In N.Y. Penn Station fracas, Amtrak says repairs could cost $40 million

By Hilary Russ
FILE PHOTO: Commuter trains travel inside New York's Penn Station, the nation's busiest train hub, on a section of a complex of tracks that Amtrak says they will begin repairing over the summer in New York City, U.S., May 25, 2017. REUTERS/Mike Segar/File Photo

By Hilary Russ

NEW YORK (Reuters) - Amtrak's summer repair program at New York's Pennsylvania Station will cost the national passenger rail company $30 million to $40 million in wages, materials and other expenses, it said on Wednesday.

The disclosure came in a letter from Chief Executive Officer Wick Moorman decrying any plans for New York transit officials to stop making the state's regular lease payments to Amtrak.

Halting those payments would be "in clear violation" of Amtrak's agreement with the Long Island Rail Road (LIRR) and would immediately trigger contract disputes, Moorman wrote in his letter to leaders of the Metropolitan Transportation Authority (MTA), which runs the LIRR.

Moorman's letter laid bare a growing rift between Amtrak, which owns Penn Station, and the two states that use most of the hub's track space, New York and New Jersey.

Amtrak's repair program at the busiest U.S. train hub is expected to cause major service disruptions this summer for commuters across the metropolitan region.

Businesses and riders are devising plans to work around the expected "summer of agony."

The repairs, scheduled to take years, were expedited after recent derailments and other problems left hundreds of thousands of commuters delayed throughout the greater New York City area because of decaying infrastructure.

New York Governor Andrew Cuomo said last week that the MTA should withhold payments to Amtrak to make up for the alternate services MTA must provide during shutdowns from July 10 through Sept. 1.

NJ Transit officials have also said they may seek reimbursements from Amtrak.

Over the last 20 years, Amtrak has paid the most for capital improvements at Penn Station while running the fewest trains, Moorman's letter said.

Amtrak invested nearly $470 million, or 69 percent of the total, while accounting for just 20 percent of train movements through the station, it said.

The LIRR invested 26 percent, or $179 million, while comprising 45 percent of trains, and NJ Transit put in about 5 percent, or $32 million, for about 35 percent of all trains, Amtrak said.

Moorman also said Amtrak would be hit hardest by its own repair program, with 31 percent of its rush-hour, peak-direction trains affected versus 19 and 21 percent for LIRR and NJ Transit, respectively.

"Insufficient investment by all parties over the past four decades, during which commuter train operations have doubled, means passengers and trains now exceed capacity even under the most optimal conditions," Moorman wrote.

MTA interim executive director Veronique "Ronnie" Hakim told board members at a meeting on Wednesday that she would consult with lawyers to figure out how to respond to the letter.

(Reporting by Hilary Russ; Editing by Daniel Bases and James Dalgleish)