OF THE
HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
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May 13, 1998
10:00 a.m.
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Presented by
LONNIE E. BLAYDES, JR.
Vice President – Commuter Rail and Railroad Management
Dallas Area Rapid Transit
American Public Transit Association
1201 New York Avenue, N. W.
Washington, DC 20005
(202) 898-4000
APTA is a nonprofit international association of over 1,100 member organizations including transit systems; planning, design, construction and finance firms; product and service providers; academic institutions, and state associations and departments of transportation. APTA members serve the public interest by providing safe, efficient and economical transit services and products. Over ninety percent of persons using public transportation in the United States and Canada are served by APTA members.
Overview
Good morning Chairman Franks and Members of the House Railroads
Subcommittee. I am Lonnie Blaydes, Chair of the Commuter Rail Committee of the American
Public Transit Association (APTA), and Vice President for Commuter Rail and Railroad
Management for Dallas Area Rapid Transit. I am testifying today on behalf of APTA.
I would like to say a special hello to Representative Kay Granger, a
member of this distinguished Subcommittee and former mayor of Fort Worth. The system which
I manage - Trinity Railway Express – is a partnership between the transit authorities
in Fort Worth, and Dallas. Representative Granger has long been keenly aware of the
transportation needs in our region, and has been instrumental in initiating this new rail
passenger service. I am proud to report that our 17 month-old system continues to
experience a steady growth in ridership and continues to receive high marks from the
traveling public. I also want to acknowledge Representative Max Sandlin of the Railroads
Subcommittee for his continuing support of public transportation and passenger rail
initiatives.
APTA appreciates the opportunity to discuss with you the critical
importance of the nation’s railroad network to public transportation operations. I
want to emphasize the need for legislative action to assure that rail passenger interests
are given full and reasonable consideration regarding their need to have access to that
network. We request that such action be included in legislation to reauthorize the Surface
Transportation Board, the federal forum with responsibility over rail access disputes.
Historically, America’s railroad corridors have been used for both
freight and passenger purposes. At one time, both were profitable and were operated by the
private sector. As passenger operations became unprofitable in the 1950’s and
1960’s, private railroads were relieved of the obligation to operate passenger
service directly, and the services were taken on and supported financially by public
entities.
Rail passenger service in the United States is now experiencing a
renaissance. Older rail systems are more important than ever in serving their
region’s urban / suburban economies. Many communities throughout the nation are
actively working to initiate new rail services, and federal policies need to support
shared access of railroad right-of-way when it is in the public interest for rail freight
and passenger operations to share operational corridors.
Times have changed and institutions have evolved. Laws governing the
nation’s railroads have been revised periodically over the past thirty years to
reflect institutional changes. It is critical that procedures now be established to assure
that both freight and passenger needs can be achieved in a way that is fair, timely and
reasonable.
Evolution of Rail Freight and Rail Passenger Services
America’s railroads historically were given a special status in
recognition of their key role in the economic growth of our nation. The federal government
provided land grants to railroads in the form of rights-of-way and adjoining property as
an incentive for the building of railroads. In addition, many states have exempted
railroads from local property taxes, instead providing for separate systems of taxation.
Significantly, railroads are exempt from federal antitrust laws. Railroads historically
have been granted the privileges and obligations of public utilities, with common carrier
duties extending to both the movement of people and the movement of goods.
As passenger operations became unprofitable, private railroads were
allowed to abandon passenger service and, if passenger service continued, public agencies
had to step in to fund rail passenger operations. A time-honored relationship remains,
however, for joint use of rail corridors for transporting people as well as transporting
goods.
Currently, a number of commuter railroads and light rail systems own
the rights-of-way used for rail passenger service and many have agreements with freight
carriers allowing the use of their track for freight movements. In many more instances,
however, public transit agencies use rights-of-way owned by private railroads for the
operation of their passenger services. In these instances, agreements are typically
negotiated regarding lease payments, schedules and dispatching, cost sharing of
maintenance and capital investments, liability, and other issues.
At the same time that rail passenger service has been growing in
popularity, a healthy national economy has also helped boost the levels of freight
traffic. As a result, public transit providers and freight railroads are finding it
increasingly difficult to reach mutually satisfactory agreements regarding trackage rights
and operational issues. Public transit providers are facing demands from freight railroads
that are increasingly costly, more restrictive, or in the worst cases, designed to deny
access entirely.
Given that their primary objectives are to serve freight customers and
to earn profits for investors, many freight railroads have little incentive to accommodate
rail passenger interests. Indeed, freight railroads generally would prefer that the
passenger operation not be there at all. At the same time, public transit agencies in this
situation are without the basic right of local governments to acquire property – the
right of eminent domain. Eminent domain often cannot be invoked against railroads on
grounds that they are engaged in interstate commerce, and thus subject to the STB. As will
be described later, however, the STB appears to be reluctant to address main line
passenger/freight trackage issues in a systematic manner. Since they are in a dominant
position, freight railroads are tough bargainers, and public transit agencies relying on
federal, state, and local resources have little leverage with which to bargain. Some cases
have been reported to APTA in which freight railroads have been unwilling to come to the
table at all, or only on the most unreasonable of terms.
