Commuter Rail
Commuter Rail Issues Should Be Considered in Debate over Amtrak Gao ID: GAO-06-470 April 21, 2006Commuter rail agencies provide mobility to millions of people across the country, often using Amtrak infrastructure and services. Given these interactions, an abrupt Amtrak cessation could have a significant impact on commuter rail operations. Amtrak's chronic financial problems and recent budget proposals make such a cessation a possibility. GAO was asked to examine (1) the extent to which commuter rail agencies rely on Amtrak for access to infrastructure and services, (2) issues that commuter rail agencies would face if Amtrak abruptly ceased to provide them with services and infrastructure access, and (3) the options available to commuter rail agencies should Amtrak abruptly cease to provide them services and infrastructure access.
Most commuter rail agencies rely on the National Railroad Passenger Corporation (Amtrak) for some level of access to infrastructure and services, particularly those that operate over Amtrak-owned portions of the Northeast Corridor (NEC). This reliance includes the use of key stations, access to the NEC, and equipment maintenance services. Commuter rail agencies typically pay Amtrak for access to infrastructure and services, although their financial relationships with Amtrak vary and often lack clarity. Several issues contribute to the lack of clarity, including limitations in Amtrak's accounting practices, the lack of transparency in Amtrak's financial reports, and the structure of the financial arrangements between Amtrak and commuter rail agencies. This makes it difficult to fully understand the financial relationship between these agencies and Amtrak and whether they are contributing their fair share for improvements and maintenance of Amtrak's infrastructure. Also, this lack of clarity hinders Amtrak management's ability to make fully informed decisions about its commuter rail line-of-business. An abrupt Amtrak cessation would raise two critical operational issues for commuter rail agencies that rely on Amtrak. Specifically, agencies would face the potential loss of skilled Amtrak labor and access to Amtrak-owned infrastructure, which could make it difficult for some to avoid severe service disruptions. For example, agencies both on and off the NEC could not continue to fully operate their services without continued access to Amtrak-owned track and other facilities. Most commuter rail agencies that rely on Amtrak have identified ways to mitigate service disruptions in an abrupt Amtrak cessation. However, these options are largely dependent on retaining Amtrak employees and access to Amtrak's infrastructure. Federal agencies could provide short-term options to mitigate potential impacts on commuter rail agencies through their authority to order continued commuter service (called "directed service"), although federal officials stated that service disruptions are likely and the cost estimates are unreliable. Private transportation companies could provide options for commuter rail agencies in the long term; however, other issues would need to be addressed to ensure a smooth transition.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-470, Commuter Rail: Commuter Rail Issues Should Be Considered in Debate over Amtrak
This is the accessible text file for GAO report number GAO-06-470
entitled 'Commuter Rail: Commuter Rail Issues Should Be Considered in
Debate over Amtrak' which was released on May 22, 2006.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to the Chairman, Committee on Banking, Housing and Urban
Affairs, U.S. Senate:
United States Government Accountability Office:
GAO:
April 2006:
Commuter Rail:
Commuter Rail Issues Should Be Considered in Debate over Amtrak:
GAO-06-470:
GAO Highlights:
Highlights of GAO-06-470, a report to the Chairman, Senate Committee on
Banking, Housing and Urban Affairs.
Why GAO Did This Study:
Commuter rail agencies provide mobility to millions of people across
the country, often using Amtrak infrastructure and services. Given
these interactions, an abrupt Amtrak cessation could have a significant
impact on commuter rail operations. Amtrak‘s chronic financial problems
and recent budget proposals make such a cessation a possibility. GAO
was asked to examine (1) the extent to which commuter rail agencies
rely on Amtrak for access to infrastructure and services, (2) issues
that commuter rail agencies would face if Amtrak abruptly ceased to
provide them with services and infrastructure access, and (3) the
options available to commuter rail agencies should Amtrak abruptly
cease to provide them services and infrastructure access.
What GAO Found:
Most commuter rail agencies rely on the National Railroad Passenger
Corporation (Amtrak) for some level of access to infrastructure and
services, particularly those that operate over Amtrak-owned portions of
the Northeast Corridor (NEC). This reliance includes the use of key
stations, access to the NEC, and equipment maintenance services (see
figure below). Commuter rail agencies typically pay Amtrak for access
to infrastructure and services, although their financial relationships
with Amtrak vary and often lack clarity. Several issues contribute to
the lack of clarity, including limitations in Amtrak‘s accounting
practices, the lack of transparency in Amtrak‘s financial reports, and
the structure of the financial arrangements between Amtrak and commuter
rail agencies. This makes it difficult to fully understand the
financial relationship between these agencies and Amtrak and whether
they are contributing their fair share for improvements and maintenance
of Amtrak‘s infrastructure. Also, this lack of clarity hinders Amtrak
management‘s ability to make fully informed decisions about its
commuter rail line-of-business.
An abrupt Amtrak cessation would raise two critical operational issues
for commuter rail agencies that rely on Amtrak. Specifically, agencies
would face the potential loss of skilled Amtrak labor and access to
Amtrak-owned infrastructure, which could make it difficult for some to
avoid severe service disruptions. For example, agencies both on and off
the NEC could not continue to fully operate their services without
continued access to Amtrak-owned track and other facilities.
Most commuter rail agencies that rely on Amtrak have identified ways to
mitigate service disruptions in an abrupt Amtrak cessation. However,
these options are largely dependent on retaining Amtrak employees and
access to Amtrak‘s infrastructure. Federal agencies could provide short-
term options to mitigate potential impacts on commuter rail agencies
through their authority to order continued commuter service (called
’directed service“), although federal officials stated that service
disruptions are likely and the cost estimates are unreliable. Private
transportation companies could provide options for commuter rail
agencies in the long term; however, other issues would need to be
addressed to ensure a smooth transition.
Figure: Types of Services and Infrastructure Access Provided by Amtrak
to Commuter Rail Agencies:
[See PDF for Image]
[End of Figure]
What GAO Recommends:
GAO recommends that the Department of Transportation (DOT) further
refine cost estimates of commuter rail directed-service scenarios. GAO
also recommends that Amtrak improve its accounting practices as well as
its financial reports. DOT generally agreed with the report‘s findings
and the intention of the recommendation, but expressed concern about
refining the cost estimate at this time because of data and resource
limitations. Amtrak generally agreed with the report‘s findings,
conclusions, and recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-470].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact JayEtta Z. Hecker at
(202) 512-2834 or heckerj@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Most Commuter Rail Agencies Rely to Some Extent on Amtrak for Access to
Infrastructure and Services:
Abrupt Amtrak Cessation Could Raise Critical Issues for Some Commuter
Rail Agencies:
Some Options Are Available to Commuter Rail Agencies in the Event of an
Abrupt Amtrak Cessation, but Service Disruptions and Financial
Difficulties Would Be Likely:
Conclusions:
Recommendations:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Commuter Rail Agency Use of Amtrak Services and
Infrastructure:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Key Aspects of Recent Amtrak Reform Proposals and Legislation
That Could Affect Commuter Rail Agencies:
Table 2: Percent of Commuter Rail Passengers Served by Railroad Service
Providers:
Table 3: Commuter Rail Agency Reliance on Amtrak Services:
Table 4: Names and Locations of Commuter Rail Agencies, State
Departments of Transportation, Class I Freight Railroads, and Private
Non-Railroad Companies Interviewed:
Table 5: List of Labor Unions:
Table 6: Commuter Rail Agency Use of Amtrak Services and
Infrastructure:
Figures:
Figure 1: NEC Ownership and Operations Map:
Figure 2: Overview of Commuter Rail Agency Reliance on Amtrak for
Infrastructure and Services:
Figure 3: Amtrak's Key Facilities for Selected Commuter Rail Agencies:
Figure 4: Sound Transit Trains in Amtrak's Holgate Yard, Seattle, WA:
Abbreviations:
AAR: Association of American Railroads:
Amtrak: National Railroad Passenger Corporation:
APTA: American Public Transportation Association:
ASLRRA: American Short Line and Regional Railroad Association:
CETC: Centralized Electrification and Traffic Control:
CSX: CSX Transportation:
DELDOT: Delaware Department of Transportation:
DOT: Department of Transportation:
FRA: Federal Railroad Administration:
FTA: Federal Transit Administration:
ICC: Interstate Commerce Commission:
LIRR: Long Island Rail Road:
MARC: Maryland Rail Commuter Service:
MBCR: Massachusetts Bay Commuter Railroad Company:
MBTA: Massachusetts Bay Transportation Authority:
NEC: Northeast Corridor:
NICTD: Northern Indiana Commuter Transportation District:
NJT: New Jersey Transit:
PENNDOT: Pennsylvania Department of Transportation:
RFP: request for proposal:
SEPTA: Southeastern Pennsylvania Transportation Authority:
SLE: Shore Line East:
STB: Surface Transportation Board:
TRE: Trinity Railway Express:
VRE: Virginia Railway Express:
United States Government Accountability Office:
Washington, DC 20548:
April 21, 2006:
[See PDF for image]
[End of figure]
The Honorable Richard Shelby Chairman, Committee on Banking, Housing
and Urban Affairs United States Senate:
Dear Mr. Chairman:
Commuter rail is an important component of regional transportation
systems throughout the country, accounting for over 400 million
passenger trips in 2004. While most of these trips occurred in the
densely populated Northeast, commuter rail services are now provided in
eight urban areas outside of the Northeast. A total of 18 commuter rail
agencies now exist, and seven more commuter rail systems are in
planning or design stages throughout the country according to the
Federal Transit Administration (FTA). Regardless of location, most
commuter rail agencies interact with the National Railroad Passenger
Corporation (Amtrak) for access to infrastructure or services, such as
train crews and equipment maintenance. Given these interactions, there
is concern that if Amtrak abruptly ceased to provide services and
infrastructure, commuter rail operations could be adversely affected.
Amtrak's chronic financial problems and recent budget proposals make
such a cessation a possibility.
Although commuter rail agencies are typically owned and operated by
state and local governments, there are several federal agencies
involved in rail transportation and in specific aspects of commuter
rail service. The Surface Transportation Board (STB) is responsible for
the economic regulation of freight railroads and also has the authority
to order other rail carriers to provide infrastructure and service(s)
to commuter rail agencies (called "directed service") if Amtrak were to
shut down. The Federal Railroad Administration (FRA), which is
primarily focused on ensuring the safe operation of railroads,
including commuter rail, would provide funding to STB to direct
commuter rail service if ordered by STB. FTA helps fund the planning
and development of commuter rail projects.
In response to your request, we examined (1) the extent to which
commuter rail agencies rely on Amtrak for access to infrastructure and
services, (2) issues that commuter rail agencies would face if Amtrak
abruptly ceased to provide them with services and access to
infrastructure, and (3) the options available to commuter rail agencies
should Amtrak abruptly cease to provide them services and access to
infrastructure. To address these objectives, we interviewed officials
at all 18 existing commuter rail agencies and two of the seven proposed
commuter rail services. We also visited seven commuter rail agencies
and one proposed commuter rail service. During these site visits, we
interviewed senior-level management and toured operation, dispatching,
and equipment maintenance facilities. We interviewed officials at STB,
FRA, FTA, and Amtrak, as well as representatives from the largest Class
I railroads,[Footnote 1] 10 of Amtrak's 15 railroad labor unions, all
of the private transportation companies that currently operate commuter
rail service in the U.S., and industry associations. Additionally, we
reviewed federal laws, internal documents from the STB, FRA, and
Amtrak, and contracts between Amtrak and various commuter rail
agencies.
Our report focuses on the impact of an abrupt Amtrak cessation on
commuter rail operations. For example, if policy makers acted on
legislative proposals that end or substantially reduce federal funding,
an Amtrak bankruptcy or shutdown could quickly follow. However,
multiple bills to reform intercity passenger rail have been proposed in
recent years--and these bills, if enacted, could result in outcomes
other than an abrupt Amtrak cessation. We did not examine how other
potential outcomes would impact commuter rail operations. We conducted
our work from July 2005 through April 2006 in accordance with generally
accepted government auditing standards. (See app. I for a more detailed
discussion of the report's scope and methodology.)
Results in Brief:
Most existing 18 commuter rail agencies rely on Amtrak for some level
of access to infrastructure and services. Although the level of
reliance varies among these commuter rail agencies, access to Amtrak's
infrastructure or Amtrak services is critical to the operations of many
commuter rail agencies. For example, seven of the nine commuter rail
agencies in the Northeast operate over Amtrak-owned portions of the
Northeast Corridor (NEC). According to officials from these agencies,
access to Amtrak's infrastructure is essential to their services.
Commuter rail agencies typically pay Amtrak for access to
infrastructure and providing services, although the financial
relationships between commuter rail agencies and Amtrak vary widely and
often lack clarity. Several issues contribute to the lack of clarity,
including limitations in Amtrak's accounting practices, the lack of
transparency in Amtrak's financial reports, and the structure of the
financial arrangements between Amtrak and commuter rail agencies. The
lack of clarity makes it difficult to determine the full extent of the
financial relationship between commuter rail agencies and Amtrak and
whether commuter rail agencies are contributing their fair share to the
cost of capital improvements to Amtrak-owned infrastructure. Amtrak's
fiscal year 2006 appropriation directs the Secretary of Transportation
to assess a fee on commuter rail agencies that use the NEC. This fee is
designed to compensate Amtrak for maintenance and capital expenditures
resulting from commuter rail agencies' use of the NEC and has important
budgetary implications for some commuter rail agencies.
An abrupt Amtrak cessation could raise two critical operational issues
for commuter rail agencies that rely on Amtrak services and
infrastructure. Specifically, commuter rail agencies would be
confronted with the potential loss of skilled Amtrak labor and access
to Amtrak-owned infrastructure. For example, some commuter rail
agencies could not take over train operations or dispatching services
provided by Amtrak employees because they do not have the workforce
capabilities or expertise to do so in a short time period.
