Positive Train Control: Additional Authorities Could Benefit Implementation
Released: 2013-09-16T00:00:00

Letter

Background

Railroads and Supporting Infrastructure

The U.S. railroad industry consists mostly of freight railroads but also serves passengers. Freight railroads are divided into classes based on revenue. Class I freight railroads earn the most revenue and generally provide long-haul freight service. Freight railroads operate over approximately 160,000 miles of track and own most of the track in the United States; a notable exception is the Northeast Corridor, between Washington, D.C., and Boston, Massachusetts, which Amtrak predominantly owns. Amtrak provides intercity passenger rail service in 46 states and the District of Columbia and operates on 21,000 miles of track. Commuter railroads serve passengers traveling within large metropolitan areas and most operate over track infrastructure owned by Amtrak or freight railroads for at least some portion of their operations. Specifically, 9 commuter railroads operate over Amtrak-owned infrastructure. Sixteen commuter railroads operate over infrastructure owned by freight railroads.

U.S. freight and passenger trains often share track, dispatchers, and signals that control train movement. Some railroads also use additional technologies to improve efficiency and achieve business benefits. Currently, dispatchers in centralized offices issue train movement authorities that allow trains to enter specific track segments, or blocks. These authorities are communicated to train operators through signals alongside the track, or in non-signaled territory through track warrants generally issued by verbal radio communication (see fig. 1).Railroads also use additional technologies to maximize operational efficiencies. These include:

Computer-assisted dispatching so dispatchers can, among other things, optimally synchronize schedules, allowing trains on single track to “meet and pass” one another safely and efficiently, thereby minimizing delays and improving on-time performance.

Energy management systems that analyze train location and track grade and curvature information to calculate the train’s most fuel- efficient speed throughout the trip.

These technologies can lead to business benefits for the railroad as well as benefits for society at large. As we have reported in the past, diversion of freight traffic from highways to rail potentially increases highway safety and reduces highway congestion and energy consumption.

Although train accidents have generally been on the decline in recent years, human factors such as train operators missing a red signal or exceeding allowable speeds, or train crews leaving a switch in the wrong position can lead to significant damage and loss of life. Overall, rail safety—measured by the train accident rate per million train miles—has improved markedly since 1980. According to FRA data, 2012 was the safest year in railroad history. Even with the significant reduction in accident rates, on average almost 300 people were reported injured and about 10 people were reported killed in train accidents each year, from 2003 through 2012.

PTC is a computer-based technology that uses a communications system to monitor and control train movements to minimize human factor errors. Prior to the enactment of the RSIA in 2008, railroads developed and tested several PTC systems but deployed them on a limited basis. For example, in 1998, while Amtrak was upgrading the Northeast Corridor to enable operation of high-speed passenger trains—a service known today as Acela—FRA directed Amtrak to install a new train control system on some portions of the corridor as a safety measure. Amtrak worked with suppliers to develop a form of PTC—known as Advanced Civil Speed Enforcement System (ACSES)—and deployed this system on the Northeast Corridor.

Railway Safety Improvement Act of 2008

In wake of the Chatsworth rail accident in September 2008 and other high-profile rail accidents, RSIA was enacted. RSIA, among other things, required railroads to install PTC by December 31, 2015, on mainlines used to transport inter-city rail passengers, commuters, or any amount of toxic-by-inhalation materials. RSIA requires railroads to install PTC systems, which are designed to prevent train-to-train collisions and derailments caused by exceeding safe speeds. PTC must also be designed to protect rail workers by preventing trains from entering work zones as well as to prevent the movement of trains through switches left in the wrong position. PTC’s communications-based system links various components, namely locomotive computers, wayside units along the side of the track, and dispatch systems in centralized office locations (see fig. 2). Through these components, PTC is able to communicate a train’s location, speed restrictions, and movement authorities, and can slow or stop a train that is not being operated safely. For example, a PTC system could have prevented the 2008 Chatsworth accident by first alerting the operator that the train was approaching a red signal and then stopping the train before passing the red signal. However, it should be noted that there are types of accidents, such as highway-railroad crossing accidents and trespasser deaths, that PTC technology is not designed to prevent. According to FRA, highway-railroad crossing and trespasser deaths account for 95 percent of all rail-related fatalities.

RSIA does not require railroads to implement the same PTC system; however, the various PTC systems must meet the PTC system functionality requirements. There are two primary ways PTC can be implemented—as an overlay or as a standalone system. An overlay system involves installing PTC over existing track equipment to work in conjunction with the existing signal system and the train’s current method of operations. A standalone system involves taking information currently communicated through the signal system and putting it onboard the locomotive, effectively eliminating the need for the existing signal system. Whatever PTC system a railroad implements, RSIA requires that systems be interoperable, meaning they must be able to communicate with one another so trains can seamlessly move across track owned by different railroads with potentially different PTC systems. Interoperability is important given that, according to FRA, there are 37 freight, intercity passenger, and commuter railroads that are required to implement PTC.

