News and Opinion

NS issues statement on Graniteville ruling

Below is a statement from Norfolk Southern on Graniteville ruling:

On March 18, 2011, Norfolk Southern received an unfavorable ruling from an arbitration panel regarding an insurance claim arising out of the Jan. 6, 2005, derailment in Graniteville, S.C.

As a result, during the first quarter of 2011 Norfolk Southern will record an expense for the receivables for the contested portion of the claim ($43 million) as well as an expense for other receivables that may be affected by the decision (approximately $15 million), as it is not probable that these amounts will be recovered.

It is anticipated that NS will be responsible for certain legal costs of the insurance carrier associated with the arbitration proceeding, although the amount of such costs is not presently known.

Axion awarded patent for flame-retardant coating

Axion International, producer of industrial building products and railroad ties made from 100 percent recycled plastic, has been awarded a new patent that will expand Axion’s intellectual property portfolio and protect the company as it begins to sell a unique flame-retardant coating for use in the flame-retardant industry. The coating can be used on Axion’s existing line of 100 percent recycled plastic railroad ties and structural building products, in addition to other applications.

The patent was awarded by the U.S. Patent and Trademark Office to Rutgers University in March 2011. Through existing licensing agreements with Rutgers, Axion is authorized to sell and sub-license the unique flame-retardant coating throughout the United States, North America and South America.

"We are pleased to announce this latest addition to Axion’s growing intellectual property portfolio," said Steve Silverman, Axion’s CEO. "This flame-retardant coating represents an impressive new technology to enhance and diversify our revenue stream. Not only does the coating tie-in perfectly with our existing railroad and structural building product lines, it also opens our sales channels to various other industries that could benefit from effective flame resistant surfaces."

"Although originally designed for use on plastic load-bearing material such as Axion’s railroad ties, due to the ease in which the coating is applied to the substrate, it can be used on virtually any surface," said Thomas Nosker, Ph.D., at Rutgers University. "This flame-retardant coating has many advantages over existing technologies, including the fact that it is halogen-free, which is beneficial due to the rising concerns over use of brominated flame-retardants and other halogen-based chemicals that can be hazardous to human health. Based on its unique properties, this product represents a significant shift from the way most flame retardants reduce combustibility."

 

MTA East Side Access Project to begin Queens tunneling phase

Metropolitan Transportation Authority officials have dedicated two tunnel boring machines that are a part of the East Side Access project. The machines will create four tunnels under Sunnyside Yard in Queens, connecting the tracks of the Long Island Rail Road main line with the tunnel under the East River that leads to Grand Central Terminal. The tunnels, to be completed in October 2012, are the last to be built as part of East Side Access. Two separate machines that are excavating tunnels and caverns in the bedrock under Manhattan are on schedule to complete their work this May.

After the completion of the overall project in 2016, LIRR trains traveling through Sunnyside will be able to head to Pennsylvania Station, as they have since 1910, or, for the first time, to Grand Central Terminal.

"One hundred years ago, the tunnels under Penn Station gave Long Islanders easy access to Manhattan, essentially giving birth to Long Island as we know it today and leading to enormous growth in the region," said MTA Chairman Jay Walder. "Today, East Side Access will build on this growth and transform this region in a similar way. Commuters throughout Long Island and Queens will have more service to Manhattan and shorter travel times to the East Side-making these communities even more attractive places to live, increasing housing values, and unlocking the next wave of economic development potential on Long Island."

East Side Access will reduce commuting times by as much as 40 minutes a day for about 160,000 customers who currently travel to Penn Station and then must take a subway, bus or walk to the East Side. It will also reduce passenger-crowding levels at Penn Station and thereby enable Metro-North trains to access Penn Station for the first time.

Each machine has a 22-foot diameter cutterhead and weighs approximately 642 tons including the trailing gear, which includes storage tanks, electrical support and exhaust fans. Each machine is approximately 300 feet long from the cutterhead to the rear of the trailing gear. In contrast to the tunnel boring machines being used to cut through Manhattan bedrock, these machines are designed for the geological conditions found in Sunnyside, where the soil is a mixture of sand, clay and boulders and the water table is high. The machines will remove soil and install inter-locking concrete rings, creating a tunnel as they proceed. To facilitate excavation and transportation of the soil that is removed, each machine turns it into a "slurry," or paste that is thinner than pudding but thicker than shampoo.

