Industry News

Amtrak: PTC Costs Could Shut Down Train Services

October 26, 2009 | 02:50 p.m. CDT

Amtrak has told the Federal Railroad Administration (FRA) that the cost of installing Positive Train Control collision-avoidance systems in at least 12 states "may be so high as to not be undertaken and therefore result in the elimination of Amtrak service," reports The Wall Street Journal.

The proposed rules, which the FRA plans to put in final form in the coming weeks, would require freight railroads, Amtrak and commuter-rail operators to install "positive train control" systems by December 2015. Estimates for the total costs of the new rail-safety rules vary widely. The FRA says the 20-year costs of the proposal could range from $7 billion to $24 billion. An FRA analysis found that the costs of the proposed rules "would far exceed the benefits."

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

Railroad executives supported the rail-safety legislation last year. But in recent weeks industry officials have become alarmed at the scope and potential cost of the FRA's rules. The FRA, rail executives say, would require expensive collision-prevention systems on as much as 80 percent of main line track – far more than the industry anticipated. Railroad executives want the FRA to exempt certain segments of tracks that carry low levels of traffic or fewer than two carloads per week of hazardous materials.

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

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