(July 17) WASHINGTON, D.C. — The federal government has reached a proposal on phase two of its plan to pull Amtrak out of its long, dark financial tunnel.

Phase one happened in the beginning of July, when the government approved a $100 million loan that kept Amtrak from having to shut down its trains after the Fourth of July. That money was enough to keep Amtrak’s trains running through August.

Now, with the second phase, the Bush administration has proposed a federal loan package of as much as $170 million to keep Amtrak running through September.

That news is especially important for Detroit-based ExpressTrak LLC, which has a 15-year contract to haul perishable goods in refrigerated cars behind Amtrak passenger trains.

In a letter to congressional leaders, Transportation Secretary Norman Mineta proposed the $170 million loan, with the stipulation that the debt be paid back no later than Jan. 1. In addition, Amtrak would have to meet certain conditions requiring the rail company to save money and improve control of its finances.

These conditions also include management reforms and bookkeeping changes.

Mineta said the railroad company should also consider looking for cutbacks and new sources of revenue. One possible revenue source would be the sale of real estate owned by Amtrak. Company president David Gunn said the administration has asked Amtrak to mortgage Chicago's Union Station to raise money, an idea Gunn rejected as impractical. Last year, the company did raise $300,000 through the mortgage of Pennsylvania Station in New York City.

Initially, Amtrak had asked for $205 million from the government to keep its trains running through Sept. 30. A $205 million appropriation was included by congressional negotiators from both houses in an emergency spending bill for homeland security. The White House budget office rejected that plan, leaving the bill stranded in Congress under a veto threat.

Reuters reported that the Bush administration favors a direct loan rather than an appropriation from Congress because it would be a better way to hold Amtrak accountable for its business practices.

The administration is seeking congressional approval of its direct loan plan, though some lawmakers fear adding to Amtrak’s existing $4 billion in debt.

Amtrak has never turned a profit in its 31 year existence. The beleaguered railroad lost more than $1 billion last year alone.