By David Shepardson

WASHINGTON U.S. passenger railroad Amtrak's $2.3 billion plan to replace its high-speed Acela train cars is more than three years behind schedule and faces more likely price hikes and further delays, a government watchdog said on Tuesday.

Amtrak, which contracted with Alstom to develop and manufacture 28 new high‐speed trainsets, initially was scheduled to begin customer service in May 2021 and has spent $1.6 billion on the program.

The Amtrak inspector general in a report on Tuesday said the program faces further delays because the new Amtrak trains have not met Federal Railroad Administration (FRA) requirements and all of the trainsets produced so far have defects. The Acela, which operates on the Boston to Washington Northeast Corridor, is Amtrak's most profitable business line.

The report added the likeliest cause of more delays would be a lack of a validated trainset model, followed by certain trainset defects. The report said the current estimate is for service to begin after June 2024. Amtrak said it was working closely with Alstom as they complete testing and modeling, adding the 2024 start date is based data received from Alstom.

The report said Alstom must still produce a validated computer model of the trainset "that proves the new designs are safe to proceed with required testing" in order to proceed with operational testing and to be able to run new trains at planned faster speeds of 160 miles per hour (257.5 km per hour).

Alstom said it is working with the FRA to meet requirements "through their first-ever safety certification for high-speed trains." FRA did not immediately comment.

Alstom said it has successfully run these trains on a test track at high-speed and on the Northeast Corridor for nearly 70,000 miles. It said planned modifications "along with additional changes that Amtrak requested are in no way in the critical path of completion of this project."

Amtrak wants to double ridership nationwide by 2040 after its ridership grew 45% from 2003 to 2019 to 32.3 million riders.

Congress approved $66 billion for rail as part of the 2021 infrastructure bill, with Amtrak receiving $22 billion. The bill also sets aside $36 billion for competitive grants.

(Reporting by David Shepardson; Editing by Mark Porter and Josie Kao)