Additionally, some commuter rail agencies on the NEC and in other parts
of the country could not continue to fully operate service--or would
cease service--without the ability to access Amtrak-owned tracks and
other key facilities. Commuter rail agencies also identified other
issues they would face if Amtrak abruptly ceases to provide services
and infrastructure, such as the loss of revenue from Amtrak for the
services or infrastructure that a few commuter rail agencies provide to
Amtrak.
Most commuter rail agencies that rely on Amtrak services and
infrastructure have identified options to mitigate service disruptions
if Amtrak abruptly ceased to provide services and infrastructure
access. However, these options are largely dependent on the ability to
retain Amtrak employees and access Amtrak-owned infrastructure,
particularly in the short term. STB could provide short-term options to
mitigate potential impacts on commuter rail agencies in the event of an
abrupt Amtrak cessation by using their directed-service authority to
gain access to Amtrak's infrastructure and equipment, and, with the
FRA, continue to fund affected commuter operations. Although directed
service could be used as a short-term solution, federal officials
stated that commuter rail service disruptions are likely under any
directed-service scenario. Further, the costs of providing directed
service are unknown, and the logistics and time required to implement
directed services are unknown because STB has never issued directed-
service orders for passenger rail. According to FRA officials, the
major concern in a directed service scenario is whether former Amtrak
employees will agree to work for the new provider. A longer-term
solution in the event of an abrupt Amtrak cessation is for commuter
rail agencies to contract with private transportation companies for the
services currently provided by Amtrak. Private transportation companies
with whom we spoke expressed interest in providing the services that
Amtrak currently provides to commuter rail agencies. However,
transitioning from Amtrak to private transportation companies would
take months, not weeks. Moreover, labor and liability issues would need
to be addressed to ensure a smooth transition.
To help ensure that policy makers have the needed information to make
fully informed decisions, we recommend that the Department of
Transportation (DOT), in consultation with STB and commuter rail
agencies, further refine cost estimates of directed-service scenarios
and that Amtrak improve its accounting practices--and financial
reporting--to clearly show the revenues and costs of providing services
and infrastructure access to commuter rail agencies. We provided draft
copies of this report to DOT and Amtrak for their review and comment.
DOT officials generally agreed with the draft report's findings and the
intention of the recommendation. However, FRA officials expressed
concerns about limitations in the data required to refine the estimates
as well as limited staff resources to devote to such an effort.
Consequently, FRA officials indicated their preference to focus on
other priorities. We recognize that FRA, like other federal agencies,
has resource constraints and must focus those resources on certain
priorities. However, given previous and current debate over the future
of Amtrak, we believe providing policy makers with accurate information
as to the implications of directed service--including the costs of such
services--is a worthwhile investment of agency resources and deserves
some level of attention. Further, we believe that refinements to the
cost estimates could be made using existing information from Amtrak and
commuter rail agencies. DOT officials acknowledged that the current
estimates are inaccurate, and most likely significantly underestimate
the true costs of directed service. Therefore, any refinements would be
a step in the right direction in providing better information to policy
makers. Amtrak generally agreed with the report's findings,
conclusions, and recommendations.
Background:
Commuter rail is a type of public transit that is characterized by
passenger trains operating on railroad tracks and providing regional
service (e.g., between a central city and adjacent suburbs). Commuter
rail systems are traditionally associated with older industrial cities,
such as Boston, New York City, Philadelphia, and Chicago. However, over
the past decade, commuter rail systems have been inaugurated in such
cities as Dallas and Seattle, and seven new systems are in various
stages of planning in cities across the country. Currently, there are
18 commuter rail agencies throughout the country, and, in 2004, these
agencies provided an average of 1.1 million passenger trips each
weekday. Advocates of commuter rail contend that it provides a number
of public benefits, including reductions in highway congestion,
pollution, and energy dependence. Moreover, commuter rail service can
operate on existing railroad rights-of-way,[Footnote 2] which
eliminates the time and significant expense associated with
constructing new infrastructure.
Most commuter rail service uses rights-of-way (to run over tracks) that
are owned by Amtrak, freight railroads, or are publicly owned. Amtrak
owns most of the NEC between Boston, MA, and Washington, D.C., but
there are several portions of the NEC owned by either commuter rail
agencies or states. The NEC is also the busiest rail corridor in the
U.S. For example, on an average weekday, over 1,800 commuter rail and
Amtrak trains operate on the NEC.[Footnote 3] Figure 1 shows the
ownership of--and Amtrak and commuter rail operations on--the NEC.
Commuter rail agencies located outside of the NEC for the most part use
rights-of-way owned by freight railroads.
Figure 1: NEC Ownership and Operations Map:
[See PDF for image]
Note: Only service on the main portion of the NEC between Washington,
D.C., and Boston is shown. This represents commuter rail agencies'
primary operating routes on the NEC and does not include smaller
segments of their service operating over the NEC. For example, New
Jersey Transit also operates over 7 miles of the NEC between Shore
Interlocking and 30TH Street Station in Philadelphia, and VRE operates
over a small portion of the NEC into Washington Union Station. Amtrak's
right-of-way from Harrisburg, PA, to Philadelphia, over which PENNDOT
service operates, is not shown on this graphic. SEPTA also operates
service over this portion of Amtrak's right-of-way between Philadelphia
and Parkesburg, Pennsylvania.
[End of figure]
Three federal agencies--FRA, STB, and FTA--are responsible for
different aspects of federal rail transportation policy, including
freight, intercity passenger, and commuter rail service. FRA
administers and enforces the federal laws and related regulations that
are designed to promote safety on railroads, such as track maintenance,
inspection standards, equipment standards, and operating
practices.[Footnote 4] Commuter rail agencies are subject to FRA
regulations. FRA provides funding for Amtrak's operating and capital
improvements, and since fiscal year 2003 has administered these funds
through grants. STB is responsible for the economic regulation of
freight railroads, which encompasses those instances when there is an
impasse in negotiations over Amtrak's access to freight rail
facilities. STB also has authority to issue directed (or emergency)
service orders to continue rail service if a rail carrier is unable to
provide service to its customers.[Footnote 5] In 2004, this authority
was amended to authorize such orders in the event that there is a
failure of freight or commuter rail service due to a cessation of
service by Amtrak. Directed-commuter-service orders could enable one or
more operators to gain access to Amtrak's facilities and equipment. In
addition, directed-service orders could provide these operators the
ability to offer employment to former Amtrak personnel for the
provision of essential commuter service.[Footnote 6] The Secretary of
Transportation, through the FRA, would be the funding agency for any
STB directed-service order for commuter rail operations.[Footnote 7]
According to STB staff, while the STB (and its predecessor agency, the
Interstate Commerce Commission) have directed freight service in the
past when freight railroads have experienced service failures, STB has
not issued any directed-service orders explicitly for passenger rail
service. Unlike FRA and STB, FTA is not principally a regulatory
agency. FTA is the primary federal financial resource for supporting
locally planned, implemented, and operated transit capital investments.
As a form of public transit, commuter rail projects are eligible for
FTA funding.
Amtrak has struggled to become financially solvent since its founding
in 1971, receiving over $29 billion in federal funds for operational
and capital improvements. Despite federal subsidies, Amtrak's financial
situation reached critical points when it had to mortgage Pennsylvania
Station in New York City in 2001 and obtain an emergency loan of $100
million in 2002 to meet expenses and continue operations. Although
Amtrak has made progress in containing its operating expenses, its
operating losses have increased to over $1 billion a year.[Footnote 8]
In light of Amtrak's continuing financial difficulties, different
Amtrak reform proposals and legislation have been introduced, some of
which could impact commuter rail agencies. For example, the
administration's fiscal year 2006 budget proposal for Amtrak did not
include any federal funds for Amtrak, however it did include $360
million to maintain commuter and freight service operated by
Amtrak.[Footnote 9] Other proposals and legislation included, among
other things, curtailing money-losing operations and transferring
Amtrak assets to other companies or directly to the federal government.
(See table 1.)
Commuter Railroads:
Long Island Rail Road (LIRR) Maryland Rail Commuter Service (MARC)
Massachusetts Bay Transportation Authority (MBTA) Metro North Commuter
Railroad (MNCR) New Jersey Transit (NJT) Connecticut Department of
Transportation's Shore Line East service (SLE) Southeastern
Pennsylvania Transportation Authority (SEPTA) Virginia Railway Express
(VRE):
Departments of Transportation:
Connecticut Department of Transportation (CDOT) Pennsylvania Department
of Transportation (PENNDOT):
Table 1: Key Aspects of Recent Amtrak Reform Proposals and Legislation
That Could Affect Commuter Rail Agencies:
Key aspects of reform proposals: Zero funding;
Description of proposed change: * No operating or capital federal
funding for Amtrak; * $360 million provided to STB to fund directed
commuter and freight service.
Key aspects of reform proposals: Infrastructure separation;
Description of proposed change: * Separate Amtrak operations from
infrastructure into different companies; * Separate Amtrak
infrastructure from operations by creating a subsidiary company under
Amtrak's Board of Directors.
Key aspects of reform proposals: NEC commuter rail fee;
Description of proposed change: * Fee for maintenance and capital costs
assessed on commuter rail agencies that use the NEC.
Key aspects of reform proposals: Multi-state NEC compact;
Description of proposed change: * Passenger rail operations on the NEC
would be transferred to multi-state compact of Northeastern states.
Key aspects of reform proposals: DOT ownership of NEC;
Description of proposed change: * Ownership of NEC would be transferred
to the Secretary of Transportation, who, in turn, would competitively
procure contractors for maintenance and operations of NEC.
Key aspects of reform proposals: Cost-reduction proposals;
Description of proposed change: * Would require Amtrak to reduce losses
on sleeper car, and food and beverage service.
Key aspects of reform proposals: Accounting reforms;
Description of proposed change: * Would require Amtrak to acquire a new
accounting system that would enable Amtrak to assign revenue and
expenses to each of its lines of business and to distinguish
infrastructure revenue and expenses from its operational revenue and
expenses.
Source: GAO analysis of U.S. House and Senate bills from the first
session of the 109TH Congress.
[End of table]
Most Commuter Rail Agencies Rely to Some Extent on Amtrak for Access to
Infrastructure and Services:
Most commuter rail agencies rely on Amtrak to some extent for access to
infrastructure and services. This dependence can range from heavy use
of Amtrak infrastructure and services to limited reliance on Amtrak
infrastructure and services. (See fig. 2.) Having access to Amtrak-
owned infrastructure, rights-of-way, stations, platforms, equipment
maintenance facilities, and storage yards is critical to many commuter
rail agencies' operations. The reliance on Amtrak for infrastructure
and services by many commuter rail agencies has led to a variety of
financial relationships between commuter rail agencies and Amtrak. In
general, these financial relationships are complicated and lack
clarity. This lack of clarity makes it difficult to determine if
commuter rail agencies are paying their fair share for access to
infrastructure and services. Amtrak's fiscal year 2006 appropriation
directs the Secretary of Transportation to levy a fee on commuter rail
agencies that use the NEC as compensation for maintenance and capital
expenditures resulting from their use of the NEC. This fee has
important budgetary, and other, implications for commuter rail
agencies.
Figure 2: Overview of Commuter Rail Agency Reliance on Amtrak for
Infrastructure and Services:
[See PDF for image]
Note: This figure indicates whether a commuter rail agency relies on
Amtrak for services or access to infrastructure. Darkened figures do
not necessarily mean that Amtrak is the primary provider of a service;
rather, it means that Amtrak provides some level of service or access
to infrastructure. See appendix II for detailed data on the extent to
which each commuter rail agency relies on Amtrak.
[End of figure]
Access to Amtrak-owned Infrastructure Is Critical to Many Commuter Rail
Agencies' Operations:
Most existing commuter rail agencies (12 of 18) rely on Amtrak-owned or
Amtrak-operated infrastructure, such as stations or platforms; rights-
of-way; and maintenance facilities. Amtrak owns most of the NEC, which
runs from Washington, D.C., to Boston. Of the nine commuter rail
agencies in the Northeast, eight agencies--including the Long Island
Rail Road (LIRR) and New Jersey Transit (NJT), two of the largest
commuter rail agencies in the country--operate over Amtrak-owned
infrastructure.[Footnote 10] Seven of these nine commuter rail agencies
operate on the NEC between Washington, D.C., and Boston.[Footnote 11]
On an average weekday, these seven commuter rail agencies run
approximately 1,630 trains on the NEC, which represents over 90 percent
of all passenger train traffic on the NEC. According to officials from
the commuter rail agencies that operate over Amtrak-owned portions of
the NEC, access to this infrastructure is essential for their services.
In addition to providing access to the Amtrak-owned portions of the
NEC, Amtrak also maintains its rights-of-way and dispatches all trains
on its rights-of-way, including commuter rail traffic; these are
critical services for commuter rail agencies using the NEC. For
example, from its centralized dispatching center in Boston, Amtrak
dispatches all of the Massachusetts Bay Transportation Authority's
(MBTA) trains on one of its lines and provides initial dispatching for
two-thirds of all other MBTA trains, as well as its own intercity
trains. Amtrak also distributes power to commuter rail agencies that
use electrically powered trains on the NEC. These trains, which may be
hauled by locomotives or made up of self-propelled, multiple-unit cars,
require electric power (called "traction power") delivered directly
from overhead power lines.[Footnote 12]
In addition to owning most of the track comprising the NEC, Amtrak also
owns or controls a number of key facilities both on and off the NEC,
many of which are critical to commuter rail service. (See fig. 3.)