To implement the requirements of RSIA, FRA has conducted three rulemakings that resulted in: (1) a 2010 final rule, (2) a 2012 final rule, and (3) a 2012 Notice of Proposed Rulemaking (NPRM), which is currently not finalized (see fig. 3). In the original 2010 rule, FRA used facts and data known in 2008 to determine where PTC implementation should occur. Recognizing that traffic levels and routing could change between 2008 and the statutory deadline in 2015, the 2010 rule provided railroads with the option to request an amendment to not equip a track segment where the railroad was initially required to install PTC, but may no longer be required to do so. In order for certain rail segments to be excluded, the segments would need to pass two qualifying tests. After FRA finalized the 2010 rule, the Association of American Railroads (AAR) challenged the two qualifying tests in a lawsuit, and FRA and AAR entered into a settlement agreement in which FRA agreed to propose elimination of the tests. The two qualifying tests were eliminated in the 2012 final rule; as a result, railroads do not have to implement PTC on rail segments that will not transport toxic-by-inhalation materials or passengers as of December 31, 2015. The FRA rulemaking that is currently under way addresses how railroads will handle en-route failures of PTC equipment, among other things.

In accordance with Executive Order 12866, FRA prepared economic analyses—also known as regulatory impact analyses—to assess the benefits and costs of PTC before promulgating regulations. Specifically, FRA issued two regulatory impact analyses evaluating final rules—one dated December 2009 evaluating the 2010 final rule and one dated January 2012 evaluating the 2012 final rule. Executive orders and OMB guidance direct agencies to assess the benefits and costs of regulatory alternatives. Agencies should generally select the regulatory approach that maximizes net benefits to society, unless a statute requires otherwise. OMB developed guidelines to encourage good regulatory impact analysis and to standardize the way that benefits and costs of federal regulations are measured and reported. OMB guidelines generally direct agencies, in analyzing the impacts of rules, to, among other things: measure the potential social benefits and costs of regulatory alternatives incremental to a “baseline,” (i.e., the conditions that would exist in the absence of the proposed regulation); analyze a range of alternatives; identify and quantitatively analyze key uncertainties associated with the estimates of benefits and costs; and provide documentation that the analysis is based on the best reasonably obtainable scientific, technical, and economic information available. OMB guidelines further state that a good regulatory analysis includes identifying the regulatory alternative with the largest net benefits to society. It also states that such information is useful for decision makers and the public, even when economic efficiency is not the only or the overriding public policy objective.

As part of overseeing railroads’ progress with PTC implementation, FRA is also responsible for reviewing railroads’ PTC-related plans. Railroads must submit and FRA must review and approve three plans: a PTC development plan, a PTC implementation plan, and a PTC safety plan.

The PTC development plan describes, among other things, the PTC system a railroad intends to implement to satisfy the PTC regulatory requirements. According to its August 2012 report, FRA’s approval of the development plans took nearly 18 months to complete.

The PTC implementation plan describes a railroad’s plan for installation of its planned PTC system. RSIA required railroads to submit these plans within 18 months (by April 16, 2010), and FRA to review and approve or disapprove them within 90 days.

The PTC safety plan includes a railroad’s plans for testing the system, as well as information about safety hazards and risks the system will address, among other things. By approving a safety plan, FRA certifies a railroad’s PTC system, a precondition for operating the PTC system in revenue service. Although FRA set no specific deadline for railroads to submit the safety plans, according to FRA, railroads must submit their safety plans with sufficient time for approval before the December 31, 2015, PTC implementation deadline. In its August 2012 report, FRA reported to need about 6 to 9 months to review each safety plan.

Almost All Railroads Are Installing PTC Overlay Systems but Face Challenges in Meeting the 2015 Implementation Deadline

Railroads Are Generally Implementing PTC as an Overlay System for Feasibility Reasons

Although there are two primary types of PTC systems—overlay and standalone— that functionally meet the PTC requirements in RSIA, almost all railroads required to install PTC are installing overlay systems. Railroad representatives told us they chose to install PTC as an overlay system because it was more feasible to meet the PTC implementation deadline than a standalone system. An overlay system allows railroads to install PTC components over existing rail infrastructure and operate the train in accordance with the existing signals and operations in the event of a PTC system failure.

Of the various PTC overlay systems that have been developed, all seven major freight railroads in the United States plan to implement Interoperable Electronic Train Management System (I-ETMS), which will account for most of the approximately 60,000 miles. Amtrak is implementing Advanced Civil Speed Enforcement System (ACSES) on the Northeast Corridor. Although ACSES and I-ETMS are functionally similar, they differ technologically. To determine train location, ACSES relies on track-embedded transponders while I-ETMS uses Global Positioning System (GPS) information (see fig. 4). Since most commuter railroads run over tracks owned by freight railroads or Amtrak, they are largely implementing the same systems developed by the freight railroads or Amtrak. For example, eight commuter rail systems that operate over Amtrak infrastructure on the Northeast Corridor—including major commuter systems in the New York City, Philadelphia, and Boston areas—are installing ACSES.

FRA has reported that in order to implement PTC, railroads must design, produce, and install more than 20 major components such as data radios for locomotive communication, locomotive management computers, and back office servers. Once these components are developed and integrated, PTC must then be installed on rail lines throughout the country, which involves upgrading and installing thousands of items, as well as replacing approximately 12,000 signals (see table 1). Adding to the complexity of PTC installation is the need to ensure that individual railroad systems are fully interoperable, which requires that the potential problems across railroads be identified, isolated, and corrected through testing in labs and in the field.