Canadian government releases Rail Freight Service Review, lays out plan for freight supply chain

The Government of Canada recently responded to the Rail Freight Service Review, which was launched in 2008 to address ongoing issues with rail freight service, raised by users of the rail supply chain.

"Our government is focused on the economy. By launching the Rail Freight Service Review, our government made a commitment to help ensure Canada has the rail system it needs to support a strong economy and our domestic and international trade," said Rob Merrifield, Minister of State (Transport). "Today we are following through on that promise with measures to enhance the effectiveness, efficiency and reliability of the entire rail freight supply chain."

The review was conducted in two phases. The first phase comprised analytical work to achieve a better understanding of the nature and extent of problems and best practices within the supply chain, including those experienced by shippers, terminal operators, ports and vessel operators, with a focus on railway performance. An independent panel, chaired by Walter Paszkowski, led the second phase, which included extensive consultations with stakeholders across the supply chain. The panel’s final report was also made public.

The government intends to implement the following steps to improve the performance of the entire rail supply chain:

• initiate a six-month facilitation process with shippers, railways and other stakeholders to negotiate a template service agreement and streamlined commercial dispute resolution process;
• table a bill to give shippers the right to a service agreement to support the commercial measures;
• establish a Commodity Supply Chain Table, involving supply chain partners that ship commodities by rail, to address logistical concerns and develop performance metrics to improve competitiveness;
• in collaboration with Agriculture and Agri-Food Canada, Transport Canada will lead an in-depth analysis of the grain supply chain to focus on issues that affect that sector and help identify potential solutions.

"The Rail Freight Service Review has been a very important undertaking for Canada’s rail system, involving close consultation with key stakeholders," said Minister Merrifield.

CN critical of Rail Freight Service Review final report

Canadian National has serious concerns about the final report of the Rail Freight Service Review panel that was issued and is disappointed with the Government’s response.

While CN is pleased that, in releasing the report, the Government recognized the importance of a supply chain approach and noted its preference for commercial solutions, CN is concerned that the Government’s decision to consider tabling legislation could stifle supply chain innovation and Canada’s competitiveness in the global marketplace.

Claude Mongeau, president and chief executive officer, said, "CN disagrees with the focus and tenor of the panel’s recommendations. Like the dissenting panel member, we are concerned that the panel’s recommendations are drifting backward toward more regulation instead of encouraging the current momentum for positive change."

Mongeau noted that the panel failed to act on the hard facts that were before it, which show that rail service in Canada is actually quite good overall.
CN says the government failed to recognize the significant positive change that has been taking place over the past two years to address key service issues, including improved customer engagement, initiatives to improve the first-mile/last-mile of rail traffic movements and enhanced supply chain efficiency and transparency.
CN says that contrary to its mandate from the government to examine service provided by the "rail-based logistics chain," the panel focused solely on the railways – the only federally regulated segment of the supply chain – and missed the fact that all participants in the supply chain are accountable for transportation system performance, not just railways.

Mongeau said, "CN remains fully committed to its strategic agenda of operational and service excellence. Deeper customer engagement is the right way to do business and the best way to help our customers across Canada win in their own end markets.

"In the end, supply chain partners need to embrace change to drive better service and efficiency gains. Burdensome regulation targeting railways alone is not the solution. Greater supply chain collaboration and more service innovation are what is needed to foster Canada’s prosperity."

CPR agrees with government focus on supply chain, but increased regulation unwarranted

Canadian Pacific commended Canada’s government for recognizing that commercial principles are the key to improving the overall performance of Canada’s world-class supply chain, but cautioned that additional regulation for relationships outside of commercial agreements is completely unwarranted.

"Isolating the rail sector will not produce the desired results," said President and Chief Executive Officer Fred Green.

To offer an independent assessment of the state of regulation relating to Canadian railway service, the government commissioned third-party research, which confirmed that the current regulatory regime for rail in Canada is robust and is superior to other frameworks reviewed.

