groups of regions, I think we really can articulate their particular needs, and, as you said, we can come up with very specific capital plans. But we also have to do that in conjunction with the freight railroads because, again, those are clearly along those rights- of-way, but we continue in those dialogues very intently. I am very interested, for example, as I have alluded to before, in looking at Chicago-Detroit. There is, I think, a large but manageable piece of capital that would get us across Indiana much more quickly. And I think all of those dialogues are occurring with a lot more intensity as we pivot our whole organization to make that our future. We have said very clearly that, going forward, the States are our future, and that is really where the ridership is going to be. Mr. Oberstar. There is the Northeast Corridor where you have this massive population concentration, where there is a rail infrastructure in place for passenger service, and it can go all the way down the East Coast to Florida. Then you have the Midwest. Then you have the long line across the northern-tiered States to the Pacific Northwest, Seattle. Then there is the California connection where, as your figures showed, passenger service is growing some 21 percent, and the State of California is a willing partner. Here in the Midwest, within 300 miles of Chicago, are 17 percent of the flights in and out of O'Hare. If we removed 15 percent--even, say, 10 percent--that would be a reduction of about 100,000 operations at O'Hare Airport, freeing up short- haul airspace and taxiways and landing and parking space. Free that up for long-haul service, which is far more valuable than 300-mile short-haul service in aviation, and provide that by rail. St. Louis lost its nonstop service to London Heathrow when Carl Ichan bought TWA, sold it off, sold off that nonstop route to American Airlines. Then, eventually, TWA declined and was absorbed by American. They have no nonstop service abroad. You could take a high-speed train from St. Louis to Chicago, be there in 2 hours, have your bags checked through security, carried on a secure railcar, check right into O'Hare and, as a passenger, board in a secure environment and get frequent flyer miles for your rail travel, fly off to London or wherever else in Europe that passengers typically go from that airport, and continue that service Chicago, Milwaukee, Madison, Minneapolis-St. Paul. Then you cited the sections going east. That makes so much good sense to have an intermodal passenger rail service system. We need the Midwest Governors to get on board and to be part of this thing. I have a problem in my own State. My own Governor of Minnesota does not see the bigger picture, but I am working on that. I would like Amtrak to take some initiative here and to lead the way. Stimulate the States. Motivate them to get going. Now it has come back to the Northeast Corridor. As Mr. Shuster said, we would sure like to see much higher-speed traffic on the East Coast. You would have a massive growth in passenger service. Ms. Brown has advocated this many, many times throughout hearings we have held over previous years. You mentioned that in the Baltimore area, speeds are reduced to 20, 25 miles an hour. What does it take to upgrade the speeds there? Mr. Kummant. Again, that is the fundamental tunnel issue, and that is a multibillion-dollar issue. It is probably about a $2 billion issue to build either a new set of tunnels or to entirely refurbish those tunnels. If I may, sir, I would like to go back and just, again, tip my hat to Illinois. You pointed out the tremendous opportunities there. Now, we are talking about the conventional speeds, but that is a State that has doubled its commitment, its financial commitment, and it is pushing very, very hard to even put, you know, multibillion dollars out from a State level. So I think that is a great story, and we expect to continue to work very closely with them as well. But, again, Baltimore--getting back to Baltimore, again, a multibillion- dollar new tunnel issue is the fundamental---- Mr. Oberstar. That needs to be spent for security purposes, a good deal of it for safety purposes and the balance for improving travel speeds in the corridor. But give us some figures on this. Give us some hard numbers and analyses and a suggested incrementalization of the investment. We will address the funding issues. We will be the advocates for it here on this Committee, but we need you to help us with the numbers. You are the ones who are "in the know" on the capital requirements. I will withhold further, Madam Chair, at this point. Ms. Brown of Florida. Thank you, Mr. Chairman. Mr. Brown. Did he leave? He stepped out. Okay. Mrs. Napolitano. Mrs. Napolitano. Thank you, Madam Chair. I was reading also, with great interest, a portion of our memo that gives us information, and it talks about the track conditions of the private rail that you use. In what condition would you need them to be to be able to provide either faster service or on-time delivery service? Because if they are not upgrading their infrastructure, you are suffering. How is that affecting you to be able to carry out your mission? Mr. Kummant. Sure. There is no question it is a significant issue. We, for example, have just signed a new 6-year agreement with Union Pacific where they have specifically designated a reduction in delay time that is associated with slow orders. So there is no doubt, if you look at some of our major routes, slow orders are a big issue for us and hurt us on some of our long-distance routes. We also have in the summer heat order issues where, when temperatures rise over a certain degree, different railroads have different approaches to slow down their railroad for safety reasons; and that, in a sense, is also an infrastructure expenditure issue. So, again, it is a difficult dilemma for the freight railroads. They are fundamentally geared economically toward supporting freight and freight velocity, and they are trying to generate a return on capital for their shareholders. Nevertheless, clearly, there is a bit of a natural conflict with the type of slow order reduction velocity we need to really be effective. So that is a challenge, and we continue to work through that with each of the railroads. Mrs. Napolitano. Well, given that, especially on the West Coast, you are going to have an increase in traffic that is going to further constrain the use of the UP or of the NSF lines, how are you working that out? Are you working with not only the railroads but also with the States to be able to find a way to be able to do all of the above--upgrade the infrastructure, find a better relationship so that you will be able to share more of it? Because they are going to be increasing the use of their rail capacity. What will you do then? Mr. Kummant. Well, again, there are no silver bullets there. It is day-to-day management. It is bringing the respective organizations closer together. We are spending more time with their dispatch operations to understand how they can dispatch more effectively. Our engineering groups do get together. Again, we have got very specifically targeted capital programs to