Report to the Ranking Democratic 

Member, Committee on Transportation 

and Infrastructure, House of 

Representatives 

United States General Accounting Office 

GAO 

January 2004 COMMUTER RAIL 

Information and 

Guidance Could Help 

Facilitate Commuter 

and Freight Rail 

Access Negotiations 

GAO-04-240 
www.gao.gov/cgi-bin/getrpt?GAO-04-240.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact JayEtta Z. 

Hecker at (202) 512-2834 or 

heckerj@gao.gov. 

Highlights of GAO-04-240, a report to the 

Ranking Democratic Member, Committee 

on Transportation and Infrastructure, 

House of Representatives 

January 2004

COMMUTER RAIL 

Information and Guidance Could Help 

Facilitate Commuter and Freight Rail 

Access Negotiations 

Freight railroads and commuter rail agencies face a number of challenges 

when negotiating agreements and sharing access to the same rights-of-way, 

including reaching agreement on compensation, capacity, and liability 

issues. For instance, in negotiating the agreements, freight railroads 

typically require that the commuter rail agency contractually indemnify them 

from any liability in the event of a commuter rail accident and procure a 

certain level of insurance coverage. Officials from freight railroads said they 

seek these provisions to protect their shareholders from the potential costs 

associated with commuter rail accidents. However, accepting these liability 

terms—notably the expense of maintaining a high level of insurance—can be 

problematic for the commuter rail agencies. In 1997, Congress limited the 

aggregate damages that may be awarded to all passengers from claims from 

a particular rail accident to $200 million and permitted providers of rail 

transportation to enter into indemnification agreements. However, we found 

some confusion within the commuter and freight rail community as to 

whether the liability cap applied to commuter rail agencies, which could 

result in problems during negotiations. After reviewing the legislation, we 

have concluded that the liability cap applies to commuter rail operations. 

Although there is no exact formula for success, officials from commuter rail 

agencies and freight railroads identified actions that can help facilitate 

mutually beneficial arrangements—understanding each other’s position, 

identifying and using incentives to leverage cooperation, securing adequate 

and flexible funding, and establishing good lines of communication. 

Although commuter rail agencies and freight railroads agreed on actions that 

could help facilitate win/win arrangements, they disagreed on the 

appropriate role for the federal government in negotiating access or 

resolving disputes between commuter rail agencies and freight railroads. 

The Federal Transit Administration (FTA), Federal Railroad Administration, 

and Surface Transportation Board (STB) have responsibility for different 

aspects of rail transportation. For example, FTA helps fund the planning 

and development of eligible commuter rail projects. However, none of the 

three agencies play a role in commuter rail access negotiations. Therefore, 

they have not provided any guidance or information to commuter rail 

agencies or freight railroads to facilitate and inform negotiations. 

Commuter and freight rail services 

have the potential to play 

increasingly important roles in the 

nation’s economy and 

transportation system as demand 

for these services increases. 

Because the cost of building new 

infrastructure can be costprohibitive, commuter rail agencies 

typically seek to use existing 

infrastructure—which is primarily 

owned by private freight railroads. 

Consequently, commuter rail 

agencies must negotiate to 

purchase, lease, or pay to access 

the existing infrastructure from 

freight railroads. GAO was asked 

to examine (1) the challenges 

commuter rail agencies and freight 

railroads face when negotiating and 

sharing rights-of-way, (2) the 

actions that help facilitate mutually 

beneficial arrangements between 

commuter rail agencies and freight 

railroads, and (3) the role the 

federal government plays in 

negotiations between commuter 

rail agencies and freight railroads. 

GAO recommends that the 

Department of Transportation 

(DOT) and STB determine whether 

it would be appropriate for them to 

provide guidance and information, 

such as best practices and 

information on the applicability of 

the federal liability cap, to 

commuter rail agencies and freight 

railroads. DOT and STB generally 

agreed with the report’s findings, 

conclusions, and recommendation. 
Page i GAO-04-240 Commuter Rail 

Letter 1

Results in Brief 2

Background 5

Commuter Rail Agencies and Freight Railroads Face Numerous 

Challenges in Negotiating and Sharing Rights-of-Way 12

There Is No Template for Success, but Certain Actions Can Help 

Facilitate Good Relationships 20

Federal Government Currently Does Not Play a Role in Commuter 

Rail Access 26

Conclusions 34

Recommendation 35

Agency Comments 36

Appendix I Scope and Methodology 37 

Appendix II Federal Legislation Addresses the Major Liability 

Concerns, but Other Issues Remain 41 

Appendix III GAO Contacts and Staff Acknowledgments 45 

GAO Contacts 45

Acknowledgments 45

Tables 

Table 1: Type of Rights-of-Way Arrangement by Commuter Rail 

Agency 10

Table 2: Names and Locations of Existing and Proposed Commuter 

Rail Agencies and the Class I Freight Railroad Companies 38

Figures 

Figure 1: Map of Existing and Proposed Commuter Rail Systems 6

Figure 2: Map of Class I Rail Lines 8

Figure 3: Example of Capacity Enhancement 16

Figure 4: Photograph of a Segment of Burlington Northern Santa 

Fe Right-of-Way in the State of Washington 21

Contents 
Page ii GAO-04-240 Commuter Rail 

Figure 5: Identified Actions Can Help Lay Foundation for Win/Win 

Arrangements 22

Figure 6: Burlington Northern Santa Fe’s (BNSF) Guiding 

Principles for Commuter Rail Service 24

Abbreviations 

ARAA Amtrak Reform and Accountability Act of 1997 

AAR Association of American Railroads 

APTA American Public Transportation Association 

BNSF Burlington Northern Santa Fe Railway Company 

CSX CSX Transportation 

DOT Department of Transportation 

FRA Federal Railroad Administration 

FTA Federal Transit Administration 

ICC Interstate Commerce Commission 

STB Surface Transportation Board 

UTA Utah Transit Authority 

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reproduce this material separately. 
Page 1 GAO-04-240 Commuter Rail 

January 9, 2004 

The Honorable James L. Oberstar 

Ranking Democratic Member 

Committee on Transportation 

 and Infrastructure 

House of Representatives 

Dear Mr. Oberstar: 

As highways become increasingly congested, communities are looking to 

different forms of public transit for relief. An increasingly popular choice 

is commuter rail—passenger trains operating on railroad tracks to provide 

regional rail service. For instance, 18 transit agencies currently provide 

commuter rail service1

 in the United States, and an additional 19 commuter 

rail projects are in various stages of planning or development in 

communities across the nation. An attractive feature of this type of transit 

service for communities is that commuter rail can operate on existing 

railroad rights-of-way, eliminating the need to build a new rail corridor, 

which could be cost prohibitive. However, the majority of existing rail 

rights-of-way in the United States are owned by private freight railroads. 

Consequently, commuter rail agencies—which have no statutory rights of 

access to freight railroads’ tracks—must often negotiate with the freight 

railroads to purchase, lease, or pay to access their rights-of-way. 

As demand for commuter rail services is increasing in communities across 

the country, the demand for freight transportation services is also growing. 

For example, the Department of Transportation (DOT) estimates that 

freight rail tonnage will increase by about 50 percent from 1998 to 2020.2

The rail network, like other modes of transportation, has capacity 

limitations—that is, only a certain amount of rail traffic can be efficiently 

and safely accommodated by existing infrastructure. When commuter rail 

trains use freight-owned rights-of-way, the amount of capacity, or the 

number of train “slots,” available for freight trains may be reduced. Thus, 

freight railroads must balance requests by commuter rail agencies to 

 1

For purposes of this report, we refer to transit agencies that provide commuter rail service 

as “commuter rail agencies.” 

2

Department of Transportation, Freight Analysis Framework (October 2002). 

United States General Accounting Office

Washington, DC 20548 
Page 2 GAO-04-240 Commuter Rail 

purchase or use their tracks against their ability to serve their current 

freight customers as well as their efforts to grow their freight business in 

the future. 

As you requested, this report discusses (1) the challenges freight railroads 

and commuter rail agencies face when negotiating agreements and sharing 

access to the same rights-of-way, (2) the actions that help facilitate 

mutually beneficial arrangements between freight railroads and commuter 

rail agencies, and (3) the role the federal government plays in access 

negotiations between freight railroads and commuter rail agencies. To 

address these objectives, we visited 8 commuter rail agencies and 4 Class I 

freight railroads3

 across the nation. During these site visits, we interviewed 

senior level management; toured operation, dispatching, and maintenance 

facilities; and/or traveled on the commuter rail system. We conducted 

structured interviews with officials from the other 29 commuter rail 

agencies—both existing and proposed—and the remaining 3 Class I freight 

railroads. We also interviewed officials at the Federal Transit 

Administration (FTA), Federal Railroad Administration (FRA), Surface 

Transportation Board (STB), and the National Railroad Passenger 

Corporation (Amtrak) as well as representatives from a variety of industry 

associations. Additionally, we reviewed federal laws and regulations; court 

cases and research related to the rail industry; and internal documents of 

federal agencies, commuter rail agencies, and freight railroads. We 

conducted our work from June through November 2003 in accordance 

with generally accepted government auditing standards. (See app. I for a 

more detailed discussion of the report’s scope and methodology.) 

Freight railroads and commuter rail agencies face a number of challenges 

when negotiating and sharing access to the same rights-of-way. However, 

reaching agreement on compensation, capacity, and liability issues present 

the most problems when negotiating agreements, according to both 

commuter rail and freight railroad officials. For example, freight railroads 

generally do not want to allow commuter rail service on their rights-of-way 

unless they are protected from the potential liability associated with 

passenger rail accidents. As a result, freight railroads typically require that 

the commuter rail agency contractually indemnify them from any liability 

 3

Class I railroads are the largest railroads, as defined by operating revenue, and account for 

the majority of U.S. rail freight activity. There are three classes of railroad. STB designates 

the class of railroad and in 2002 defined Class I railroads as railroads with operating 

revenues of $271.9 million or more. 

Results in Brief 
Page 3 GAO-04-240 Commuter Rail 

in the event of a passenger accident and procure a certain level of 

insurance coverage to guarantee their ability to pay the entire allocation of 

damages. Accepting these liability terms can be problematic for the 

commuter rail agencies; therefore, negotiations could stall or fail. 

Recognizing the freight railroad’s potential exposure to liability when 

hosting passenger trains on their rights-of-way, Congress enacted the 

Amtrak Reform and Accountability Act of 1997 (ARAA), which limited the 

aggregate overall damages that may be awarded to all passengers for all 

claims from a particular rail accident to $200 million and permitted 

providers of rail transportation to enter into indemnification agreements 

allocating financial responsibility for passenger accidents. However, in 

discussions with officials from commuter rail agencies and freight 

railroads, we found some confusion as to whether the liability cap 

established in the ARAA applied to commuter rail agencies. After 

reviewing the legislation, we have concluded that the liability cap applies 

to commuter rail operations based upon the plain language of the statute 

and our review of the pertinent legislative history. Given the growing 

demand for commuter and freight rail services and financial pressures on 

the rail industry, reaching agreement will likely become even more 

difficult in the future. In addition to negotiation challenges, there are dayto-day or operational challenges that the commuter rail agency and freight 

railroad have to work through when sharing the same rights-of-way. 

Officials from commuter rail agencies and freight railroads identified a 

number of challenges in sharing the same rights-of-way; however, the most 

commonly cited problems were associated with the dispatching of trains 

(i.e., controlling the movement of trains) and maintaining the rights-ofway. 