"I recognize the government is addressing the weaknesses in the Panel’s findings by taking steps to encourage even further improvement across the entire supply chain," said Green. "While the report suggests negotiated commercial principles are preferred, I am concerned about the application of some of the recommendations involving regulation. The devil will be in the details. We will work with government to ensure equitable accountability is achieved throughout the supply chain and fosters further gains in service reliability."

 

Indiana Rail Road celebrates 25th anniversary with record infrastructure spending, improvements

The Indiana Rail Road Company will invest more than $21 million on major upgrades to its route infrastructure in 2011, an appropriate way to celebrate its 25th anniversary while benefiting southwest Indiana communities and businesses.

In 2010, INRD eclipsed the $100-million mark in total infrastructure investment over the lifetime of the company. Announcements detailing the record investments for 2011 are forthcoming.

"The Indiana Rail Road has grown its business by double digits each year of its existence, and we foresee 50 percent growth over the next five years," said Hoback, CEO. "Our 2011 capital investments will allow us to prepare for that growth and maintain a high level of customer service."

The Indiana Rail Road Company is a privately held, 500-mile railroad based in Indianapolis with a full-time staff of almost 200. The company hauls a variety of consumer, industrial and utility-based products.

Metro-North to install ties, perform catenary work

Installation of concrete ties on the New Haven Line between the New York and the Connecticut state line and at the Stamford Station is entering its final phase this spring.

Between March 21 and June 26, Metro-North Railroad will be replacing concrete ties on the outbound local track (Track 4) from Rye to Greenwich.

Preparation work for and installation of concrete ties at Stamford Station will result in track changes at Stamford from March 23 until April 1.
This project, along with continuing catenary replacement work, greatly limits Metro-North’s operating flexibility on the New Haven Line, normally a four-track railroad, as there are fewer tracks available to use for train service.

Amtrak completes modernization of Wilmington station

After nearly two years, the extensive renovation project to modernize the Amtrak Wilmington Station is now complete. The historic station has been rededicated as the Joseph R. Biden, Jr., Railroad Station, in honor of the long-time Amtrak rider, strong advocate of passenger rail and current Vice President of the United States of America.

As a U.S. Senator from Delaware for 36 years, Vice President Biden regularly used this station to travel between Wilmington and Washington, DC.

"This is an historic day for Amtrak, the State of Delaware and the entire region," said Amtrak President Joseph Boardman. "Today we are proud to announce that the Wilmington Station Project has been completed and not only have we improved the transportation function and utility of the station for our passengers but we have modernized and renovated the historic parts of the station while holding on to its charm."

"The Wilmington Amtrak Station is more than just one of the nation’s busiest train stations-at more than 100 years of age, it is also one of our city’s greatest historic and architectural treasures," said Wilmington Mayor James B. Baker. "Following a remarkable renovation and modernization project that successfully preserved the signature handiwork of the building’s famed Victorian architect, Frank Furness, this landmark building is now ready to proudly serve for another century."

The renovation project balanced the need to modernize the station while retaining its historic charm. The project included detailed restoration to various parts of the station including the grand staircase located in the lobby and the historic men’s and women’s waiting rooms on the second floor.

Amtrak and SEPTA passengers utilizing the station will now enjoy a more comfortable and convenient station that features a larger concourse, safety improvements, a new passenger information display system and enhancements to the station’s accessibility to people with disabilities. In addition, the renovation includes track and platform improvements.

A number of environmentally responsible elements also were included in the renovation, such as LED lighting, a new energy efficient heating/cooling system and motion sensors for the operation of lighting and "smart" elevators that automatically shutoff when not in use for a period of time.

Funding for the renovation project was provided by Amtrak ($5.7 million), the American
Recovery and Reinvestment Act ($20 million), the Delaware Department of Transportation ($2 million) and the Delaware Congressional Delegation through the SAFETEALU Transportation bill and other appropriations bills ($10 million) all supported by the Biden-Carper-Castle Delaware Congressional Delegation.

 

DART brings new life to maintenance building

The Monroe Shops building, located at Dallas Area Rapid Transit’s (DART) Blue Line Illinois Station, has become the new home of the DART Police Department, as of March 21.

With the DART Rail system slated to grow to 90 miles over the next few years, the number of DART police personnel will need to expand beyond its current force. Together, with Steven Bourn, AIA, DART architect and project manager, and Ronald Maddox, DART Construction Engineering Manager, the team developed and executed a plan to rehabilitate the building and provide approximately 69,000 square feet to accommodate the police. 