reduce slow orders. And going forward, I can certainly envision, as we talk about Federal-State capital grants or matching grants, that those funds can go to debottlenecking very specific capacity constraints. And then that is an area in which we will have to continue being active, going forward, where we just really sit down with the freight railroads and say, you know, "Here are a whole series of projects. What is the schedule? How do we get through them? How do we fund them?" it is about capital. It is about reducing constraints. At the same time, certainly, every projection one reads over the next 15 years is still for dramatic freight volume increase, so there is no doubt there is an overall challenge with the capacity of the entire freight network. Mrs. Napolitano. How are you planning to address it? Mr. Kummant. Well, again, we do not have a simple solution to that other than going through, identifying and prioritizing bottlenecks and working with the freight railroads to put capital into those areas. At the end of the day, it is an intersection of essentially a private company and public policy where--and this is just a personal view--we are collectively going to have to find more and more ways to get public capital into debottlenecking the overall rail network. Mrs. Napolitano. Well, Amtrak got to reach much of the ridership gains in recent years due to collaborative efforts with the State governments. Can you describe what those partnerships have been? How have they been successful? Are you continuing to press forward on those? Mr. Kummant. Sure. Great examples, again, have been mentioned here in some of our opening comments. California, for example, since 1990 has put somewhere between $1.8 billion and $1.9 billion into the railroad infrastructure themselves, and those are unmatched dollars. Illinois has done something similar. They also have doubled their support number over the last couple of years. The State of Washington has done a very good job in collaborating with BNSF in terms of putting something between $300 million and $400 million into their rail infrastructure. And if you look at those three States, that is where the frequencies are; that is where the real growth has been; and that is where the State corridors are doing very well. Mrs. Napolitano. So there is a correlation, then, between the success for economic development, so to speak, and the ability to get your goods delivered on time. Mr. Kummant. Very much so, yes. Mrs. Napolitano. Thank you, Madam Chair. I will wait for the next round. Ms. Brown of Florida. Yes. I see that the Ranking Member, my colleague from Florida, has joined us. Mr. Mica. Mr. Mica. Thank you. I am pleased that the Rail Subcommittee is asking for some of Amtrak's strategic reform initiative information. I probably share the Chairman of the Full Committee's interest, too, in trying to get in the United States one high- speed rail corridor. I was not here during his questions. I was preoccupied. It was my understanding that Mr. Oberstar had requested information on what it would take to get the current Northeast Corridor up to a higher speed. Is any information being prepared in that regard? Mr. Kummant. Yes. I mean, we certainly have prepared and have submitted quite a bit of information on trip time reductions which, in the end, are average velocity improvement. Mr. Mica. Right now, our average speed is, what, 84 miles an hour? Mr. Kummant. I understand it is something in that neighborhood. But I do understand his fundamental question or that the question at hand was: Will we anytime soon exceed 150 miles an hour as a top speed? Given the current overall structure, I said that that would be highly unlikely, but we do have a whole series of projects that includes continuing trip time reduction. We are also, in fact tomorrow, launching a capital master planning effort in a collaborative effort with the States along the Northeast Corridor where we will go through and really look at a 20- to 25-year vision on how do we really grow the entire corridor, what is the future of the commuter, where do they need slots, how do we increase velocity? Mr. Mica. Okay. Commuter versus high speed, you are going to look at both? Mr. Kummant. Yes, sir. Well, we are looking at the corridor in totality in terms of---- Mr. Mica. I think you--and again, I was not here, but first of all, what is the maximum speed you could get out of the system if you put into play all of the improvements that you could out of the current trackage that you have? Mr. Kummant. Well, again, our peak velocity is 150, and I would have to go back and look at what an overall average speed trip time would be. Mr. Mica. I have not seen anything that exceeds like 85, 89 miles an hour. Is there something that you have? Mr. Kummant. It is probably not dramatically more than that, but we would have to go back and look at that. Mr. Mica. And I think you answered his question. To get to TGV speeds or true high-speed rail, you would have to develop a separate corridor? Mr. Kummant. Essentially. Or you would have to take major segments of the corridor and develop a dedicated line. Mr. Mica. Why not have us put out for bid a contract on the Northeast Corridor to put in high-speed service? Mr. Kummant. Well, again---- Mr. Mica. I mean that is not your decision. That is Congress' decision. Would you oppose that? Mr. Kummant. I do not oppose in principle looking at new alternatives, looking at---- Mr. Mica. Actually, it would do quite a bit to free up that corridor for both freight and commuter service. Mr. Kummant. Well, it is a very broad question. Mr. Mica. If I took Acela, your high-speed service, off there and we just did commuter and local and freight service, wouldn't that dramatically free up the corridor? Mr. Kummant. Well, if you look at overall train miles, we are still the dominant user in train miles. So certainly it would open up a corridor for commuters, but you would essentially lose, you know, 10 million riders that we have today. Mr. Mica. Ten million riders for what? Mr. Kummant. For noncommuter service. That is the Amtrak and---- Mr. Mica. It is Acela? Mr. Kummant. It is Acela and our regional product, yes. Mr. Mica. Well, again, you have heard of Richard Branson and what he did. He bought into the two north-south lines--one going up towards Edinburg, the other having 33 million passengers. Your total passengers are, what, 26 million for the entire system? Mr. Kummant. Twenty-five million. Mr. Mica. Twentyy-five million for the entire system. Mr. Kummant. Right. Mr. Mica. He just took those two corridors--and we had the rail folks in-- he put 10 billion U.S. dollars and 5 billion pounds into it. He put in all new equipment. He increased the ridership from 33 million to, I think, in the 44-million range, and he paid a dividend for the last 3 years. Now, I have asked continually for you all to separate out the Northeast Corridor activities and finances. Has that been done yet? Mr. Kummant. We are in the process of really restructuring our whole system. Our whole financial reporting system is---- Mr. Mica. Can you tell what it costs to run the Northeast Corridor? Mr. Kummant. You can essentially tell