There is not a defined formula for developing mutually beneficial 

arrangements between commuter rail agencies and freight railroads. A 

“cookie cutter” approach is not possible because every situation is 

unique—from the parties involved to the needs and expectations for the 

commuter rail system—requiring the agreements to be tailored to the 

circumstances of the situation. The characteristics of the rights-of-way, 

such as freight traffic density and the physical constraints of each rail line, 

also vary from location to location, creating unique negotiating 

environments. For example, the freight railroads would likely be more 

willing to allow commuter rail trains on a lightly used branch line (or 

secondary line) than a main line that is critical to their freight network. 

Although there is not a formula for negotiating and cultivating successful 

arrangements, officials from commuter rail agencies and freight railroads 

identified conditions or actions that can help facilitate mutually beneficial 

arrangements between commuter rail agencies and freight railroads. The 
Page 4 GAO-04-240 Commuter Rail 

most frequently identified actions include understanding each other’s 

position, identifying and using incentives to leverage cooperation, securing 

adequate and flexible funding to help improve capacity and infrastructure, 

and establishing good communication between both parties. 

The federal government currently does not play a role in access 

negotiations between commuter and freight railroads. Three federal 

agencies, FTA, FRA, and STB, have responsibility for different aspects of 

rail transportation. Specifically, FRA is primarily focused on ensuring safe 

operation of railroads; FTA’s primary role is providing funding to transit 

projects, including commuter rail; and STB is responsible for the 

economic regulation of railroads. For example, FTA helps fund the 

planning and development of eligible commuter rail projects—currently 

funding up to 60 percent of the total capital costs of new projects through 

its New Starts program.4

 According to officials from FRA, FTA, and STB, 

these agencies do not have the authority or responsibility for commuter 

rail access issues; therefore, they do not currently act to facilitate 

negotiations or resolve impasses between commuter rail agencies and 

freight railroads regarding access to freight-owned rights-of-way. For 

instance, none of these agencies have issued guidance or information on 

commuter rail access issues, such as best practices for negotiations, to 

commuter rail agencies or freight railroads. Commuter rail agencies and 

freight railroads differ on the roles they would like to see the federal 

government play in negotiations between commuter rail agencies and 

freight railroads. In general, most commuter rail agencies would like the 

federal government to play a more active role, such as serving as a 

mediator; freight railroads do not want the federal government involved, 

except for assuring the adequacy of funding for commuter rail projects. 

We recommend that the Secretary of Transportation and the Chairman of 

the Surface Transportation Board determine whether it would be 

appropriate and useful for them to provide guidance and information, such 

as tips for successful negotiations and information on best practices, 

availability of federal resources, and the applicability of the liability 

 4

FTA’s New Starts program provides funds to transit providers for constructing or 

extending certain types of mass transit systems, like commuter rail projects. Current law 

allows FTA to grant up to 80 percent of the estimated net project cost to individual transit 

projects. However, on the basis of direction from Congress in the conference report that 

accompanied DOT’s fiscal year 2002 appropriations act, FTA instituted a preference policy 

to recommend projects with federal shares that do not exceed 60 percent for funding. The 

administration’s proposed surface transportation reauthorization legislation seeks to 

reduce the statutory federal share to no more than 50 percent of the net project cost. 
Page 5 GAO-04-240 Commuter Rail 

provisions in the Amtrak Reform and Accountability Act of 1997, to 

commuter rail agencies and freight railroads. This information and 

guidance would serve to facilitate and inform negotiations. If DOT and 

STB determine that it would be helpful for them to provide such 

information but that they lack the statutory authority to do so, DOT and 

STB should seek a legislative change to allow them to provide guidance 

and information to commuter rail agencies and freight railroads. We 

provided draft copies of this report to DOT and STB for their review and 

comment. DOT and STB officials generally agreed with the report’s 

findings, conclusions, and recommendation. They also provided some 

technical comments on our draft, which we incorporated where 

appropriate. 

Commuter rail is a type of public transit that is characterized by passenger 

trains operating on railroad tracks and providing regional service (e.g., 

between a central city and adjacent suburbs).5

 Commuter rail systems are 

traditionally associated with older industrial cities, such as Boston, New 

York, Philadelphia, and Chicago. However, over the past decade, 

commuter rail systems have been inaugurated in such cities as Dallas and 

Seattle as communities sought to ease congestion on their roads. Today, 

there are 18 commuter rail agencies throughout the country. (See fig. 1.) In 

the first quarter of 2003, commuter rail systems provided an average of 1.2 

million passenger trips each weekday. Advocates of commuter rail 

contend that it provides a number of public benefits, including reduced 

highway congestion, pollution, and energy dependence. Moreover, 

commuter rail service can operate on existing rights-of-way, which 

eliminates the time and significant expense associated with constructing 

new infrastructure. The potential benefits ascribed to commuter rail have 

stimulated interest in this type of public transit in many communities 

across the country; as a result, many communities are planning to provide 

commuter rail service. Specifically, as figure 1 shows, 19 commuter rail 

projects are currently in various stages of planning or development in 

communities across the nation. All of the proposed commuter rail 

agencies have purchased or plan to purchase, lease, or pay to access 

existing rights-of-way from freight railroads or other entities. 

 5

For more information about commuter rail, see FRA’s statement of policy concerning 

enforcement of railroad safety laws (49 CFR 209, Appendix A). 

Background 
Page 6 GAO-04-240 Commuter Rail 

Figure 1: Map of Existing and Proposed Commuter Rail Systems 

As demand for commuter rail services is increasing in communities across 

the country, the demand for freight transportation services is also growing. 

The nation’s private railroads are important providers of freight 

transportation services. Currently, 7 Class I railroads—CSX 

Transportation (CSX), Burlington Northern Santa Fe Railway Company 

(Burlington Northern Santa Fe), Union Pacific Railroad Company (Union 

Pacific), Norfolk Southern, Kansas City Southern Railway Company, 
Page 7 GAO-04-240 Commuter Rail 

Canadian National Railway, and Canadian Pacific Railway6—and over 500 

short line and regional railroads7

 are operating in the United States. These 

railroads operate the nation’s freight rail system as well as own the 

majority of rail infrastructure in the United States. (See fig. 2.) According 

to the Association of American Railroads (AAR), freight railroads carried 

about 42 percent of domestic intercity freight (measured by ton miles) in 

2001. Railroads are the primary mode of transportation for many products, 

especially for such bulk commodities as coal and grain. In addition, 

railroads are carrying increasing levels of intermodal freight (e.g., 

containers and trailers), which travel on multiple modes and typically 

require faster delivery than bulk commodities. The demand for freight rail 

service is projected to increase in the future. For example, DOT estimated 

that freight rail tonnage will grow by almost 50 percent from 1998 to 2020. 

According to advocates for the freight rail system, transporting freight by 

rail offers a number of public benefits, including reducing congestion on 

the highways, lowering highway costs, increasing fuel efficiency, and 

supporting military mobilization. 

 6

The entire Canadian National Railway and Canadian Pacific Railway systems are not Class 

I railroads. However, the U.S. portions of these railroads (e.g., Grand Trunk Corporation 

and Soo Line Railroad Company) meet the U.S. regulatory criteria and are Class I railroads. 

7

Short line and regional railroads are small and medium-sized railroads, respectively. 

Generally, short line railroads are Class III railroads, and regional railroads are Class II 

railroads. STB defined Class II railroads as railroads with operating revenues less than 

$271.9 million but more than $21.7 million and Class III railroads as railroads with 

operating revenues less than $21.7 million in 2002. 
Page 8 GAO-04-240 Commuter Rail 

Figure 2: Map of Class I Rail Lines 

Historically, America’s rail corridors have been used for both freight and 

passenger purposes. At one time, both passenger and freight services were 

operated by the private railroads. The private railroads were required by 

federal law to maintain their passenger services. However, by the 1970s, 

American freight railroads were in serious financial decline. Congress 

responded by passing the Rail Passenger Service Act of 1970, which 

created Amtrak to provide intercity passenger rail service because existing 

railroads found such service unprofitable. In creating Amtrak, Congress 

relieved freight railroads of the requirement to provide passenger service. 

In return, Amtrak operates primarily over tracks owned by freight 
Page 9 GAO-04-240 Commuter Rail 

railroads,8 and federal law requires that freight railroads give Amtrak trains 

priority access and charge Amtrak an incremental cost—rather than the 

full cost—associated with the use of their tracks. Congress also passed the 

Railroad Revitalization and Regulatory Reform Act of 1976 and the 

Staggers Rail Act of 1980, which reduced rail regulation and encouraged 

greater reliance on competition to set rates. Since these acts were passed, 

the railroad industry has become more stable, as railroads continue to 

consolidate to reduce costs, become more efficient, and improve their 

financial health. 

Unlike Amtrak, commuter rail agencies do not possess statutory rights of 

access to freight railroads’ tracks. If a commuter rail agency wants to use a 

freight railroad’s existing infrastructure, it must negotiate with the freight 

railroad to purchase, lease, or pay to access the railroad’s right-of-way. If 

the two parties reach agreement, there are often multiple documents 

detailing this agreement, including the purchase, lease, or access 

agreement and the shared use agreement.9

 The number and type of 

agreements vary by the parties involved and location. The contents of 

these agreements may also vary, but they are likely to address a number of 

important issues, including dispatching trains, maintenance of rights-ofway, liability, capital improvements, and access fees, among other things. 

Hence, the agreements will govern how the two parties will operate on the 

rights-of-way they share. The period of time covered by the agreements 

and amount of time required to negotiate the agreements also varies. For 

example, some commuter rail agencies and freight railroads reach 

agreement in a manner of months; negotiations of other commuter rail 

agencies and freight railroads can extend over a period of years. 

As commuter rail agencies buy or lease rights-of-way from freight 

railroads, they create unique and complex relationships with the freight 

railroads. As table 1 shows, about half of the existing and proposed 

commuter rail agencies lease or plan to lease rights-of-way from freight 

railroads for their operations. An even greater number of these agencies 

own or plan to purchase at least a portion of the rights-of-way from freight 

railroads. (See tab. 1.) When the commuter rail owns rights-of-way, there 

 8

Over 95 percent of Amtrak’s 22,000-mile network operates on freight railroad tracks. 

Amtrak owns about 730 miles of track, primarily on the Northeast Corridor between 

Boston, Massachusetts, and Washington, D.C. 

