To extend or not to extend the PTC deadline? The question dividing the industry.

Revised July 29, 2015 at 2:50 AM EDT.

As it becomes clear that the majority of the nation’s railroads that host passenger trains will not have Positive Train Control technology installed and operational by the deadline, written into the 2008 Passenger Rail Investment & Improvement and Rail Safety Act,  of the end of this year, the questions of whether and how to extend the deadline and of how to handle railroads that fail to meet it if it remains are dividing the community of rail policy professionals and advocates who are usually on the same page when it comes to safety issues. Although the industry generally supports the goal of expanding and improving passenger train service (albeit with significant differences over how to go about that), a number of potential outcomes on the PTC question stand to significantly hamper that goal.

The high cost of putting in place the technology — which involves a complex network of radio transmitters and receivers along a rail line, one or more central control centers with server farms, and a mechanism in every locomotive that displays system messages to the engineer and is able to take over and slow or stop a train if an engineer fails to observe signals and speed limits — is not the only factor that is keeping railroads from meeting the deadline. Another is the time-consuming process involved in acquiring both the necessary broadcast spectrum for the radio communications and the land on which to erect transmitters. The Federal Communications Commission has been slow to grant sufficient spectrum to railroads and refuses to cede authority over a swath of spectrum to the Department of Transportation, and the process of finding suitable sites for broadcast towers involves mandatory consultation with affected communities, including Native American tribes. Yet another difficulty is the limited industrial capacity for specialties such as software engineering, hardware engineering, manufacturing, installation and testing is limited. A final limiting factor is the challenge of geo-mapping the 60,000+ miles of rail rights of way which carry TIF hazardous materials and passenger trains. Few firms specialize in such work. 

Here is a breakdown of the possible outcomes as I see them, their ramifications, and who supports and opposes them. In my last column on this subject, I called on Congress to provide funding to back up the mandate, particularly to commuter rail agencies. I see very little chance of this happening, though. The closest we are likely to see is perhaps a provision giving PTC costs a higher priority for reimbursement through the undersubscribed Railroad Rehabilitation and Improvement Financing (RRIF) loan program, a provision included in the Senate’s current six-year surface transportation authorization bill. Qualifying projects for RRIF loans is hampered, however, by FRA’s interpretation that such projects meet Buy America standards, whereby a majority of the components must be manufactured and/or assembled in the United States. Many railroads have requested, and some have received, waivers from Buy America requirements.

1. The deadline remains as-is, and railroads that do not meet it are penalized. Many Democrats in Congress and some rail labor organizations (including the Brotherhood of Locomotive Engineers and Trainmen) favor this outcome (which would result if Congress takes no action on PTC by the end of the year), while most railroads (including Amtrak, freight railroads and commuter rail agencies) and the railroad supply and contractor industries (including the makers of PTC components) represented by the National Railroad Construction and Maintenance Association favor some type of extension. There seems to be the sense that safety advocates see railroads as "bad actors" that are needlessly delaying PTC implementation, but there do not appear to be any specific organizations lobbying to maintain the deadline.

However, keeping it as-is may result in significant disruptions to passenger service, as railroads that are still in the process of setting up PTC may find it more cost-effective to suspend service rather than pay fines for each day they continue to operate without it being operational. Or, they may be forced to suspend service if their maintenance personnel cannot clear locomotives for service without PTC installed (based on FRA-approved equipment checklists), or they may simply wish to avoid liability exposure and thus higher insurance costs for running non-compliant equipment. Commuter railroads such as Virginia Railway Express (VRE) and Maryland Rail Commuter (MARC), which bring many federal employees to work in Washington from their northern Virginia homes, have already suggested that service might have to be suspended effective Jan. 1, 2016, in the absence of an extension. 

Amtrak says it will meet the deadline for the tracks that it owns (the Northeast Corridor — except for the important New Rochelle-New Haven segment owned by the State of Connecticut — and the Michigan Line), but its service may be disrupted where its host railroads have not come into compliance. Amtrak is not providing its hosts with any financial assistance for PTC installation, whereas freight railroads that host commuter trains generally expect commuter agencies to cover at least part, and sometimes the lion’s share, of PTC costs. States that sponsor Amtrak corridor services may also be on the hook for some PTC costs. All of this expenditure by railroads, while it will bring invaluable safety benefits, comes with the significant opportunity cost of not being available to be spent on new equipment, capacity expansion, electrification, etc.

2. The deadline remains, but Congress allows the Federal Railroad Administration (FRA) to grant exemptions and one-off extensions to railroads on a case-by-case basis. This could be the happy medium that wins the acceptance of safety advocates, labor and railroads. A law to this effect would have to grant FRA specific authority to grant exemptions, and would likely require railroads seeking an extension to present to FRA a plan and a timeline for completing installation after December 31 and demonstrate that they have the money and resources to do it. FRA would then have to approve the plan and oversee its implementation, but railroads granted exemptions would not be penalized after December 31. The Senate's current version of a comprehensive six-year surface transportation authorization (S. 1732) includes language requiring railroads to present FRA with updated PTC implementation plans, which FRA would then have 120 days to review, after which FRA would be able to grant case-by-case exemptions from the deadline.

The American Public Transportation Association, whose members include commuter rail agencies, supports this approach, as well as direct federal funding covering up to 80% of railroads’ implementation costs and legislation directing the FCC to provide all necessary spectrum. The National Association of Railroad Passengers (NARP) also generally favors giving FRA authority to allow case-by-case extensions.

3. The deadline is extended across the board, either by three years (to Dec. 31, 2018) or by five years (to Dec. 31, 2020). Most railroads favor a blanket extension, while many labor organizations and safety advocates strongly oppose this idea.  Sen. Roy Blunt (R-MO) introduced a bill in March to extend the deadline to Dec. 31, 2020.

NARP would accept a blanket extension, so long as it includes a requirement that any PTC technology installed also be able to prevent low-speed, rear-end collisions. The technology that is currently required only detects the locations of locomotives, but not the rear ends of trains, and thus would have no way of taking over to stop a train from rear-ending a stopped train in front of it at a low speed. The Association of Independent Passenger Rail Operators, whose member firms operate commuter services like VRE under contract and are seeking to bid on intercity operations, would also welcome a blanket extension. AIPRO supports the rail title of the Senate bill, but has not explicitly endorsed its PTC provisions. The Association of American Railroads favors extending the deadline to 2020, and the American Short Line and Regional Railroad Association also backs an extension.

PTC, as currently designed, will bring immeasurable benefits to the train-riding public and to communities that stand to be impacted by major railroad collisions. But for what it costs, its benefits will hardly impact railroads’ bottom lines — including cash-strapped commuter agencies, Amtrak and short-line railroads, as well as more flush Class Is. Had Congress put some money behind the mandate in 2008 and ensured that railroads would have access to the necessary spectrum, we might not be having this debate now. But given the current state of affairs and Congress’s aversion to upping appropriations for rail, giving the FRA authority to grant case-by-case exemptions to the deadline may be the best compromise the railroad community can hope for. But almost anything Congress does to help the situation at this point is preferable to inaction.