Railroads have invested billions in PTC implementation to-date, but anticipate spending billions more. In May 2013, AAR reported that by the end of 2012, railroads had spent about $2.8 billion on PTC implementation. According to AAR, the total cost to freight railroads for PTC implementation is estimated to be approximately $8 billion. Despite the billions railroads have invested, much of the work to implement PTC remains to be done. For example, AAR reported that as of the end of 2012, about a third of wayside interface units— which are needed to communicate data—had been installed. In addition, AAR reported that as of the end of 2012, less than 1 percent of locomotives needing upgrades had been fully equipped.

Most Railroads Report They Will Miss the 2015 PTC Implementation Deadline Due to a Number of Challenges

Most railroads report they will not complete PTC implementation by the 2015 deadline due to numerous interrelated challenges caused by the breadth and complexity of PTC. Both AAR and FRA have reported that most railroads will not have PTC fully implemented by the deadline. Of the four major freight railroads we included in our review, BNSF is the only railroad expecting to meet the 2015 deadline. According to BNSF representatives, it is on schedule to meet the 2015 deadline because of its extensive experience working on PTC prior to RSIA, its iterative build and test approach, and the concurrent development of its PTC dispatching and back office systems. Of the three remaining freight railroads we spoke to, representatives believe they will likely have PTC fully implemented by 2017 or later. In addition, while Amtrak officials report that they anticipate full PTC implementation on their Northeast Corridor and Michigan lines by the end of 2015, they noted it is unlikely they will have equipped the approximately 300 locomotives that will run on I-ETMS freight lines by the deadline. Commuter railroads generally must wait to equip their locomotives until freight railroads and Amtrak equip the rail lines that commuter railroads generally operate on. Four of the seven commuter railroads we included in our review reported that they will be unable to meet the 2015 PTC implementation deadline.

Challenges to meeting the 2015 deadline are complex and interrelated. For instance, many of the PTC components had not been developed before RSIA was enacted, and some continue to be in various stages of development. In addition, all components, once developed must be assembled and integrated to achieve the overall safety function of PTC. Likewise, the steps involved with implementing PTC are interrelated, with delays or problems with one component or process resulting in additional delays. Railroad representatives told us that once all the components have been assembled, integrated, and tested for reliability, rolling out and phasing in a PTC system into each railroad’s network will take a considerable amount of time. For example, Amtrak first conducted a demonstration test of its PTC system on its Michigan line in 1996, but it was 5 years later, in 2001, when the system was put into service. Finally, FRA’s resources and ability to help facilitate implementation by the 2015 PTC deadline are limited. Below is a discussion of these key interrelated challenges.

Developing system components and PTC installation. Some PTC components are still in development, most notably the I-ETMS back office server. One or more of these servers will be installed in over a dozen railroads’ back offices and are needed to communicate vital information between the back office, locomotives, and waysides. According to AAR and the railroads, back office system delays are due to system complexity, interfaces to other systems, and lack of supplier resources. Nearly all of the freight railroads included in our review anticipate they will not have a final version of the back office system until 2014 and have identified it as one of the critical factors preventing them from meeting the deadline. In addition to component development, PTC installation is a time- and resource-consuming process. For example, railroads collectively will have to install approximately 38,000 wayside interface units. According to AAR and freight railroads, the volume and complexity of installing these signals is another significant reason most railroads cannot meet the 2015 deadline. Railroads have also encountered unexpected delays while installing PTC. For example, the Federal Communications Commission (FCC) recently requested railroads halt their construction of radio antennae towers to allow FCC to consider how to implement oversight of the towers being installed for PTC. According to FRA and AAR officials, FCC requested that railroads halt construction on antennae towers that have not gone through the environmental evaluation process, including tribal notice, while FCC considers ways to streamline the process. FRA officials told us they did not anticipate this issue. AAR and FRA officials report they are working together with FCC to find a solution that meets the goals behind the process while still allowing for timely PTC deployment. However, the impact of halting construction on the towers may result in additional delays in railroads’ time frames.

System integration and field testing. Successful PTC implementation will require numerous components to work together, many of which are first-generation technologies being designed and developed for PTC. All components must properly function when integrated or the PTC system could fail. To ensure successful integration, railroads must conduct multiple phases of testing—first in a laboratory environment, then in the field—before installation across the network. Representatives from all of the freight railroads we spoke with expressed concern with the reliability of PTC and emphasized the importance of field testing to ensure that the system performs the way it is intended and that potential defects are identified, corrected, and re-tested. One railroad representative we spoke with said that in some field tests, the PTC system components behaved differently than in the laboratory tests because labs do not reflect field conditions completely. Identifying the source of these types of problems is an iterative process; consequently, correcting the problems and re- testing can be time-consuming and potentially further contribute to railroads not meeting the 2015 deadline.