Figure 3: Amtrak's Key Facilities for Selected Commuter Rail Agencies:
[See PDF for image]
[End of figure]
These facilities include many of the busiest passenger stations in the
country, such as Pennsylvania Station in New York City and Chicago
Union Station, as well as the platforms and train storage facilities
outside of Washington Union Station. For example, according to LIRR
officials, LIRR and NJT trains account for 87.4 percent of the trains
coming into Pennsylvania Station in New York City, while Amtrak
intercity trains represent the remaining 12.6 percent.[Footnote 13]
Amtrak also owns or controls a number of equipment maintenance and
storage yards that are strategically located near key urban or downtown
stations. For example, some commuter locomotives and coaches used by
Virginia Railway Express (VRE) and Maryland Transit Administration,
which owns Maryland Rail Commuter Service (MARC), are maintained at
Amtrak's Ivy City Yard, just north of Washington Union Station. These
trains are also stored in Washington, D.C., during midday so that they
can make evening rush hour trips. This allows VRE and MARC to avoid
running trains back out to storage yards in outlying areas during the
middle of the day--a practice officials from both agencies said would
make the service too costly to provide. Similarly, Sound Transit in
Seattle relies on Amtrak to maintain and store its trains during the
midday at Holgate Yard, an Amtrak maintenance facility near Sound
Transit's King Street Station in downtown Seattle, which serves both
Sound Transit and Amtrak trains. (See fig. 4 for a picture of Holgate
Yard.) According to Sound Transit officials, the use of Amtrak's
facility saved Sound Transit the one-time cost of building its own
multi-million dollar maintenance facility.
Figure 4: Sound Transit Trains in Amtrak's Holgate Yard, Seattle, WA:
[See PDF for image]
[End of figure]
Many Commuter Railroads Rely on Amtrak for Services, with Reliance on
Amtrak Greater along the NEC:
Out of the 18 existing commuter rail agencies, 14 rely on Amtrak for
some level and type of service--including the operation of commuter
trains, maintenance of equipment (i.e., locomotives and train cars),
maintenance-of-way (i.e., track and related infrastructure), train
dispatching, and other services such as ticketing and security.
Although most passengers ride commuter rail lines that use their own in-
house employees for services critical to the operation of their
service, Amtrak is a key player when commuter rail agencies do contract
with other providers for services, compared to other individual
companies (see table 2).
Table 2: Percent of Commuter Rail Passengers Served by Railroad Service
Providers:
Commuter rail agency in-house employees;
Dispatching: 51.2%;
Maintenance of equipment: 71.5%;
Maintenance-of-way: 64.4%;
Train operations: 74.7%.
Amtrak;
Dispatching: 30.4%;
Maintenance of equipment: 8.2%;
Maintenance-of-way: 11.7%;
Train operations: 4.7%.
Freight;
Dispatching: 17.9%;
Maintenance of equipment: 7.2%;
Maintenance-of-way: 14.1%;
Train operations: 8.1%.
BNSF Railway;
Dispatching: 1.7%;
Maintenance of equipment: 1.7%;
Maintenance-of-way: 1.6%;
Train operations: 2.1%.
Union Pacific Railroad;
Dispatching: 6.0%;
Maintenance of equipment: 5.2%;
Maintenance-of-way: 6.3%;
Train operations: 5.2%.
Other freights;
Dispatching: 10.1%;
Maintenance of equipment: 0.3%;
Maintenance-of-way: 6.2%;
Train operations: 0.8%.
Private operators;
Dispatching: 0.6%;
Maintenance of equipment: 13.2%;
Maintenance-of-way: 10.0%;
Train operations: 12.6%.
Herzog;
Dispatching: 0.6%;
Maintenance of equipment: 1.6%;
Maintenance- of-way: 2.8%;
Train operations: 1.3%.
Massachusetts Bay Commuter Railroad;
Dispatching: N/A;
Maintenance of equipment: 8.9%;
Maintenance-of-way: 7.2%;
Train operations: 8.9%.
Other;
Dispatching: N/A;
Maintenance of equipment: 2.7%;
Maintenance- of-way: N/A;
Train operations: 2.4%.
Total;
Dispatching: 100.1% [A];
Maintenance of equipment: 100.1%;
Maintenance-of-way: 100.2%;
Train operations: 100.1%.
Source: GAO analysis of commuter rail agency information.
Note: This table estimates the percentage of services provided by the
various railroad service providers to commuter rail agencies. In order
to account for the relative size of the commuter rail agencies, we
weighted the percentages in our calculations. Specifically, we used the
total number of passengers riding each commuter rail agency during July
- September 2005 as a rough proxy for the size and service requirements
of each agency. Totals may not add to 100% due to rounding.
[A] Data on dispatching was not available for MBTA, and MBTA was
excluded from the dispatching column. MBTA data was available, and was
included in the other service categories.
[End of table]
However, the extent to which commuter rail agencies rely on Amtrak for
services varies. In general, those commuter rail agencies that use
Amtrak-owned segments of the NEC have a greater level of reliance on
Amtrak for services than those who do not. For example, all eight
commuter rail agencies that use Amtrak-owned portions of the NEC rely
on Amtrak for services related to that infrastructure--specifically,
dispatching and maintenance-of-way--and they also are more likely to
contract with Amtrak for additional services. Five of the eight
commuter rail agencies accessing the Amtrak-owned NEC also contract
with Amtrak for train operation and maintenance of equipment. By
comparison, three of the ten commuter rail agencies, which do not
operate over Amtrak-owned portions of the NEC, contract with Amtrak for
train crews and maintenance of equipment.[Footnote 14]
As shown in table 3, we classified the commuter rail agencies we
contacted based on their level of reliance on Amtrak for services in
one of four categories--heavy reliance, moderate reliance, limited
reliance, or little to no reliance on Amtrak. Specifically:
Table 3: Commuter Rail Agency Reliance on Amtrak Services:
Existing commuter rail agencies;
Altamont Commuter Express (ACE);
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: X;
Little to no reliance: [Empty].
Connecticut Department of Transportation's Shore Line East and New
Haven Lines (SLE);
Heavy reliance: X;
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Maryland Transit Administration (MARC);
Heavy reliance: X;
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Massachusetts Bay Transportation Authority (MBTA);
Heavy reliance: [Empty];
Moderate reliance: X;
Limited reliance: [Empty];
Little to no reliance: [Empty].
MTA Long Island Rail Road (LIRR);
Heavy reliance: [Empty];
Moderate reliance: X;
Limited reliance: [Empty];
Little to no reliance: [Empty].
MTA Metro-North Rail Road;
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: X.
New Jersey Transit Corporation (NJT);
Heavy reliance: [Empty];
Moderate reliance: X;
Limited reliance: [Empty];
Little to no reliance: [Empty].
North County Transit District (Coaster);
Heavy reliance: X;
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Northeast Illinois Regional Commuter Railroad Corporation (Metra);
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: X;
Little to no reliance: [Empty].
Northern Indiana Commuter Transportation District (NICTD);
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: X.
Peninsula Corridor Joint Powers Board (Caltrain);
Heavy reliance: X;
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Pennsylvania Department of Transportation (PENNDOT);
Heavy reliance: X;
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Sound Transit, Central Puget Sound Regional Transportation Authority
(Sounder);
Heavy reliance: [Empty];
Moderate reliance: X;
Limited reliance: [Empty];
Little to no reliance: [Empty].
Southeastern Pennsylvania Transportation Authority (SEPTA);
Heavy reliance: [Empty];
Moderate reliance: X;
Limited reliance: [Empty];
Little to no reliance: [Empty].
Southern California Regional Rail Authority (Metrolink);
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: X;
Little to no reliance: [Empty].
Tri-County Commuter Rail Authority (Tri-Rail);
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: X.
Trinity Railway Express (TRE);
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: X.
Virginia Railway Express (VRE);
Heavy reliance: X;
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Proposed commuter rail agencies;
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: [Empty].
Nashville Music City Star;
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: X.
New Mexico Rail Runner Express;
Heavy reliance: [Empty];
Moderate reliance: [Empty];
Limited reliance: [Empty];
Little to no reliance: X.
Source: GAO analysis.
Notes:
(1) We determined the level of reliance on Amtrak for services through
interviews with commuter rail agencies in which we discussed to what
extent Amtrak provided services critical to the commuter rail
operations, the results of which are summarized in appendix II. For the
purposes of this classification, we considered train operation crews,
maintenance of equipment, maintenance-of-way, and dispatching, as
services critical to commuter rail operations.
(2) We used the following definitions to classify the commuter rail
agencies:
Heavy reliance: Commuter rail agency contracts with Amtrak for at least
half of two (or more) of the services critical to the commuter rail
agency's operations.
Moderate reliance: Commuter rail agency contracts with Amtrak for at
least half of one service critical to the commuter rail agency's
operations.
Limited reliance: Commuter rail agency contracts with, or in some other
way relies on, Amtrak for less than half of any service critical to the
commuter rail agency's operations.
Little to no reliance: Commuter rail agency does not contract with, or
in some other way rely on, Amtrak for any services critical to the
commuter rail agency's operations.
[End of table]
² Heavy reliance on Amtrak: We classified six commuter rail agencies as
having a heavy reliance on Amtrak for services. For example, Caltrain-
-a commuter rail service connecting San Francisco and San Jose--
contracts with Amtrak for all train operations, maintenance of
equipment, and dispatching services. In addition, Amtrak provides
maintenance-of-way services for about 65 percent of the track Caltrain
uses. Commuter rail agencies that rely heavily on Amtrak services told
us they would face significant challenges, such as having to conduct
emergency procurement for replacement service providers and potential
service shutdowns, if Amtrak suddenly ceased to provide these services.
Of these six agencies, four use the Amtrak-owned NEC.
² Moderate reliance on Amtrak: We classified five agencies as having a
moderate reliance on Amtrak for services. For example, the Southeastern
Pennsylvania Transportation Authority (SEPTA), a service linking
Philadelphia to its outlying suburbs and Newark/Wilmington, Delaware,
contracts with Amtrak to maintain almost 40 percent of the track that
SEPTA traverses, and to dispatch more than half of SEPTA's
trains.[Footnote 15] Amtrak also provides traction power for many SEPTA
trains. One of these five agencies classified as having moderate
reliance on Amtrak--Sound Transit in Seattle, which contracts with
Amtrak for all of its maintenance of equipment service--does not travel
on Amtrak-owned NEC tracks. The impact of an abrupt Amtrak shutdown on
agencies with moderate reliance is the most uncertain and depends on
the particular circumstances of a shutdown. For example, if an Amtrak
shutdown included discontinuation of propulsion power to the NEC,
SEPTA's service would cease. However, if power remained, SEPTA could
potentially operate its service, although other challenges such as
dispatching services currently provided by Amtrak would still need to
be addressed.
² Limited reliance on Amtrak: We classified three agencies as having
limited reliance on Amtrak for service. None of these agencies use the
NEC, and these agencies could likely cope with an abrupt shutdown of
Amtrak services by using existing resources until more resources became
available. For example, Metra, a commuter rail agency in Chicago,
relies on Amtrak for dispatching services and access to infrastructure
in and around Chicago Union Station--a key station for several of
Metra's lines that is owned and operated by Amtrak. Provided that Metra
was granted the authority to assume responsibility for Chicago Union
Station and obtained information regarding the employees it would need
to hire to operate the station, a senior Metra official stated that it
would be able to take over the operation of the station, and could do
so over a weekend if necessary.
² Little to no reliance on Amtrak: We classified six commuter rail
agencies, including two proposed commuter rail services, as having
little to no reliance on Amtrak. These agencies either have their own
in-house employees or they contract for services with private
transportation companies or freight railroads. For example, the
Northern Indiana Commuter Transportation District (NICTD) operates
commuter rail service from South Bend, Indiana, to Chicago with its own
employees and equipment on its own track. In addition, none of the
agencies require access to Amtrak-owned NEC tracks, and all reported
that they could continue service with minimal or no disruption in the
event of an abrupt Amtrak cessation of services. Although these six
agencies do not rely on Amtrak for services, most of these agencies
have some kind of relationship with Amtrak. For example, the Fort Worth
Transportation Authority--one of the two transit agencies that owns
Trinity Railway Express (TRE)--built a multi-modal transportation
facility that serves as a train, bus, and cab station for commuters in
Fort Worth, Texas. In developing the center, Amtrak requested a number
of features that would allow its intercity trains to use the station,
and in turn Amtrak agreed to a 10-year operating lease of the station.
According to TRE officials, the transportation authority would stand to
lose a revenue stream of more than $500,000 per year if Amtrak ceased
to use the station.
Financial Arrangements between Amtrak and Commuter Rail Agencies Vary
and Lack Clarity:
The reliance on Amtrak for infrastructure and services by many commuter
rail agencies has led to a variety of financial arrangements between
these parties. While information on these arrangements could help
decision makers in their efforts to reform Amtrak, these arrangements
vary significantly and frequently lack clarity. As a result, it is
difficult for Amtrak's internal and external stakeholders to identify
the overall amount of revenues Amtrak generates, and the costs it
incurs, in providing services and infrastructure access to commuter
rail agencies. Several factors contribute to the lack of clarity,
including limitations in Amtrak's accounting practices, lack of
transparency in Amtrak's financial reports, and the structure of some
of the arrangements. Amtrak's fiscal year 2006 appropriations bill
directs DOT to levy a fee on commuter rail agencies that use the NEC to
compensate Amtrak for maintenance and capital expenditures resulting
from their use of the NEC. This fee could increase the transparency of
Amtrak's--and commuter rail agencies' financial--arrangements, but it
does pose some challenges.
Financial Arrangements between Commuter Rail Agencies and Amtrak Vary:
The financial arrangements between commuter rail agencies and Amtrak
vary. One reason for this variation is the negotiation process.
Although some financial arrangements have grown from the historical
relationships between Amtrak and commuter rail agencies, most of
today's arrangements are the product of individual negotiations.
Through these negotiations, Amtrak and a commuter rail agency reach
agreement on the terms and conditions--including price--for the
commuter rail agency's use of Amtrak services and infrastructure. This
agreement is typically documented in a contract between Amtrak and the
commuter rail agency. The specific contract terms and conditions vary
due to a number of factors, such as the comparative bargaining power of
each party, the specific services and infrastructure used, and the
extent of competition for the contract.[Footnote 16]
According to Amtrak officials, another factor that influences the
specific terms and conditions of some of Amtrak's commuter rail
contracts is the Interstate Commerce Commission's[Footnote 17] 1983
ruling known as Ex Parte 417. This ruling governed compensation for
access to the NEC for some commuter rail agencies, but not necessarily
others.[Footnote 18]
² Amtrak officials stated that NEC commuter rail agencies that were
established prior to the ruling--namely, LIRR, SEPTA, NJT, MBTA, and
MARC--start from an avoidable cost basis in NEC-access negotiations
with Amtrak. Avoidable costs refer to only those expenses above what
Amtrak would pay if the commuter rail did not use Amtrak
infrastructure.