what it runs, but we have legacy financial systems that we are working through. We have a new CFO, a new CIO. It is a very broad effort to really improve the financial clarity and transparency that I have committed to. Mr. Mica. Do you have the authority to contract out for services? Say if we wanted to take the Northeast Corridor, which is the only asset you have, you accumulate scattered assets and bid that out, both for the development of the corridor and for the operation of the corridor, do you have the authority to do that now? Mr. Kummant. It is really varying opinions on that because there is a whole underlying tax structure of the organization. It is not entirely clear how easy it is. Mr. Mica. It might have to be separated out by law? Mr. Kummant. That is an under---- Mr. Mica. It could be done. Mr. Kummant. It is not a piece of work we have worked on over the last year. Mr. Mica. Finally, I went up to New York City and got a briefing on the Madison Square Garden moving Penn Station; and, first, my eyes were opened. I never realized that Farley Square, the Farley Station, which is the principal rail station when all the mail was brought in, I guess, from the '30s separated in Farley Station, which is about a block long. You ought to go up and see it. Farley Station is basically vacant property. It is only the Federal Government could screw up a potentially productive asset, leave it sitting like that. I think they said they had 12 stamp windows where they sell stamps. And the final decision on relocating the rail, part of the rail service in that location, part of the hang-up is getting Amtrak to make decisions. I am sure it is part of a larger picture. Do you have any idea when you would be prepared to make a decision on developing that asset? The plan, as I understand it, is to take Madison Square Garden, rebuild it where Farley Station is. That would be a new passenger terminal. Then go back, got Madison Square Garden, put a couple towers and additional service that would be sort of intermodal and sort of cross-platform transfer. When do you think we will be able to move on that? Mr. Laney. That is not our decision. Mr. Mica. Who would make the decision? Mr. Laney. The decision--we are part of the decision, and we are moving forward quickly, but it is led by some developers in New York; also, the State of New York; also, the City of New York. There is a development authority involved and a number of other parties. We are working as cooperatively and constructively and effectively as we can to move it forward, but it is a very complicated project, as you know. We would love to see it materialize. I think a lot of the oddsmakers put it at less than 50 percent. Mr. Mica. Well, there was about $300 million, I think, some seed money from Congress. The deal could be put together if everybody at the different governmental levels would make the decision, because there is nothing but revenue to be gained out of a project like that. It will support itself. I am just a small-town developer, but that project will work if we get a pledge from you all to continue working, which I am sure you will do. I have more questions, but I will reserve the balance of my time. Ms. Brown of Florida. All right. We want to give him as much time as he needs. Let's go to Congressman Cummings, then come back to you. Mr. Cummings. Thank you very much, Madam Chairlady. Mr. Laney, I have always had concerns over the last several years about Amtrak not getting the kind of support that it needs to sustain itself. As one who lives in the northeast section along that corridor in Baltimore, a lot of my folks depend upon Amtrak; and to that end I want to ask you just a few questions. First of all, going back, there have been all kinds of proposals about the States taking more--putting more money into Amtrak services. I mean, is that where the Board is going? Mr. Laney. The short answer is, yes, that is where the Board is going. Because, ultimately, we need support from a capital standpoint for growth; and as the Federal operating support diminishes, we are going to need some sort of supplemental support from States involved. A lot of States, as you heard already, are heavily involved on an unmatched basis, but we have been pressing very hard for the importance of an addition of a match funding program of some sort in the reauthorization. But, yes, sir, the short answer is yes. Mr. Cummings. With regard to capital funding--I don't know what you may have discussed before I got here, but I apologize to keep repeating--Amtrak's own fiscal year 2008 grant seeks $1.5 billion, is that right, on Federal funding--in Federal funding, including $760 million in capital funding, is that right? Mr. Laney. Yes, sir. Mr. Cummings. The DOT Inspector General has indicated that at least $1.4 billion, or roughly double what is requested by Amtrak, is required to keep the system from falling further into disrepair. Are you familiar with that? Mr. Kummant. Maybe I can chime in briefly. I believe the DOT Inspector General suggested that for a total funding level, including the operating support number, that he felt we would need 1.3 to 1.4 billion. So I believe the number that we are talking about is an all-in number, which actually is fairly consistent with our view. Mr. Cummings. So what do we need for capital repairs and maintenance. Is that the figure you are saying? Mr. Kummant. The $700 million really includes all those figures. Mr. Cummings. Now where are we on this labor agreement? I spoke before with the unions, must have been a month ago; and, you know, when they told me it has been 7 years, I just wondered why is it taking so long to come up with an agreement. Mr. Kummant. Let me address that, sir, if I may. First, I share that. I would love nothing better than to have that behind us so we can really get on and run the railroad. We are in the middle of actually very serious dialog with three different unions. We have one deal that is out for ratification, one that is I believe very close to a handshake deal to move forward, and another where we have had a high- level discussion and an agreement to come in and have a very detailed discussion. I think, as you know, the issues we really have on hand, first, we have put a very competitive pay package on the table that is very similar to what was just ratified with the freight railroads. So we are very consistent there. There does remain, obviously, a very difficult question of the unions asking for a back pay number. That back pay number in total would have a $200 million price tag on it. What we have on the table is a bonus payment, which is less per person clearly than the total back pay but is something that we can fit into our total financial profile. So, absent some sort of action entirely outside of our financial ability, that $200 million would really be impossible for us to deal with. But, at the same time, I do think that there is a number of discussions and very serious, honest discussions we are having that are moving toward a potential agreement. So we do have a bonus payment on the table, we do have wage rates that are very competitive with the freight railroads, and we are clearly--and