FRA resources. Although most railroads we spoke with said they have worked closely with FRA throughout the PTC implementation process, some railroads cited concerns with FRA’s limited staffing resources. These concerns focused on two of FRA’s responsibilities. First, FRA officials must verify field testing of PTC. However, FRA reported that it lacks the staffing resources to embed a dedicated FRA inspector at each railroad for regular, detailed, and unfiltered reporting on railroads’ PTC progress. To address the lack of staff to verify field- testing, FRA has taken an audit approach to field testing, whereby railroads submit field test results for approval as part of their safety plans and FRA staff select plans to evaluate the accuracy of the results. Second, before a railroad can operate a PTC system in revenue service, it must be FRA certified, and FRA must approve the railroad’s final safety plan. FRA set no specific deadline for railroads to submit the safety plans, and according to FRA, to-date only one railroad has submitted a final safety plan, which FRA has approved. As it reported in its 2012 report to Congress, FRA’s PTC staff consists of 10 PTC specialists and 1 supervisor who are responsible for the review and approval of all PTC final safety plans. FRA also reported that this work covers the 37 railroads implementing PTC on over 60,000 miles of track. FRA and railroads have expressed concern that railroads will submit their final safety plans to FRA at approximately the same time, resulting in a potential review backlog particularly since each plan is expected to consist of hundreds of pages of detailed technical information. FRA officials told us that they are dedicated to the timely approval of safety plans and that their oversight will not impede railroads from meeting the deadline. However, railroads report that their time frames are based on a quick turnaround in approvals from FRA. If approvals are delayed, it could be a further setback in railroads’ PTC implementation.

Generally commuter railroads face these same PTC implementation challenges, as well as others. First, because commuter railroads are using the PTC systems developed by freight railroads and Amtrak, they are captive in many respects to the pace of developments of those entities and have few means to influence implementation schedules. Commuter railroads also face challenges in funding PTC implementation due to the overall lack of federal funding available to make investments in commuter rail and limited sources of revenue. Most commuter railroads are non-profit, public operations that are funded by passenger fares and contributions from federal, state, and local sources. Economic challenges such as the recession have eroded state and local revenue sources that traditionally supported capital expenses. In addition, according the American Public Transportation Association (APTA), commuter railroads face competing expenses such as state of good repair upgrades, leaving them with limited funding to implement PTC. According to APTA, collectively, PTC implementation will cost commuter railroads a minimum of $2 billion. Finally, commuter railroads report that obtaining radio frequency spectrum—essential for PTC communications—can be a lengthy and difficult process. FCC directed commuter railroads to secure spectrum on the secondary market. According to the FCC, spectrum is available in the secondary market to meet PTC needs. While freight railroads have secured most of the spectrum needed for PTC implementation, commuter railroads have reported difficulty acquiring spectrum in the 220 megahertz (MHz) band, which is required to operate the data radios that communicate information between PTC components. In particular, railroad representatives said that obtaining spectrum is a critical challenge in high-density urban areas. Without acquiring sufficient spectrum, railroads may be unable to adequately test their PTC systems, potentially causing further delays in meeting the 2015 PTC deadline.

By attempting to implement PTC by the 2015 deadline while key components are still in development, railroads may be making choices that could introduce financial and operational risks to PTC implementation. Representatives from freight railroads and FRA officials told us that railroads will not compromise the safety functions of the PTC system and will ensure that systems meet the functionality requirements in RSIA. However, freight railroad representatives told us that in order to work towards testing and installation, they compressed time frames and undertook processes in parallel rather than sequentially. For example, to begin installation while key components were being developed, railroads took a “double touch” approach to equipping locomotives, which involves taking locomotives out of service twice to begin installation while software was being developed. Railroad representatives told us this approach is more expensive than installing the equipment after the software is fully mature, as it involves more labor hours and more time that locomotives are out of service. Our prior work on weapon systems development has shown that technologies that were included in a product development program before they were mature later contributed to cost increases and schedule delays. This work showed that demonstrating a high level of maturity before new technologies are incorporated into a product development plan increases the chances for successful implementation. In 2010, we reported that railroads expected key PTC components to be available by 2012. Railroads have subsequently reported that PTC installation has involved many delays, particularly in component development and many of the essential components are still in development. Consequently, product maturity remains an issue for some PTC components and may result in additional cost and schedule overruns.

The development time frames involved in implementing PTC by the end of 2015 also potentially introduce operational risks. Representatives from all of the freight railroads we spoke with expressed concern regarding the reliability of PTC and noted that adequate field testing was important to identify and correct problems. These representatives noted that without adequate testing, PTC systems may not perform as planned and may be more prone to system reliability issues, possibly causing service disruptions. FRA officials also expressed concern that if pressured to meet the 2015 deadline, railroads might implement an unreliable PTC system that breaks down and leads to operational inefficiencies through slower trains or congestion.

FRA’s Request for Legislative Changes to Provide Additional Authority in Overseeing PTC’s Implementation Could Help Manage PTC Implementation

In an August 2012 report to Congress, FRA identified three items for consideration in the event Congress amends RSIA. FRA officials told us that if Congress chooses to amend RSIA, additional authority to extend the deadline on certain rail lines, grant provisional certification of PTC systems and approve the use of alternative safety technologies in lieu of PTC would help them to conduct oversight more effectively by providing FRA flexibility in overseeing PTC. Specifically FRA requested the authority to:

Extend the deadline on certain rail lines to grant railroads incremental deadlines on a case-by-case basis. FRA officials told us they do not want a deadline extension applied to the whole railroad industry. Rather, FRA would like flexibility to create new deadlines based on an individual railroad’s circumstances, particularly a railroad’s due diligence to achieve the 2015 deadline and efforts to mitigate risks. FRA officials said currently they are unable to approve implementation plans that give completion dates beyond 2015. FRA officials said that such a change would require railroads to update their implementation plans.