² Amtrak officials stated that other commuter rail agencies must
negotiate NEC-access agreements from a fully allocated cost basis,
which could include all of Amtrak's costs for running commuter rail
trains over the NEC (e.g., including avoidable costs, depreciation, and
overhead). These agencies include PENNDOT, SLE, and VRE.[Footnote 19]
Commuter rail agencies' financial arrangements with Amtrak also vary in
relation to the terms of their capital contributions for shared
infrastructure. Some commuter rail agencies contribute significantly
more to capital projects that benefit both the commuter rail agency and
Amtrak than others. For example, NJT has negotiated a $600 million, 10-
year (1997-2006) joint benefit capital investment program with Amtrak.
In contrast, SEPTA made over $30 million in capital investments on
Amtrak-owned portions of the NEC between fiscal years 1995 and
2005.[Footnote 20]
The financial arrangements between Amtrak and commuter rail agencies
also vary in terms of how they are structured. For example, Amtrak may
have separate contracts for services, infrastructure access, and
capital investment with one commuter rail agency, while another agency
might have only one contract that bundles several services and access
fees together in a fixed price. In addition, a few commuter railroads
have entered into "quid-pro-quo" exchange arrangements with Amtrak. For
example, Sound Transit and Amtrak have an exchange arrangement where
monetary values are not established for maintenance of the two stations
they share--that is, Amtrak uses the Tukwila Station, which is
maintained by Sound Transit, and in turn Sound Transit uses the King
Street Station, which is maintained by Amtrak. No recognition is given
to this exchange in Amtrak's financial records and reports. Similarly,
Amtrak grants MBTA commuter service access to 5.7 miles of track that
Amtrak owns and maintains; in exchange, MBTA grants Amtrak the right to
run intercity trains over 37 miles of track owned by MBTA. No money is
exchanged between Amtrak and MBTA for the use of those portions of
track.
Financial Arrangements between Amtrak and Commuter Rail Agencies Lack
Clarity:
The financial arrangements between Amtrak and commuter rail agencies
also lack clarity. That is, although such information could help
decision makers consider potential reforms to Amtrak, it is difficult
for commuter rail agencies, Amtrak's management, and external
stakeholders (such as Congress and DOT) to identify the overall amount
of revenue Amtrak generates and the costs it incurs in providing
services and infrastructure access to commuter rail agencies. It is
also difficult to determine whether commuter rail agencies are being
over-or under-charged for services and infrastructure access. Several
factors contribute to the lack of clarity, including limitations in
Amtrak's accounting practices, a lack of transparency in Amtrak's
financial reports, and the structure of some of the arrangements.
Specifically:
² Limitations in Amtrak's accounting practices: Limitations of Amtrak's
cost-accounting practices produce a lack of clarity in the financial
relationships between commuter rail agencies and Amtrak--particularly
with respect to Amtrak's ability to clearly show all of the costs it
incurs in providing access to infrastructure and various services.
While Amtrak can support amounts in periodic billing statements to some
of its commuter rail customers, it cannot identify (and does not
allocate and bill) the full cost of providing these services or access.
In prior reports, we noted that Amtrak has insufficient unit cost
metrics to measure the full costs of its core functions, such as train
operations or infrastructure maintenance. Amtrak officials acknowledged
that the methods for assigning its costs are not exact, and some
commuter rail agencies with whom we spoke expressed dissatisfaction
with Amtrak's ability to clearly document these costs. For example,
officials from one commuter rail agency explained that Amtrak relied on
historical cost data from prior negotiations and regularly adjusted
these amounts for inflation rather than on clear and transparent actual
annual costs. As a result, these commuter rail agency officials
believed that Amtrak significantly overcharges for some items and
significantly undercharges for others. In October 2005, we recommended
that Amtrak enhance financial management transparency by lines-of-
business (which include commuter operations) and establish unit cost
measures, which could help Amtrak increase the accuracy of its cost
information in providing services and infrastructure access to commuter
railroads.[Footnote 21] Amtrak received $5 million in its fiscal year
2006 appropriations to develop and implement a new managerial
accounting system, which could also help improve its financial
transparency.[Footnote 22]
² Lack of clarity in Amtrak's financial reports: Amtrak's financial
reports do not clearly and transparently present useful information for
all amounts of revenue generated and all costs incurred for providing
infrastructure access and services to commuter rail agencies. Amtrak
has made some progress in showing its revenues and costs in its monthly
performance reports; however, the total amount of revenue and costs
from providing infrastructure access and services to commuter rail
agencies is still unclear. For example, income generated from Amtrak's
operation of commuter rail service is shown as commuter revenue;
however, infrastructure access fees from commuter rail agencies are
included with other railroads' access fees as infrastructure management
revenue. Similarly, Amtrak's audited consolidated financial statements--
while they properly report all items of revenue, cost, and offsets to
capital items from commuter rail activities--Amtrak's management does
not separately disclose all of this activity in one place, which would
increase its usefulness. The lack of transparency in Amtrak's financial
reports is due, in part, to limitations in Amtrak's accounting
practices. Although commuter rail activities are not the focus of
Amtrak's financial reports, the lack of transparency about the revenues
and costs incurred as a result of Amtrak's commuter rail activities
makes it difficult for Amtrak's management and external stakeholders to
make fully informed decisions about its commuter line- of-business.
² Structure of financial arrangements: The structure of Amtrak's
financial arrangements with commuter rail agencies also contributes to
the lack of clarity. For example, as noted above, some commuter rail
agencies have a single contract for both infrastructure access and
services. According to Amtrak officials, while these contracts separate
charges for infrastructure access and services, commuter rail agencies
are not able to identify Amtrak's specific costs associated with these
charges. As a result, several commuter rail agencies stated that this
makes it difficult to determine the value of the specific services or
access that they are purchasing from Amtrak. In addition, the "quid-
pro-quo" arrangements are not recorded as revenues or expenses by
Amtrak. Because these arrangements are not assigned monetary values, it
is difficult to quantify the financial value or impact to Amtrak's or
commuter rail agencies' bottom line.
Officials from Amtrak acknowledged that there is a lack of clarity in
the current financial arrangements between Amtrak and commuter rail
agencies. In particular, officials noted that because of Ex Parte 417
and the practice of some (but not all) commuter rail agencies
contributing to capital projects, there is a built-in imbalance in
access fees and capital contributions paid to Amtrak from commuter
railroads on the NEC. Amtrak officials said they would welcome a
uniform capital contribution and access fee policy from the federal
government.
New NEC Fee Could Improve Transparency but Poses Potential Challenges:
As part of Amtrak's fiscal year 2006 appropriation, Congress directed
the Secretary of Transportation to assess a fee on commuter rail
agencies using the NEC. According to the statute, the fee will be based
on annual NEC maintenance and capital costs--net of any current
contributions from commuter rail agencies--attributable to commuter
rail use of the infrastructure. The statute directs the Secretary of
Transportation to calculate the fee based on relative use of the NEC
(e.g., train mile usage or another factor). The revenue generated from
this fee would be used to support capital projects on the NEC. As of
March 2006, FRA was working to develop and implement the fee.
FRA and FTA officials identified several challenges in implementing
this new fee. First, FRA officials stated that developing a formula for
assessing the fee could be complicated; several factors could be used
as a basis for the fee, including ridership or train miles--both of
which are already used in other federal funding formulas--or other
factors. Second, FTA officials noted that most commuter rail agencies
already have negotiated agreements with Amtrak concerning cost-sharing
approaches for capital investments, which will complicate the
development of a separate formula for assessing the fee. Finally, FTA
officials stated that they will need clarification regarding whether
the Congress intended this fee as a rescission to federal funding of
capital projects from FTA to commuter rail agencies, or as a new
federal funding source to Amtrak.
Commuter rail agencies using Amtrak-owned NEC share many of these
concerns--especially that the contracts they have negotiated with
Amtrak already establish their contribution for infrastructure access
and capital contributions. These agencies also noted to us that their
state fiscal year 2006 budgets have already been passed and did not
include any funding for such a fee. As a result, these agencies may
face difficulties in securing funding to pay the fee if DOT levies the
charge as directed during the remainder of fiscal year 2006. In
addition, because commuter rail agencies and Amtrak use the NEC in
different ways (e.g., Amtrak high-speed intercity trains require more
costly maintenance-of-way requirements as compared to slower commuter
trains) and have different levels of use, commuter rail agencies argue
that there are valid reasons for cost differentials between commuter
rail agencies and Amtrak. Finally, officials from several commuter rail
agencies expressed concern that they were not consulted prior to the
enactment of this fee and believe that Amtrak, the federal government,
and representatives of the affected states and commuter rail properties
should cooperatively develop a formula for determining and allocating
costs and compensation for shared-track operations on the NEC.
According to FRA officials, FRA is in the process of meeting with
commuter rail agencies to develop a methodology to calculate and apply
this fee.
Abrupt Amtrak Cessation Could Raise Critical Issues for Some Commuter
Rail Agencies:
Decisions made by federal policy makers in the debate over Amtrak will
play a critical role in whether or not Amtrak abruptly ceases to
provide services and infrastructure to commuter rail agencies. In the
event that Amtrak abruptly ceases to provide services and
infrastructure, commuter rail agencies would face two critical
operational issues that could make it difficult for some to continue
operations and avoid severe service disruptions. One critical issue
they would face would be the potential loss of Amtrak skilled labor.
Another critical issue would be the potential loss of access to Amtrak-
owned infrastructure. Some commuter rail agencies also described facing
additional issues, such as the loss of revenue or a strain on capacity.
Decisions Made by Federal Policy Makers Will Play a Critical Role in
Whether Amtrak Abruptly Ceases to Provide Infrastructure and Services
to Commuter Rail Agencies:
Decisions made by federal policy makers will play a critical role in
whether or not Amtrak abruptly ceases to provide services and
infrastructure to commuter rail agencies.[Footnote 23] The most likely
cause for an abrupt Amtrak cessation is bankruptcy. Amtrak has been on
the edge of bankruptcy several times. For example, in 2001, Amtrak lost
over $1.2 billion and had to mortgage a portion of Pennsylvania Station
in New York City to generate enough cash to meet its expenses. As we
reported in October 2005, Amtrak's financial troubles have continued
since that time, with operating losses now totaling over $1 billion per
year.[Footnote 24] Given Amtrak's precarious financial position,
federal policy makers' decisions could either usher Amtrak into
bankruptcy or prevent Amtrak from slipping into bankruptcy. For
example, if policy makers acted on legislative proposals that end or
substantially reduce federal funding, an Amtrak bankruptcy or shutdown
could quickly follow. Specifically, Amtrak officials have stated that
proposals with zero funding for Amtrak operating or capital costs would
promptly trigger an Amtrak bankruptcy. In contrast, federal policy
makers could also act to prevent Amtrak from declaring bankruptcy, as
was the case in July 2002 when DOT approved an emergency loan because
the railroad was running out of cash.
If federal policy makers allow an Amtrak bankruptcy to occur, a trustee
would be appointed to oversee the bankruptcy proceedings. Under current
law, the trustee, along with the bankruptcy court, would make decisions
about Amtrak's future.[Footnote 25] Although it is difficult to predict
what decisions a bankruptcy court would make, there is no guarantee
that all of Amtrak services--such as the services it provides to
commuter rail agencies--would continue. In October 2005, we suggested
that as a first major step toward implementing and rationalizing the
provision of intercity passenger rail service, Congress should consider
establishing a clear national policy for intercity passenger rail
service that would address, among other things, the interests of the
diverse set of Amtrak stakeholders and limit unintended consequences to
these parties.[Footnote 26] Commuter rail agencies are one kind of
stakeholder, and the effect of an abrupt Amtrak shutdown on commuter
rail agencies could be one such unintended consequence.
One Critical Issue Commuter Rail Agencies Would Face Would Be the
Potential Loss of Skilled Amtrak Labor:
For those commuter rail agencies that contract with Amtrak to provide
services, an abrupt Amtrak cessation could result in a shortage of
qualified labor needed to maintain commuter service and avoid severe
disruptions or a shutdown of service. Amtrak employees provide a number
of services to commuter rail agencies that support a wide range of
commuter rail functions. In addition, these employees have
institutional knowledge regarding the use and maintenance of the
equipment and infrastructure needed to provide safe and efficient
passenger rail service. If Amtrak employees no longer provided these
services, commuter rail agencies would need to replace Amtrak labor
with other experienced railroad employees or hire new employees and
train them. However, the narrowed available pool of qualified rail
employees due to the recent increase in freight traffic as discussed by
freight railroad officials, as well as the time required to train new
employees, could limit the ability of commuter rail agencies to replace
Amtrak employees in the short term.
STB staff placed Amtrak employees that provide services to commuter
rail agencies in the following categories based on the type of service
they provide to commuter rail agencies:
² Dedicated-contract employees: these employees are mainly dedicated to
a single commuter rail service and include conductors, engineers, and
maintenance of equipment personnel. For example, the Amtrak engineers
and conductors that operate VRE commuter trains are dedicated to this
service by contract, although they may occasionally work on Amtrak
service.
² Cross-cutting employees: these employees provide services, such as
maintenance-of-way, signals and communications, or dispatching, for
more than one passenger rail service. For example, Amtrak and LIRR
dispatchers working in Pennsylvania Station Central Control facility in
New York City are jointly managed by Amtrak and LIRR. These dispatchers
control the movement of Amtrak intercity trains as well as LIRR and NJT
commuter trains.