I am sure you have heard this. What is very important to us is workplace flexibility issues, and that often becomes one of the sticking points in our discussions with the unions. Mr. Cummings. I see my time is running out, but let me just ask this last question. The differential between--you kept mentioning freight, and I appreciate it, but what about the difference between Amtrak workers' pay and, say, transit agencies, other transit agencies? Mr. Kummant. Some of those gaps have grown; and, honestly, that is the result of only having some COLA for 7 years. Sometimes you will hear gaps referenced that will be much, much narrower after a deal. But there is no doubt that large gaps have opened up along many of the trades and many of the types of occupations, and that is a big concern, and that is another reason that I very much would like to get some deals done. We will never be able to head to head completely compete with some of the very high-paid railroads, for example, Long Island Railroad, but we can close that gap substantially. Mr. Cummings. May I ask one more question, Madam Chair? Just one. Ms. Brown of Florida. Yes, sir. Mr. Cummings. Just one. I guess one of the things that concerns me is it seems as if we--the argument that you hear made all the time is we pump a lot of money into air, the air industry and others, and then when it comes to trains--the other day somebody stole my car, and I took the train over from Baltimore. And, I tell you, I had a chance to really talk to some folks. It was a blessing in disguise. But I said to myself, these people get up early--I am talking about I caught the train at 6:15--and they work hard. I am trying to figure out when you all look at your numbers are you all saying we just accept what we are told to accept? Do you all come up with the numbers? Does somebody else come up with them? Because, in other words, I am trying to figure out can we do more or are you all in the position as the Board to say, look, this is what we need to really do this, and this is what we need to run a first rate--and do you ever say, look at what you are doing for the airline industry? But we have got hard-working Americans getting up at 4:30 every morning trying to make it and then these employees doing the best they can with what they got. Do you ever make any of those arguments? Mr. Kummant. We have got a great workforce. Mr. Cummings. I know. That is my point. Mr. Kummant. I will say this. The Board has moved substantially, and the numbers that we put on the table in March are very, very different and I think show a real commitment to trying to get there. So I would say we are doing everything we possibly can, and I am personally involved, I personally, through the numbers. I see the comparisons. So I say it is a very personal issue for me, and I am very committed to do what we can, and I think we have got some very fair packages on the table. Mr. Cummings. Thank you, Madam Chairlady. Ms. Brown of Florida. Thank you for raising those issues, all of the Members. Let me say for the past 6 years we have been doing all we can just to keep Amtrak afloat when the administration provided zero budgeting they recommended. So now that we have a change in leadership in the Congress I feel that we are moving forward and we are making progress, but it is very important on this one particular area in the area of labor negotiations and agreements that we do come to some conclusion because we want to move--I mean this Committee--we want to move the industry forward as we move freight; and we want to move Amtrak forward, also. So as a follow-up question, one that I have heard a lot about, back pay. It has been since 2000 when the contract expired, but the Amtrak board decision not to give back pay, can you talk to me about that? Because it is a major problem. It is like the story of the chicken and the pig. They have given all, the Amtrak employees. So where are we with this back pay issue? Mr. Kummant. It is no doubt a sticky problem; and let me go back a little bit, to 2002. David Gunn actually sat with a group of union leaders and laid out five principles for labor settlement back in 2002. The very first one is the freight railroads had just agreed to a deal; and he said, we will match that freight railroad deal or be competitive with that deal. Number two, we need workplace flexibility; number three, we need health insurance containment; number four, no workplace flexibility will result in a furlough of any employee; and, number five, we will not offer back pay. That was back in 2002. The intent at that point was for all parties to quickly try to move to some sort of resolution. Unfortunately, here we are 7 years later; and that one principle has now ballooned into a $200 million issue. Again, that alone, if you were to say, hey, let's just write a check for that, we are not capable of doing that within the framework of our own financial structure. That is the simple reality of it. We can probably meet on a bonus payment something between 30 and 40 percent of that, and that is the basic structure, the types of offers we have on the table today for the back pay issue. Ms. Brown of Florida. Mr. Laney, can you speak with that, as chairman of the Board? Because, I mean, the Board has to, I guess, approve whatever recommendation. Mr. Laney. Yes, ma'am, we do. I don't know that I can add anything to that. Ms. Brown of Florida. I just want to hear you on the record where you stand. Mr. Laney. Well, let me just say that I have been here since about the time David Gunn mentioned or laid out to the union those principles, and I agreed with him then, and I agree with those principles now. The ultimate issue from our standpoint is workplace flexibility or, as you have heard it called otherwise, work rules. Without some additional flexibility in a significant way, there is not much future from an economic performance, financial sustenance standpoint for Amtrak, as far as I am concerned. Back pay is a sticking point, but, as President Kummant has just said earlier, I think we are within striking distance of some resolution with our major unions, and I would like to see us go there. It would be very helpful for all parties to move forward and move past the back pay issue. Ms. Brown of Florida. Okay. I would like to ask unanimous consent that Mr. Baker be allowed to participate in today's hearing and sit in with questions to the witnesses. Without objection, so ordered. Mr. Baker. Mr. Baker. Thank you, Madam Chair. I appreciate the courtesy extended and that of other Members and the witnesses who are anxious to get on with the matters at hand. Mr. Laney, I want to revisit what I think I heard you express a moment ago relative to workplace flexibility. Your response was to the point--and I want to make sure that I do not mischaracterize--that without appropriate flexibility and workplace environment that the financial future of Amtrak is cloudy at best. Mr. Laney. The short answer is, yes, sir. There is so much pressure in the rail industry generally and on ours in particular in terms of efficiencies from a financial standpoint, and our biggest challenge from a financial standpoint is our labor