A new report by Amtrak’s watchdog lays out four key concerns for the railroad as it seeks to implement the $66 billion investment made in last year’s bipartisan infrastructure law.
The report by the Amtrak Office of Inspector General, released Monday, finds that “the sheer size” of the bipartisan law’s infrastructure investment and requirements “presents a potential strain on the company’s ability to manage its current operations while concurrently planning and managing a long-term multibillion-dollar infrastructure portfolio.”
The report is based on oversight work compiled by the inspector general highlighting Amtrak’s challenges and progress. It is meant to serve as a guidepost as the company begins to implement the directives in the law.
First, it found the mammoth size of the investment requires the company to use “its best business judgment” to maximize the benefits of federal funds and be good stewards of taxpayer dollars, including by identifying the highest-priority projects, being transparent on how it prioritizes capital projects and preventing waste, fraud and abuse.
Second, Amtrak will also have to quickly expand its skilled employee pool, including hiring new managers. The company plans to expand its workforce by as much as 21 percent even as it recovers from a pandemic that spurred it to lose many experienced managers because of downsizing and early retirement. It plans to hire 750 new managers in fiscal 2022 alone.
“The challenge will be not only to replace these employees but also to grow the workforce with highly qualified personnel,” the inspector general wrote. “Exacerbating this challenge is a tight labor market in which multiple industries are vying for candidates with the same skills and experience the company needs.”
Third, the company’s expansion will require it to rely on strong relationships with stakeholders such as state partners, commuter rail agencies and local governments to successfully implement the law.
But “the company has had mixed success managing these relationships” in the past — a fact that has affected everything from the railroad’s on-time performance to its scheduling track outages to conduct repairs to cost sharing with partners on state-supported routes. Some $36 billion of the funds for Amtrak in the law are provided through a federal-state partnership program, and “the company will need to work with external partners to prioritize which projects to support, apply for the funds, and plan and execute the projects efficiently,” it found.
Amtrak has also struggled with state partners that have questioned the fairness and accuracy of Amtrak’s billing practices, and “going forward, the company will need to focus on rebuilding this trust if it is to optimally access and successfully execute projects funded by the partnership grant programs,” the report found.
Finally, the report found that to manage the $22 billion allotted for capital spending, “the company will need to consistently apply sound program and project management practices.”
The company will need to clearly define each project’s scope, provide adequate staff to implement it and clearly define the roles and decision-making authority for project management staff.
Overall, the report concluded that the law “sets the stage for an unprecedented expansion of the company’s traditional rail operations mission, which has been to provide efficient and effective intercity passenger rail service.”
Properly implemented, it said, the law “will significantly increase the company’s capital spending opportunities in order to further its long-term, large-scale infrastructure goals.”
A spokesperson for Amtrak was not immediately available for comment on the report.