² Overhead employees: these employees take care of functions such as
payroll and training, and provide support to both Amtrak and the
various commuter operations. These employees support dedicated, cross-
cutting, and other overhead functions. It is unclear how many of these
employees would be needed to support each individual commuter service
contract.
According to STB staff, dedicated-contract employees may be easier for
commuter rail agencies to replace or assume in the short term than
employees that provide either cross-cutting or overhead functions. For
instance, dedicated-contract employees are easier to identify because
they generally work for only one commuter rail service. In addition,
the costs associated with dedicated-contract employees, such as
salaries and benefits, are easier to quantify than costs associated
with employees that support functions for more than one passenger rail
service.
If Amtrak abruptly ceased to provide services and infrastructure to
commuter rail agencies, officials from a few commuter rail agencies
told us they might be able to replace the Amtrak employees who are
dedicated to their particular commuter rail service with employees from
another railroad. For example, SLE, which operates between New London
and New Haven, Connecticut, may be able to replace Amtrak train and
engine crews with Metro-North employees that are already familiar with
SLE's operation in 6 to 12 months. Similarly, according to a senior
Coaster official, the Coaster service operating between San Diego and
Oceanside, California, would be able to replace Amtrak maintenance-of-
way employees more quickly than other employees because either
Burlington Northern Santa Fe, a Class I freight railroad, or local
contractors could step in to perform this type of work.
In most cases, however, commuter rail agencies told us they could not
quickly replace current Amtrak employees because of workforce
limitations, such as the availability of a qualified labor pool. For
example, according to officials from several Class I freight railroads,
their current workforce is already strained due to a growing demand for
freight rail transportation and a narrow labor pool of qualified
applicants. In addition, freight railroad employees could not
immediately take over services provided by Amtrak employees without
first obtaining training on commuter rail equipment. According to
officials from one freight railroad, it would take at least 9 months to
train someone to safely operate commuter service if existing Amtrak
train crews were unavailable. Commuter rail agencies also told us they
do not have the workforce capabilities or expertise to take over the
services provided by Amtrak (especially overhead, dispatching, or
maintenance services) in the short term. As a result, some commuter
rail agencies would have to limit or shut down service in the short
term unless current Amtrak employees could continue providing these
services. For example:
² Caltrain bundles the services required to operate, maintain, and
dispatch its commuter trains into one contract with Amtrak. According
to one Caltrain official, if Amtrak no longer provided these services,
Caltrain would likely go out of business and discontinue its commuter
operations, because, among other things, Caltrain employees are not
equipped to assume overhead functions currently provided by Amtrak,
such as payroll, training, and human resources. Moreover, because of
the small size of the commuter operation, it would be cost-prohibitive
for Caltrain to handle these overhead functions compared to Amtrak,
which can centralize such functions for its national network and all of
its commuter services.
² While MBTA no longer contracts with Amtrak for operations and
maintenance of equipment services, Amtrak personnel still provide some
services, including maintenance-of-way, signal maintenance, and
dispatching for some of its trains. In particular, Amtrak employees
dispatch MBTA trains at the joint Centralized Electrification and
Traffic Control (or CETC) center in Boston's South Station. The
technical skills required to dispatch trains take time to develop and
could not be replaced in a short time period. An official from the
Massachusetts Bay Commuter Railroad Company (MBCR), the contract
operator of the MBTA commuter service, stated that if Amtrak no longer
provided dispatching services for MBTA trains, it would need to hire 18
dispatchers--and hiring and training these dispatchers would take about
15 months if it could not hire the existing, qualified Amtrak
employees. Until these dispatchers were trained and in place, MBTA's
service would be limited.
Other commuter rail agencies on the NEC that rely on Amtrak's skilled
workforce would also face issues in the event of an abrupt Amtrak
cessation. For example, NJT relies on Amtrak employees to dispatch some
of its trains out of the CETC center in Philadelphia's 30th Street
Station. SEPTA also relies on Amtrak dispatchers to provide overhead
electric power and dispatch both power and some of its trains out of
this CETC center. According to NJT and SEPTA officials, these employees
could not be replaced in the short term because of the training and
expertise required to provide these services.
Potential Loss of Access to Amtrak Infrastructure Is Another Critical
Issue Commuter Rail Agencies Would Face:
To avoid disruptions or shutdowns, commuter rail agencies would need to
be able to continue accessing Amtrak-owned infrastructure if Amtrak
abruptly shut down. Commuter rail agencies on the NEC, in particular,
could face severe service disruptions without the ability to access
Amtrak-owned track and stations along the NEC. For example:
² Officials from LIRR stated that without access to Pennsylvania
Station, which is the LIRR's major access point to downtown New York
City, about 87.4 percent of LIRR's daily passengers would have to be
taken to temporary west-end terminals and transferred to various subway
stations in order to complete their trips into Manhattan.
² NJT officials estimated that over 77 percent of its daily passengers
would be affected each day if it could no longer operate its trains
over the NEC. According to these officials, there are not enough
suitable alternative transportation options to accommodate these
passengers because of capacity limitations on area highways and lack of
additional bus equipment.
² According to a SEPTA official, almost all of its passengers would be
affected without access to Amtrak-owned right-of-way and traction
power, which is provided through the CETC Center in Philadelphia's 30th
Street Station. This is because almost all SEPTA passengers begin or
end their commute in the city center, where all of SEPTA's routes are
connected through a central tunnel that has traction power provided by
Amtrak. If access to Amtrak-owned infrastructure and power is
unavailable, limited bus service to SEPTA heavy rail and light rail
lines might be available to some passengers.
As discussed previously, Amtrak also owns and controls infrastructure
outside the NEC, including stations and maintenance yards that are used
by commuter rail agencies. These commuter rail agencies would also need
continued access to these facilities in order to limit service
disruptions if Amtrak abruptly ceased service. For example, over half
of Metra's commuter rail lines could not complete their trips without
access to Chicago Union Station. In Seattle, Sound Transit officials
stated that they would have to obtain access to another maintenance
facility, which would likely cause severe service disruptions, or
discontinue service if access to Amtrak's Holgate maintenance yard was
unavailable due to an abrupt Amtrak cessation.
Commuter Rail Agencies Also Described Other Issues They Would Face with
Abrupt Amtrak Cessation:
While access to labor and infrastructure present critical issues for
commuter rail agencies that rely on Amtrak, a number of other issues
could also face commuter rail agencies in the event of an abrupt Amtrak
cessation. These include loss of revenue and a strain on capacity.
² Loss of revenue: some commuter rail agencies could lose revenue
received from access fees paid by Amtrak to operate its trains over
tracks owned by the commuter authority. For example, the Coaster
service in California receives $1.9 million a year from Amtrak to
operate over infrastructure owned by Coaster. According to one Coaster
official, without this revenue, service reductions or fare increases
would likely result.
² Strain on capacity: some commuter rail agencies could also face a
strain on capacity as a result of an abrupt Amtrak cessation. For
example, some commuter rail services may have to accommodate passengers
from Amtrak's intercity service or take over portions of Amtrak's
intercity service. However, commuter rail agencies may not have
adequate resources or the capacity to accommodate additional intercity
passengers. For example, both Metro-North and Metrolink expect they
would have to add equipment to their service in order to accommodate
Amtrak intercity passengers. However, according to a Metrolink
official, it is uncertain how quickly it could procure additional
equipment to meet increased demand in the short term. In addition, some
commuter rail agencies have cross-ticketing programs with Amtrak that
allow one or both parties to increase capacity on their lines without
having to add cars or trains to their service. For example, both
Coaster and Metrolink have initiated "rail-to-rail" ticketing programs
with Amtrak that allow commuters who hold monthly passes to ride Amtrak
trains within the commuter rail's service territory. This effectively
increases the number of trains that Coaster passengers can use each day
from 22 to 44. An Amtrak cessation, therefore, would significantly
reduce these commuter rail agencies' capacity.
Some Options Are Available to Commuter Rail Agencies in the Event of an
Abrupt Amtrak Cessation, but Service Disruptions and Financial
Difficulties Would Be Likely:
Most commuter rail agencies that rely on Amtrak services and Amtrak-
owned infrastructure have identified short-and long-term options to
mitigate service disruptions in the event that Amtrak abruptly ceases
operations. However, those options are largely dependent on the ability
to retain Amtrak employees and access to Amtrak's infrastructure,
particularly in the short term. Federal agencies could provide short-
term options to mitigate potential impacts on commuter rail agencies in
the event of an abrupt Amtrak cessation. However, service disruptions
are likely and the cost of funding such options is unknown. Private
transportation companies could take over commuter rail services
provided by Amtrak; however, labor and liability issues, among others,
would need to be addressed.
Most Commuter Rail Agencies Have Identified Contingencies for an Amtrak
Cessation that are Largely Dependent on Access to Amtrak Employees and
Infrastructure:
Contingencies identified by commuter rail agencies to respond to an
abrupt Amtrak cessation vary depending on the reliance of that agency
on Amtrak for services and access to infrastructure. Commuter rail
agencies that have little to no reliance on Amtrak would be able to
continue operating commuter service with little or no service
disruption if Amtrak abruptly ceased to provide services and
infrastructure. Nevertheless, some of these agencies have identified
some options to mitigate the potential non-service impacts, such as the
potential strain on capacity as a result of an Amtrak cessation. For
example, Metro-North would add train cars to its current service in
order to accommodate passengers from Amtrak's intercity service.
Commuter rail agencies with limited to heavy reliance on Amtrak,
however, could face minor to severe service disruptions depending on
their ability to retain Amtrak employees and use Amtrak infrastructure-
-which is particularly critical for commuter rail agencies on the NEC.
Commuter rail agencies identified short-term contingencies ranging from
assuming portions of the service to curtailing or shutting down service
if Amtrak abruptly ceases to provide services and access to
infrastructure to them.
² Assume portions of service: In some cases, commuter rail agencies may
be able to assume management of some of the services provided by
Amtrak. For example, MBTA has the option to add dispatching and
infrastructure maintenance functions to its contract with MBCR. These
functions are currently provided by Amtrak on those portions of the NEC
that MBTA operates commuter service. However, MBTA stated it would
prefer to hire the current Amtrak personnel or would need the current
workers to continue to provide these services until other workers were
hired and trained--a process that could take more than 1 year.
² Find alternate service provider: A few commuter rail agencies would
make arrangements for an alternate provider to take over services
provided by Amtrak. For example, a commuter rail agency official told
us that they would either conduct an emergency procurement to replace
the current contract with Amtrak or would go directly to another
operator and ask them to fill in. However, this process would likely be
very expensive because there would not be sufficient time to
competitively procure the contract. It would also require the
willingness of Amtrak employees currently dedicated to that commuter
rail agency's service to hire on with the new contractor.
² Curtail or shut down service: Several commuter rail agencies,
particularly on the NEC, stated they would either have to curtail
portions of their service or shut down service entirely, particularly
if access to Amtrak employees and infrastructure were unavailable. For
example, MARC officials told us if MARC could no longer access
Washington Union Station, they would run only the trains that operate
over CSX Transportation (CSX) infrastructure to stations outside of
Washington, D.C., and passengers would need to transfer to subway or
bus lines to complete their trips into Washington, D.C. Other commuter
rail agencies told us they would likely shut down service if Amtrak
abruptly ceased to provide services and infrastructure. For example, a
Caltrain official stated that it would likely end all of its commuter
rail service because it does not have the workforce capabilities to
take over all of the services provided by Amtrak.
Commuter rail agencies also identified long-term contingencies in the
event of an Amtrak cessation. Commuter rail agencies that use Amtrak
for services would issue request-for-proposals (RFP) to hire new
contractors to replace Amtrak. However, several commuter rail officials
told us that the procurement process takes an average of 18 months from
the time the RFP is issued to the time the new contractor can begin
providing service. These contractors would also need to hire a
qualified workforce, which may or may not include Amtrak employees, and
would require access to Amtrak-owned infrastructure in order to provide
services to commuter rail agencies.
Federal Agencies Could Provide Short-Term Options for Commuter Rail
Agencies, but Service Disruptions Are Likely and Costs Are Unknown:
STB has the statutory authority to direct a rail carrier to provide
services, previously provided by Amtrak, to commuter rail agencies in
the event of an abrupt Amtrak cessation of services. According to the
statute, in order for STB to issue a directed-service order (1) a
commuter rail agency must be adversely affected by an Amtrak shutdown
and (2) funding must have been appropriated for directed service. The
statute also establishes parameters for the use of directed service.
For example, a single directed-service order cannot last more than 270
days (about 9 months). In addition, in a directed-service scenario, STB
must require the use of the employees who would have normally performed
the work, to the extent practicable. Such employees could be former
Amtrak employees or employees from another railroad,[Footnote 27]
including commuter or freight railroads. The statute also gives STB the
authority to direct a service provider to take over the provision of
infrastructure functions related to operations, such as traction power,
dispatching, and maintenance. Therefore, according to STB staff, STB
could direct service over the NEC so that current commuter rail
agencies could continue to operate on the NEC for a limited period of
time. However, STB's authority to direct service for commuter rail
agencies has never been used, and a number of uncertainties about
directed service--such as the time required to implement a directed
service order and the costs of such efforts--exist. Consequently, FRA
officials believed that service disruptions under a directed-service
scenario would be unavoidable and could be either brief or extended,
depending on the particular situation of the commuter rail agency.
Companies that could be directed to provide the services now performed
by Amtrak for commuter rail agencies include freight railroads, the
commuter rail agencies themselves, and possibly other entities. For
example, Metra in Chicago might be directed to take over the operation,
maintenance, and dispatching for Chicago Union Station--a
responsibility Metra officials stated they would be able to do. STB
staff did note that even though STB has the authority to direct
entities to serve as a directed service provider, it would have to
weigh their willingness to perform this task. For example, although STB
can direct a freight railroad to provide train crews to operate
commuter rail service, freight railroad officials with whom we spoke
have consistently expressed a lack of interest in being directed-
service providers. STB staff did note, however, that the freight
railroads operating in the Northeast do have an interest in Amtrak's
continued operations. For example, Norfolk Southern (NS) relies on
Amtrak dispatching and infrastructure to provide freight service over
some of the NEC to several major mid-Atlantic markets. According to a
Norfolk Southern official, the NEC is the only practical route NS
freight trains can use to reach Baltimore, Wilmington, and the Delmarva
Peninsula,[Footnote 28] which are all major rail markets. STB staff
recognize that directing an unwilling entity to provide service is an
undesirable situation that could result in service delays, and STB
staff stated that they would prefer to avoid this type of scenario.