Bourn admits it was a challenge designing the sensitive conversion of an old trolley repair shop listed on the National Register of Historic Places into a 21st Century police headquarters. DART is applying for recognition of Monroe Shops as the agency’s first LEED certified building.


"Working with a historical building can be tricky, but DART’s priority was to preserve the structure while making it useful to the needs of a growing transit system," Bourn added. The new $20 million facility now includes three floors of modern workspace, meeting rooms, staff offices, showers, lockers and an exercise facility.

Nobody can remember how it got its name, but there is no denying that Monroe Shops played an important part in Dallas’ transportation history according to Stephen Salin, DART Vice President of Rail Planning. 



"It was the home of all heavy repair work to cars belonging to the Texas Electric Railway, or Interurban, until its final run in 1948," he said. "Prior to the arrival of the railway, Dallas mainly served as a prosperous agriculture-based town. That all changed due to the existence of the Interurban and this historic repair facility." 



For more than three decades, the Interurban created transportation jobs, brought buyers to Dallas markets and workers to downtown over 226 miles of track on three lines that traveled to Denison, Sherman, Ennis, Corsicana, Hillsboro and Waco. 



When the Interurban stopped taking daily care of 250 rail cars, their maintenance property became the home of such businesses as Fleming & Son Papermill, U-Haul Company and the city of Dallas before DART acquired the abandoned building in April 1991 as part of the land acquisition for the southern Blue Line segment. 



 

Regulatory overreach subject of House hearing

Railroads, Pipelines and Hazardous Materials Subcommittee Chairman Bill Shuster (R-PA) has pointed out the need to rein in out-of-control federal regulations, citing Federal Railroad Administration’s implementation of rail safety provisions that exceeded the agency’s congressional mandate.

A hearing of the Subcommittee focused on the implementation of the Rail Safety Improvement Act of 2008. In accordance with that law, the FRA published a final rule in January to implement requirements for freight and passenger railroads to install positive train control systems by December 31, 2015. However, there are concerns that FRA’s rule exceeded the scope of its mandate.

RSIA moved forward in part due to a tragic train accident in Chatsworth, Calif. on September 12, 2008, that resulted in 25 fatalities and 135 additional injuries. Ms. Mackenzie Souser from Camarillo, Calif. whose father was killed in the tragedy, testified before the Committee on March 17.

"My thoughts and prayers are with the victims of this accident, in particular Mackenzie, who is the daughter of Doyle Souser, who was killed in the crash," said Shuster during his opening statement.

Shuster stressed the need to continue to ensure the safety of the nation’s railways, as set forth in RSIA, but noted that regulatory overreach could threaten the industry and the economy for very little safety benefit.

The following continues Shuster’s opening statement from the hearing:

"Throughout our government, I am deeply concerned with the regulatory overreach that cripples our economy, stifles job creation and ties our nation up in red tape. I applaud President Obama for his recent comments on reducing the regulatory burden and for calling for a government-wide review of burdensome regulations. However, it seems like every time I turn around, another agency is moving forward with new cumbersome and expensive rulemakings. There is a significant disconnect between the President’s words and the action’s of the Administration’s agencies.

"Positive Train Control is an example of regulatory overreach that I would like to focus on here today. PTC describes technologies designed to automatically stop or slow a train before certain accidents caused by human error.



"FRA’s PTC rule has raised great concern and strong objections, specifically because the FRA regulation appears to have gone beyond the scope of the Rail Safety Improvement Act PTC mandate.

"FRA’s own cost-benefit analysis of its final rule implementing PTC states:

‘an immediate regulatory mandate for PTC could not be justified based upon normal cost-benefit principles relying on direct safety benefits…. The safety benefits of PTC systems were relatively small in comparison to the large capital and maintenance costs.’

"The FRA estimated a cost-benefit ratio of 15:1 for required installation of PTC systems when it issued its Notice of Proposed Rulemaking, and an even higher cost-benefit ration of 22:1 in its final rule. The 20-year costs are estimated to be $13.21 billion.