costs. Mr. Baker. Let me, if I may---- Mr. Laney. Can I add one thing? Mr. Baker. Certainly. Mr. Laney. What we envision over time is, as you have seen and heard from all Members, is there are a number of pressures, whether it is rising trends in gasoline prices or congestion in air and highways and the inability to fund an expansion enough to handle the loads of traffic on our highways, there will be rising levels of demand for rail. We have got to be able to address that growth and address it from a financial standpoint in terms of efficiencies that we cannot deliver right now without---- Mr. Baker. I certainly understand. I don't think we want to be in the position of the more service we offer, the more money we lose, which gets me to the operational metrics. I have been concerned--and let me acknowledge at the outset I have not been the most ardent of Amtrak supporters, but it is not because of the disagreement with the basic purpose of the operation. It has been with a frustration over the lack of what I call appropriate financial metrics to understand where the pressure points may exist and to what extent services may be modified or changed in order to achieve what I believe is the intent to provide economical, on-time service to people who otherwise would not be served by any other provider. To that extent, would either of you have--or let me back up. Since my last visit to this subject matter over the last 18 months, have there been no reporting methodologies, establishment of new or different metrics or financials in a better condition to be able to report operational bottom line? Do we have a better cost per passenger mile operational assessment? Have we had customer satisfaction surveys to find out what is good, what is bad? What is the progress with the Acela line? In other words, make me feel good that where we are today is not where we were 5 years ago when we were collecting fares on cars with cigar boxes and wondering why we couldn't figure out the cash flow. Do you have financials that are deliverables, that someone could look at and objectively say I know where we are and I know how much we are going to lose, and this is why? Mr. Laney. That is a lot of questions, and I am not going to try to answer them all. Let me start with answer one. Then I would like to give it to our CEO for a little more detail. One is, are we today where we were 5 years ago from a financial standpoint, from a ridership satisfaction standpoint, from our allover ridership and revenue standpoint? Absolutely not. It is a different operation than it was 5 years ago as far as I am concerned; and, more importantly, it continues to head in the direction I think you would like to see it head. As I said earlier before you were here, it has moved farther than I expected it would move, not as fast as I would hope. Mr. Baker. How do you square that with the opening statement that, unless we get workplace flexibility, the financial future of Amtrak is very bleak? Mr. Laney. I expect we will have workplace flexibility. Mr. Kummant. Well, let me just make a couple of comments about where I think we are really moving the ball and then to your fundamental question about structure of the financials. If you look at the Acela product, for example, and we do plenty of customer surveying. Customer satisfaction numbers are up significantly, and the share numbers are up dramatically. We are actually taking share from the airline industry along the Northeast Corridor. Ridership is up over 20 percent year over year. Overall, Amtrak revenue is up 11 percent year over year. We have a very specific measure of revenue per available seat mile that is up in almost every category. So there are very specific measures that we are doing well in. Safety tends to be something that within the railroad industry is very, very meaningful to rail guys, because it is such a measure of how kind of management and front lines work together. Safety is improved on a reportable incidentbasis---- Mr. Baker. Let me get a couple things on the record, because my time is about to expire. They extended courtesy the allow me to do this. For the record purposes, if you can provide the cost per passenger mile--you can pick any two routes you want--between route A and B. If you can give me some year over year data, if you can show me where the projected operational deficit will be reduced over time and for what reasons or factors. The other thing I was going to start out asking, but I got diverted, there is an act that was passed in 1993, the Federal Program Performance Review Act, which is subject--a number of governmental agencies are subject to some sort of metric analysis, and I can't see why Amtrak would have been exempt. And I know the GSE argument, that you are not really fish or fowl. I don't go there. I think as long as you are getting operational subsidies from the government, there is a standard to report to the government to disclose why we are in the mess we are in. If you can at some point respond--not today--to whether you would have a policy objection to being made subject to the Federal Program Performance Review Act, and that is simply an ability for us as indirect shareholders to be able to get a way in which we can look at operations and feel better or worse about where we are going. I hate that the time has been so limited. I am sure you are enjoying it, but I really, really want to try to work with you. This is not about shutting Amtrak down. This is about trying to get us on a basis where we can all say we are standing on solid footing. I thank the gentlemen and the gentlelady for yielding time. Ms. Brown of Florida. Yes. Mr. Baker, I want to make a point here, because I am glad you came to the Committee, and I am glad you asked the questions. But on the other half of my concern, you, coming from your area, I had a question that I want to ask them on the Sunset Limited, when the people from that region have come to my office and have discussed that particular route is not financially--one that is financial--but there are other things I want them to consider when they develop whatever model, and one of them is homeland security. We need to have another way to get those people from that area out of harm's way. Amtrak would be one way, but that is not a profitable line. That is a problem. The profitability cannot be the only factor. Clearly, we need to have a way that--economics is part of the plan, but also we need to look at security. I have had several meetings with them. I have called Mr. Laney about this issue, because I want them to put that train back on and run it at a time that--not 2:00 in the morning. But if we had another Katrina, we would already be up in operation and could get those people out of harm's way. But it does not work for them financially. So I want them to consider other things other than just finance when they consider it. Mr. Baker. Would the gentlelady yield? I don't dispute the Chairlady's observations at all. There should be other considerations in determination of whether a public service is continued. All really I am suggesting is that we have that discussion; and if the gentlelady chooses to support the continuation of a