STB staff and FRA officials believe that directed service would be
highly problematic and should be avoided if at all possible.[Footnote
29] FRA officials stated that the current directed service
implementation plan contains some questionable assumptions,
particularly the assumptions about labor and the cost of directed
commuter service. For example, implementation plans assume that Amtrak
employees (especially on the NEC) would be willing to continue
performing their same duties for the directed-service provider.
However, according to FRA and FTA officials as well as STB staff,
former Amtrak employees would have no legal obligation to accept an
employment offer from the directed-service provider. The labor unions
we spoke with stated that they believed that in a directed-service
scenario, Amtrak employees would be much more likely to accept jobs
with employers that participate in the railroad retirement-system, such
as freight railroads. These jobs would be more secure and would allow
employees to remain in the railroad retirement-system.[Footnote 30] Not
all commuter rail agencies participate in the railroad retirement-
system, which would make jobs with those commuter rail agencies less
desirable to employees currently covered by the retirement system.
According to FRA officials, the biggest concern and unknown in a
directed service scenario is whether former Amtrak employees will agree
to work for the new provider.
In addition, FRA officials stated that the estimates of the costs of
providing directed service are unreliable and not based on a robust set
of assumptions. In fiscal years 2004 - 2006, Congress directed the
Secretary of Transportation to withhold $60 million from Amtrak's
federal grant to use if STB issued a directed-service order.[Footnote
31] According to STB staff and FRA officials, the $60 million figure is
a rough estimate of the cost of providing directed service that FRA
developed based on Amtrak's overall cash burn rate per month. However,
because of the assumptions used to calculate the estimate, officials
from FRA and STB staff questioned the reliability of the estimate and
the length of time this level of funding could cover. For example, FRA
officials suggested that $60 million could cover no more than 2 months-
-and likely far less--of directed commuter rail service. These
officials stated that this estimate assumed only minimal services for
the 2-month period. For instance, according to FRA officials, this
level of funding would not allow for any significant mechanical work on
any piece of commuter rolling stock, which would force any equipment
requiring such servicing to be parked until additional funding was made
available. Taking equipment that needs maintenance out of service is
not sustainable for more than a few months. In addition, STB staff and
FRA officials stated that the estimate reflects only the operational
costs associated with providing directed service, and therefore, did
not include funding for capital maintenance or for the backlog of
capital improvements on the NEC. It also does not account for the
access fees commuter rail agencies would presumably continue paying to
the residual Amtrak (or new infrastructure owner) for the use of its
infrastructure. STB staff and FRA officials stated that long-term
directed-service scenarios (i.e., when directed service lasts longer
than 1 or 2 months) would require additional funds for train
operations, equipment maintenance, and capital funding for critical
infrastructure. Some commuter rail agencies noted that directed service
would probably be needed for more than a few months due to the time
required to transition to a new service provider.
Although the accuracy of the $60 million estimate for 2 months of
directed service is questionable, it was used to calculate the costs of
providing directed service for 12 months in the administration's fiscal
year 2006 budget proposal. Specifically, the administration's fiscal
year budget proposed that no capital or operating funds be provided to
Amtrak, and that $360 million be set aside for directed service for
commuter and freight rail. According to FRA officials, the $360 million
was based on FRA's 2-month estimate and multiplied out to cover an
entire year. However, as the original estimate was not based on robust
assumptions, officials do not think that $360 million would be able to
cover 1 year of directed commuter rail service in the event of an
Amtrak shutdown, much less commuter and freight rail services.
Private Transportation Companies Could Provide Options for Commuter
Rail Agencies, but Challenges Exist:
In addition to Amtrak, freight railroads and other private
transportation companies currently provide services, including train
operations, equipment maintenance, infrastructure maintenance, and
dispatching, to commuter rail agencies. Freight railroads typically
provide some level of services to commuter rail agencies in cases where
the commuter service operates in part (or entirely) over infrastructure
owned and maintained by the freight railroad. For example, Burlington
Northern Sante Fe provides access to--and maintenance of--its
infrastructure for Metrolink, Sounder, and Metra. In addition, private
transportation companies, including Bombardier, Connex, and Herzog,
provide services to seven commuter rail agencies. These companies
provide a range of services, including operations, equipment
maintenance, infrastructure maintenance, and dispatching.
While some freight railroads currently provide services to commuter
rail agencies, most are not actively pursuing additional commuter rail
contracts and would be hesitant to take over services provided by
Amtrak if it abruptly ceased to provide services and infrastructure.
Freight railroad officials told us they have limited resources to
dedicate to commuter rail service because the freight industry
continues to grow and expand. The growth of freight traffic also
presents a greater opportunity for freight railroads to make a profit
and limits the capacity freight railroads have to add commuter trains
on their infrastructure. In addition, most of the freight railroad
officials with whom we spoke told us liability is an issue in providing
commuter rail service.
Private transportation providers, on the other hand, expressed interest
in expanding their role in the commuter rail market and in taking over
services provided by Amtrak if Amtrak was to abruptly cease providing
services and infrastructure access to commuter rail agencies. However,
officials from some private transportation companies told us that they
would need sufficient time to ensure a smooth transition, noting it
would take months to work out all the operational and administrative
details, such as complying with FRA safety regulations--particularly if
the new operator was unable to hire Amtrak employees. For example, in
taking over Metrolink's service from Amtrak in July 2005, Connex had to
take responsibility for all regulatory requirements pertaining to the
operation of the railroad, including, among other things, setting up a
drug and alcohol testing regime, obtaining engineer certification, and
setting up operating rules. According to Metrolink officials, it took
Connex about 4 months to satisfy these regulatory requirements from the
time the contract was awarded.
In addition to addressing these issues, private transportation
companies would need time to secure a workforce to provide the
services. The private transportation companies do not have a pool of
available and qualified rail employees to take over commuter rail
services. Rather, these companies would need to hire, and possibly
train, employees. Officials from the private transportation companies
told us that the quickest and easiest option would be to hire the
Amtrak employees currently providing the commuter rail services. Hiring
these employees would provide the private transportation company a
qualified workforce that is knowledgeable about the specific service,
and therefore help ensure a smooth transition, according to officials
from these private transportation companies. However, there is no
guarantee that the Amtrak employees would want to switch to the private
transportation company providing the commuter service. For example, in
taking over MBTA's services from Amtrak, MBCR entered into labor
agreements with 14 separate unions representing 1,600 Amtrak employees
within 6 months of winning the contract.[Footnote 32] According to
union representatives, MBCR was successful in hiring Amtrak employees
because it was willing to "come to the table" and negotiate a fair
contract that continued to participate in the railroad retirement-
system and offered higher wages to employees than what they received
working for Amtrak. As a result, MBCR was able to reach an agreement
with all Amtrak employees in 3 months. In contrast, Bombardier was
unable to hire sufficient Amtrak employees when it took over Amtrak's
maintenance-of-equipment contract with Metrolink. According to union
representatives, this situation can be expected as experienced railroad
labor seeks to remain in the railroad retirement-system and retain
other labor protections--conditions that Bombardier did not offer. As a
result, Bombardier had to hire new maintenance staff with very little
railroad experience and train them on Metrolink's procedures and
equipment. According to Metrolink officials, this contributed to a
"turbulent" and lengthy transition.
The labor union representatives with whom we spoke told us that many
senior Amtrak employees would be hesitant to accept a job offer from a
private transportation company that did not have Amtrak's experience
and understanding of the railroad business. In accepting an offer with
another company, Amtrak employees may not only lose their employee
benefits and collective bargaining agreements, but also could lose
their seniority. That is, these employees would not likely transition
to a new service provider and expect to maintain the same level of
seniority they had with Amtrak. As a result, despite Amtrak's long-term
financial uncertainty, Amtrak employees are cautious about taking on
the risk of working for a private transportation company.
In addition to securing a workforce, officials from private
transportation companies with whom we spoke identified several other
challenges, such as the regulatory process, in competing for or
assuming commuter rail services. The most frequently cited challenge
was liability. According to private transportation company officials,
they carefully review liability and insurance language in evaluating
whether or not they will bid on a particular commuter rail contract;
although, according to an official from one private transportation
company, liability and insurance language has never prevented it from
submitting a bid for a commuter rail contract. These factors are
particularly important when negotiating with a commuter rail agency
that operates its service over infrastructure owned by freight
railroads. According to an official from one private transportation
company, freight railroads require public entities, including commuter
rail agencies, to carry upwards of $200 million for liability insurance
to operate over their track and also include expensive indemnification
language in commuter contracts. Therefore, some commuter rail agencies
are now using shared-liability contracts for services, in which the
operator and commuter rail agency share exposure to liability risk. For
example, in taking over the train operations contract from Amtrak, one
commuter rail agency required its private operator to assume some of
the liability if it was found to have shown willful misconduct in
causing an accident. Specifically, if that operator is found
responsible for an incident causing over $500,000 in damages, the
operator is responsible for contributing $500,000 toward the damages up
to two times a year.
Some Commuter Rail Agencies Are Moving away from Amtrak to Provide
Services, but Others Like Having Amtrak as an Option:
Seven commuter rail agencies currently contract with private
transportation companies to provide services, such as operations and
equipment maintenance. Of these seven commuter rail agencies, two
agencies had contracted with Amtrak for services in the past, but in
one case, moved away from Amtrak because of dissatisfaction with the
service Amtrak was providing and its unresponsiveness in meeting the
needs of the commuter rail agency. In the other case, Amtrak withdrew
from the commuter rail agency's most recent procurement process and did
not submit a proposal in response to the agency's RFP to continue
providing services.
Other commuter rail agencies have also expressed interest in moving
away from contracting with Amtrak for services, including commuter rail
agencies on the NEC. These agencies cited a number of reasons,
including Amtrak's unstable federal funding and long-term planning
challenges, in their decisions to reduce their reliance on Amtrak--
either by conducting more of their services in-house, or by contracting
with a private transportation company. For example, one commuter rail
agency constructed its own maintenance facilities so it would not have
to rely entirely on Amtrak to service its equipment at Amtrak
facilities. In addition, another commuter rail agency recently
conducted a procurement process and recommended that a private
transportation company be awarded the contract to provide the services
previously provided by Amtrak. According to officials from the American
Public Transportation Association, Amtrak's threatened service shutdown
in 2002 over the level of federal funding for Amtrak may also have
caused some commuter rail agencies to contemplate other service
providers more seriously.
Although some commuter rail agencies have moved away from contracting
with Amtrak for services, officials from a few commuter rail agencies
stated that they would like Amtrak to continue providing services to
commuter rail agencies. According to these officials, Amtrak has a
history of providing services to commuter rail agencies and its
employees are knowledgeable about the commuter rail business. In
addition, commuter rail agencies would like to have a number of firms
or companies to choose from when competitively procuring service
contracts. Two commuter rail agency officials mentioned that having
more competition provides commuter rail agencies more flexibility in
choosing a service provider, and can reduce costs.
Conclusions:
Given the dependence of most commuter rail agencies on Amtrak for
services and infrastructure, an abrupt Amtrak cessation would likely
result in major disruptions or shutdowns of commuter rail services
throughout the country. This could strain regional transportation
systems, as hundreds of thousands of regular commuter rail passengers
would be forced to seek alternative forms of transportation. Although
commuter rail agencies have some contingency plans and the STB has the
authority to direct commuter rail service, an abrupt Amtrak cessation
would create a worst-case scenario for many commuter rail agencies,
especially those that use Amtrak-owned infrastructure in the densely
populated NEC.
Certainly, commuter rail issues should not drive or derail policy-
makers' efforts to reform Amtrak. However, given the importance of
commuter rail services to many regions and the negative impact an
abrupt Amtrak exit would create, it seems appropriate that these issues
are included as federal policy makers consider the debate over Amtrak.
In our October 2005 report on Amtrak's management,[Footnote 33] we
suggested that Congress consider establishing a nationwide policy for
intercity passenger rail that would address, among other things, the
interests of the diverse set of Amtrak stakeholders and limit
unintended consequences to these parties. Given the complex
relationships between commuter rail agencies and Amtrak, commuter rail
agencies are one such stakeholder, and the effect of an abrupt Amtrak
shutdown on commuter rail agencies would be an unintended consequence
of some Amtrak reform proposals. Any such negative impact on commuter
rail agencies should be taken into account when developing any national
policy for intercity passenger rail.
Our work indicates that two critical issues for commuter rail agencies
that would need to be addressed in the event of an abrupt Amtrak
shutdown are (1) the potential loss of Amtrak's skilled labor force and
(2) access to Amtrak-owned infrastructure. Without access to key
infrastructure, such as the NEC, and a skilled labor force to crew
trains and maintain the right-of-way, among other things, commuter rail
service disruptions throughout the nation are inevitable. A related
issue is the time that commuter rail agencies need to transition from
Amtrak to other operators in the event of an Amtrak shutdown. According
to some commuter rail agencies and private transportation operators, a
transition between qualified operators takes months, not weeks. To
date, the various Amtrak reform proposals do not comprehensively
address these issues. As deliberations about Amtrak move forward, such
issues should be considered and addressed so that disruptions to
commuter rail service can be minimized.