"Another important issue is the base year used for PTC route determination. In its final rule, the FRA orders railroads to install PTC on rail lines that carried toxic-by-inhalation materials in 2008. Yet nothing in the Rail Safety Improvements Act calls for using 2008 as the base year – only the 2015 implementation date is mentioned in the statute.

"Using 2008 as the base year makes little sense because TIH traffic patterns in 2015 will be vastly different than they were in 2008. If left unchanged, the 2008 baseline year will mean railroads may have to spend hundreds of millions of dollars to deploy PTC on thousands of miles of rail lines on which neither passengers nor TIH materials will be moving in 2015.

"We simply must get out-of-control government regulations under control and today’s hearing is one step in that direction."

Kerchof to head NS Research and Tests Department

Brad Kerchof has been appointed Norfolk Southern Corporation’s director of Research and Tests in Roanoke, Va.

Kerchof began his railroad career with Conrail in 1977 and worked in the engineering departments of Conrail and Norfolk Southern for 32 years, serving as division engineer for three Norfolk Southern operating divisions, before becoming Norfolk Southern’s director of engineering, his most recent position.

Kerchof replaces Bob Blank, who retired in February after 37 years in the Research and Tests department.

UTU, BLET ratify pacts on MBCR

United Transportation Union-represented conductors and assistant conductors on Massachusetts Bay Commuter Railroad have ratified a four-year agreement covering wages, benefits and working conditions, the UTU Website reports.

The agreement is retroactive to July 2009 and may be reopened for amendment in July 2013 under provisions of the Railway Labor Act.

BLET-represented engineers on MBCR also ratified a new four-year agreement. The UTU and the BLET negotiated jointly to reach those separate craft agreements, with the expectation that a better agreement for each craft would result if negotiations were held jointly.

Included in the UTU amended agreement with MBCR are retroactive pay, a signing bonus, a 13.7 percent overall increase in wages by July 2013, certification pay for conductors, a cap on healthcare cost-sharing and a provision that discipline records will not be retained beyond a maximum of 36 months (other than substance abuse violations, which are subject to record-keeping under federal law).

The agreement also includes an increase in compensation for release-time — from the decades-old 50 percent of the full-time rate to 62.5 percent.

UTU International Vice President John Previsich, who assisted with the negotiations, commended General Chairperson Roger Lenfest and Assistant General Chairperson Dirk Sampson (both, Amtrak, GO 769), along with Local 898 Chairperson Don Wheaton "for their participation in securing substantial improvements to wages and working conditions in today’s difficult economic environment.

"It is through their extraordinary efforts that the negotiating team was able to add groundbreaking enhancements such as conductor certification pay and increased pay for release time," Previsich said.

 

Axion signs tie order with Alcoa

Axion International, a producer of industrial building products and railroad ties made from 100 percent recycled plastic, has signed its first order to provide Axion’s Recycled Structural Composite (RSC) railroad ties to Alcoa Fastening Systems, a subsidiary of Alcoa, Inc., one of the largest producers of aluminum in the world.

"We are pleased to announce this new contract-win and look forward to working with Alcoa’s team as we complete our first project together," stated Jim Kerstein, Axion’s chief technology officer. "Using our patented material, designed from 100 percent recycled plastic, Alcoa will be able to further reduce its carbon foot-print."

"Jim and the rest of the Axion team have been a pleasure to work with and we look forward to delivering these new sleepers (ties) to the refinery at Wagerup," stated Glen R. Woodrow – manager, Mining, Rail, Oil & Gas of Alcoa Fastening Systems. "After our initial purchase we will evaluate Axion’s materials on both an engineering and cost basis for potential use in future railroad sleeper (tie) projects throughout Australia, the Pacific and South East Asia."

Bi-Cameral delegation forms High-Speed and Intercity Rail Caucus

The founding members of the Bi-Cameral High-Speed & Intercity Passenger Rail Caucus recently joined together at Washington’s Union Station to announce the formation of a coalition that will serve as the leading advocates to advance high-speed and intercity rail programs across the country.

The caucus’ members are Representative Louise Slaughter (D-NY) and Senator Frank R. Lautenberg (D-NJ), along with Congress members Corrine Brown (D-FL), Zoe Lofgren (D-CA), David Price (D-NC), Tim Walz (D-MN) and John Olver (D-MA) and Senator Dick Durbin (D-IL). According to a statement on Rep. Slaughter’s Website, the caucus will be dedicated to supporting federal legislative and funding policies to ensure the long-term viability of the high-speed and intercity passenger rail program.