route even with the knowledge that it does not necessarily cash flow, that is fine with me, because we subsidize a lot of things. However, this is a little different. Certified annual financial reports, quarterly operating expenses and revenues, things that any other entity, Fannie Mae or Freddie Mac--that is a bad example because Fannie is kind of late right now on theirs. But my point is at least there is requirements; and all I am suggesting, Madam Chair, is if we can come to a standard for reporting and understand the scope of our liabilities, it will help the Congress plan and I think encourage Amtrak to make the proper decisions subject to---- Ms. Brown of Florida. Perhaps we will let them answer that question, because they had discussed it earlier. Why don't we just give you a moment to answer. Mr. Kummant. We produce monthly performance reports that are sent to the Hill and are posted on our Web site. Can every financial system be better? Yes, and we certainly are beginning a process to put the entire company on an SAP enterprise system and again have brought in a new CFO, a new CIO. But there is plenty of financial information available, as well as on our route level. Mr. Laney. We also have annual independently audited financial statements available at any time to you. Mr. Baker. If I may, I am not disputing that there isn't a financial regime in place, Madam Chair. I am just saying the information we get does not address the concerns that I have raised. I have spent considerable time in past sessions in this endeavor, and I am confident new leadership now being at the table, that these gentlemen are very capable and sincere of achieving their goals, but the fact that we are just now engaging in implementation of SAP is an indication we have still got work to accomplish. Not being combative, just we are not where we need to be, and I think that should be acknowledged. Ms. Brown of Florida. Thank you, Mr. Baker. I wasn't being combative, also. I just want you to know that I am pushing them because the people in your area have been pushing me. We are going to do our last round of questioning and start with my colleague from Florida, Mr. Mica. Mr. Mica. Thank you again. Just a couple of quick questions, if I may. Over the period I have been on the Committee you have had a high of, I think, in the 25,000 number of employees. What is the current number? I see a nod there. Then it went down to about 19,000. Where are you now? Mr. Kummant. We are about 18,5. A large piece of that was the Boston commuter service that dropped out, and the rest has been a gradual attrition and management efficiency work. Mr. Mica. Okay. So about 18,500. Your operating subsidy, last year I think Congress gave you about 1.2 and what was---- Mr. Kummant. Excuse me, do you mean the total number or actual operating support number? Mr. Mica. Total number. Mr. Kummant. The number for--I will have to look over my shoulder. For 2006, it was the 1.295. Mr. Mica. But that wasn't all operating subsidy, was it? Mr. Kummant. That included capital and debt service. Mr. Mica. What would you say the subsidy was? I have between 500 and 600 million. Mr. Kummant. It ended up being about 450 and the debt service---- Mr. Mica. That makes the average subsidization of a ticket based on your ridership about $49 for every ticket? Mr. Kummant. I would have to do the math, dividing that by 25 million riders. Mr. Mica. Well, it is too difficult. I think that is correct. I may be wrong. Your debt service was running around 300 million. Mr. Kummant. A little over 300. Mr. Mica. About 300 million. And your capital--backlog maintenance, I am sorry, backlog maintenance at one time that was 4 to 5 billion. Is that still that high or has it been brought down? Mr. Kummant. Ongoing capital number has been between 4 and 600 million. We have put 1.4 billion into the corridor. Mr. Mica. Okay, that is capital. What about your maintenance backlog for the whole system? Mr. Kummant. Basically, that essentially, as you pointed out earlier, is our system. So we pretty much have worked off the state of good repair types of issues to get to that point. The ongoing number to maintain state of good repair in the corridor will be about 350 million, and about 70 percent of the equipment has been refurbished. Mr. Mica. Not annualized but the total maintenance backlog would be? Mr. Kummant. The total maintenance backlog on the rest of the system is a freight railroad. Mr. Mica. You are not counting that. Mr. Kummant. No, sir. Mr. Mica. But to operate you are going to need 1.2 to 1.3 billion budget per year, right? Mr. Kummant. In the range of 1.2 to 1.5. Mr. Mica. In the Lautenberg bill that was about 1.8 billion or something like that, that would give you about 4 to 500 million a year extra, but that is not really going to bring you to a high-speed system based on any testimony we have ever had here. Mr. Kummant. No, sir. Again, we are talking about tens of billions for a radically different system. Mr. Mica. Last time we had someone testify it was 16 to 18 billion, as I recall. But that has been years ago, too. I am not sure what that would have gotten you. Might have gotten some tunnels and bridges and all the other things, but I don't know if it would get you a full high-speed system. Because, as you testified earlier, you still have problems running it in the same corridor. It needs to be separated, right? Mr. Kummant. If you are looking for 300 kilometer an hour, 200 plus mile hour system, you need a radically different system. There is no doubt. Mr. Mica. All right. One other thing that is in the--there are several measures, the environmental meltdown, the global warming. There is a proposal to have commuter rail and other passenger rail preempt freight as one of the measures that they are looking. Have you at all taken a position on anything like that, passenger service? In fact, I think you are still in charge of all passenger service. Mr. Kummant. Forgive me. Are you referring to the fundamental Amtrak right on host railroads? Mr. Mica. I think they are looking at beyond that in one of these proposals. Maybe you haven't seen it. Mr. Kummant. There are preemption discussions on local preemptions in the Northeast Corridor which we would be very concerned about very specific language on that. Because you end up have enormous system difficulties if any locality can preempt service on any kind of contiguous piece of the Corridor. Mr. Mica. In the Northeast Corridor you wouldn't favor that. Mr. Kummant. Because, again, you would probably destroy the value of actually having a corridor. It wouldn't become a corridor. It would become a local, fractured piece of locally controlled segments. Mr. Mica. But there are some proposals in Congress as part of the global warming initiatives and may be coming out of one of the Committees to do just that. Mr. Kummant. I am not intimately familiar with that. Mr. Mica. You wouldn't favor that? Mr. Kummant. In a general sense, and I may be misspeaking because I don't know the specific provisions, but if you split up until small, locally controlled pieces you will use the effectiveness of intercity passenger rail. Mr. Mica. Thank you. I