To fully understand the relationship between commuter rail agencies and
Amtrak, it will also be important to obtain better information on the
costs Amtrak incurs--and the revenue it earns--in providing services
and infrastructure access to commuter rail agencies. Although Amtrak
has made some progress in improving its accounting systems and
practices, its current practices do not allow for full transparency. In
particular, Amtrak's financial reports do not clearly show the revenues
earned and costs incurred for providing services and infrastructure
access to commuter rail agencies. Moreover, Amtrak lacks a methodology
to adequately allocate shared costs to different commuter rail users.
Consequently, it is difficult to determine what Amtrak's true costs are
in providing services and infrastructure to commuter rail agencies, and
whether commuter rail agencies are paying their "fair share."
Furthermore, the lack of this type of information clouds the
negotiation process between commuter rail agencies and Amtrak--that is,
commuter rail agencies do not necessarily know if they are being over-
or undercharged for services. Likewise, Amtrak management cannot make
fully informed decisions about competing for commuter rail contracts.
As Amtrak's precarious financial position raises the possibility of an
Amtrak cessation of service, it is prudent that commuter rail agencies
and the responsible federal agencies plan for such an event. These
plans are in place in many commuter rail agencies and include a range
of options--from shutting down service to taking over control of key
infrastructure by the commuter rail agency. STB and FRA's ability to
order and fund directed service for commuter rail agencies is a
limited, short-term option. However, directed service is not a panacea-
-rather there is agreement that service disruptions would occur in a
directed-commuter-service scenario. Moreover, the cost of providing
directed service is unknown. Current estimates of providing this
service--including the $60 million estimate for 2 months of directed
service, or the $360 million estimate for an entire year of service--
are, at best, rough estimates of how much such service would cost.
Without accurate cost estimates, federal policy makers cannot make
fully informed decisions about directed service.
Recommendations:
In order to provide more information to federal policy makers involved
in the debate over Amtrak, we recommend that the Secretary of
Transportation direct FRA, in consultation with STB and commuter rail
agencies, to further refine cost estimates of commuter rail directed-
service scenarios.
To ensure that Amtrak provides useful information to both its internal
and external stakeholders, including commuter rail agencies that
contract with Amtrak, we recommend that the president of Amtrak improve
its accounting practices, as well as its financial reports, to clearly
show all revenues earned and all costs incurred when providing services
and infrastructure access to commuter rail agencies. This information
could increase the clarity of Amtrak's costs for providing services and
access to infrastructure to Amtrak management, commuter rail agencies,
and Congress. It would also allow for a more informed debate about how
commuter rail agencies interact with Amtrak and compensate it for
access to critical infrastructure and services.
Agency Comments:
We provided DOT officials a copy of our draft report for their review
and comment. On April 6, 2006, we met with DOT officials, including
DOT's Audit Liaison, FRA's Assistant Chief Counsel, and an FTA
Economist; as well as STB staff, including the Associate Director for
the Office of Economics, Environmental Analysis, and Administration, to
obtain their comments on our draft. These officials and staff
represented the views of their respective agencies. Overall, they
generally agreed with the draft report's findings and the intention of
the recommendation. DOT officials indicated that the draft report
provides useful information about the implications of directed service
for commuter railroads. Further, they indicated that the draft report
does a good job of explaining how Amtrak's internal costing and
contracting systems do not adequately or accurately identify the costs
incurred and the revenues received for specific lines-of-business, such
as those provided for commuter railroads. DOT officials recognized that
these Amtrak accounting systems were not designed with this intent in
mind. As a result, DOT officials stated that until Amtrak accounting
and contracting systems provide better documentation and greater
clarity with respect to individual lines of business, further
refinements of cost estimates associated with various commuter rail
directed-service scenarios will continue to prove problematic.
According to FRA officials, in light of the data limitations,
attempting further refinements in the cost scenarios associated with
the unlikely event of an Amtrak shutdown does not represent the best
possible use of the limited staff resources. FRA officials indicated
their preference is to continue focusing their resources on priorities
related to maintaining and improving Amtrak operations. FRA and FTA
officials and STB staff also provided technical clarifications to the
draft report, which we incorporated as appropriate.
We recognize that FRA, like other federal agencies, has resource
constraints and must focus those resources on certain priorities.
However, given previous and current debate over the future of Amtrak,
we believe providing policy makers with accurate information as to the
implications of directed service--including the costs of such services-
-is a worthwhile investment of agency resources and deserves some level
of attention. Moreover, although the limitations in Amtrak's accounting
systems that we detail in the report would prevent the development of a
precise cost estimate of directed service, we believe that refinements
could be made using existing information from Amtrak and commuter rail
agencies. Further, as FRA works with Amtrak to improve its accounting
systems--and thus improve its cost data--it could further refine the
directed service cost estimates. DOT officials acknowledged that the
current estimates--which are based on a limited set of assumptions--are
inaccurate, and most likely significantly underestimate the true costs
of directed service. Therefore, any refinements would be a step in the
right direction in providing better information to policy makers.
We also provided Amtrak officials a copy of the draft report for their
review and comment. Amtrak generally agreed with the report's findings,
conclusions, and recommendations. Amtrak provided technical
clarifications to the draft report, 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 of this report
to congressional committees with responsibilities for commuter rail
issues; the Secretary of Transportation; the Acting President of
Amtrak; the Administrators of FRA and FTA; the Chairman of STB; and the
Director, Office of Management and Budget. We also will make copies
available to others upon request. In addition, this report will be
available at no charge on GAO's Web site at http://www.gao.gov.
If you or your staff have any questions on matters discussed in this
report, please contact me on (202) 512-2834 or at heckerj@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report can be found in appendix III.
Sincerely,
Signed by:
JayEtta Z. Hecker:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Scope and Methodology:
To address our objectives, we contacted officials from all existing
(and two proposed) commuter rail agencies, the four largest Class I
railroads, and private transportation companies that currently operate
commuter rail service in the U.S. To identify the universe of existing
and proposed commuter rail systems, we used information published by
and provided to us by the American Public Transportation Association
(APTA). We reviewed this information with APTA in order to identify
transit agencies that are currently providing commuter rail services
and proposed commuter rail agencies that were the closest to becoming
operational. APTA categorized proposed commuter rail agencies as either
"immediate," "midway," or "later"; those in the immediate category were
considered closest to becoming operational. Using these sources we
identified 18 existing commuter rail agencies and 2 proposed commuter
rail agencies. While APTA considered 8 proposed commuter rail agencies
as immediate, we selected the 2 proposed commuter rail agencies APTA
officials indicated were likely to begin operations during the course
of our review. To identify the four largest Class I railroads, we
reviewed the February 2005 Surface Transportation Board (STB) Report of
Railroad Employment and information provided by the Association of
American Railroads (AAR). AAR also provided contact information for
each Class I railroad. To identify private transportation providers, we
interviewed officials from APTA, the National Railroad Passenger
Corporation (Amtrak), freight railroads, and commuter rail agencies to
ask about companies that currently operate commuter trains or provide
other services. We subsequently interviewed officials at all of the
private transportation companies identified by these officials. Table 4
lists the names and locations of the commuter rail agencies, freight
railroads, and private transportation providers we contacted.
Table 4: Names and Locations of Commuter Rail Agencies, State
Departments of Transportation, Class I Freight Railroads, and Private
Non-Railroad Companies Interviewed:
Existing commuter rail agencies;
Name: Altamont Commuter Express;
Location: Stockton, CA.
Name: Connecticut Department of Transportation (Shore Line East line);
Location: New Haven, CT.
Name: Maryland Transit Administration (MARC);
Location: Baltimore, MD.
Name: Massachusetts Bay Transportation Authority (MBTA);
Location: Boston, MA.
Name: MTA Long Island Rail Road;
Location: New York, NY.
Name: MTA Metro-North;
Location: New York, NY.
Name: New Jersey Transit Corporation;
Location: Newark, NJ.
Name: Northeast Illinois Regional Commuter Railroad Corporation
(Metra);
Location: Chicago, IL.
Name: North County Transit District (Coaster);
Location: Oceanside, CA.
Name: Northern Indiana Commuter Transportation District;
Location: Chesterton, IN.
Name: Peninsula Corridor Joint Powers Board (Caltrain);
Location: San Francisco, CA.
Name: Pennsylvania Department of Transportation (PennDOT);
Location: Harrisburg, PA.
Name: Southeastern Pennsylvania Transportation Authority (SEPTA);
Location: Philadelphia, PA.
Name: Southern California Regional Rail Authority (Metrolink);
Location: Los Angeles, CA.
Name: Sound Transit, Central Puget Sound Regional Transportation
Authority;
Location: Seattle, WA.
Name: Tri-County Commuter Rail Authority;
Location: Pompano Beach, FL.
Name: Trinity Rail Express;
Location: Dallas, TX.
Name: Virginia Railway Express;
Location: Alexandria, VA.
Proposed commuter rail agencies;
Name: Nashville Regional Transportation Authority;
Location: Nashville, TN.
Name: New Mexico Rail Runner;
Location: Albuquerque, NM.
State Department of Transportation;
Name: Delaware Department of Transportation (DELDOT)[A];
Location: Wilmington, DE.
Class I railroads;
Name: BNSF Railway;
Location: Fort Worth, TX.
Name: CSX Transportation;
Location: Jacksonville, FL.
Name: Norfolk Southern;
Location: Norfolk, VA.
Name: Union Pacific Railroad Company;
Location: Omaha, NE.
Private transportation providers;
Name: Massachusetts Bay Commuter Railroad;
Location: Boston, MA.
Name: Bombardier, Inc;
Location: Montreal, Quebec, Canada.
Name: Connex North America;
Location: Silver Spring, MD.
Name: Herzog Transit Services;
Location: St. Joseph, MO.
Name: Washington Group International;
Location: Boise, ID.
Source: GAO.
Note: The commuter rail agencies that we visited are listed in italics.
[A] In addition to its regular commuter rail service, SEPTA also
provides a "turnkey," or contracted commuter rail service, for the
Delaware Department of Transportation (DELDOT) between Newark/
Wilmington, DE and Philadelphia, PA. Information on SEPTA's use of
Amtrak services and infrastructure for the Delaware service are
included in SEPTA's data. Therefore, we did not consider DELDOT as a
separate commuter rail agency.
[End of table]
We conducted site visits to seven existing commuter rail agencies and
one proposed commuter rail agency. We selected these agencies based on
their dependence on Amtrak for services and access to infrastructure,
as well as their location. Specifically, based on interviews with each
commuter rail agency, we divided each commuter rail agency's
relationship into several categories based on their reliance on
Amtrak's infrastructure and services, and their current or past
relationship with Amtrak. These categories included: the extent to
which commuter rail agencies rely on Amtrak for infrastructure and
services, whether the commuter rail agency operates on the Northeast
Corridor (NEC), whether the commuter rail agency no longer contracts
with Amtrak for services, and whether a newer commuter rail agency
chose not to contract with Amtrak. Some commuter rail agencies were
placed into multiple categories. Using this categorization, we selected
commuter rail agencies that represent a range of reliance on Amtrak and
are geographically disperse. During the site visits, we interviewed
senior level management and toured operation, dispatching, and
maintenance facilities. In addition to the site visits, we conducted
semi-structured interviews with officials from all 18 existing commuter
rail agencies and 2 proposed commuter rail agencies. We analyzed the
information we collected from the site visits and semi-structured
interviews to identify shared concerns across the commuter rail
agencies we interviewed.
In addition, to obtain information on the options commuter rail
agencies will have if Amtrak abruptly ceased to provide services and
infrastructure access, we conducted semi-structured interviews with all
of the existing commuter rail agencies and asked them to identify short-
and long-term contingencies if Amtrak abruptly ceases to provide
services and infrastructure to commuter rail agencies. We also
interviewed representatives from the American Short Line and Regional
Railroad Association (ASLRRA) to get an understanding of non-Class I
railroads' interest in providing services to commuter rail agencies. We
analyzed the information we collected from the semi-structured
interviews to determine private transportation companies' and freight
railroads' interest in entering the commuter rail market, as well as
barriers to doing so.
We also conducted informational interviews with the Federal Railroad
Administration, STB, the Federal Transit Administration, and Amtrak;
and with representatives from industry and government associations,
including AAR, APTA, ASLRRA, the Coalition of Northeastern Governors
and the National Railroad Construction and Maintenance Association. We
also interviewed representatives from 10 of Amtrak's 15 total labor
unions. (See table 5.) In addition, we interviewed a representative
from the Law Office of Jenner and Block to get background information
on railroad bankruptcy law.
Table 5: List of Labor Unions:
Name: Brotherhood of Locomotive Engineers and Trainmen.
Name: Transport Workers Union of America.
Name: United Transportation Union.
Name: Transportation Workers Union.
Name: Sheet Metal Workers International Association.
Name: American Train Dispatchers Association.
Name: International Brotherhood of Electrical Workers.
Name: Brotherhood of Maintenance of Way Employees.
Name: Transportation Communications International Union.
Name: Brotherhood of Railroad Signalmen.
Source: GAO.
[End of table]
Finally, we reviewed statutes, government reports on Amtrak, recent
Amtrak reform proposals from the 109TH Congress, and our past reports.
Additionally, we reviewed Amtrak, STB, FRA, and APTA documents and
statistics, as well as contracts and requests for proposals for
services and access to infrastructure between several commuter
railroads and Amtrak (or other operators).
To ensure the reliability of the information presented in this report,
we corroborated information provided from commuter rail agency
officials and Amtrak officials about aspects of their contractual
relationship with other sources. For example, we compared information
we obtained from commuter rail agencies about the extent to which they
rely on Amtrak for access to infrastructure and services against
information obtained from Amtrak, as well as statistics compiled by STB
staff and FRA. Based on our assessment, we concluded that the
information provided from commuter rail agency officials and Amtrak
officials about aspects of their contractual relationship was
sufficiently reliable for the purposes of this report.
A limitation of our review is that we only focused on the impact of an
abrupt Amtrak cessation on commuter rail operations. For example, if
policy makers acted on legislative proposals that end or substantially
reduce federal funding, an Amtrak bankruptcy or shutdown could quickly
follow. Multiple bills to reform intercity passenger rail have been
proposed in recent years--and these bills, if enacted, could result in
outcomes other than an Amtrak cessation. However, we did not examine
how these other outcomes or scenarios would impact commuter rail
operations.