Within this framework, public transit agencies face significant
difficulties negotiating fair, or any, access agreements. Moreover, once a passenger
operation is established on a particular line the agency often has even less leverage. The
renewal or any necessary modification of the trackage rights agreement, or any necessary
modification, may mean conceding to new burdens prescribed by the freight railroad. If the
only alternative is simply to curtail passenger operation altogether (usually not a
tenable option) the transit agency is put into a very bad bargaining position. This can
happen even after a significant investment in upgrading the railroad facility.
Compounding the problem, the new "mega-railroads," created by
recent rail mergers, seem to be even less receptive to the revenue potential or public
relations benefits of rail passenger service. Transit agencies are left with a very small
number of private railroads with which they can negotiate. There are many situations where
transit agencies are akin to the so-called "captive shipper" in that use of a
right-of-way controlled by a single private railroad is almost always the only way
that rail passenger service can be provided.
These factors have all contributed to problems which have occurred in
negotiations with private railroads. Such problems include:
- Demands for exorbitant payments by freight railroads.
- Demand for full indemnification regardless of negligence.
- Refusals to negotiate for uses of adjacent track or property necessary for passenger
rail operation.
- Protracted negotiations that sometimes can delay projects for years.
- Unilateral imposition of schedule changes without regard to the negative impact such
changes have on passenger service.
- Refusals to accept modest passenger service schedule adjustments without stating a
reason.
- Refusals to consider minor adjustments in freight service in order to expedite passenger
construction or capital improvement activities.
- Demands for large capital investments - far in excess of additional capacity needed - as
a condition for right-of-way use.
- Refusal to allow special passenger trains for community events when to do so would not
interfere with freight schedules.
Examples of failed access agreements are accumulating rapildly. Efforts
to negotiate trackage rights agreements to permit rail passenger service to the 1996
Atlanta Olympic Games were unsuccessful, even though this was an event of obvious national
significance. In Maryland, special passenger trains to Orioles baseball games had to be
cancelled, and renewed trackage rights agreements for the MARC system resulted in
significantly higher costs. The Virginia Railway Express has had a history of on-time
performance problems due to freight derailment and track maintenance practices. In
Pittsburgh, conditions imposed on the use of a freight corridor increased construction
costs for a proposed transit project so much that a major segment of the project had to be
dropped.
Preparing for a Future of Growth
At least 15 U.S. communities have new commuter rail projects in the
planning stages. New commuter operations utilizing existing freight trackage or
rights-of-way are in development in Portland, Maine; Burlington, Vermont; Raleigh-Durham,
North Carolina; Jacksonville, Florida; Tampa, Florida; Atlanta, Georgia; Nashville,
Tennessee; Memphis, Tennessee; Cleveland, Ohio; Milwaukee, Wisconsin; St. Louis, Missouri;
San Joaquin Co., California; Salt Lake City, Utah; Portland, Oregon; St. Paul /
Minneapolis region in Minnesota; and Johnson County, Kansas.
In addition, the Federal Transit Administration lists a total of 102
"New Start" rail transit projects in its capital funding process. Further, the
House Transportation and Infrastructure Committee has identified more projects for
"New Start" funding in its pending legislation to reauthorize the Intermodal
Surface Transportation Efficiency Act of 1991 (ISTEA).
The feasibility of many of these projects is dependent on using
the existing corridors. Without access to the existing rail corridor, the cost of many new
projects would become too high.
I ask the Subcommittee, does it not make sense to facilitate the use of
existing transportation corridors for these projects rather than subject communities to
the negative impacts of dislocation which would be the inevitable consequence of acquiring
new rights-of-way for these projects? Certainly, this is a public policy issue that will
loom all the larger in the future. Now is the time to address these issues – while a
vehicle exists in pending legislation.
As part of the national agenda to enhance air quality, reduce
automobile congestion, and encourage economic development and growth, a strong
federal-state-local partnership has emerged in support of public transportation. The
landmark ISTEA reauthorization legislation, now being considered in Conference Committee,
will reflect these public policy imperatives by authorizing between $37-$41 billion for
transit over the next six years. APTA suggests that federal policies which provide
significant support to public transportation, and other policies such as rail access which
facilitate the development and growth of public transportation markets.
