Breaking Down Katrina Costs
SUSAN STAMBERG, host:
And time now for business news. Hurricane Katrina is costing the government $1 billion a day according to one reported estimate; a huge amount. To get a sense of it, we examine the costs for just one part of the relief effort launched in the early hours of the disaster.
(Soundbite of beeping)
Ms. SALLY SNEAD (Bus Dispatcher): All right, go head and give me a little update on what's going up there--what we've got in...
STAMBERG: In the Washington, DC, area, Sally Snead played a central role in dispatching buses to New Orleans to move people from the Superdome to the Astrodome in Houston. As vice president of Carey worldwide meetings and events, Snead got a call around midnight, the Monday Katrina hit. A contractor for the Department of Transportation told her the government needed buses and lots of them.
Ms. SNEAD: In the first 12 hours, we were committing 300 motor coaches. So you're looking at a commitment of, let's see--you're looking at somewhere in the vicinity of $700,000 plus.
STAMBERG: Doing the math for what she says ultimately turned into 1,100 buses, that figure climbed to $2 1/2 million. At first, planners thought they would need buses for just a few days. But the need grew and grew and it continues, which creates more money problems. Kevin O'Connor(ph) of Transportation Management Services(ph) says the drivers he's hired are already having trouble with cash flow.
Mr. KEVIN O'CONNOR (Transportation Management Services): Many of them said, 'Sure, we can help.' And then we requested they stay longer, and so what they did was they killed charter tours and other customer business back at home for the sake of trying to help out in this endeavor. Sure, they're getting paid, but they did it for the greater good. A bigger thing for these guys is cash flow. They're used to getting paid half the money on a charter up front, half the money when you're done. They can't pay for the buses. They can't pay for the drivers. They can't pay for fuel without cash coming in. We're not paying them yet. Nobody's paying them yet.
STAMBERG: Sally Snead sees this money crunch lasting for quite some time.
Ms. SNEAD: I'll have hotel bills. I've have food bills. You know, we've put satellite phones on this. We've got RVs out there that people are using to sleep in. All those bills will come in time and we'll take care of them. So closing the books is going to be right--way down the road. Months.
STAMBERG: Sally Snead says to get buses involved, she has put a staggering amount of money on her own American Express card; close to $500,000. Snead's company has transported clients in more peaceful days; the last 16 Super Bowls. But Katrina, she says, is the largest transportation event in our nation's history.
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