appreciate the job you and Mr. Laney try to do. Thank you. Ms. Brown of Florida. Mr. Mica, have you finished? Thank you very much. I know that you know we spend close to $4 billion a week in Iraq for 28 million people. I would like to see what would a couple of extra billion dollars do if we put it into the system so we can move our citizens and get them to work and back and forth and free up some of the money that we put into the airports so that a lot of our aging population or elderly would love to be on the train as opposed to the plane and all that security the way they have it. Mr. Mica. If the gentlelady would yield. I would be happy to sign on to any legislation. We heard the request here that we need to draw private capital into the process. Private capital will flow into the process if they are allowed to develop and operate those corridors and you won't have to put--well, you have to put very, very little Federal money into it. We may require some Federal backing, maybe some exceptions like we do on some liability for airlines, and we will have high-speed corridors, rail passenger corridors throughout the United States. Ms. Brown of Florida. I am excited about that initiative, and I take back my time. I am just looking forward for them to come forward with the plans so we can figure out how we can assist. Mrs. Napolitano. Mrs. Napolitano. Thank you, Madam Chair. I am sitting here because I am listening to that, and I wish that we had all the money to be able to do those high- speed intermobile and everything else to move our product to market and our people to work. One of the questions that comes to mind as you are talking is about the pay raises that have not happened since, what, 7, 8 years. Is it something that happened that management recently is going to be giving raises and not staff? Doesn't that kind of go against the wage increases of $1.70 for labor for the last 7, 8 years or whatever? And then, aside from that, have you lost personnel because of it? And then what are you going to do in having to train new employees who have to come and backfill, if you will, to be able on to take on those jobs, the time and money spent on that, and then what does that do to your accident rate? Mr. Kummant. All very good questions. Let me address there is a program that we had put in play which was to address hard-to-fill jobs in the management ranks. Let me just put that in perspective. The price tag on this for the company was in the 5 to $6 million range, in contrast to a $200 million back pay issue. The intent there was to focus very specifically on jobs that have remained open and frontline jobs that we simply haven't been able to fill in areas where our current pay was perhaps 25 percent below local markets. I would also like to say that no one is well served, either management or labor, by not having jobs filled. I absolutely agree with that. Now that specific program we are going to take another look at, look at specific provisions. We had a geographic component that may have been a little too broad. It is actually a very modest program in contrast to some of the large issues relative to labor front, and it ended up being something like--I don't know--2 percent on the total salary. But, again, that program we are taking a look at and making sure that it is the right thing to do. I am not trying to pour the salt in anyone's wounds. I am trying to run an effective organization. That really was the thrust of that. To your other points, I simply say I agree with your concerns and worries. We do have difficulty filling jobs without having labor agreements. It does make training more difficult. So far, our safety numbers have held up. I agree that not having experienced people on the job sometimes can be a safety liability. But in the safety realm it is actually interesting, because it can cut both ways simply on how the numbers work. This is, believe me, not an argument to hire new people, but sometimes new people can actually be much more focused on safety than people on the job for a long time, not exclusively true, but that is why one can drive safety numbers effectively even when one has turnover. But there is a training cost, training liability, and that we need to fill jobs is absolutely true, and that is a problem. Mrs. Napolitano. But isn't it true that experienced people are necessary to be able to prevent accidents? Mr. Kummant. Yes, I agree completely. I only meant in some cases you can have fairly new workforces and see good safety numbers and you kind of wonder how can that be. That is not to say experienced workforce and sustaining it is not where it is at. I absolutely agree with that. No question. Mrs. Napolitano. Then one other area that is rather interesting is that you apparently have 70 percent of your rolling stock has been refurbished, but most of it is over 25 years old. When and how and what plan have you got to be able to replace, modernize and be able to expand to be able to increase your ridership? Mr. Kummant. You are absolutely again right. That is really the centerpiece of where we believe we have to go forward strategically. We have to begin a whole new cycle of equipment procurement, even this year, even for our high-speed product. Mrs. Napolitano. Is that part of what you are presenting to Congress at all? Because if it is not being considered, how are we going to look at it? Mr. Kummant. This is part of the document we will be producing shortly. But, in all candor, it is something we have talk about at almost every hearing in terms of a very significant need for the system. We would also love to look for some demonstration train sets of modern equipment to show what that can do for ridership as well. We may be able to do some of that more quickly rather than major other procurement. But you are exactly right, and that is a key issue to focus on in the coming year. Mrs. Napolitano. I hope that Amtrak will move forward on trying to get this imminence of strike avoided. Thank you, ma'am. Ms. Brown of Florida. Thank you. Mr. Shuster. Mr. Shuster. Thank you. First, I just want to make a statement. I am very encouraged to see in your plan that you are going to use the Customer Service Index as one of your metrics as you go forward. I think in any business making sure customers are satisfied is the number one job. So I am pleased to see that. Also very pleased to see that you are, in your procurement for equipment in the future, to purchase DMUs, lower cost to operate and flexibility; and I am very interested in finding out if you are considering using them on the Harrisburg to Pittsburgh. There is about 70 to 75,000 boardings in that region. That is what I consider--I am sure you consider--lower volumes. Where are you looking at using them and can you generally comment has there been any discussion of the Harrisburg to Pittsburgh? Mr. Kummant. I am afraid I can't specifically comment on that, but that is exactly the type of service we look at in a development in a less dense area. I think along the gulf coast might also be an interesting area for DMUs and anyplace where we would like to build ridership. I think we are also looking at it in the Northeast. Mr. Shuster. I just