Grant provisional certification of PTC systems under controlled conditions before final system completion to allow railroads to operate PTC in certain places while they are still developing it in other places. According to FRA, this would provide assurance that the PTC system was safe, so that a railroad could begin to use the PTC system while FRA reviewed the railroad’s full safety plan. FRA and railroads told us the benefit of this authority is that it would allow railroads and the public to experience the safety benefits of PTC sooner. FRA officials said they believed this would provide railroads with additional time to address issues and would lead to the implementation of a more reliable system.

Approve the use of alternative safety technologies in lieu of PTC to allow railroads to improve safety and meet many of the functions of PTC through other means. FRA officials told us that they would anticipate using this authority only for commuter and some smaller railroads and would consider technologies in combination with operating rules that railroads demonstrate would enhance safety.

Although some freight railroad representatives we spoke with supported providing FRA with additional authority, others voiced concerns about how the authorities would be administered. For example, details such as how FRA will identify and apply criteria to determine which railroads should receive extensions would need to be addressed. In addition, one freight railroad representative raised concerns over timeliness of FRA’s determinations of deadline extensions. Furthermore, representatives from another railroad suggested that granting deadline extensions to some railroads unfairly penalizes those railroads that may meet the PTC deadline. FRA could not provide us with specific information detailing how these authorities would be applied. However, if Congress were to amend RSIA in order to provide FRA additional authorities in implementing PTC, the Secretary of Transportation would need to direct FRA to develop new regulations or orders, in order to carry out its duties.

At a June 2013 hearing on rail safety, AAR and APTA stated their support for FRA’s request for additional authority and extending the PTC implementation deadline to December 31, 2018, for all railroads. In addition, FRA recommended the Secretary of Transportation be given the authority to grant railroads extensions beyond a December 2018 deadline. In particular, AAR stated its support for FRA’s request for flexibility to extend the deadline and previously noted that FRA’s request to provide provisional certification of PTC systems could reduce delays. According to AAR, these authorities could provide some relief to railroads experiencing challenges meeting the deadline. APTA, representing commuter railroads, also supported FRA’s request for additional authority and specifically stated its support that FRA be allowed to consider alternative technologies in lieu of a PTC system on specified line segments. According to APTA’s testimony statement, some commuter railroads already have collision avoidance systems in place that protect against train-to-train collisions. According to APTA, allowing FRA to examine the feasibility of alternative technologies to PTC for some of the smaller railroads on a line-by-line basis could provide opportunities to free up PTC components for other railroads to expedite their PTC implementation.

While an extension of the PTC implementation deadline may provide railroads with additional time to implement PTC, it is not clear that all railroads would be able to meet a revised December 31, 2018 deadline proposed by AAR and APTA. For example, AAR’s May 2013 report predicts that, while PTC could be in operation on most mandated PTC routes by December 31, 2018, the date PTC will be in operation on all routes would vary by railroad. One freight railroad we spoke to anticipated it would not be able to fully implement PTC until 2020. In addition, given that many commuter railroads are waiting for freight railroads to develop and implement PTC, many commuter railroads will likely have PTC fully installed after the freight railroads. Furthermore, in a hearing statement, AAR recommended flexibility beyond December 2018 due to the unprecedented nature of PTC and the uncertainties — both known and unknown—of implementation.

Given the uncertainties in implementing PTC and the unexpected delays already encountered, additional challenges could prevent railroads from meeting a new deadline. However, FRA’s request for additional authority could provide railroads the flexibility to implement PTC on individual, case-by-case deadlines, either instead of or in addition to an overall deadline extension. Additional authority could also assist FRA in managing its limited staff resources and help railroads mitigate risks and ensure PTC is implemented in a safe and reliable manner. For example, although at the June 2013 rail safety hearing concerns were raised that providing railroads deadline extensions on a case-by-case basis would be resource-intensive and could provide additional challenges and delays, we found that railroads were at various stages in their implementation. Flexibility in extending the deadline for certain railroads acknowledges these differences and also may help FRA better manage limited resources by, for example, preventing a potential review backlog resulting from final safety plans being submitted at the same time—a concern raised by freight railroads and FRA. In addition, according to FRA, allowing provisional certification of PTC systems not only helps to manage limited resources, it also reflects good engineering practice in implementing wide-ranging, complex systems and is a well documented risk mitigation strategy. Finally, as outlined in APTA’s testimony at the June 2013 hearing on rail safety, allowing some railroads to use alternative technologies on certain lines could provide relief to other railroads struggling to procure certain PTC components.

FRA Found the Costs of Implementing PTC Outweigh the Safety Benefits, but Opportunities May Exist to Pursue Future Business Benefits

FRA Estimated That the Costs of PTC Implementation Far Outweigh the Safety Benefits

FRA’s final regulatory impact analysis for the 2010 final rule estimated that the costs of PTC installation far outweigh the safety benefits. FRA’s regulatory impact analysis presents an analysis of the costs and benefits associated with implementing a PTC system on qualifying rail segments. FRA estimated the total costs of implementing PTC to be about $13.2 billion and the total safety benefits to be about $674 million. Costs FRA anticipated to accrue to railroads through the implementation of PTC included: development of implementation plans and administrative functions related to the implementation and operation of PTC systems, including the information technology and communication systems that make up the central office; hardware costs for onboard locomotive-system components, including hardware costs for wayside system components, including installation; maintenance costs for all system components.