Partial Remedy Sought Through STB Administrative Action
On April 2, 1998, APTA testified before the Surface Transportation
Board (STB) in relation to Ex Parte No. 575, Review of Rail Access and Competition
Issues. In its statement, APTA presented the following request:
As has been discussed, it is in the public interest for rail passenger
and rail freight interests to work cooperatively with one another toward equitable
agreements for the joint use of freight rights-of-way. It is APTA’s expectation that,
in most instances, this will be accomplished in negotiations between the parties.
However, when these negotiations fail, the lack of a suitable forum for
working out timely and fair solutions often has hindered vital public transportation
services. APTA requests that STB act affirmatively as a forum for the resolution of
disputes between the private railroads and states or other public agencies seeking to
provide rail passenger service in existing freight rights-of-way. We believe STB could
fulfill this role within its existing statutory authority.
In support of this position, APTA and the American Association of State
Highway and Transportation Officials (AASHTO) have both adopted policy resolutions calling
for the federal government to establish such a neutral federal forum.
Neither APTA nor its members are seeking any handouts. We intend to pay
fair compensation as is required. However, it is absolutely necessary that a process be
established which ensures the fair treatment of all parties, along with due consideration
of the public interest. It is likely that the mere existence of a dispute resolution or
arbitration mechanism would in itself cause increased cooperation between passenger and
freight railroads.
The STB issued its decision in Ex Parte 575 on April 16, 1998. In it,
the Board made no reference to passenger rail access concerns, nor to APTA’s request
for a process to resolve disputes.
Need for Congressionally Sanctioned Process for Access Issues: Amtrak Model
As the request to STB for administrative action in establishing a
dispute resolution process for main-line access has not been addressed, APTA strongly
urges Congress to pass legislation which would clearly put such a process into law.
Fortunately, a model for such a statutory process already exists – the access
provisions available to rail passenger services operated by Amtrak.
Amtrak was created by Congress under the Rail Passenger Service Act of
1970 (RPSA) to assume the intercity rail passenger duties of private railroads. Section
402 of RPSA puts forth a very thorough process wherein Amtrak has contracted with freight
and commuter railroads for the use of tracks and other facilities. In the event of a
failure to agree, RPSA provides that the STB shall order the use of track and other
facilities on such terms and for such compensation as STB finds just and reasonable.
Essentially, the STB’s role is to determine whether an impasse
exists and to provide the freight railroad with reasonable compensation for the access and
service provided to Amtrak. This model has worked well for both Amtrak and other
railroads. STB has very rarely been called upon to intervene in any dispute.
At the time the Rail Passenger Service Act of 1970 was enacted, the
nation’s passenger railroads were only beginning to be established and the role of
regional and local public transportation authorities was not nearly what it has become
today. Today, transit ridership far eclipses that of Amtrak (commuter railroads alone
carry over 17 times as many passengers as Amtrak.) APTA suggests that statutory language
similar to that which applies to Amtrak should be made applicable to state and local
public agencies responsible for the provision of rail passenger service. This would
provide for more consistent treatment of all forms of passenger rail service. Disputes
would be resolved by STB only when a prolonged impasse in negotiations occurs, or when the
parties, in the judgment of STB, are not negotiating in good faith.
Further justification for such an action can be found in the ICC
Termination Act of 1995, wherein Congress specifically allowed rail carriers including
eligible passenger rail authorities to seek access to railroad terminals using public
interest criteria as the basis. The STB has authority to prescribe terms if parties cannot
agree.
Conclusion: The Need for a Constructive Solution
Certainly, there are many examples throughout the country of access
agreements which have been successfully implemented. Chairman Franks, in New Jersey, your
home state, the Department of Transportation has negotiated a mutually beneficial
agreement with CSX and Norfolk Southern which allows rail passenger access in accordance
with certain principles set forth by the freight railroads. These conditions include:
- Assured safety
- No downgrade of freight service
- No subsidy
- A good-faith approach to addressing liability concerns.
Indeed, rail passenger providers, in good faith, are willing to
accommodate all of these factors. If these are the conditions for access, let them serve
as a nationwide model with passenger rail access as the end result.
Rail access among freight carriers has emerged as a major issue in the
context of the pending legislation to reauthorize the STB. Regardless of the outcome on
that issue, it is time for Congress to provide state and local rail passenger operators
with the same conditions for access as have been provided to Amtrak.
APTA and its members want to work cooperatively with private railroads
to ensure that our nation continues to be served with an efficient and effective
freight-passenger rail network. We recognize that freight railroads are profit-making
enterprises that cannot be expected to subsidize passenger services. We pledge to continue
working with this Subcommittee, with the STB, and with all interested parties including
the Association of American Railroads, the American Short Line and Regional Railroad
Association, individual freight railroads and others to develop reasonable, workable,
mutually beneficial approaches for implementing passenger rail access.
Thank you for the opportunity to testify. I would be pleased to provide
any additional information that might be useful to the Subcommittee.
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