think there are tremendous opportunities to build ridership. The final question I have deals with the food and beverage department. I know in 2006 the GAO had a study out there that, for every $2 in expense, you had brought in $1 of revenue; and in a time period from 2002 to 2004 Amtrak lost almost $250 million, basically, selling ham sandwiches and chips. What reforms have you instituted and is it possible to get the last quarter profit and loss on the food and beverage department, see what you have done? Mr. Kummant. What I can tell you is this year we will continue improving that number. I think between 16 and $19 million cost takeout. Let me also make the point, though, that you can go back and look at Santa Fe numbers from the 1950s and look at their food numbers. There simply is no way you are ever going to make money on food on trains. It is essentially part of what every seat pays for. So I do think we have to look at Amtrak in aggregate; and if you look Amtrak's fare box recovery overall we, in fact, stack up with anybody in the world, including the French, including the Germans. Our total fare box recovery of 70 percent is a very good number and is in fact twice what transits run at, and that includes the entire food service. Now as far as the specific initiative, we do have areconfiguration of our dinners into a diner-lounge structure with a simplified menu, with a simply food and more flexible service that can be scaled up or scaled down depending on the service. That is really going to be our vehicle for efficiency and saving in the future, and I think we feel very good about that initiative. Mr. Shuster. In the last quarter, can you give me numbers? Mr. Kummant. I can give you the annual number, a savings of in excess of $16 million this year. Mr. Shuster. Again, thank you both for being here today. I appreciate your time, and I yield back. Ms. Brown of Florida. Thank you. My last question, I know I had a discussion, but I didn't get an answer, so let me just ask it in the form of a question. What is Amtrak's plans for the Sunset Limited route and when will those plans be finalized? I know that you all was in a board meeting when I tried to call you, Mr. Chairman, on this issue, because my office had been full of people from that region that came and talked with me about it. So I would like some discussion on that. Also, I can just fold in my other question, what is the largest challenges facing Amtrak; and, lastly, how can we in Congress assist you? If both of you could address those issues, I would appreciate it. Mr. Kummant. I would like to start with the Sunset. I do think what we would very much like to do, and it is in consultation with your office, is to focus on corridors along the same route in order to offer services that really work. I would, frankly, like to reduce or I should say eliminate the Sunset as this lightning rod for the--as an avenue of criticism. I think there is better and more effective service that we can offer your constituents and constituents along the whole gulf coast from Mobile to New Orleans as well as we discussed very specific corridors within Florida. And we also have different approaches on the western route in order to service that area and sustain the slot. So that is really how we want to move forward. The biggest challenges, again, I think we have addressed here today, which is, look, I will be the first to say we really want to come to a settlement with our whole workforce and our labor force. We want to be one team, move forward and really make this thing run. I do think the equipment procurement piece that we have talked about is substantial, and I think there again it is process, and it is capital, and there is, obviously, a lot of people committed to that. Finally, you have heard about the on-time performance challenges, and that is not an easy one. I think we are moving forward; and we do have a plan to continue working with the railroads, freight railroads. It is a personal view. But we are going to have to continue to find ways to put public capital into the real constraints in the freight network where both freight and passenger rail can get some benefit and drive on- time performance. Thanks for the time today. Mr. Laney. With respect to the Sunset Limited, Madam Chairman, part of our challenge, as you know and you have heard us talk about it, is restructure, rationalization of our resources and investment within the long-distance structure. I think you just heard from our President probably what is likely to be the ultimate sense of the Board in relatively short order; and that is, those resources, that investment is not best served in the Sunset Limited. It is best served in focusing it on corridors and, in particular, in that part of the country in the concentrated populated area of Florida. Our biggest challenges are I think fairly easily identifiable: on-time performance, equipment replacement, the Federal-State match and the implications that has for corridor growth, our labor contracts. And not in that order. Ms. Brown of Florida. How can we help? Mr. Laney. The starting point is reauthorization. It is vitally important that we have some form of Federal-State match that is enough of an invitation to bring the States to the table to work with us for the corridor development. That is, I think, first and foremost in terms of what you can do. We will be delighted to help in any way we can, but our primary care is to continuing the progress that I think we have sustained for a number of years by working with you, with DOT, with the FRA, good partners, with the States, and continue the progress and the growth of ridership and revenue and the containment of the costs. Ms. Brown of Florida. Well, we certainly want to work with you. My challenge is that it is very important that I understand the operations side, that is one side of it, but also we need to know long term what kind of investment that is separate from operation. But when we look at security, when we look at your stakeholders that we have to work with, whether it is bridges and tunnels, what we need is to make sure that we have a system 10 years from now or 15 years from now that is really moving America where we want it to go. When we look at gas prices at $3, $5--$5, people cannot afford it. So we realistically need to be together on a team to move this country where it needs to go. I think we have the vision and the leadership in Congress, and working with you all on the Board, we can move forward, but we cannot do it in a vacuum. We need the input from you all. Mr. Laney. We fully understand and agree and look forward to working with you, Madam Chairman. Ms. Brown of Florida. Thank you. I want to thank the witnesses for their testimony and the Members for their questions. Again, the Members of this Subcommittee may have additional questions for the witnesses; and we will ask you to respond to those in writing. The hearing record will be open for 14 days for Members wishing to make additional statements or to ask further questions. Unless there is further business, the Subcommittee stands adjourned. Thank you all very much. 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