Each founding Co-Chair represents a region containing a major high-speed and intercity rail corridors that, when completed, will make up a national high-speed rail network anticipated to both directly and indirectly spur the creation of hundreds of thousands of good-paying jobs across the country.

The Obama Administration has set the goal to give 80 percent of Americans access to high-speed rail within 25 years. Lawmakers gathered to argue that funding for high-speed and intercity rail programs are exactly the type of bold investment necessary to increase America’s competitiveness.

"Like President Obama, we share the goal of giving 80 percent of Americans access to high speed rail within 25 years," said Congresswoman Slaughter. "We understand that this investment will more than pay for itself with the jobs created for Americans in need of work and opportunities it creates for future growth. As rail lines open and communities are brought closer together, the potential long-term impact of rail service will only grow. I represent Upstate New York, which is home to the busiest freight corridor in the nation, stretching between Buffalo and Albany. A dedicated third track for high-speed, intercity travel will mean $1.1 billion in new wages and 21,000 estimated new jobs in my home state alone."

"High-speed rail needs to play a bigger role in our nation’s overall transportation system so we can move people and goods from one place to another faster and more efficiently," said Congressman Price. "Planned rail investments will relieve congestion, reduce our dependence on foreign oil, and create jobs – including 20,000 jobs in North Carolina. If we want to stay competitive in the international economy, we simply cannot continue to lag behind countries like China in developing a 21st Century infrastructure. We must invest in a smarter transportation system that includes high-speed rail."

 

UP invests $18M in Texas track improvements

Union Pacific continues improving Houston’s transportation infrastructure with an $18.7 million investment to enhance a rail line that parallels the Hardy Toll Road from Spring to Crosstimbers Street in Houston.

The 17-mile project includes removing and installing new rail, 11 track switches and more than 45,000 concrete ties. Crews also will spread more than 78,000 tons of ballast to ensure a stable roadbed and renew the roadway surfaces at seven crossings.

Union Pacific will use a modern track renewal train, the TRT 909, which installs rail and concrete ties in one pass. The TRT can install up to 6,000 ties in a 12-hour day. The track renewal train consists of approximately 30 rail cars, with each car capable of carrying 210 concrete ties. Three sets of gantry cranes move the concrete ties forward for the TRT to drop into place and the machine then threads the new rail onto the ties. The old wooden ties are picked up and discarded rail is threaded out as the machine works its way down the track. A conveyor moves the removed ties into position for the gantry cranes to load them onto the cars for movement to a facility for sorting.

 

AAR to Congress: Freight rail investments propel safety achievements

The Association of American Railroads has told Congress that private capital investments made over the past 30 years by the nation’s freight railroads have helped propel the industry’s enviable safety record. Testifying on behalf of AAR, Norfolk Southern Executive Vice President and Chief Operating Officer Mark Manion told members of the House Transportation and Infrastructure Committee that the rail industry’s record safety achievements are due in large part to the commitment and tremendous resources freight railroads put into constantly improving safety.

"For Norfolk Southern and America’s other freight and passenger railroads, safe operations are an imperative," Manion said, noting the industry has made massive investments in safety- enhancing infrastructure, equipment and technology, as well as employee training and cooperative programs with other safety stakeholder groups like labor unions, customers and federal regulators.

"Nothing is more important to our nation’s freight railroads than the safety of their employees, customers and the communities they serve, as demonstrated by the scope of the industry’s safety efforts," he added.

At the Hill hearing on the status of the Rail Safety Improvement Act of 2008, Manion said Congress passed the most costly federal mandate in U.S. railroad history – a $13.2 billion price tag and a 20-to-one cost-benefit ratio – which will require railroads to deploy positive train control technology by 2015 on lines handling certain types of hazardous materials and passenger operations.

"The cause of safety will not be advanced if resources are directed to programs or requirements that siphon resources that would have a more pronounced impact on safety if spent elsewhere," he said. "It is short sighted to put such enormous emphasis on one technology, when less costly, more effective alternatives exist for reducing the risk of accidents."