FRA expects that PTC implementation will generate safety benefits from the reduction in the risk of certain types of accidents and the number and severity of casualties caused by train accidents on lines equipped with PTC systems. FRA also estimated benefits related to accident preventions that are anticipated to accrue, such as reductions in property damage, equipment cleanup, environmental damage, train delays resulting from track closures, road closures, emergency response, and evacuations. In addition to these safety benefits, FRA’s regulatory impact analysis stated that after PTC systems are refined, business benefits resulting from more efficient railroad operations could be forthcoming. FRA did not, however, include business benefits in its impact analysis estimates because of significant uncertainties regarding whether and when such benefits would be achieved.

FRA Generally Followed OMB Guidance in Assessing the Benefits and Costs of PTC Implementation

We found that FRA generally followed OMB guidance in assessing the benefits and costs of implementing PTC, and although we generally agree with FRA’s estimation that costs likely outweigh benefits, we are not confident in the precision of the specific estimates of costs and benefits. Specifically, we compared FRA’s regulatory impact analyses with key elements of OMB guidelines, including establishing a baseline, considering alternatives, analyzing uncertainty and quantifying key categories of costs and benefits. We identified some limitations in the analyses, for example, analyses are not comprehensive in some respects and the source and quality of some of the underlying data is unclear. According to FRA officials, the limitations in its analysis and data do not affect the primary outcome of the analysis— that total costs are expected to exceed total safety benefits (i.e., that there are negative net societal benefits). Based on our review, we also believe the limitations we identified were not significant enough to affect FRA’s general determination that PTC’s implementation costs outweigh benefits. (See app. II for more detail on our assessment of FRA’s regulatory impact analyses and findings.)

The PTC mandate limited the flexibility and time available to FRA to develop a rule and analyze its economic impacts; nonetheless, more thorough analyses and better quality data could have made the benefit cost analysis more useful in discussions of PTC implementation. FRA’s PTC rulemaking was initiated to implement PTC, as required by RSIA. Specifically, RSIA mandated the installation of a PTC system, which can achieve certain safety benefits, and specified the system’s functional requirements and the 2015 implementation deadline. FRA had little latitude to implement other, non-PTC alternatives that may have been less costly to achieve the same safety benefits. In addition, FRA officials told us that because the PTC rulemaking process was expedited, they had to use the information that was available to them at the time to conduct their analysis. However, we found that some information was up to 10 years old and the quality of some of the underlying data was unclear. Finally, FRA excluded business benefits from its estimates, instead opting to include a discussion of potential business benefits in an appendix to its analysis. FRA officials said that they excluded business benefits from their analysis due to uncertainty about whether and when business benefits could be achieved. While we found this decision was appropriate, we found limitations to the discussion of business benefits. For example, FRA assumed that railroads would achieve business benefits associated with a standalone PTC system, but did not include supporting evidence that railroads would likely install such a system.

PTC Alone Is Unlikely to Generate Business Benefits, but Opportunities Might Exist to Pursue Business Benefits over Time and with Additional Investment

Although an overlay PTC system alone is not expected to generate business benefits, over time and with additional investments, there may be opportunities for railroads to achieve some business benefits. PTC implementation involves upgrades that railroads could integrate with existing technologies to provide operational enhancements. As previously discussed, railroads are making substantial investments in their rail network infrastructure to implement PTC. These investments include (1) upgrading existing wayside and office subsystem components; (2) installing a new communication infrastructure to facilitate the communication of train speed, train location, work zone and switch information; (3) and developing detailed geographical information systems (GIS) mappings of an entire rail network. The first two investments can help to generate information that can be shared with other applications, such as train dispatching software and energy management systems to potentially produce business benefits while the detailed GIS mapping can be used to support a railroad’s state of good repair.

More specific train location and speed data for use in other applications such as precision dispatching could help to improve train dispatching, potentially increasing network capacity. The PTC overlay systems railroads are installing require changes to most dispatching systems to account for more precise train location information. For example, according to AAR and FRA, most railroad dispatching systems, which currently require location information within one-tenth of a mile, are being upgraded as part of PTC to require location information of up to a ten- thousandth of a mile. According to a freight railroad representative we spoke to, using the more detailed train location information from PTC could help dispatchers better prioritize train movements based on a train’s delivery schedule and better manage “meet and pass” operations (when two trains approach each other on a single track). PTC, however, is not a prerequisite for precision dispatching. For example, one freight railroad representative told us that their railroad is already using alternative means independent of PTC to enable real-time train position reporting to improve dispatching. Nonetheless, the PTC system that is being installed is also expected to provide this information. In addition, according to a supplier we included in our review, PTC could enable development of additional features, such as precision dispatching. Representatives from another supplier we spoke with said they anticipate that railroads will use PTC-generated train location information for improved dispatching in the future after the initial rollout of PTC.

PTC-generated information and data also could help railroads achieve greater fuel savings than they are currently achieving with their energy management systems. An energy management system is an on-board technology that uses a variety of information, including train location and track elevation and curvature, to calculate a train’s most fuel efficient run and make throttle and braking recommendations to the operator to minimize a train’s consumption of fuel. PTC can generate information that could assist energy management systems in two ways. First, PTC systems are being designed to enforce compliance with safety parameters, such as speed restrictions, that trains encounter when traveling from origin to destination. According to an energy management system supplier and freight railroad representatives we spoke with, these parameters could be used to make train movement calculations based on the PTC safety parameters governing the route, which is information currently unavailable to such systems. Second, railroads are developing more detailed mapping of their rail networks, including its critical features such as signals and switches and putting this information into a track database as part of PTC implementation. According to an energy management system supplier we spoke with, this more precise information, which is needed for the PTC system to calculate train safety stopping distances could enhance railroads’ existing fuel-management systems’ performance through more accurate information on track features.

