The federal government is easing rules requiring railroads to install positive train control (PTC) equipment, saving the industry hundreds of millions of dollars.
The Department of Transportation said under the revisions announced Thursday railroads will no longer have to conduct risk analyses to obtain approval to not install PTC or take other costly risk mitigation measures on an estimated 10,000 miles of track that will not carry passenger trains or toxic-by-inhalation (TIH) chemicals after December 2015.
DOT said “railroads are expected to save approximately $335 million over the first five years, and up to $775 million over 20 years, by utilizing safety measures other than PTC, where appropriate.”
Legislation passed by Congress in 2008 mandates that PTC equipment be installed by the end of 2015 on U.S. Class I rail main lines used to transport passengers or TIH materials. The law was passed following the collision of a Metrolink passenger train and a Union Pacific freight train on Sept. 12, 2008 in Chatsworth, Calif., which resulted in the deaths of 25 and injuries to more than 135 passengers.
The investment bank Stifel, Nicolaus said in a research note that CSX and UP “have said that they expect to spend $1.3 billion and $1.6 billion, respectively, during the next four years (i.e., 2012-2015) and we believe NSC and BNSF will spend similar amounts.
“So, we believe the $335 million savings during the next five years will be less than 5 percent of the amount the U.S. Class I rails will spend on PTC during that time and the $775 million savings over 20 years will represent only a low single-digit percentage of total PTC spending when considering the PTC maintenance costs that the rails will incur after PTC implementation,” the bank said.
It added that “we would not be surprised if the year-end 2015 PTC deadline is extended (the American Association of Railroads is lobbying for a five-year extension). In our view, that 2015 deadline was never realistic when considering the scope of the U.S. freight rail network combined with the rigors of implementing the PTC-related equipment.”
The Association of American Railroads says its members are “committed to meeting this deadline and are working hard to make it happen. That said, according to the Federal Railroad Administration (FRA), it will cost up to $13.2 billion to install and maintain PTC over the next 20 years, making PTC the most costly federal mandate in history for America’s railroads.”
It said “PTC will yield just $1 in benefits for every $20 spent on it, and money spent on PTC means less money will be available for other critical infrastructure and safety-enhancing projects.”
Virginia-based personal industry attorney Richard Shapiro said in a blog entry that the change was a victory for the AAR but “is actually a terrible loss for the men and women who actually do the work of moving goods and people by rail.” – Chris Dupin
U.S. eases positive train control rules