Following the issuance of FRA’s final rule for implementing PTC, AAR filed suit in the U.S. Court of Appeals for the D.C. Circuit, seeking to change certain aspects of the rule. Earlier, FRA agreed to undertake a review of the rules, and the suit was put on hold.

"FRA’s review of the final PTC rule provides the Obama Administration a great opportunity to make good on its Executive Order to identify and change regulations that are preventing job growth and economic recovery," said AAR’s President and CEO Edward Hamberger. "Given the vast amounts of private capital and resources that will be required to meet the PTC mandate, much will depend on how the revised rules are ultimately shaped."

WMATA to hold public hearing on capital improvement program of projects

The Washington Metropolitan Area Transit Authority will hold a public hearing on Monday, March 21, to receive public input on Metro’s fiscal 2012 Capital Budget and Capital Improvement Program, both of which focus on ensuring safety and maintaining a state of good repair across the Metro system. 



The public is invited to provide input on the Program of Projects that Metro staff has proposed to include in its fiscal 2012 Capital Improvement Program. The program is expected to total $851.1 million and to include funding from an estimated $398.0 million of federal grants. Projects include replacing the 1000 series rail cars; replacing and rehabilitating old buses and bus garages and rehabilitating rail lines and stations. 



The hearing is scheduled to begin at 4 p.m. Monday, March 21, at Metro Headquarters, in the lobby-level Board Room, 600 Fifth Street, NW, Washington, D.C

AAR: 2010 is safest year in freight railroad history

The Association of American Railroads recently announced that 2010 was the safest year in U.S. Class 1 freight railroad history, with preliminary year-end data indicating the industry’s train accident and employee casualty rates both were at record low levels.

The safety data, which is released by the Federal Railroad Administration, shows that the total number of train accidents involving U.S. Class 1 freight railroads declined by three percent in 2010, with the rate per-million-train-miles falling 9.6 percent from the previous record established in 2009. The number of employee casualties on U.S. Class 1 freight railroads fell by 14.2 percent, while the employee casualty rate measured per-hundred full-time equivalent employees declined 16 percent from the previous record set in 2009.

"These safety accomplishments demonstrate the depth of the freight railroad industry’s commitment to the safety of our employees, the communities we serve and the country’s rail network infrastructure," said AAR President and CEO Edward Hamberger. "Safety is not an option for the railroads. It drives how we conduct our business day in and day out."

Hamberger said that record investments by freight railroads in their infrastructure, equipment and technology in recent years have made railroads much safer. In fact, as railroad spending on infrastructure and equipment has increased over the years, train accident rates have decreased.

He also noted that at a time when the nation’s railroads are working to meet the most expensive federal mandate in U.S. railroad history by installing positive train control systems – primarily intended to prevent train collisions – railroads are experiencing record low collision rates, down 13 percent in 2010 from the previous record low in 2009. The train collision rate has dropped by 89.9 percent since 1980 and 47 percent since 2000.

Train derailment rates also hit historic lows in 2010, down 9.6 percent from 2009, as did train accidents caused by defective track, human error and equipment, which were down 9.4 percent, 9.6 percent and 14.2 percent, respectively. In 2010, grade crossing collision incidents increased for the first time in six years, up 7.8 percent from 2009. The grade crossing collision rate in 2010 also increased for the first time in four years, up 0.5 percent on a per-million-train-mile basis from 2009.

"The safety challenge is never-ending," said Hamberger. "Our industry’s excellent safety record reflects its commitment to innovation and investment."

 

Senators unveil plan for $10B infrastructure bank

At a press conference, Senators John Kerry (D-Mass.), Kay Bailey Hutchison (R-Texas), and Mark R. Warner (D-Va.), announced legislation to create an infrastructure bank that would help close America’s widening infrastructure-funding gap, create millions of American jobs in the next decade and make the United States more competitive in the 21st century.

"This is a bi-partisan moment to make a once bi-partisan issue bi-partisan once again," said Sen. Kerry. "Democrats and Republicans, business and labor, are now united to create an American infrastructure bank to leverage private investment, make America the world’s builders once again and close the deficit in our infrastructure investments. The BUILD Act will create good jobs, strengthen our competitiveness, and do more with less. Most of all, this bill breaks a partisan stalemate to get America back in the game. When you’ve got a Massachusetts Democrat, a Texas Republican, the Chamber of Commerce and the AFL-CIO preaching from the same hymnal, you’ll find a sweet spot that can translate into a major legislative step forward."

