Monday, October 26, 2009

PTC safety costs chafe railroads

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Passenger- and freight-railroad operators are pressing the White House to scale back proposed rules that would mandate billions in new safety hardware to prevent collisions, warning that the financial burden could lead to cuts in passenger-train service instead of the expansion President Barack Obama wants, reports the Wall Street Journal.

The rules, which the FRA plans to put in final form in the coming weeks, would require freight railroads, Amtrak and commuter-rail operators to install "positive train control" systems by December 2015.

The goal is to prevent collisions like the one that occurred last year between a commuter train and a Union Pacific freight train near Los Angeles. That accident killed 25 people and spurred federal legislation mandating new technology that can automatically prevent trains from barreling through stop signals.

Amtrak, the federally subsidized passenger-rail system, has told the FRA that the cost of installing collision-avoidance systems in at least 12 states "may be so high as to not be undertaken and therefore result in the elimination of Amtrak service."

The American Public Transportation Association said it would cost more than $2 billion for commuter-rail agencies to comply with the rules, resulting in "increased fares, decreased service levels and deferral of state-of-good-repair projects." Passenger-rail officials have signaled they may ask Congress for subsidies to offset the costs.

Estimates for the total costs of the new rail-safety rules vary widely. The FRA says the 20-year costs of the proposal could range from $7 billion to $24 billion. An FRA analysis found that the costs of the proposed rules "would far exceed the benefits."

Many labor unions support the new rules and say they are worth the cost. James Stem, national legislative director for the United Transportation Union, said his position "mirrors what the FRA is dictating."

The FRA declined to comment on the proposed rules or how they might be changed before they are finalized later this year. Industry officials said they have been lobbying Transportation Secretary Ray LaHood and officials at the Office of Management and Budget to minimize the financial impact.

As currently written, the FRA's rules would compel railroads to install collision-avoidance technology along any tracks used for passenger service or shipments of certain hazardous materials. Railroads are concerned not just by the potential costs of installing the hardware and software, but the expense of maintaining and testing the systems as well.

Railroad executives supported the rail-safety legislation last year. But in recent weeks industry officials have become alarmed at the scope and potential cost of the FRA's rules. The FRA, rail executives say, would require expensive collision-prevention systems on as much as 80 percent of main line track -- far more than the industry anticipated.

Railroad executives want the FRA to exempt certain segments of tracks that carry low levels of traffic or fewer than two carloads per week of hazardous materials.

"We're not asking to be let out of this," said Matthew Rose, chief executive of BNSF. "All we're saying is the OMB and FRA ought to use some cost-benefit analysis. We ought to concentrate it" in high-risk areas, he said.

Overall, railroad officials are pressing the FRA to ease off on $1.2 billion of implementation costs, according to Edward Hamberger, president of the Association of American Railroads.

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