Representatives from all of the freight railroads we spoke with reported already achieving fuel savings through energy management systems but noted that there may be potential for additional savings by integrating these systems with these PTC components. For example, one freight railroad representative reported that the railroad’s energy management system currently provides annual fuel savings of 4 to 6 percent, but that integrating the system with PTC could lead to an additional 1 to 2 percent in fuel savings.

Freight railroad officials we spoke with generally expressed interest in pursuing PTC-related business benefits, but noted they are currently focused on installing PTC and are devoting their time and resources to that effort. For example, one freight railroad representative told us the railroad has not had time to fully think through how to achieve business benefits using the PTC system since all resources are currently focused on implementing PTC and noted that these benefits were incremental and could likely be achieved outside of PTC. However, railroad representatives from the four freight railroads we spoke with said they would explore ways to leverage the safety investment they are making in PTC to obtain additional business benefits once the PTC system is fully implemented and operating. These railroads emphasized that pursuing business benefits will involve additional investments beyond their current investments in PTC installation.

Nevertheless, railroad representatives also identified a number of concerns about attempting to achieve business benefits through PTC systems. First, some business benefits are already being achieved through existing technologies. Second, the potential for significant PTC business benefits is still not clear. For example, according to one railroad representative, despite his railroad’s long history with PTC, it is still unsure of the potential for PTC to achieve business benefits. PTC is a new technology, and system components are still being developed. After the safety functionalities of the system have been tested and deployed, representatives will be able to determine what additional functionality (e.g., operational efficiencies) can be achieved through PTC implementation. In addition, additional functionalities to achieve PTC business benefits must be done in a way that would not compromise the system’s underlying safety functions. FRA officials told us that when integrating PTC with other systems to achieve business benefits, railroads must be careful not to compromise the integrity of PTC system’s underlying safety functions. According to a PTC supplier, delaying the introduction of any business benefit features to the PTC system may help railroads avoid complicating the initial deployment of PTC. Representatives from one freight railroad we spoke with anticipated that railroads would, with additional investment, begin to achieve business benefits through PTC over the next two decades as PTC is fully installed and operational.

Conclusions

In the wake of the 2008 Chatsworth commuter rail accident that resulted in 25 deaths and over 100 injuries, RSIA was enacted, marking a public policy decision that rail safety warranted mandatory and accelerated PTC system installation. PTC implementation is a massive, complex, and expensive undertaking. Amid numerous implementation challenges, it appears that most railroads will not fully implement PTC by the December 31, 2015, deadline. Given the state of PTC technology and the myriad of PTC components that must seamlessly work together, the potential risks railroads may be taking in attempting to meet the deadline should be considered. Accordingly, FRA has requested additional authorities which could allow FRA to better manage its limited resources and give railroads the flexibility to take a more measured approach to PTC implementation, potentially mitigating some implementation risks. AAR and others have proposed extending the PTC implementation deadline to December 31, 2018, and agree that providing FRA with additional authorities could increase flexibility in managing PTC implementation. Given all the uncertainties in implementing PTC technology, it is not clear 2018 will be sufficient time for railroads to fully implement PTC. Consequently, Congress, the railroads, and FRA may end up in the same position they are currently in, with an impending deadline and not enough flexibility to ensure that all railroads fully implement PTC both reliably and expediently. Regardless of whether the deadline is extended for the industry as a whole or FRA is given the flexibility to grant extensions to railroads on a case-by-case basis—upon consideration of railroads’ due diligence in implementing PTC—action is needed to help FRA better manage its limited resources and address the reality of PTC implementation, which is that different railroads are at different stages.

Matters for Congressional Consideration

To help ensure that the Federal Railroad Administration manages its limited resources and provides flexibility to railroads in implementing PTC, Congress should consider amending RSIA as requested in the FRA’s August 2012 PTC Implementation Status Report to Congress, including granting FRA the authority to: extend the deadline on individual rail lines—when the need to do so can be demonstrated by the railroad and verified by FRA—to grant railroads incremental deadlines based on a case-by-case basis; grant provisional certification of PTC systems under controlled conditions before final system completion; and approve the use of alternative safety technologies in lieu of PTC to allow railroads to improve safety and meet many of the functions of PTC through other means.

Agency Comments

We provided a draft of this report to the Secretary of Transportation for review and comment. DOT provided technical comments, which we incorporated as appropriate.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretary of Transportation and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-4431 or flemingS@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix III.

Appendix I: Objectives, Scope, and Methodology

This report discusses (1) how railroads are implementing positive train control (PTC) and the challenges, if any, to meeting the PTC implementation deadline; and (2) FRA’s estimates of the benefits and costs of PTC and the extent to which railroads might be able to leverage PTC technology to achieve business benefits.