9

The shared use agreement documents how the rights-of-way will be operated—for 

example, it will outline the agreed-upon dispatching rules. 
Page 10 GAO-04-240 Commuter Rail 

is a role reversal between the freight railroad and the commuter rail 

agencies from the typical relationship—that is, if a freight railroad uses the 

commuter rail agency’s rights-of-way, the commuter rail agency is the host 

and the freight railroad is the tenant. Moreover, as table 1 shows, a number 

of existing and proposed commuter rail agencies may be both the host and 

tenant in certain situations, creating a unique relationship with the freight 

railroads with whom they interact.10

Table 1: Type of Rights-of-Way Arrangement by Commuter Rail Agency 

Name of commuter rail agency 

Own or plan to own 

right-of-way 

Lease or plan to lease right-of-way 

from freight railroads 

Existing commuter rail agencies 

Altamont Commuter Express X 

Connecticut Department of Transportation: 

 Shore Line East line 

 New Haven line Xf b 

Maryland Transit Administration (MARC) XeX 

Massachusetts Bay Transportation Authority X X 

Metra X X 

MTA Long Island Rail Road Xa

MTA Metro-North Railroad Xa

New Jersey Transit Corporation X X 

North County Transit District (Coaster) X 

Northern Indiana Commuter Transportation District X 

Peninsula Corridor Joint Powers Board (CALTRAIN) X X 

Pennsylvania Department of Transportation b 

Sound Transit X X 

Southeastern Pennsylvania Transportation Authority X X 

Southern California Regional Rail Authority (Metrolink) XaX 

Tri-County Commuter Rail Authority (Tri-Rail) Xa

Trinity Railway Express X 

Virginia Railway Express XeX 

Proposed commuter rail agencies 

Akron lined X X 

 10For example, the Southeastern Pennsylvania Transportation Authority owns a portion of 

the rights-of-way it uses; and freight railroads use these rights-of-way. In addition, the 

Southeastern Pennsylvania Transportation Authority uses rights-of-way owned by CSX, 

Amtrak, and the City of Philadelphia. 
Page 11 GAO-04-240 Commuter Rail 

Name of commuter rail agency 

Own or plan to own 

right-of-way 

Lease or plan to lease right-of-way 

from freight railroads 

Alaska Railroad Corporation Xa

Austin-San Antonio Intermunicipal Commuter Rail District X X 

Charlotte Area Transit System X 

Cumberland-Dauphin-Harrisburg Transit Authority X 

Dane County T2020 (Transport 2020) X 

Delaware Department of Transportationc TBD TBD 

Eastern Corridor, Hamilton County Transportation Improvement 

District 

X 

Georgia Rail Passenger Program TBD TBD 

Johnson County Transit X 

Nashville to Lebanon Corridor Regional Transportation Authority XaX 

NeoRail line X X 

New Haven-Hartford-Springfield Commuter Rail b 

Northstar Corridor X 

Regional Transportation District X X 

Sonoma-Marin Area Rail Transit Xa

Triangle Transit Authority X X 

Washington Country Commuter Rail XaX 

Utah Transit Authority, Commuter Rail X X 

Source: GAO. 

TBD = To be determined. 

Note: The proposed commuter rail agencies’ plans to purchase or lease rights-of-way are subject to 

change. 

a

The rights-of-way are owned by commuter agency’s local or state government or the agency’s 

regional transportation authority. 

b

Commuter rail agency operates exclusively on Amtrak-owned rights-of-way. 

c

Southeastern Pennsylvania Transportation Authority provides a “turnkey,” or contracted commuter 

rail service for the Delaware Department of Transportation between Newark/Wilmington, Delaware, 

and Philadelphia, Pennsylvania. 

d

The Akron line, which is proposed to run between Cleveland and Canton, Ohio, was originally part of 

the NeoRail study, which has several proposed lines out of Cleveland. Due to an opportunity to move 

forward, the Akron line was separated as a distinct project for planning purposes. The Akron and 

NeoRail lines may be integrated again at some point in the future. 

e

The commuter rail agency owns a very limited portion of the rights-of-way it uses. Most of the rightsof-way are owned by Amtrak or a freight railroad. 

f

The New Haven line is operated by MTA Metro-North Railroad. The state of Connecticut owns about 

50 miles on which the Connecticut trains operate. 

Three federal agencies—FRA, FTA, and STB—are responsible for different 

aspects of commuter or freight rail in the United States. In particular, FRA 
Page 12 GAO-04-240 Commuter Rail 

administers and enforces the federal laws and related regulations that are 

designed to promote safety on railroads, such as track maintenance, 

inspection standards, equipment standards, and operating practices.11

Freight railroads and commuter rail agencies are subject to FRA 

regulations. FTA is the primary federal financial resource for supporting 

locally planned, implemented, and operated transit capital investments. As 

a form of public transit, commuter rail projects are eligible for FTA 

funding. Unlike FRA and STB, FTA is not a regulatory agency. STB is 

responsible for the economic regulation of interstate surface 

transportation, primarily freight railroads, within the United States. STB 

has jurisdiction to resolve compensation and access issues between 

freight railroads and Amtrak in the event of an impasse in negotiations. 

Proposed legislation (H.R. 2192) would give STB the jurisdiction to order 

agreements between freight railroads and commuter rail agencies that 

have reached an impasse during negotiations.12 The legislation would also 

grant commuter rail agencies the same right of access to freight railroads’ 

rights-of-way that Amtrak currently possesses. In May 2003, the proposed 

legislation was referred to the Subcommittee on Railroads, House 

Committee on Transportation and Infrastructure. As of December 2003, 

the proposed legislation has not been moved out of the subcommittee. 

According to officials from commuter rail agencies and freight railroads, 

negotiating and sharing access to the same rights-of-way can be 

challenging. Although they cited a variety of challenging issues, there was 

overall agreement among commuter rail agencies (both existing and 

proposed) and freight railroads that reaching agreement on compensation, 

capacity, and liability issues presents the most problems during 

negotiations. For example, commuter rail agencies and freight railroads 

may disagree as to whether there is adequate capacity available to 

accommodate commuter trains and/or what capacity enhancements (e.g., 

additional tracks) are needed to accommodate the commuter rail service. 

Until the commuter rail agencies and freight railroads reach agreement, 

 11FRA exercises jurisdiction over all areas of railroad safety under title 49, U.S.C., chapter 

201. 

12In May 2000 a similar piece of legislation, Transit Rail Access Improvement and Needs Act 

for the 21st Century (H.R. 4507), was introduced and referred to the Subcommittee on 

Ground Transportation, House Committee on Transportation and Infrastructure. The bill 

proposed to designate STB as a forum for resolution of disagreements between mass 

transportation authorities and freight railroads regarding access to freight track and rightsof-way. 

Commuter Rail 

Agencies and Freight 

Railroads Face 

Numerous Challenges 

in Negotiating and 

Sharing Rights-of-Way 
Page 13 GAO-04-240 Commuter Rail 

the commuter rail project may not move forward. If the parties 

successfully reach agreement and the commuter rail service begins 

operations, there are yet more day-to-day challenges that the commuter 

rail agency and freight railroad will have to work through when sharing 

the same rights-of-way. Officials from commuter rail agencies and freight 

railroads described a number of challenges in sharing the same rights-ofway; however, the most commonly cited problems were issues associated 

with dispatching trains and maintaining the rights-of-way. 

Officials from commuter rail agencies and freight railroads cited a variety 

of challenges in negotiating agreements. However, there was overall 

consensus about the most significant challenges. These challenges can be 

grouped into three issues: compensation, capacity, and liability. 

Depending on how long it takes the commuter rail agencies and freight 

railroads to resolve these and other issues, the amount of time required to 

negotiate agreements can range from months to years. Given the growing 

demand for commuter rail and freight rail services and financial pressures 

on the rail industry, reaching agreement will likely become even more 

difficult in the future. 

Officials from both commuter rail agencies and freight railroads reported 

that negotiating a mutually agreeable price for the freight-owned rights-ofway is challenging. Like other transactions, there is often a natural tension 

between the seller and buyer—that is, the seller wants to obtain the most 

money from the transaction possible, and the buyer wants to keep the 

price as low as possible. In addition to this natural tension, the commuter 

rail agencies and freight railroads cited reasons why they believe the other 

party’s compensation offers or demands can be too high or low, making it 

difficult to reach agreement. 

From the freight railroads’ perspective, the commuter rail agencies’ 

compensation offers are often inadequate. Officials from freight railroads 

and AAR commented that a common misconception is that rail 

infrastructure is public property. According to these officials, this 

misconception leads people to assume that the public should be able to 

use the railroads for a minimal cost. In reality, most rail infrastructure in 

the United States is owned by private freight railroads that must generate 

sufficient profits to survive. This can be difficult given the intense 

competition within the transportation marketplace and the capitalintensive nature of railroads. According to AAR, the financial health of the 

freight railroads has improved since the enactment of the Staggers Act; 

however, overall the freight rail industry does not earn its cost of capital, 

Negotiating Mutually 

Beneficial Agreements Is 

Difficult 

Agreeing to a Price Can Be 

Challenging 
Page 14 GAO-04-240 Commuter Rail 

and the railroads must borrow money from commercial sources for much 

of their capital expenditures. It is with this financial backdrop that freight 

railroads negotiate with commuter rail agencies. Hence, when negotiating 

a purchase agreement for their rights-of-way, freight railroads typically 

expect the price to reflect the fair market value, which is a function of the 

limited commodity and the high demand for its use. Similarly, when 

negotiating a lease or access agreement, freight railroads generally want to 

be compensated for all operating, capital, and other costs associated with 

hosting commuter rail trains. This would include both direct costs, such as 

costs of dispatching trains and maintaining the rights-of-way, and indirect 

costs, such as opportunity costs. For example, when a commuter train fills 

a train slot, the freight railroad loses the opportunity to use the slot for its 

own purposes or to lease it to another freight railroad at a premium price. 

According to freight railroads, when they are not compensated for all of 

the costs incurred from hosting a commuter rail train, the result is that the 

freight railroads subsidize the commuter rail service. Although the freight 

railroads recognized the potential public benefits of commuter rail service, 

they argued that they should not be forced to bear the costs of providing 

such benefits. 

In contrast, from the commuter rail agencies’ perspective, freight 

railroads’ compensation demands are often too high. Officials from 

commuter rail agencies stated that they have limited financial resources. 

Notably, commuter rail agencies usually rely on public funds to bridge the 

gap between operating and capital costs and farebox revenue. Officials 

from APTA and a commuter rail agency also suggested that the price 

should reflect all of the benefits commuter rail agencies bring to the table. 

For example, commuter rail agencies could invest in and improve the 

freight-owned rights-of-way through projects designed to accommodate 

commuter rail trains, such as improving grade crossings and adding tracks. 

These projects would benefit the freight railroad’s operations as well as 

the commuter rail service. Finally, if the right-of-way is not fully utilized, 

the commuter rail service serves as a stream of revenue that the freight 

railroad would not have otherwise received. 

Another challenge in negotiations is the issue of capacity. The number of 

trains that can pass over a line of track is limited. If the line is full, or at 

capacity, additional trains cannot be accommodated unless enhancements 

are made to increase the capacity of the line. Capacity enhancements can 

Capacity Issues Are Also 

Problematic during 

Negotiations 
Page 15 GAO-04-240 Commuter Rail 

range from adding new tracks to increasing height clearances of tunnels.13

(See fig. 3 for an example of a capacity enhancement.) The amount of 

capacity available varies by line of track. Determining whether capacity is 

available and/or what capacity enhancements are needed to accommodate 

additional trains on a particular line is a subjective exercise. For example, 

depending on the assumptions used, capacity studies of the same line can 

produce different results. Consequently, capacity issues can become 

contentious during negotiations. 

 13Adding new tracks can include the construction of a new track to existing single-track 

line allowing simultaneous operations in opposite directions (double tracking) or the 

building of additional track(s) to an existing multiple track line. Tunnel clearance 

enhancements are necessary for the movement of “double-stack” freight trains and doubledeck passenger cars. 
Page 16 GAO-04-240 Commuter Rail 

Figure 3: Example of Capacity Enhancement 

From the freight railroads’ perspective, freight service is their core 

business, and their ability to efficiently move freight through their systems 

must be protected. Thus, officials from the freight railroads insist that they 

must protect their systems’ capacity to handle today’s freight traffic as 
Page 17 GAO-04-240 Commuter Rail 

well as tomorrow’s anticipated traffic growth. According to the AAR, some 

rail lines do not currently have capacity available for commuter rail 

operations, or expected increases in freight traffic will consume the 

available capacity unless capacity is expanded. In determining what 

capacity enhancements are needed to accommodate commuter rail 

service, officials from the freight railroads generally argue that the 

commuter rail agency must “keep them whole”—that is, their ability to 

serve their freight customers must not be degraded or impinged upon 

because of the presence of the commuter rail service. Freight railroads 

also consider the need for additional capacity enhancements in the future 

when negotiating with commuter rail agencies. In particular, a freight 

railroad official noted that when adding capacity, it is common practice in 

the rail industry to “pick the low hanging fruit”—that is, construct the 

cheapest and most cost-effective enhancement. If the cheapest and most 

cost-effective enhancements are built for the commuter rail service, any 

future capacity enhancements needed for freight operations will come at a 

much higher cost, according to freight railroad officials. 

From the commuter rail agencies’ perspective, freight railroads are too 

conservative when estimating available capacity and/or overly optimistic 

about projected freight traffic growth. Consequently, officials from some 

commuter rail agencies and APTA argue that freight railroads set 

excessive demands for capacity enhancements. For example, officials 

from one commuter rail agency told us that a freight railroad’s cost 

estimate of capacity enhancements needed to accommodate the commuter 

rail service was $75 million more than the commuter rail agency’s 

estimates. This difference in estimates has contributed to challenges 

during the negotiations. Even if the commuter rail agencies believe the 

freight railroads demands are unreasonable, they have little recourse. 

Because the freight railroads own the infrastructure, the freight railroads’ 

assessment of capacity is the final word, according to commuter rail 

agencies. 

Liability was the most frequently identified challenge by proposed and 

existing commuter rail agencies and freight railroads. If a passenger rail 

accident should occur, injured passengers may sue the transportation 

provider for their damages. Freight railroads have been traditionally 

sheltered from this exposure when they haul freight. However, when a 

freight railroad allows a commuter rail service to operate over its rights-ofway, the freight railroad becomes exposed to these risks as passengers 

may sue the commuter rail provider and owner of the track. Hence, freight 

railroads do not want to allow commuter rail service on their rights-of-way 

unless they are protected from liability. 

Liability Is a Major Challenge 

for Negotiations 
Page 18 GAO-04-240 Commuter Rail 

Freight railroads generally want the commuter rail agency to assume all 

risks associated with the presence of the commuter rail service. This is 

often referred to as a “but for” arrangement—that is, but for the presence 

of the commuter rail service, the freight railroad would not be exposed to 

certain risks; therefore, the freight railroads should be held harmless. 

Officials from freight railroads stated that they must take this position in 

order to protect their businesses and stockholders from potential lawsuits. 

As a result, freight railroads typically require that the commuter rail 

agency contractually indemnify them from any liability in the event of a 

passenger accident, and procure a certain level of insurance coverage to 

guarantee the commuter rail agency’s ability to pay for all of the damages. 

The amount of insurance required can range significantly—for example, 

we heard insurance coverage requirements of $100 million to $500 million. 

Several commuter rail agency and freight railroad officials commented 

that the amount of insurance required has increased in recent years. For 

instance, officials from one commuter rail agency told us that during 

negotiations for their new agreement (their previous agreement expired), 

the freight railroad informed the agency that it must carry $500 million in 

insurance—double the amount the agency was required in its previous 

agreement with the freight railroad. This has contributed to stalling the 

negotiations between the commuter rail agency and freight railroad. 

Accepting these liability terms can be financially problematic for the 

commuter rail agencies. The premiums on the commercial insurance 

coverage becomes an operating expense for the commuter rail agencies—

and these expenses can be significant. For example, officials from one 

commuter rail agency told us that their annual premium for their $125 

million insurance coverage is $1.5 million. These officials also noted that 

the freight railroad they share the rights-of-way with is seeking to increase 

the amount of insurance the commuter rail agency must maintain from 

$125 million to $500 million, which would significantly increase its annual 

premium. Officials from another commuter rail agency estimated that their 

insurance premiums would account for 20 percent of their annual 

operating budget. 

Recognizing the freight railroads’ exposure to liability when hosting 

passenger trains on their rights-of-way, Congress established liability 

provisions in the Amtrak Reform and Accountability Act of 1997 (ARAA). 

Specifically, the act limits the aggregate overall damages that may be 

awarded to all passengers for all claims (including punitive damages) from 

a particular rail accident to $200 million. The act also permits Amtrak and 

other providers of rail transportation to enter into indemnification 

agreements allocating financial responsibility for passenger accidents. In 

discussions with officials from commuter rail agencies and freight 
Page 19 GAO-04-240 Commuter Rail 

railroads, we found some confusion as to whether the liability cap 

established in the ARAA applies to commuter rail agencies. After 

reviewing the legislation, we have concluded that the liability cap applies 

to commuter rail operations on the basis of the plain language of the 

statute and our review of the pertinent legislative history. However, there 

are limitations to the protection the legislation provides. The legislation 

does not limit damages for claims brought by nonpassengers. For example, 

the legislation would not apply to claims brought by adjacent property 

owners or populations that may be harmed in a hazardous materials spill 

or an accident at a rail crossing. Further, because the application of this 

liability cap has been untested in court, many freight railroads and 

commuter rail agencies are hesitant to rely upon this statute to cover the 

full extent of their potential liability. (See app. II for a more detailed 

discussion of the applicability and limitations of the ARAA.) 

In addition to the challenges in negotiating agreements, officials from 

commuter rail agencies and freight railroads identified a number of 

challenges in the day-to-day operations of shared use rights-of-way. The 

challenges cited by officials from commuter rail agencies or freight 

railroads ranged from dealing with the public’s concern about additional 

train traffic to safety concerns. The most frequently mentioned challenges, 

however, can be grouped into two categories: dispatching and 

maintenance issues. 

Officials from freight railroads and commuter rail agencies frequently 

identified issues associated with the dispatching of trains as an important 

challenge in sharing the rights-of-way. Dispatching controls the movement 

of trains through the rail network. The owner of the rights-of-way 

generally dispatches all trains on those rights-of-way. For instance, when 

Virginia Railway Express trains are traveling on CSX-owned rights-of-way, 

CSX dispatches the Virginia Railway Express trains. Because dispatching 

controls and directs rail traffic, it is key to the on-time performance of 

commuter and freight trains. The success of a commuter rail service is 

largely dependent on its reliability. If commuter rail passengers cannot 

count on the train to be on time, they will stop using the service. Freight 

railroads are increasingly providing “just-in-time” delivery for their 

customers. If the freight trains carrying time-sensitive freight do not arrive 

on schedule, the freight railroads run the risk of losing customers and/or 

incurring financial penalties. Thus, officials from commuter rail agencies 

and freight railroads want their trains to run on time. Keeping both 

commuter and freight trains consistently on time, however, can be difficult 

Challenges Also Exist in 

Sharing Rights-of-Way 
Page 20 GAO-04-240 Commuter Rail 

due to the amount of traffic on a corridor as well as unexpected events, 

such as severe weather, which disrupts normal operations. 

Officials from commuter rail agencies and freight railroads also cited 

issues associated with maintenance-of-way as a significant challenge in 

sharing rights-of-way. A frequently cited challenge was finding time in the 

schedule for maintenance-of-way work. As traffic on the rights-of-way 

increases, scheduling and performing maintenance become more difficult. 

For example, if a commuter rail agency provides morning and evening 

rush hour service as well as mid-day service and the freight trains operate 

at night, the windows of opportunities for maintenance work are limited. If 

maintenance is deferred, the tracks may deteriorate from a state of good 

repair, resulting in speed restrictions for the tracks. Reducing the speed of 

the traffic can further complicate efforts to keep commuter rail trains on 

time. Another maintenance-of-way challenge identified was handling the 

different track maintenance requirements for passenger and freight trains. 

Because of the speed of passenger trains, the tracks used by these trains 

must be maintained at a higher standard compared with tracks used solely 

by freight trains. In addition, freight trains create more wear and tear on 

the tracks because of their weight. In combination, these differences 

create the need for more maintenance on tracks shared by passenger and 

freight trains, compounding the problem of finding time to schedule and 

perform maintenance work. 

According to industry representatives and officials from commuter rail 

agencies and freight railroads, there is no single approach or “cookie 

cutter” formula for developing mutually beneficial arrangements between 

commuter rail agencies and freight railroads. A cookie cutter approach is 

not possible because every situation is unique—from the parties involved 

to the needs and expectations for the commuter rail system—requiring the 

agreements to be tailored to the circumstances of the situation. The 

characteristics of the rights-of-way, such as freight traffic density and the 

physical constraints of each rail line and whether the tracks are a main or 

branch line, also vary from location to location, creating unique 

negotiating environments. An example of how the characteristics of the 

rights-of-way can affect negotiations is Sound Transit’s efforts to extend 

service from Seattle to Everett, Washington. In particular, the right-of-way 

from Seattle to Everett is a main line of the Burlington Northern Santa Fe, 

which experiences heavy freight traffic and serves as a critical link from 

the Pacific Northwest seaports to the markets in the midwest and on the 

east coast. Amtrak also uses the corridor, adding to the level of traffic on 

the right-of-way. Moreover, the right-of-way is physically constrained—

There Is No Template 

for Success, but 

Certain Actions Can 

Help Facilitate Good 

Relationships 
Page 21 GAO-04-240 Commuter Rail 

Puget Sound is on one side of the right-of-way and steep terrain is on the 

other side, which can be prone to mud slides. (See fig. 4.) The high level of 

traffic and physical constraints along this corridor have made adding 

passenger trains to the existing infrastructure or adding capacity difficult 

and, therefore, made negotiations between Sound Transit and Burlington 

Northern Santa Fe challenging.14

Figure 4: Photograph of a Segment of Burlington Northern Santa Fe Right-of-Way in 

the State of Washington 

Although there is no template for success, officials from commuter rail 

agencies and freight railroads identified conditions or actions that can 

help facilitate mutually beneficial arrangements between commuter rail 

agencies and freight railroads. The officials identified a number of actions, 

 14As of November 2003, negotiations between Sound Transit and Burlington Northern Santa 

Fe are ongoing. 
Page 22 GAO-04-240 Commuter Rail 

ranging from capacity improvements strategies to legislative initiatives. 

Although the officials discussed a range of ideas related to these themes, 

there were several recurring suggestions, including understanding each 

other’s position, identifying and using incentives to leverage cooperation, 

securing adequate and flexible funding to help improve capacity and 

infrastructure, and establishing good communication between both parties 

(see fig. 5). 

Figure 5: Identified Actions Can Help Lay Foundation for Win/Win Arrangements 

• Understanding each other’s position: Although commuter rail agencies 

and freight railroads are both in the rail business, they differ in many 

respects. Commuter rail agencies want to have fast and predictable service 

for their customers, which can clash with the railroads’ desire for flexible 
Page 23 GAO-04-240 Commuter Rail 

scheduling and need for trains of varying lengths and speeds to meet their 

customers’ shipping demands. Also, freight railroads have shareholders

while commuter rail agencies have stakeholders—that is, freight 

railroads are private companies that seek to generate profits to benefit 

their stockholders, and commuter rail agencies are usually public entities 

that provide service to the public. In addition, commuter rail agencies are 

usually concerned with relatively small, defined portions of the right-ofway. In contrast, freight railroads own and operate rail networks that span 

thousands of miles and multiple states. These differences, as well as 

others, result in freight railroads and commuter rail having very different 

agendas and goals for the negotiations. For example, commuter rail 

agencies may want to get through the negotiation process as quickly as 

possible because of public pressure to begin service; however, such a rush 

to reach agreement does not necessarily benefit freight railroads’ 

shareholders. Freight railroads will likely want to examine how the 

proposed commuter rail service will affect their entire network, not just 

the specific location of the proposed service. To help commuter rail 

agencies better understand their position, several freight railroad 

companies have developed guiding principles that they provide to 

commuter rail agencies that are interested in using freight railroads’ rightsof-way. (Fig. 6 lists Burlington Northern Santa Fe’s guiding principles for 

commuter rail service.) Several commuter rail agency officials also 

stressed the importance of having people with freight railroad knowledge 

and expertise on their teams. According to these officials, having railroad 

expertise on their teams during negotiations helps commuter rail agencies 

better understand the challenges faced by the railroads, speak and 

understand railroad terminology, and establish credibility with the 

railroads. 
Page 24 GAO-04-240 Commuter Rail 

Figure 6: Burlington Northern Santa Fe’s (BNSF) Guiding Principles for Commuter Rail Service 

• Identifying and using incentives to leverage cooperation: Officials 

from commuter rail agencies told us that identifying and using incentives 

to leverage freight railroads’ cooperation can help negotiations. According 

to both commuter rail agency and freight railroad officials, using an 

incentive or “carrot” can make the freight railroads more amenable to 

commuter rail service by making the opportunity to host commuter rail 

service more attractive. There is a range of incentives commuter rail 

agencies may be able to offer, from lobbying for rail infrastructure funding 

with the railroad, to seeking local tax relief, to investing in railroad 

infrastructure. According to several commuter rail officials, the key is 
Page 25 GAO-04-240 Commuter Rail 

identifying something the freight railroad wants or needs. For example, 

the Utah Transit Authority (UTA) in Salt Lake City was interested in 

purchasing a portion of a right-of-way owned by Union Pacific. However, 

the purchase of this right-of-way would significantly diminish the ability of 

Union Pacific to operate its downtown freight intermodal transfer yard. In 

order to spur negotiations, UTA offered to pay the cost of relocating Union 

Pacific’s facility to a site that allowed Union Pacific to upgrade its support 

operations and provide for future growth opportunities. According to UTA 

officials, adding this incentive helped UTA and Union Pacific reach 

agreement on UTA’s purchase and lease of Union Pacific rights-of-way. In 

another example, the state of Delaware financed the reconstruction of a 

bridge that will provide access to an alternative freight route. In exchange, 

Norfolk Southern agreed to grant Delaware’s Department of 

Transportation free access to all of its Delaware rights-of-way for its 

commuter rail service for a 20-year period. 

• Securing adequate and flexible funding: Several commuter rail 

officials stressed the importance of treating the freight railroads as true 

partners and acting as real customers. For instance, one commuter rail 

agency official noted that commuter rail agencies should be willing to fully 

reimburse the freight railroads and pay their fair share. Officials from the 

freight railroads also echoed the importance of commuter rail agencies 

bringing adequate funds to the negotiating table to pay for the costs they 

impose. APTA suggests that commuter rail agencies and freight railroads 

can work together to obtain federal, state, or local funds for rail 

improvements that benefit both parties. For example, Metra, the 

commuter rail agency in Chicago, is partnering with the city of Chicago, 

the state of Illinois, and six freight railroads to secure $1.5 billion in funds 

for rail improvements in the Chicago area that will reduce the impact of 

freight traffic on the region as well as benefit both freight and passenger 

operations.15 In addition to adequate funding, officials from several 

commuter rail agencies emphasized the importance of having the 

flexibility to invest in capacity improvements outside the commuter rail 

service area. Because freight railroads operate national networks, delays 

on one part of the system are likely to cause ripple effects throughout the 

entire network. Thus, according to several commuter rail and freight 

railroad officials, sometimes the most effective way to improve commuter 

rail operations or to accommodate additional trains on a given corridor is 

to make improvements to the rail infrastructure 10 miles or even hundreds 

 15The identified sources of funding for the rail improvements include Metra, the city of 

Chicago, the state of Illinois, the federal government, and freight railroads. As of this date, 

the federal government has not committed any funds to this project. 
Page 26 GAO-04-240 Commuter Rail 

of miles away from the corridor. Having the flexibility to invest funds 

outside the commuter service area allows for the freight railroads and 

commuter rail agencies to implement the most effective solution. 

• Establishing good lines of communication: Officials from many 

commuter rail agencies and freight railroads stressed the importance of 

early, direct, and continuous communication. Officials from both 

commuter rail agencies and freight railroads noted that freight railroads 

should be notified early in the planning process about proposed commuter 

rail systems or expansions on their rights-of-way because the freight 

railroads can help the commuter rail agencies develop realistic cost 

estimates. Moreover, many freight railroads noted that hearing about such 

proposals through the media or other sources sets a bad tone for 

negotiations. Officials from freight railroads also commented that they 

prefer to work directly with the commuter agency rather than being 

pressured through the media or elected officials. As one freight railroad 

official noted, when commuter rail agencies use elected officials to apply 

political pressure, his company is likely to “dig their heels in” rather than 

bow to the pressure. In addition to early and direct communication, a 

number of commuter rail officials stated that continuous communication 

with the freight railroads was important in order to identify and resolve 

issues as they arise. One commuter rail official said that his agency has 

daily monitoring and conference calls as well as quarterly meetings with 

railroad contacts. Similarly, through the Chicago Transportation 

Coordination Office, Metra works with the freight railroads that travel 

through the Chicago area to coordinate freight and passenger train 

movements and to address any problems as they arise. Although there was 

general agreement that early communication is important, a number of the 

commuter rail officials noted that the freight railroads do not want to 

begin negotiations until they are sure the project is funded and moving 

forward; however, the commuter rail agencies cannot secure funding and 

move the project forward until they reach agreement with the freight 

railroads. One official described this situation as a “Catch 22.” 

The federal government currently does not participate in access 

negotiations between commuter and freight railroads. Three federal 

agencies— FRA, FTA, and STB—have responsibility for different aspects 

of rail transportation. FRA is primarily focused on ensuring safe operation 

of railroads; FTA’s primary role is providing funding to transit projects, 

including commuter rail; and STB serves as the freight rail industry’s 

economic regulator. None of these three agencies currently play a part in 

facilitating negotiations between freight and commuter railroads. 

Commuter rail agencies told us that they have few options if they reach an 

Federal Government 

Currently Does Not 

Play a Role in 

Commuter Rail 

Access 
Page 27 GAO-04-240 Commuter Rail 

impasse with freight railroads; as a result, they usually continue 

negotiations or elevate the problem through the railroad’s chain of 

command. Commuter rail agencies and freight railroads disagree on the 

role they would like to see the federal government play in resolving 

disputes between commuter rail agencies and freight railroads. 

Specifically, most commuter rail agencies would like the federal 

government to play a more active role; freight railroads generally do not 

want the federal government involved except for assuring the adequacy of 

funding for commuter rail projects. 

FRA has safety jurisdiction over all freight and passenger railroads in the 

United States.16 FRA is responsible for promoting and enforcing rail safety, 

administering railroad financial programs, conducting research and 

development, and developing executive branch policy on railroad industry 

issues. Both commuter rail agencies and freight railroads are subject to 

FRA’s oversight. According to an FRA official, the agency’s primary role in 

commuter rail issues is promoting and enforcing safety—that is, ensuring 

that the commuter rail system is safe. For example, FRA has issued 

regulations that establish safety standards for passenger rail cars that are 

used by commuter rail agencies. 

FRA does not currently play a role in commuter rail access issues. 

According to FRA officials, FRA has no specific statutory authority over 

commuter rail access issues. FRA officials also stated that FRA does not 

have responsibilities for negotiations between commuter rail agencies and 

freight railroads. Consequently, FRA is not involved in helping commuter 

rail agencies negotiate agreements with freight railroads or resolving 

impasses between commuter rail agencies and freight railroads. FRA also 

has not issued regulations related to commuter rail access issues or issued 

any guidance to assist commuter rail agencies in developing agreements 

with freight railroads. 

 16Excluding urban rapid transit operations that are not connected to the general railroad 

system of transportation. 

FRA’s Primary Focus Is on 

Rail Safety, Not Access 

Issues 
Page 28 GAO-04-240 Commuter Rail 

Since the early 1970s, the federal government has provided a large share of 

the nation’s capital investment in mass transit.17 FTA is the primary 

federal funding source for commuter rail projects, and much of the 

investment has come through FTA’s New Starts program, which helps pay 

for certain transit projects, including commuter rail, through full-funding 

grant agreements. A full-funding grant agreement establishes the terms 

and conditions for federal participation, including the maximum amount 

of federal funds available for the project.18 The New Starts program is an 

important source of funding for many commuter rail projects. For 

example, FTA reports that the commuter rail project in Johnson County, 

Kansas proposes to use New Starts funds for 80 percent of the project’s 

total capital cost of $31 million and the commuter rail project in 

Washington County, Oregon proposes to use New Starts funds for 60 

percent of the project’s total capital cost of $120 million.19 In making 

funding recommendations to the Congress, FTA assesses the cost 

estimates for the commuter rail projects, which would include payments 

to freight railroads for purchasing, leasing, or accessing freight-owned 

tracks. According to FTA officials, FTA will not award full-funding grant 

agreements to commuter rail projects unless the commuter rail agency and 

freight railroad have reached agreement on relevant access issues. To 

obtain a full-funding grant agreement, a commuter rail project must first 

progress through a local or regional review of alternatives, develop 

preliminary engineering plans, and obtain FTA’s approval for final design. 

 17U.S. General Accounting Office, Mass Transit: FTA Could Relieve New Starts Program 

Funding Constraints, GAO-01-987 (Washington, D.C.: Aug. 15, 2001).

18Current law allows FTA to grant up to 80 percent of the estimated net project cost to 

individual transit projects. However, on the basis of direction from the Congress in the 

conference report that accompanied DOT’s fiscal year 2002 appropriations act, FTA 

instituted a preference policy to recommend projects with federal shares that do not 

exceed 60 percent for funding. The administration’s proposed surface transportation 

reauthorization legislation seeks to reduce the statutory federal share to no more than 50 

percent of the net project cost. 

19Federal Transit Administration, Annual Report on New Starts: Proposed Allocations of 

Funds for Fiscal Year 2004 (Washington, D.C.: Feb. 3, 2003). 

FTA Provides Funding for 

Commuter Rail Projects 

but No Assistance on 

Access Issues 
Page 29 GAO-04-240 Commuter Rail 

Projects may receive federal funds as they advance through the planning, 

preliminary engineering, and final design phases.20

FTA does not currently play a role in commuter rail access issues. 

According to FTA officials, FTA does not have authority over commuter 

rail access issues. Consequently, FTA does not consider it appropriate to 

help commuter rail agencies negotiate agreements with freight railroads or 

resolve disputes between commuter rail agencies and freight railroads. 

FTA officials state that because FTA has no specific statutory 

responsibilities over commuter rail access issues, the agency has not 

developed or issued any guidance to commuter rail agencies on 

negotiating with freight railroads. Although FTA has not issued any 

guidance, agency officials indicated that they encourage commuter rail 

agencies to contact the affected freight railroads early in the planning 

stages and to consult with the railroads as the project advances through 

the stages of development. These officials stated that getting the freight 

railroad’s early buy-in and assistance in developing realistic cost estimates 

is important to the successful implementation of the commuter rail 

project. FTA does not have any documented guidance, however, on when 

the commuter rail agency should contact the freight railroad or why such 

consultation is important. 

STB’s mission is to ensure that competitive, efficient, and safe 

transportation services are provided to meet the needs of shippers, 

receivers, and consumers. Among other things, STB must determine 

whether freight railroads may construct, acquire, or discontinue service 

over individual rail lines, and whether proposed railroad mergers and 

consolidations will be allowed. STB also adjudicates complaints 

concerning the quality of freight rail service and the reasonableness of 

 20The alternatives analysis stage provides information on the benefits, costs, and impacts of 

alternative strategies leading to the selection of a locally preferred solution to the 

community’s mobility needs. During the preliminary engineering phase, project sponsors 

refine the design of the proposal, taking into consideration all reasonable design 

alternatives, which results in estimates of costs, benefits, and impacts (e.g., environmental 

or financial). Final design is the last phase of project development before construction and 

may include right-of-way acquisition, utility relocation, and preparation of final 

construction plans and cost estimates. 

STB Has No Role in 

Negotiations between 

Commuter Rail Agencies 

and Freight Railroads 
Page 30 GAO-04-240 Commuter Rail 

certain freight rail rates.21 In making these decisions STB considers a 

number of factors, including the interests of affected shippers and the 

financial health of the railroad(s) involved. In carrying out its duties, STB 

is charged with providing an efficient and effective forum for the 

resolution of certain disputes. Because Amtrak was specifically created to 

relieve freight railroads of the requirement to provide passenger service, 

STB has jurisdiction to resolve compensation and access issues between 

freights and Amtrak in the event of an impasse in negotiations. According 

to STB officials, STB’s authority to adjudicate disputes or provide a forum 

for the resolution of shipper disputes does not extend to disputes over 

access between commuter rail agencies and freight railroads. 

STB officials stated that STB does not currently have a role in or 

responsibilities for commuter rail access issues. In particular, STB officials 

noted that STB is statutorily prohibited from assuming jurisdiction over 

mass transportation provided by local government authorities.22 STB 

officials said that STB’s jurisdiction may be extended to commuter rail in 

certain circumstances, including if (1) the local government authority 

providing commuter rail services meets the definition of a rail carrier;23 (2) 

the commuter rail agency enters into a contract with Amtrak;24 or (3) a 

commuter rail agency acquires control of a railroad and therefore meets 

the definition of a rail carrier.25 STB officials stated that because the Board 

does not have a specific statutory role in commuter rail access issues, STB 

has not been involved in helping commuter rail agencies and freight 

railroads negotiate agreements or resolving disputes between commuter 

 21Under the ICC Termination Act of 1995 (49 U.S.C. 10101), STB may review the 

reasonableness of a rate only upon a shipper’s complaint. Moreover, STB may consider the 

reasonableness of a rate only if (1) the revenue produced is equal to or greater than 180 

percent of the railroad’s variable costs for providing the service and (2) it finds that the 

railroad in question has market dominance for the traffic at issue. 

2249 U.S.C. 10501(c)(2). 

23A rail carrier is an entity providing common carrier railroad transportation for 

compensation, but does not include street, suburban, or interurban electric railways not 

operated as part of the general system of rail transportation (49 U.S.C. 10102(5)). STB 

officials noted that STB has not had an opportunity to interpret its jurisdiction pursuant to 

this subsection within a ruling. 

24STB officials noted that a commuter rail agency has never tried to use STB’s jurisdiction 

over compensation and access issues between freights and Amtrak as a means to have STB 

resolve a dispute between the commuter rail agency and freight railroad. Therefore, STB 

officials were unsure as to the outcome of such an approach. 

2549 U.S.C. 10501(c)(3)(B). 
Page 31 GAO-04-240 Commuter Rail 

rail agencies and freight railroads. Moreover, STB has not issued 

regulations related to commuter rail access issues, nor has it issued any 

guidance to assist commuter rail agencies in developing agreements with 

freight railroads. 

Prior to the sun-setting of STB’s predecessor, the Interstate Commerce 

Commission (ICC) played a more active role in commuter rail access 

issues.26 In particular, the ICC’s Rail Services Planning Office provided 

technical expertise and assistance to commuter rail agencies and 

conducted national studies on such matters as rail and port rates and rail 

mergers. The Rail Services Planning Office also examined the U.S. Railway 

Association’s plan to reorganize the northeastern railroads after the Penn 

Central Railroad’s bankruptcy and assessed the impact of the plan on 

commuter rail agencies. According to DOT officials, the roles and 

responsibilities of this office were not transferred to STB when ICC was 

abolished in 1995. 

Commuter rail agencies and freight railroads do not agree on the 

appropriate role for the federal government in commuter and freight rail 

access issues. Although there was some difference of opinions among 

individual commuter rail agencies, most commuter rail agencies would 

like the federal government to take a more active role in access issues. 

Officials from commuter rail agencies suggested a number of roles the 

federal government could serve in negotiations or dispute resolution 

between commuter rail agencies and freight railroads, ranging from 

helping with the liability issue to giving commuter rail agencies the same 

statutory rights as Amtrak. The most frequently cited suggestions by 

commuter rail agencies were for the federal government to serve as an 

arbitrator or mediator for disputes between commuter rail agencies and 

freight railroads, provide additional funding for commuter rail projects 

and railroad infrastructure, and provide guidance and information. In 

contrast, officials from freight railroads generally do not see a role for the 

federal government except for assuring the adequacy of funding for 

commuter rail projects. 

 26The ICC Termination Act of 1995 (49 U.S.C. 10101) terminated the ICC, eliminated various 

functions performed by the ICC, transferred licensing and certain nonlicensing motor 

carrier functions to the Federal Highway Administration, and transferred remaining rail 

and nonrail functions to the STB. 

Commuter Rail Agencies 

and Freight Railroads Have 

Differing Views on the 

Appropriate Role of the 

Federal Government 
Page 32 GAO-04-240 Commuter Rail 

Officials from a number of existing and proposed commuter rail agencies 

would like to see the federal government serve as an arbitrator or 

mediator for disputes between commuter rail agencies and freight 

railroads. Commuter rail officials often stated that commuter rail agencies 

have little to no recourse if the freight railroads refuse to negotiate, 

prolong the negotiations, or demand what they perceive as unaffordable 

amounts of compensation or capacity enhancements. Officials from most 

commuter rail agencies told us that they continue to negotiate or elevate 

the problem through the railroad’s chain of command if they reach an 

impasse during negotiations. These officials commented that it would be 

beneficial to have a forum in the federal government that commuter rail 

agencies and freight railroads could use if negotiations broke down. 

Commuter rail officials emphasized, however, that the federal government 

agency that served as a mediator or arbitrator must be viewed by the 

industry as having rail expertise and being unbiased. Although a number of 

commuter rail officials supported the idea of a federal government entity 

serving as a mediator or arbitrator, a few commuter rail officials explicitly 

rejected this role for the government because they were concerned it 

would only further complicate negotiations. 

According to some commuter rail officials, another potential role for the 

federal government is providing additional funding for commuter rail 

investments and railroad infrastructure. Commuter rail agencies 

sometimes must pay freight railroads a significant amount of money to use 

their rights-of-way. For example, one commuter agency agreed to pay for 

approximately $350 million in capital improvements to a freight railroad’s 

rights-of-way in exchange for access. Obtaining the necessary funds is not 

an easy task for the commuter rail agencies, especially considering that 

their fare box revenues do not cover their costs. Moreover, although the 

federal government provides funding for capital improvements, many 

commuter rail agencies are prohibited from using federal dollars for 

operating expenses, such as access fees. According to commuter rail 

agencies, being able to come to the negotiating table with additional funds 

would help them reach agreement with the freight railroads. In addition, 

commuter rail agencies noted that additional federal funding for freight 

railroads’ infrastructure would also benefit commuter rail negotiations. As 

discussed earlier, negotiations between commuter rail agencies and freight 

railroads often get hung up on capacity issues. According to commuter rail 

officials, increased federal funding for rail infrastructure could help pay 

for additional capacity; moreover, it could improve the infrastructure, 

which would benefit commuter rail operations. 
Page 33 GAO-04-240 Commuter Rail 

Officials from commuter rail agencies also repeatedly suggested that the 

federal government provide guidance and information, such as best 

practices, tips for negotiations, and technical expertise. Commuter rail 

officials said it would be helpful if the federal government provided 

information on such matters as what to expect during negotiations and 

what data are needed for negotiations. Providing this type of information 

would establish a framework for negotiations, which could guide 

commuter rail agencies and freight railroads through the negotiation 

process. American Public Transportation Association (APTA) and 

Association of American Railroads (AAR)—trade associations that 

represent commuter rail and freight railroad interests, respectively—

attempted to work together to develop a framework for negotiations 

several years ago. According to representatives from APTA and AAR, both 

associations believed a framework would be beneficial; however, the two 

associations were unable to develop a framework and are no longer 

actively continuing this effort. Commuter rail officials also said that it 

would be helpful if the federal government identified and shared best 

practices from past negotiations as well as provided technical assistance. 

Officials from several commuter rail agencies told us that in the past they 

had relied on ICC’s Rail Services Planning Office for technical expertise 

and assistance, which was helpful to their agencies. A commuter rail 

agency official noted that since the Rail Services Planning Office was 

abolished, there is no longer a source of professional, accurate, and 

unbiased information that can be used during negotiations. 

In general, officials from the freight railroads we spoke to did not believe 

the federal government should be involved in negotiations between 

commuter rail agencies and freight railroads. There was universal 

agreement among officials from all of the freight railroads we spoke to 

opposing the federal government serving as an arbitrator or mediator. 

According to freight railroad officials, negotiations over the purchase or 

lease of rights-of-way should be private and at arms-length. They said that 

limiting the negotiations to the affected commuter rail agency and freight 

railroad helps to ensure that mutually beneficial arrangements will be 

negotiated—that is, that they make economic and business sense for both 

parties. Freight railroad officials expressed concern that having the federal 

government serve as an arbitrator or mediator would result in freight 

railroads being forced to accept arrangements that do not make good 

business sense for the railroads. Officials from a number of freight 

railroads we spoke to also expressed opposition to the federal government 

granting commuter rail agencies the same statutory rights of Amtrak—that 

is, giving commuter trains priority access to freight-owned tracks at the 

incremental cost. Freight railroad and AAR officials stated that giving 
Page 34 GAO-04-240 Commuter Rail 

commuter rail agencies these statutory rights would force the freight 

railroads to subsidize commuter rail operations and harm their freight 

business. Moreover, officials from one freight railroad characterized 

extending Amtrak’s statutory rights to commuter rail agencies as the 

“taking” of private property. 

Rather than taking a direct role in negotiations, a number of officials from 

freight railroads stated that the most appropriate role for the federal 

government was serving as a source of funding for commuter rail agencies. 

Freight railroad officials noted that commuter rail could provide public 

benefits, such as reduced highway congestion and pollution; therefore, the 

federal government, not freight railroads, should pay for these benefits. In 

addition, officials from a couple of freight railroads raised concerns that 

the federal funding process, notably FTA’s New Starts program, may skew 

communities’ decision-making about the implementation of commuter rail 

projects or create a situation where the commuter rail service is 

unsustainable. For example, officials from one freight railroad noted that 

there is a significant amount of pressure on proposed commuter rail 

systems to make “the numbers work” so that the commuter rail option is 

the preferred alternative in the New Starts evaluation—that is, commuter 

rail is chosen as the preferred public transit option.27 According to these 

officials, this pressure can result in the costs of proposed commuter rail 

systems being underestimated, which may create funding shortfalls in the 

future. Officials from another freight railroad also commented that the 

timing of FTA’s New Starts program can create problems. For example, 

local communities can use New Starts funds for feasibility studies for 

proposed commuter rail projects, which can result in increased public 

expectations; however, the funding of these studies is not a guarantee that 

the federal government will help pay for the proposed commuter rail 

system. 

The expeditious flow of people and goods through our transportation 

system is vital to the economic well-being of the nation. The movement of 

people and goods by rail is an important part of the nation’s transportation 

system and is likely to play an even greater role in the future. To ensure 

that both commuter and freight rail reach their potential, it is important 

 27There are three stages of the New Starts program—alternatives analysis, preliminary 

engineering, and final design. The alternatives analysis stage provides information on the 

benefits, costs, and impacts of alternative strategies leading to the selection of a locally 

preferred solution to the community’s mobility needs. 

Conclusions 
Page 35 GAO-04-240 Commuter Rail 

that the success of one form of rail does not come at the expense of the 

other. Striking the right balance is a difficult task that the federal 

government, commuter rail agencies, and freight railroads will wrestle 

with as demand for commuter and freight services continues to grow. 

Negotiating mutually beneficial arrangements between commuter rail 

agencies and freight railroads is challenging. The negotiation process can 

be lengthy and tedious as commuter rail agencies and freight railroads try 

to reach agreement on a number of tough and critical issues. To help 

tackle these issues, officials from commuter rail agencies told us that 

information and guidance, such as best practices, would be useful. Several 

commuter rail officials said that they had relied on the Rail Services 

Planning Office in the former ICC for technical assistance and expertise; 

however, this office was not transferred to the STB when the ICC was 

terminated in 1995. The federal government could act to help facilitate and 

inform negotiations by providing guidance and information, such as best 

practices, tips for negotiations, and information on the applicability and 

limitations of the liability provisions in the Amtrak Reform and 

Accountability Act of 1997, to commuter rail agencies and freight 

railroads. Without accurate, unbiased guidance and information, 

negotiations may stall, issues (such as the applicability of the federal 

liability cap) may be needlessly reexamined, and/or decisions may be 

made on the basis of questionable data. The three federal agencies—FTA, 

FRA, and STB—responsible for different aspects of commuter and freight 

rail have not provided such guidance and information because they do not 

consider it an appropriate role for them to play. The upcoming 

reauthorization of the surface transportation legislation, however, 

provides an opportunity for these agencies and the Congress to reexamine 

their roles and responsibilities for commuter rail access issues, notably 

their roles in providing guidance and information to commuter rail 

agencies and freight railroads to better inform negotiations. As long as the 

federal government is funding the planning and development of individual 

commuter rail projects, it may be appropriate for the government to 

provide guidance and information to help facilitate negotiations between 

commuter rail agencies and freight railroads and thereby help to ensure 

that federal dollars are efficiently used. 

In order to facilitate and inform negotiations between commuter rail 

agencies and freight railroads, we recommend that the Secretary of 

Transportation and the Chairman of the Surface Transportation Board 

determine whether it would be appropriate and useful for them to provide 

guidance and information, such as tips for successful negotiations and 

Recommendation 
Page 36 GAO-04-240 Commuter Rail 

information on best practices, availability of federal resources, and the 

applicability of the liability provisions in the Amtrak Reform and 

Accountability Act of 1997, to commuter rail agencies and freight 

railroads. If DOT and STB determine that it would be helpful for them to 

provide such information but that they lack the statutory authority to do 

so, DOT and STB should seek a legislative change to allow them to provide 

guidance and information to commuter rail agencies and freight railroads. 

We provided draft copies of this report to DOT and STB for their review 

and comment. On December 8, 2003, DOT and STB officials provided oral 

comments on the draft. DOT and STB officials generally agreed with the 

report’s findings, conclusions, and recommendation. They also provided 

some technical comments, which we incorporated into this report where 

appropriate. 

As we agreed with your office, unless you publicly announce the contents 

of this report earlier, we plan no further distribution of it until 30 days 

from the date of this report. We will then send copies of this report to the 

Secretary of Transportation, the Chairman of the Surface Transportation 

Board, the Administrators of the Federal Railroad Administration and 

Federal Transit Administration, the Director of the Office of Management 

and Budget, and interested congressional committees. We will make 

copies available to others upon request. In addition, this report will be 

available at no charge on our Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

on (202) 512-2834 or at heckerj@gao.gov. Individuals making key 

contributions to this report are listed in appendix III. 

Sincerely yours, 

JayEtta Z. Hecker 

Director, Physical Infrastructure Issues 

Agency Comments 
Appendix I: Scope and Methodology 

Page 37 GAO-04-240 Commuter Rail 

To address our objectives, we contacted officials from all existing and 

proposed commuter rail agencies and Class I freight railroads. To identify 

the universe of existing and proposed commuter rail agencies, we 

compiled a list on the basis of information published by the American 

Public Transportation Association (APTA), the Federal Transit 

Administration’s (FTA) New Starts Project Profiles from fiscal years 2003 

and 2004, and the 2001 National Transit Summaries and Trends report.1

 We 

reviewed our initial list with a representative from APTA in order to 

identify potential changes in program status and to confirm contact 

information for the commuter rail systems. Using these sources, we 

identified 19 existing and 30 proposed commuter rail agencies. We then 

contacted officials from the 49 commuter rail systems to verify the status 

of each commuter rail service or project. On the basis of information 

collected from these officials, we further refined our list of existing and 

proposed commuter rail agencies—resulting in the identification of 18 

existing commuter rail systems and 19 proposed commuter rail systems.2

To identify the Class I railroads, we reviewed the January 2003 Surface 

Transportation Board (STB) Report of Railroad Employment and 

information provided by the Association of American Railroads (AAR). 

AAR also provided contact information for each Class I railroad. We 

limited our scope to Class I railroads because they own the majority of all 

rail lines in the United States and therefore have more interaction with 

commuter rail agencies than short line or regional railroads. (Table 2 lists 

the names and locations of the 18 existing and 19 proposed commuter rail 

agencies and the 7 Class I freight railroads.) 

 1

APTA does not consider the Port Authority Trans-Hudson (PATH) a commuter rail service, 

therefore it was not included in our universe. According to an APTA official, PATH’s 

vehicles and services are more characteristic of heavy rail rather than commuter rail. PATH 

is regulated by FRA because it provides interstate service. 

2

Specifically, we eliminated 11 commuter rail agencies (1 existing and 10 proposed) from 

the initial list because the agency no longer provided commuter rail service or the agency 

was still considering what type of transit service to provide. We combined 2 commuter rail 

projects from the initial list of proposed commuter rail systems because we found they 

were the same project. We also combined 1 proposed commuter rail system with an 

existing commuter rail system because we found that the proposed system was merely an 

expansion project of the existing commuter rail. Finally, we separated 1 commuter rail 

project on the list of proposed commuter rail systems because we found that it was 2 

distinct projects. 

Appendix I: Scope and Methodology 
Appendix I: Scope and Methodology 

Page 38 GAO-04-240 Commuter Rail 

Table 2: Names and Locations of Existing and Proposed Commuter Rail Agencies and the Class I Freight Railroad Companies 

Name of commuter rail agency and freight railroad Location 

Existing commuter rail 

Altamont Commuter Express Stockton, CA 

Connecticut Department of Transportation (Shore Line East and New Haven lines) New Haven, CT 

Maryland Transit Administration (MARC) Baltimore, MD 

Massachusetts Bay Transportation Authority Boston, MA 

Metra Chicago, IL 

MTA Long Island Rail Road New York, NY 

MTA Metro-North Railroad New York, NY 

New Jersey Transit Corporation Newark, NJ 

North County Transit District (Coaster) Oceanside, CA 

Northern Indiana Commuter Transportation District Chesterton, IN 

Peninsula Corridor Joint Powers Board (CALTRAIN) San Carlos, CA 

Pennsylvania Department of Transportation Harrisburg, PA 

Southeastern Pennsylvania Transportation Authority Philadelphia, PA 

Southern California Regional Rail Authority (Metrolink) Los Angeles, CA 

Sound Transit, Central Puget Sound Regional Transportation Authority Seattle, WA 

Tri-County Commuter Rail Authority Pompano Beach, FL 

Trinity Railway Express Dallas, TX 

Virginia Railway Express Alexandria, VA 

Proposed commuter rail 

Akron Line, Northeast Ohio Corridorsa Cleveland, OH 

Alaska Railroad Corporation Anchorage, AK 

Austin-San Antonio Intermunicipal Commuter Rail District Austin, TX 

Charlotte Area Transit System Charlotte, NC 

Cumberland-Dauphin-Harrisburg Transit Authority Harrisburg, PA 

Dane County T2020 (Transport 2020) Madison, WI 

Delaware Department of Transportationb Wilmington, DE 

Eastern Corridor, Hamilton County Transportation Improvement District Cincinnati, OH 

Georgia Rail Passenger Program Atlanta, GA 

Johnson County Transit Johnson County, KS 

Nashville to Lebanon Corridor Regional Transportation Authority Nashville, TN 

NeoRail Line, Northeast Ohio Corridors Cleveland, OH 

New Haven-Hartford-Springfield Commuter Rail Hartford, CT 

Northstar Corridor Minneapolis, MN 

Regional Transit District Denver, CO 
Appendix I: Scope and Methodology 

Page 39 GAO-04-240 Commuter Rail 

Name of commuter rail agency and freight railroad Location 

Sonoma-Marin Area Rail Transit San Francisco, CA 

Triangle Transit Authority Raleigh, NC 

Utah Transit Authority, Commuter Rail Salt Lake City, UT 

Washington Country Commuter Rail Portland, OR 

Class I Freight Railroad Companies 

Burlington Northern Santa Fe Railway Company Fort Worth, TX 

Canadian National Railway (Grand Trunk Corporation)c Montreal, Canada 

Canadian Pacific Railway (Soo Line Railroad Company)c Calgary, Canada 

CSX Transportation Jacksonville, FL 

Kansas City Southern Railway Company Kansas City, MO 

Norfolk Southern Norfolk, VA 

Union Pacific Railroad Company Omaha, NE 

Source: GAO. 

Notes: 

The commuter rail agencies and freight railroad companies that we visited are listed in italics. 

A number of the existing commuter rail agencies are currently planning expansion projects. 

a

The Akron line, which is proposed to run between Cleveland and Canton, Ohio, was originally part of 

the NeoRail study, which has several proposed lines out of Cleveland. Due to an opportunity to move 

forward, the Akron line was separated as a distinct project for planning purposes. The Akron and 

NeoRail lines may be integrated again at some point in the future. 

b

Southeastern Pennsylvania Transportation Authority provides a “turnkey,” or contracted commuter 

rail service for the Delaware Department of Transportation between Newark/Wilmington, Delaware, 

and Philadelphia, Pennsylvania. 

c

The entire Canadian National Railway and Canadian Pacific Railway systems are not Class I 

railroads. However, the U.S. portions of these railroads (e.g., Grand Trunk Corporation and Soo Line 

Railroad Company) meet the U.S. regulatory criteria and are Class I railroads. 

We conducted site visits to eight commuter rail agencies across the 

country and to the four largest U.S. Class I freight railroads. We selected 

the eight commuter rail agencies on the basis of the type of track 

arrangements (i.e., lease or own); representation of the four largest U.S. 

Class I freight railroads; the system’s maturity; and geographic dispersion. 

(The commuter rail agencies and railroads that we visited are listed in 

italics in table 2.) During the site visits, we interviewed senior level 

management; toured operation, dispatching, and maintenance facilities; 

and/or traveled on the commuter rail system. In addition to the site visits, 

we also conducted semistructured interviews with officials from the 

remaining existing and proposed commuter rail agencies and Class I 

freight railroad companies via teleconference or in-person meetings. We 

synthesized the information we collected from the site visits and 

semistructured interviews. We also performed a content analysis of the 
Appendix I: Scope and Methodology 

Page 40 GAO-04-240 Commuter Rail 

information to identify major themes and commonalities and differences 

among proposed and existing commuter rail agencies as well as between 

commuter rail agencies and freight railroads. We did not observe 

significant differences between the existing and proposed commuter rail 

agencies in terms of the most frequently cited challenges in negotiating 

and sharing rights-of-way, actions that could help facilitate mutually 

beneficial arrangements, and possible roles for the federal government in 

access issues. 

We also conducted informational interviews with DOT, FRA, STB, and 

FTA; and with representatives from industry associations, including AAR, 

APTA, the National Industrial Transportation League, and the American 

Short Line and Regional Railroad Association. We also interviewed 

representatives from the law office of Kirkpatrick and Lockhart and 

Woodside Consulting, who have served as consultants to commuter rail 

agencies and freight railroads. Additionally, we reviewed statutory and 

case law and federal and commuter rail agency regulations, guidance, and 

internal documents as well as information from freight railroads, including 

annual reports, ridership and traffic density reports, and position papers. 

We also identified and analyzed rail-related research. 

We did not examine FTA’s process of reviewing commuter rail projects for 

federal funding, the costs and benefits of individual commuter rail 

projects, and the merits of Amtrak’s statutory access rights to freightowned rights-of-way or the costs and benefits of extending these rights to 

commuter rail agencies. Statistics presented in the background section of 

this report about the freight and commuter rail industries, such as freight 

ton-miles hauled and ridership, were obtained from DOT, FRA, FTA, AAR, 

and APTA. This information was presented for background and illustrative 

purposes only; consequently, we did not assess the reliability of this 

information. We also did not assess the reliability of the factual 

information provided by commuter rail agencies, freight railroads, and 

industry associations because of the abundance of corroborating evidence. 

Therefore, we determined that the data we obtained were sufficiently 

reliable for the purposes of this report. 
Appendix II: Federal Legislation Addresses 

the Major Liability Concerns, but Other 

Issues Remain 

Page 41 GAO-04-240 Commuter Rail 

The issue of managing risk and liability is a huge concern for commuter 

rail operators and freight railroads when they negotiate agreements for 

commuter rail operators to use the freight railroads’ rights-of-way. This 

concern has the potential to slow the expansion of commuter rail services 

by delaying or preventing the signing of such “access” agreements. 

Understandably, freight railroads want to minimize their exposure to 

liability for any potentially large damage awards and associated costs that 

may result when they allow commuter rail operators to use their tracks. 

Accordingly, it has become customary for freight railroads to require 

commuter rail operators to enter into agreements with them that will hold 

the host freight railroads harmless, indemnify the freight railroads from all 

liability, and require the commuter rail operators to purchase commercial 

liability insurance that will ensure a reliable funding source to pay the 

entire amount of any damage awards. In some parts of the country, freight 

railroads generally require commuter rail operators using their rights-ofway to acquire up to $500 million in liability coverage. The required 

premiums to obtain such a large amount of insurance coverage are costprohibitive for many existing or proposed commuter rail operators. 

The issue of liability arising from rail accidents was addressed by 

Congress when it enacted the Amtrak Reform and Accountability Act of 

1997 (ARAA). Congress introduced tort reform measures within Section 

161 of the ARAA in response to concerns from freight railroads, commuter 

rail operators, and Amtrak about the liability issue and the difficulties the 

parties were having in negotiating the use of freights’ rights-of-way by 

Amtrak and the commuter rail operators. These concerns were 

particularly acute after a 1987 district court decision that put in doubt the 

ability of private parties to deal contractually with liability issues by 

entering into indemnification agreements. That decision, National 

Railroad Passenger Corp. v. Consolidated Rail Corp., 698 F. Supp. 951 

(D.C. 1988), vacated, 892 F.2d 1066 (D.C. Cir. 1990), stemmed from the 

1987 collision of Amtrak and Conrail trains in Chase, Maryland, that left 16 

people dead and more than 350 injured. 

The catastrophic Chase accident was caused by the gross negligence of 

Conrail employees, including the engineer, who was under the influence of 

illicit drugs. Amtrak asked the court to abrogate its indemnification 

agreement with Conrail, which required that Amtrak defend and indemnify 

Conrail for any claims and damages arising out of the Chase accident, on 

the grounds that it violated public policy. The trial court acted in Amtrak’s 

favor and voided the indemnification agreement. This decision had a ripple 

effect throughout the industry, and as the House Committee reported, 

“[t]his avoided a large taxpayer-funded expense in the short-term, but in 

Appendix II: Federal Legislation Addresses 

the Major Liability Concerns, but Other 

Issues Remain 
Appendix II: Federal Legislation Addresses 

the Major Liability Concerns, but Other 

Issues Remain 

Page 42 GAO-04-240 Commuter Rail 

the long run convinced the entire freight industry that the indemnity 

agreements offered no real legal protection.” H.R. Rep. No. 105-251, at 21 

(1997). 

In 1997, Congress enacted Section 161 of the ARAA, which limited the 

overall damages for passenger claims from a single rail incident to $200 

million and also authorized the providers of passenger rail transportation 

to enter into contracts allocating financial responsibility for claims. Pub. L. 

105-134, § 161 (1997); 49 U.S.C. § 28103. Congress intended to facilitate the 

ability of freight railroads and passenger rail operators to contract for the 

use of the freights’ rights-of-way, stating that without tort reform and 

liability protection, “future passenger operations, whether commuter, 

high-speed rail, or intercity rail, will be placed in jeopardy as freight 

railroads resist taking on what is increasingly viewed as an unacceptable 

and uncompensated liability exposure.” H.R. Rep. No. 105-251, at 22 

(1997). 

During the course of our work, questions arose about the proper 

interpretation and application of the liability protections set forth in the 

ARAA and related issues. In particular, questions were raised about 

whether the liability provisions that are part of the ARAA apply to 

commuter rail operators and whether the statute applies to all types of rail 

incident damages claims. The ensuing discussion addresses the 

interpretation and application of the ARAA and the limitations of this 

legislation in resolving all of the concerns raised by commuter rail 

operators and freight railroads. 

Our examination of Section 161 of the Amtrak Reform and Accountability 

Act of 1997 leads us to conclude that all commuter rail operators, as well 

as Amtrak, are covered by the $200 million cap on awards for any claims 

by or on behalf of rail passengers resulting from an individual rail 

accident. The act creates a $200 million cap for passenger injuries arising 

“in connection with any rail passenger transportation operations over or 

rail passenger transportation use of right-of-way or facilities owned, 

leased, or maintained by any high-speed railroad authority or operator, any 

commuter authority or operator, any rail carrier, or any State.” 49 U.S.C. 

28103(a)(1)(emphasis added). Additionally, the definitions section defines 

a “claim” as “against Amtrak, any high-speed railroad authority or 

operator, any commuter authority or operator, any rail carrier, or any 

State.” 49 U.S.C. 28103 (e)(1)(emphasis added). The plain language of the 

statute expressly provides that commuter authorities or operators are 

protected by this statutory cap. 
Appendix II: Federal Legislation Addresses 

the Major Liability Concerns, but Other 

Issues Remain 

Page 43 GAO-04-240 Commuter Rail 

The statutory language that specifically authorizes freight railroads and 

commuter rail operators to enter into agreements allocating financial 

responsibility for claims, which forms the statutory underpinning for the 

indemnification agreements that protect freight railroads, is embodied 

within 49 U.S.C. § 28103(b). That subsection provides that “[a] provider of 

rail passenger transportation may enter into contracts that allocate 

financial responsibility for claims.” 49 U.S.C. § 28103(b). By enacting this 

provision, Congress intended to protect commuter rail operators, as well 

as Amtrak, by establishing a clear statutory basis for the enforceability of 

indemnification contracts. In this respect, the Senate Committee’s report 

on the legislation states “[t]he bill contains a provision that would help 

assure the enforceability of certain contracts between operators of rail 

passenger services—some of which are state and local governments—and 

owners of rights-of-way and other facilities.” S. Rep. No. 105-85, at 9 

(1997). Although we understand that the enforceability of indemnification 

agreements entered into pursuant to this provision has never been 

addressed in federal court, we believe the express statutory language and 

clear legislative history suggest that such indemnification agreements 

would be upheld. 

Although Section 161 of the ARAA resolves the major concerns that have 

been voiced by commuter rail operators and freight railroads with respect 

to the liability issue, it does not address all potential issues that have been 

raised. For example, the ARAA’s liability provision is limited in the scope 

of claims that it covers. The liability limitation, which does include claims 

for punitive damages, is restricted to “a claim for personal injury to a 

passenger, death of a passenger, or damage to property of a passenger.” 49 

U.S.C. § 28103(a)(1). It does not cap personal and property third-party 

(nonrail passenger) claims. Such potential plaintiffs could include adjacent 

property owners or populations that may be harmed in a hazardous 

materials spill or an accident at a rail crossing. Although the original 

version of the bill (H.R. 2247, § 401, 105th Cong. (1997)) would have 

applied to all potential plaintiffs, it was not contained in the legislation as 

enacted. H.R. Rep. No. 105-251, at 93-94 (1997). An official of one freight 

railroad said that in this era of escalating verdicts, they need to have 

adequate insurance to protect themselves in the event of potential thirdparty claims, and they use the example of an environmental spill and 

evacuation that may cause no human injuries or deaths but nonetheless 

could amount to a very large damages award against the freight railroad 

determined to be responsible. Because of the limited nature of the liability 

cap in the ARAA, extensive arms-length negotiation between the freight 

railroads and commuter rail operators to address the concerns of both 

parties remains essential. 
Appendix II: Federal Legislation Addresses 

the Major Liability Concerns, but Other 

Issues Remain 

Page 44 GAO-04-240 Commuter Rail 

There are other concerns that compound the freight railroads’ desire to 

require commuter rail operators to obtain a high level of liability insurance 

coverage for use of their rights-of-way. The concerns that have been raised 

include potential state law claims and questions about whether a court will 

uphold the liability limit established in the ARAA as it has never been 

tested in federal court. Although many carriers admit that they are being 

“super-cautious” in requiring such high levels of insurance, they point to 

the Amtrak-Conrail decision as an example of “judicial justice” as they 

seek to be protected from any potential liability. 

We find that the ARAA offers a good starting point for resolving many of 

the most important issues that arise when commuter rail operators use 

rights-of-way owned by freight railroads. However, it does not eliminate 

the need for freight railroads and commuter rail operators to consider 

individual circumstances and factors as they negotiate the terms of these 

access agreements because of the potential liability concerns that are 

otherwise not addressed by the statute. 
Appendix III: GAO Contacts and Staff 

Acknowledgments 

Page 45 GAO-04-240 Commuter Rail 

JayEtta Z. Hecker (202) 512-2834 

Susan Fleming (202) 512-4431 

In addition to those named above, Alan Belkin, Nikki Clowers, Lindy CoeJuell, Michelle Dresben, Sharon Dyer, Amy Higgins, Kristen Massey, and 

Stacey Thompson made key contributions to this report. 

Appendix III: GAO Contacts and Staff 

Acknowledgments 

GAO Contacts 

Acknowledgments 

(544077) 
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