A press release from Sen. Kerry’s office stated, "The Building and Upgrading Infrastructure for Long-Term Development Act would establish an American Infrastructure Financing Authority – a kind of infrastructure bank – to complement our existing infrastructure funding. This institution, which would provide loans and loan guarantees, would be both fiscally responsible and robust enough to address America’s needs."


KEY PROVISIONS OF THE BUILD ACT

Independent, non-partisan operations
• While AIFA would be a government-owned entity, it would not be controlled by any federal agency and instead would operate independently. It would be led by a Board of Directors with seven voting members and a chief executive officer.
• No more than four voting members of the board could be from the same political party.
• Board members would have to be U.S. citizens with significant expertise either in the management of a relevant financial institution or in the financing, development or operation of infrastructure projects.

Strong oversight by Congress and the Federal government
• The Board and CEO would be appointed by the President, with one board member designated as chairperson. All candidates would have to be confirmed with the advice and consent of the Senate.
• The Majority Leader of the Senate, the Minority Leader of the Senate, the Speaker of the House of Representatives and the Minority Leader of the House of Representatives would each recommend candidates.
• An Inspector General would oversee AIFA’s operations, an independent auditor would review AIFA’s books and AIFA would submit an assessment of the risks of its portfolio, prepared by an independent source.
• The General Accounting Office would also conduct an evaluation of AIFA and submit a report to Congress no later than five years after the date of enactment.

Broad eligibility for infrastructure
• Eligible projects would include transportation infrastructure; water infrastructure; and energy infrastructure.
• In general, projects would have to be at least $100 million in size and be of national or regional significance.
• Projects would have a clear public benefit, meet rigorous economic, technical and environmental standards, and be backed by a dedicated revenue stream.
• Geographic, sector, and size considerations would also be weighed.

Unbiased project selection
• The CEO would be responsible, in consultation with professional staff, for reviewing and preparing the eligible project applications.
• The Board would be responsible for the ultimate approval or disapproval of the eligible projects that are submitted to the Board by the Chief Executive Officer and staff.

Strong rural protections
• Rural projects would only need to be $25 million in size.
• Five percent of the initial funding of AIFA would be dedicated to helping rural projects.
• AIFA would include an Office of Rural Assistance to provide technical assistance regarding the developing and financing of rural projects.
• Projects would still have to have a clear public benefit, meet rigorous economic, technical and environmental standards and be backed by a dedicated revenue stream.

Addressing market gaps for infrastructure financing
• AIFA would issue loan and loan guarantees to eligible projects.
• Loans issued by AIFA would use approximately the same interest rate as similar-length United States Treasury securities and would have a maturity of no longer than 35 years.
• Loans and loan guarantees could be subject to additional fees or interest rate premiums based largely on the costs of the loan to the Federal government, as determined by AIFA in consultation with the Office of Management and Budget.
• AIFA would finance no more than 50 percent of the total costs of the project, in order to avoid crowding out private capital.

Self-sufficiency of AIFA
• AIFA is set up to be self-sufficient after the first few years.
• To achieve self-sufficiency, the CEO of AIFA would establish fees for loans and loan guarantees. These fees could be in the form of application fees or transaction fees, and could include an interest rate premium associated with the loan or loan guarantee.
• However, AIFA would receive an initial funding of $10 billion, which would earn interest. This initial funding would be used both to offset the cost of the loans to the Federal government and to cover administrative costs.
• Funding under the Act would be subject to the Federal Credit Reform Act, except that it would be exempted from the requirement that appropriations are needed for subsequent loans and loan guarantees.

Additional BUILD Act provisions
• The BUILD Act also addresses private activity bonds. These bonds are frequently used to finance infrastructure projects. Under current law, interest on tax-exempt private activity bonds is generally subject to the Alternative Minimum Tax. This, in turn, limits the marketability of these bonds and causes states to issue bonds at higher interest rates. This Act would extend the current exemption to bonds that are issued in 2011 or 2012.