To obtain information about how railroads are implementing PTC and the challenges to meeting the PTC implementation deadline, we interviewed representatives from the four largest Class I freight railroads—BNSF Railway, CSX Corporation, Norfolk Southern, and Union Pacific—and Amtrak. We also interviewed representatives from seven commuter railroads:

Massachusetts Bay Transportation Authority (Boston, Massachusetts)

Metropolitan Transportation Authority (MTA) Long Island Railroad (New York, New York)

MTA Metro-North Railroad (New York, New York)

Southern California Regional Rail Authority, also known as Metrolink (Los Angeles, California)

Southeastern Pennsylvania Transportation Authority (SEPTA) (Philadelphia, Pennsylvania),

Utah Transit Authority (Salt Lake City, Utah)

Virginia Railway Express (Washington, D.C.)

We selected the commuter railroads to represent a range of geographic locations, levels of ridership, and PTC implementation status, while selecting railroads that had a mix of operations, including those operating on tracks owned by all four of the largest Class I railroads and Amtrak. We also interviewed or received written responses from representatives from selected rail supply companies (New York Air Brake, Wabtec, MeteorComm, and Parsons); railroad industry associations (the Association of American Railroads (AAR), the American Short Line and Regional Railroad Association, and American Public Transportation Association (APTA)); the Chlorine Institute; six experts; and FRA. We selected the railroad supply companies based on the types of products and services provided, railroad clients, and recommendations from FRA, associations, and experts. We selected experts based on their experience working on PTC, independence from current PTC work, and recommendations from associations and other experts. We also reviewed PTC development and implementation requirements in the Rail Safety Improvement Act of 2008 and FRA regulations; FRA’s 2012 report to Congress on Positive Train Control Implementation Status, Issues, and Impacts; and prior GAO reports. We attended the Railway Age International Conference on Communications-Based Train Control in Washington, D.C., and the National Transportation Safety Board Forum on Positive Train Control Implementation. We visited and met with officials at Southern California Regional Rail Authority, in Los Angeles, California, and Amtrak officials in Wilmington, Delaware, to witness computer simulations of PTC and view PTC track side components. In addition, we visited and met with officials at SEPTA in Philadelphia, Pennsylvania.

To understand how FRA estimated the benefits and costs of PTC in its rulemakings we reviewed the 2010 and 2012 PTC rules and the supporting proposed and final regulatory impact analyses, and interviewed representatives from the FRA. To review the quality of the regulatory impact analyses, we used key elements in the OMB economic guidelines (Circular A-4) as criteria, including: use of appropriate baseline from which to estimate benefits and costs; assessment of a range of alternatives; inclusion of all key categories of benefits and costs; use of best available information in analyzing benefits and costs; and analysis of uncertainty. In addition, to better understand the potential economic effect of the rules, and the changes that FRA made in response to comments, we reviewed public comments submitted to FRA in response to the rulemakings, and we interviewed FRA officials, stakeholder groups (AAR, the Chlorine Institute), PTC technology and railroad industry experts, economists, and railway supply companies. We did not independently analyze the benefits and costs of FRA’s PTC regulations. Since the rulemaking is in response to a mandate, we focused on the information contained in the benefit cost analyses and did not comment on the overall rule.

To determine the extent to which railroads might be able to leverage PTC technology to achieve business benefits we interviewed representatives from the previously mentioned Class I freight railroads, Amtrak, 7 commuter railroads, association officials, experts, railroad supply companies, and FRA to learn about plans to leverage PTC to achieve business benefits as well as existing technologies that could potentially be used to achieve business benefits. We reviewed documentation from an array of sources, including FRA, AAR, the Chlorine Institute, and PTC experts to determine the types of technology that could potentially be used to achieve PTC business benefits and the extent railroads can leverage PTC technology to achieve business benefits.

Appendix II: Observations on the Quality of FRA’s Regulatory Impact Analyses Used in PTC Rulemaking

FRA issued regulatory impact analyses that examined the economic impact of the implementation of RSIA and generally found that the costs far outweighed the benefits of PTC installation. Specifically, the December 2009 final regulatory impact analysis concluded that the costs to comply with the regulation far exceeded the safety benefits of PTC. The January 2012 final regulatory impact analysis evaluated the costs and benefits of the final rule (i.e., to eliminate the two risk-based tests for exempting certain rail segments from the PTC requirement) and found that the benefits, which were the costs saved by installing PTC on fewer rail lines, outweigh the costs, which were the increased risk for train incidents as a result of PTC no longer being required along 10,000 miles of track. However, this final rule did not alter the conclusions of the December 2009 analysis conclusion that the costs of PTC far outweighed the safety benefits.

We reviewed FRA’s 2009 and 2012 regulatory impact analyses using OMB guidance for developing regulatory impact analyses and found that although FRA generally followed OMB guidance in assessing the costs and benefits of implementing PTC, the quality of some of the underlying data suggests some limitations in the analyses. Specifically, we found:

Although FRA established a baseline and considered one alternative, an analysis of other alternatives in the implementation of PTC may have been useful.

FRA analyzed uncertainty associated with cost estimates, but not with safety benefit estimates.

FRA included key costs in its analysis, but excluded the cost of implementation to the government.

Data and computations underlying the analysis were not clearly sourced and explained, and for some data, the quality was unclear resulting in a lack of transparency.

See Table 2 for a discussion of these findings, including the OMB guidance, what FRA did in the December 2009 analysis, what FRA did in the January 2012 analysis, and our analysis.

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Sharon Silas, Assistant Director; Richard Bulman; Tim Guinane; Delwen Jones; Emily Larson; Sara Ann Moessbauer; Josh Ormond; Madhav Panwar and Crystal Wesco made key contributions to this report.