[End of section]
Appendix II: Commuter Rail Agency Use of Amtrak Services and
Infrastructure:
Table 6: Commuter Rail Agency Use of Amtrak Services and
Infrastructure:
Existing commuter rail agencies;
Altamont Commuter Express (ACE);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 7%;
Dispatching: 7%;
Amtrak-owned or Amtrak-managed stations and platforms: Minimal;
Other services: Minimal;
Does this commuter operate over Amtrak-owned NEC?: No.
Connecticut Department of Transportation's Shore Line East and New
Haven Lines (SLE);
Train operations: 100%;
Maintenance of equipment: 100%;
Maintenance-of-way: 100%;
Dispatching: 100%;
Amtrak-owned or Amtrak-managed stations and platforms: Significant;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: Yes.
Maryland Transit Administration (MARC);
Train operations: 50%;
Maintenance of equipment: 83%;
Maintenance-of-way: 50%;
Dispatching: 50%;
Amtrak-owned or Amtrak-managed stations and platforms: Critical point;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: Yes.
Massachusetts Bay Transportation Authority (MBTA);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 7%;
Dispatching: N/A[A];
Amtrak-owned or Amtrak-managed stations and platforms: Minimal;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: Yes.
MTA Long Island Rail Road (LIRR);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 3%;
Dispatching: 50%;
Amtrak- owned or Amtrak-managed stations and platforms: Critical point;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: Yes.
MTA Metro-North Rail Road;
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
New Jersey Transit Corporation (NJT);
Train operations: 0%;
Maintenance of equipment: 19%;
Maintenance-of-way: 27%;
Dispatching: 55%;
Amtrak-owned or Amtrak-managed stations and platforms: Critical point;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: Yes.
North County Transit District (Coaster)[B];
Train operations: 100%;
Maintenance of equipment: 100%;
Maintenance-of-way: 100%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
Northeastern Illinois Commuter Railroad Corporation (Metra);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 2.3%;
Dispatching: 0.5%;
Amtrak-owned or Amtrak-managed stations and platforms: Critical point;
Other services: Minimal;
Does this commuter operate over Amtrak-owned NEC?: No.
Northern Indiana Commuter Transportation District (NICTD);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak- owned NEC?: No.
Peninsula Corridor Joint Powers Board (Caltrain);
Train operations: 100%;
Maintenance of equipment: 100%;
Maintenance-of-way: 65%;
Dispatching: 100%;
Amtrak-owned or Amtrak-managed stations and platforms: Significant;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: No.
Pennsylvania Department of Transportation (PENNDOT);
Train operations: 100%;
Maintenance of equipment: 100%;
Maintenance-of-way: 100%;
Dispatching: 100%;
Amtrak-owned or Amtrak-managed stations and platforms: Significant;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: Yes.
Sound Transit, Central Puget Sound Regional Transportation Authority
(Sounder);
Train operations: 0%;
Maintenance of equipment: 100%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak- managed stations and platforms: Minimal;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
Southeastern Pennsylvania Transportation Authority (SEPTA)[C];
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 39%;
Dispatching: 54%;
Amtrak-owned or Amtrak-managed stations and platforms: Minimal;
Other services: Significant;
Does this commuter operate over Amtrak-owned NEC?: Yes.
Southern California Regional Rail Authority (Metrolink);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 5%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak- owned NEC?: No.
Trinity Railway Express (TRE);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
Tri-County Commuter Rail Authority (Tri-Rail);
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
Virginia Railway Express (VRE);
Train operations: 100%;
Maintenance of equipment: 66%;
Maintenance-of-way: 1%;
Dispatching: 2%;
Amtrak- owned or Amtrak-managed stations and platforms: Critical point;
Other services: Minimal;
Does this commuter operate over Amtrak-owned NEC?: Yes.
Proposed commuter rail agencies;
New Mexico Rail Runner Express;
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
Nashville Music City Star;
Train operations: 0%;
Maintenance of equipment: 0%;
Maintenance-of-way: 0%;
Dispatching: 0%;
Amtrak-owned or Amtrak-managed stations and platforms: None;
Other services: None;
Does this commuter operate over Amtrak-owned NEC?: No.
Source: GAO analysis of commuter rail agency responses.
[A] With the exception of one route dispatched entirely by Amtrak, all
of MBTA's routes are dispatched by more than one company. Because of
this, MBTA officials stated that it is not possible to represent the
percent of trains dispatched by each of its dispatching service
providers. MBTA officials indicated that Amtrak provides dispatching
for MBTA's 34 Attelboro line trains, and the initial dispatching for
about two-thirds of all other MBTA trains before transferring them to
another provider.
[B] Coaster's contract with Amtrak expires on June 30, 2006. Amtrak was
not selected to continue the service beyond this point.
[C] In addition to its regular commuter rail service, SEPTA also
provides a "turnkey," or contracted commuter rail service, for the
Delaware Department of Transportation between Newark/Wilmington, DE and
Philadelphia, PA. Information on SEPTA's use of Amtrak services and
infrastructure for the Delaware service are included in SEPTA's data.
Table Definitions:
"Other services" includes police/security, ticketing, and traction
power.
The following definitions refer to the station and platform category
and other services .
None = No reliance on Amtrak for access to--or management of--stations
and platforms. No reliance on Amtrak for "other services."
Minimal = Amtrak provides access to--or management of--less than 25
percent of the stations and platforms used by the commuter rail agency.
Amtrak provides less than half of one "other service."
Significant = Amtrak provides access to--or management of--more than 25
percent of the stations and platforms used by the commuter rail agency.
Amtrak provides more than half of one or more of the "other services,"
or provides less than half of one or more "other services"--but the
service allows the commuter rail agency to access a critical point for
its operations (e.g., a critical station).
Critical point = Although the commuter rail agency may rely on Amtrak
for access to--or management of--less than 25 percent of the stations
and platforms it uses, one of these Amtrak-owned stations is critical
to the service (e.g., a majority of riders enter or exit the commuter
service at this point, or the station is a terminus for several of the
agency's lines).
[End of table]
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
JayEtta Z. Hecker, Director, (202) 512-2834, heckerj@gao.gov:
Acknowledgments:
In addition to those named above, Jay Cherlow, Nikki Clowers, Greg
Hanna, Joah Iannotta, Bert Japikse, Nancy Lueke, Sara Ann Moessbauer,
Josh Ormond, Robert Owens, Eileen Tumalad, and Alwynne Wilbur made key
contributions to this report.
(544111):
FOOTNOTES
[1] Class I railroads are the largest railroads, as defined by
operating revenue, and account for the majority of U.S. rail freight
activity. There are three classes of railroads. The Surface
Transportation Board (STB) designates the class of railroad and in 2004
defined Class I railroads as railroads with operating revenues of $289
million or more.
[2] Rights-of-way include the fixed infrastructure required for train
operations, including tracks and signals.
[3] In addition, in fiscal year 2001, an average of 38 freight trains
used the NEC each day.
[4] The Federal Railroad Administration (FRA) exercises jurisdiction
over all areas of railroad safety under title 49 U.S.C., chapter 201.
[5] STB has this authority under section 11123 of title 49 U.S.C. STB's
predecessor, the Interstate Commerce Commission, also had this
authority.
[6] "Final Report: Directed Service for Amtrak-Dependent Carriers,"
prepared by The Woodside Consulting Group, Inc., for the FRA (Palo
Alto, CA: Oct., 2005), 2.
[7] Congress directed the Secretary of Transportation to withhold $60
million for directed commuter and freight service from Amtrak's fiscal
year 2004, 2005, and 2006 appropriations.
[8] GAO, Amtrak Management: Systemic Problems Require Actions to
Improve Efficiency, Effectiveness, and Accountability, GAO-06-145
(Washington, D.C.: Oct. 2005), 6.
[9] Amtrak's fiscal year 2006 appropriation was $1.3 billion.
[10] The nine commuter rail agencies in the Northeast are the Long
Island Rail Road, the Maryland Transit Administration's MARC Commuter
Service, the Massachusetts Bay Transportation Authority, Metro-North
Railroad, New Jersey Transit (NJT), the Pennsylvania Department of
Transportation's Keystone Service from Harrisburg to Philadelphia, the
Southeastern Pennsylvania Transportation Authority (SEPTA), the
Connecticut Department of Transportation's Shore Line East service, and
the Virginia Rail Express. Metro-North, which operates in New York and
Connecticut, is the only commuter rail agency in the Northeast that
does not use any Amtrak-owned track or infrastructure.
[11] The Pennsylvania Department of Transportation service uses Amtrak-
owned infrastructure from Harrisburg, PA, to Philadelphia that connects
with the NEC.
[12] Amtrak also provides traction power for one SEPTA-owned line in
its entirety (other than those lines that are on the NEC) and for
certain other NJT lines.
[13] Based on passenger counts, LIRR and NJT account for 92.6 percent
of arriving passengers, while Amtrak accounts for 7.4 percent.
[14] This number will be reduced to two in 2006, as Amtrak was not
selected to be the service provider for San Diego's Coaster service.
[15] The remainder of the services (e.g., train operations, equipment
maintenance, and the rest of the dispatching) are provided by SEPTA
employees.
[16] Commuter rail contracts can either be a product of a competitive
or non-competitive process. In a competitive process, a commuter rail
agency requests proposals for a certain set of services and several
companies submit offers to provide that service. The companies may be
given feedback and an opportunity to refine their offers. One or more
companies are ultimately selected for a contract. Where Amtrak owns the
infrastructure necessary for commuter service, commuter rail agencies
have entered into non-competitive contracts with Amtrak--for example,
to access the Amtrak-owned NEC, Chicago Union Station, or Holgate
Maintenance Yard in Seattle. A non-competitive contract is one in which
the cost is developed through negotiations with a single provider such
as Amtrak.
[17] STB is the successor to the Interstate Commerce Commission (ICC).
[18] According to STB staff, no commuter rail agency has petitioned the
Board to apply the ICC ruling. Nevertheless, it serves as an option
should Amtrak and those commuter rail agencies subject to the ruling
fail to reach agreement as to the terms and conditions of access.
Moreover, a senior Amtrak official stated that commuter rail agencies
covered by the ICC ruling use it as the basis for access negotiations.
[19] SEPTA provides commuter rail service for the Delaware Department
of Transportation between Newark/Wilmington, DE, and Philadelphia, PA.
This service was initiated after Amtrak's inception, and therefore,
Delaware's Department of Transportation also negotiates a price for
accessing the NEC.
[20] SEPTA and Amtrak are finalizing an agreement to invest $380
million on portions of the Amtrak-owned Keystone Corridor over 11
years.
[21] GAO-06-145.
[22] According to FRA officials, they are currently working with Amtrak
to develop a plan for revamping its accounting system.
[23] Our report focuses on the impact of an abrupt Amtrak cessation on
commuter rail operations. For example, if policy makers acted on
legislative proposals that end or substantially reduce federal funding,
an Amtrak bankruptcy or shutdown could quickly follow. Multiple bills
to reform intercity passenger rail service have been proposed in recent
years--and these bills, if enacted, could result in outcomes other than
an Amtrak cessation. However, we did not examine how these other
outcomes or scenarios would impact commuter rail operations.
[24] GAO-06-145.
[25] For more information on issues involved in an Amtrak liquidation,
see GAO, Intercity Passenger Rail: Potential Financial Issues in the
Event That Amtrak Undergoes Liquidation, GAO-02-871 (Washington, D.C.:
Sept. 20, 2002).
[26] GAO-06-145.
[27] According to the statute, "[for purposes of the section with
regard to directed service,] the National Railroad Passenger
Corporation and any entity providing commuter rail passenger
transportation shall be considered rail carriers subject to the Board's
jurisdiction." 49 U.S.C. § 11123(e).
[28] The Delmarva Peninsula refers to the peninsula between the
Chesapeake Bay and the Atlantic Ocean made up of territory from the
states of Delaware, Maryland, and Virginia.
[29] STB staff have been working with FRA officials to identify
possible implementation plans, but STB staff said that there has been
no need for a meeting of the working group tasked with this activity
since Amtrak's fiscal year 2006 appropriation was passed, which
provided Amtrak nearly $1.3 billion. The Secretary of Transportation
holds an additional $40 million that may be released to Amtrak for
efficiency incentive grants. This appropriation made Amtrak's financial
situation potentially less dire and significantly reduced the chance
that Amtrak would be in a bankruptcy situation in fiscal year 2006.
[30] The railroad retirement-system provides retirement and disability
benefits to the nation's retired railroad workers and their survivors,
including those of Amtrak. If employees leave a company that
participates in the railroad retirement-system, they may face reduced
retirement benefits. Employees moving from one participant company to
another (e.g., from Amtrak to a freight railroad) would retain their
full benefits. For more information on the railroad retirement-system,
see GAO, Intercity Passenger Rail: Potential Financial Issues in the
Event That Amtrak Undergoes Liquidation, GAO-02-871 (Washington, D.C.:
Sept. 20, 2002).
[31] In fiscal years 2004 and 2005, this money was released to Amtrak
in the fourth quarter when it was clear that Amtrak would not run out
of money and enter into bankruptcy before the end of the fiscal year.
[32] As part of its request for proposal process, MBTA required all
bidders to offer comparable positions to the existing workforce,
including key terms of the current contract, such as wages and
benefits.
[33] GAO-06-145.
GAO's Mission:
The Government Accountability Office, the investigative arm of
Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO's commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains
abstracts and full-text files of current reports and testimony and an
expanding archive of older products. The Web site features a search
engine to help you locate documents using key words and phrases. You
can print these documents in their entirety, including charts and other
graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as "Today's Reports," on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order
GAO Products" heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office
441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director,
NelliganJ@gao.gov
(202) 512-4800
U.S. Government Accountability Office,
441 G Street NW, Room 7149
Washington, D.C. 20548:
