High Speed Rail
Learning From Service Start-ups, Prospects for Increased Industry Investment, and Federal Oversight Plans
Gao ID: GAO-10-625 June 17, 2010
The American Recovery and Reinvestment Act (Recovery Act) and subsequent appropriations have dramatically increased federal funds available for high speed intercity passenger rail from $120 million in fiscal year 2008 and fiscal year 2009 combined to $10.5 billion available in fiscal year 2010. Other issues, such as developing industry capacity to supply rail equipment and fostering multiyear public support for such systems must be resolved. As part of its efforts to assess Recovery Act initiatives, GAO reviewed (1) how states started or improved passenger rail services in the recent past, (2) rail industry plans to accommodate the increased passenger rail investments, and (3) Federal Railroad Administration (FRA) plans to oversee the use of federal intercity passenger rail funds. GAO reviewed federal legislation; interviewed state, industry and federal officials; and reviewed selected literature. GAO is not making any recommendations. The Department of Transportation did not express an overall opinion on a draft of this report. It did provide technical and clarifying comments, which GAO incorporated.
State successes to initiate or improve intercity passenger rail services in the recent past (the last 15 years), hinged largely on their abilities to build public and political support, secure funding, obtain equipment, and manage their services. Public and political support and funding provided a foundation for these services. States acquired equipment by using collaborative and cost-saving approaches. Further, states managed their rail services by building consensus with stakeholders, borrowing expertise, and developing state capacity. All of these activities will be important for states that seek to initiate or improve services in the future, including developing conventional passenger rail (operating at speeds up to 79 miles per hour), higher speed passenger rail (operating at speeds up to 150 miles per hour), and even high speed rail services (operating at speeds of 150 miles per hour or more). Rail industry stakeholders are optimistic that they can meet increased public investment in intercity passenger rail; however, they are looking for (1) federal leadership in setting safety standards for high speed rail and in promoting interstate cooperation for service across state lines, among other things, and (2) stable funding to create a structure for developing a passenger rail marketplace. Additionally, stakeholders said that a stable federal funding stream would encourage firms to enter and invest in the intercity passenger rail marketplace. However, even with strong federal leadership and funding it could take several years to provide the necessary infrastructure, such as for building new passenger rail cars, potentially making it difficult to spend some Recovery Act high speed rail funds by 2017, as required by law. As a result of Recovery Act funding and the Passenger Rail Investment and Improvement Act of 2008, FRA has had to develop a rail program and an oversight approach. Among other things, FRA had to quickly draft a preliminary national rail plan and a high speed rail strategic vision, as well as develop a program to distribute Recovery Act funds. As a result, FRA officials stated that they concentrated their efforts on meeting these requirements and they are currently designing their oversight program. FRA is in its early stages of setting up agreements with its state grantees and hiring both FRA and contractor personnel to oversee how the federal funds are used. FRA is planning to release another version of its national rail plan in September 2010 which it expects to discuss issues such as the roles of federal, state, and local governments in rail transportation and public and private funding sources. The strategic vision did not define the goals, stakeholder roles, or objectives for federal involvement in high speed intercity passenger rail and the preliminary national rail plan did not have any recommendations for future action. While states will be the recipients of Recovery Act funds, many states do not have state rail plans that would establish strategies and priorities, capital investments, and public benefits of rail investments in the state. To try to stimulate the economy quickly, Congress exempted projects funded by the Recovery Act and recent appropriations from being in state rail plans.
GAO-10-625, High Speed Rail: Learning From Service Start-ups, Prospects for Increased Industry Investment, and Federal Oversight Plans
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
June 2010:
High Speed Rail:
Learning From Service Start-ups, Prospects for Increased Industry
Investment, and Federal Oversight Plans:
GAO-10-625:
GAO Highlights:
Highlights of GAO-10-625, a report to congressional committees.
Why GAO Did This Study:
The American Recovery and Reinvestment Act (Recovery Act) and
subsequent appropriations have dramatically increased federal funds
available for high speed intercity passenger rail from $120 million in
fiscal year 2008 and fiscal year 2009 combined to $10.5 billion
available in fiscal year 2010. Other issues, such as developing
industry capacity to supply rail equipment and fostering multiyear
public support for such systems must be resolved.
As part of its efforts to assess Recovery Act initiatives, GAO
reviewed (1) how states started or improved passenger rail services in
the recent past, (2) rail industry plans to accommodate the increased
passenger rail investments, and (3) Federal Railroad Administration
(FRA) plans to oversee the use of federal intercity passenger rail
funds. GAO reviewed federal legislation; interviewed state, industry
and federal officials; and reviewed selected literature.
GAO is not making any recommendations. The Department of
Transportation did not express an overall opinion on a draft of this
report. It did provide technical and clarifying comments, which GAO
incorporated.
What GAO Found:
State successes to initiate or improve intercity passenger rail
services in the recent past (the last 15 years), hinged largely on
their abilities to build public and political support, secure funding,
obtain equipment, and manage their services. Public and political
support and funding provided a foundation for these services. States
acquired equipment by using collaborative and cost-saving approaches.
Further, states managed their rail services by building consensus with
stakeholders, borrowing expertise, and developing state capacity. All
of these activities will be important for states that seek to initiate
or improve services in the future, including developing conventional
passenger rail (operating at speeds up to 79 miles per hour), higher
speed passenger rail (operating at speeds up to 150 miles per hour),
and even high speed rail services (operating at speeds of 150 miles
per hour or more).
Rail industry stakeholders are optimistic that they can meet increased
public investment in intercity passenger rail; however, they are
looking for (1) federal leadership in setting safety standards for
high speed rail and in promoting interstate cooperation for service
across state lines, among other things, and (2) stable funding to
create a structure for developing a passenger rail marketplace.
Additionally, stakeholders said that a stable federal funding stream
would encourage firms to enter and invest in the intercity passenger
rail marketplace. However, even with strong federal leadership and
funding it could take several years to provide the necessary
infrastructure, such as for building new passenger rail cars,
potentially making it difficult to spend some Recovery Act high speed
rail funds by 2017, as required by law.
As a result of Recovery Act funding and the Passenger Rail Investment
and Improvement Act of 2008, FRA has had to develop a rail program and
an oversight approach. Among other things, FRA had to quickly draft a
preliminary national rail plan and a high speed rail strategic vision,
as well as develop a program to distribute Recovery Act funds. As a
result, FRA officials stated that they concentrated their efforts on
meeting these requirements and they are currently designing their
oversight program. FRA is in its early stages of setting up agreements
with its state grantees and hiring both FRA and contractor personnel
to oversee how the federal funds are used. FRA is planning to release
another version of its national rail plan in September 2010 which it
expects to discuss issues such as the roles of federal, state, and
local governments in rail transportation and public and private
funding sources. The strategic vision did not define the goals,
stakeholder roles, or objectives for federal involvement in high speed
intercity passenger rail and the preliminary national rail plan did
not have any recommendations for future action. While states will be
the recipients of Recovery Act funds, many states do not have state
rail plans that would establish strategies and priorities, capital
investments, and public benefits of rail investments in the state. To
try to stimulate the economy quickly, Congress exempted projects
funded by the Recovery Act and recent appropriations from being in
state rail plans.
View [hyperlink, http://www.gao.gov/products/GAO-10-625] or key
components. For more information, contact Susan Fleming at (202) 512-
2834 or flemings@gao.gov.
[End of section]
Contents:
Letter:
Background:
States Developed Services by Generating Support, Securing Funding,
Obtaining Equipment, and Managing Services:
Industry Stakeholders View Federal Leadership as Important in Creating
a Robust Intercity Passenger Rail Market:
FRA's New Responsibilities Have Held Back Developing a National Rail
Plan, Strategic Vision, and Grant Oversight Plan:
Concluding Observations:
Agency Comments:
Appendix I: Scope and Methodology:
Tables:
Table 1: New or Improved Service Sponsored by States, 1995-Present:
Table 2: Annual State Operating Support:
Table 3: Issues Identified by Rail Industry Stakeholders for Federal
Action:
Table 4: FRA's Oversight Plan in Relation to Selected Grant Oversight
Principles:
Table 5: Organizations Contacted:
Figures:
Figure 1: Recovery Act High Speed Rail Awards:
Figure 2: Stages of New Rail Car Development and Manufacturing:
Abbreviations:
Amtrak: National Railroad Passenger Corporation:
FRA: Federal Railroad Administration:
FTA: Federal Transit Administration:
PRIIA: Passenger Rail Investment and Improvement Act of 2008:
Recovery Act: American Recovery and Reinvestment Act of 2009:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 17, 2010:
The Honorable Christopher Bond:
Ranking Member:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Corrine Brown:
Chair:
Subcommittee on Railroads, Pipelines, and Hazardous Materials:
Committee on Transportation and Infrastructure:
House of Representatives:
Interest in passenger rail service in the United States is high.
Recent legislation, especially the American Recovery and Reinvestment
Act of 2009 (Recovery Act), has established a new federal role in and
provided an unprecedented amount of federal funds for intercity
passenger rail. Thirty-seven states and the District of Columbia
submitted 259 applications totaling approximately $57 billion for the
$8 billion that the Recovery Act made available for new passenger rail
corridors or improvements to existing service. Passenger rail
operators and suppliers from around the world are showing interest in
making and operating high speed passenger trains for a possible
emerging U.S. market. In addition, prominent statements by the
President, the Vice President, the Secretary of Transportation, and
others have elevated the profile of intercity passenger rail service
and promoted its possible public benefits including energy efficiency,
reductions in greenhouse gas emissions, and road and airport
congestion reduction.
However, while there is a palpable excitement created by the Recovery
Act's funding for new high speed rail service, establishing new
service is a difficult, multiyear effort. This effort hinges on, among
other things, the availability of federal capital and state operating
funds to build and operate systems that go far beyond the funds
provided by the Recovery Act in a time of continuing federal and state
deficits; the ability of states to work together for service that
crosses state lines; gaining the cooperation from private railroads
which own most of the rail infrastructure in the United States; and
obtaining equipment, such as rail cars, which can take years to
design, test, and build. In addition, the Federal Railroad
Administration (FRA) recognizes that it has to transform itself from
essentially a rail safety organization to one that can make
multibillion dollar investment choices while simultaneously carrying
out its safety mission.
To provide some insight into these issues, this report, as part of our
overall effort to assess Recovery Act spending, focuses on (1) how
states started or improved passenger rail services in the recent past;
[Footnote 1] (2) rail industry's plans to accommodate increased
passenger rail investments; and (3) FRA's plans to oversee the use of
federal intercity passenger rail funds.
Our overall approach to addressing these topics was to (1) review
federal legislation, regulations, plans, and other guidance; (2)
interview a broad cross-section of intercity passenger rail
stakeholders, including FRA, states that have established or improved
intercity passenger rail service, freight railroads, the National
Railroad Passenger Corporation (Amtrak), and other potential operators
of intercity passenger rail service; passenger rail car manufacturers;
railroad construction contractors; and industry and transportation
associations; and (3) review studies by various organizations,
including the American Association of State Highway and Transportation
Officials, the Transportation Research Board, and the Congressional
Research Service, as well as our reports on high speed rail. To gain
some insight into the types of infrastructure improvements necessary
to increase speeds and improve the performance of intercity passenger
rail service, we visited railroad projects in Indiana, Michigan, and
Illinois designed to reduce rail congestion and increase train speeds.
To provide principles of grants oversight that could be used by FRA as
it formulates its grants management program, we identified important
elements of an effective grants oversight program from information
provided by the Comptroller General's Domestic Working Group and
contained in our reports evaluating various federal grants programs.
[Footnote 2]
We conducted this performance audit from June 2009 to June 2010 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Since Amtrak started operations in 1971, federal involvement in
funding intercity passenger rail has mainly consisted of capital and
operating subsidies to Amtrak annually appropriated from general
funds. However, recent legislation has vastly increased the federal
role in and federal funds for developing intercity passenger rail
service, making the federal government a major investor with state
governments in passenger rail service. The Passenger Rail Investment
and Improvement Act (PRIIA), enacted in October 2008, authorized over
$3.7 billion for three different federal programs for high speed rail,
intercity passenger rail congestion, and capital grants. PRIIA
required that projects funded through two of these three programs be
included in a state rail plan.[Footnote 3] A state rail transportation
authority would develop a statewide rail plan coordinated with other
state transportation planning programs that, among other things, must
include an explanation of the state's passenger rail service
objectives; an analysis of rail's transportation, economic, and
environmental impacts in the state; and a long-range investment
program for current and future freight and passenger infrastructure in
the state. PRIIA also called for the Department of Transportation to
establish minimum standards for the preparation and periodic revision
of state rail plans. It also called for FRA to create a preliminary
national rail plan within 1 year of passage of the law as well as a
long-range national rail plan that is consistent with approved state
rail plans. FRA released a preliminary national rail plan in October
2009.
The Recovery Act appropriated $8 billion for the three PRIIA-
established intercity passenger rail programs.[Footnote 4] This
funding represented a dramatic increase in federal funding for
intercity passenger rail projects. The Recovery Act provided up to 100
percent federal funding available for expenditure until 2017 and
exempted projects from having to be included in a state rail plan;
however, it did require, by incorporating the programs and the
requirements of PRIIA, that the funds be competitively awarded and
that the Department of Transportation develop a strategic plan to use
these funds. The department released its strategic plan to use these
funds in April 2009.[Footnote 5] In December 2009, the Department of
Transportation's fiscal year 2010 appropriation also included $2.5
billion for high speed rail and intercity passenger rail projects.
These funds are subject to a 20 percent nonfederal matching
requirement and the law also exempted these projects from having to be
included in a state rail plan. The fiscal year 2011 budget proposal
includes another $1 billion in intercity passenger rail funding.
[Footnote 6]
Amtrak, the nation's only intercity passenger rail operator, currently
carries about 28 million passengers per year, which amounts to less
than 1 percent of the country's total intercity passenger miles,
although Amtrak's market share when compared to air service is higher
in certain corridors. Amtrak operates long and short distance routes,
as well as provides some commuter rail service through contracts with
transit providers.[Footnote 7] Most of the nation's railroad network
is owned by private, for-profit freight railroads with the primary
exception of the Amtrak and state-owned Northeast Corridor from
Washington, D.C., to Boston[Footnote 8] and almost 100 miles in
southwest Michigan. As a result, about 70 percent of Amtrak's train
miles are over tracks owned by other railroads.[Footnote 9] Top speeds
are limited by track conditions. Amtrak's trains are generally limited
to top speeds of 79 miles per hour off the Northeast Corridor and up
to 150 miles per hour on the corridor.[Footnote 10]
States provide financial support to certain intercity passenger rail
corridors. In fiscal year 2010, 14 states funded short distance
service in their states or between states by contract with Amtrak.
Between 1995 and 2009, states initiated six new services and improved
or increased the speed on seven existing intercity passenger rail
services. (See table 1.)
Table 1: New or Improved Service Sponsored by States, 1995-Present:
New service:
Service: Lynchburg Service;
State: Virginia;
Year(s) service initiated or improved: 2009.
Service: Downeaster;
State: Maine;
Year(s) service initiated or improved: 2001.
Service: Heartland Flyer;
State: Oklahoma;
Year(s) service initiated or improved: 1999.
Service: Ethan Allen;
State: Vermont;
Year(s) service initiated or improved: 1996.
Service: Piedmont;
State: North Carolina;
Year(s) service initiated or improved: 1995.
Service: Vermonter;
State: Vermont;
Year(s) service initiated or improved: 1995.
Improved service:
Service: Lincoln Service;
State: Illinois;
Year(s) service initiated or improved: 2006.
Service: Keystone Corridor;
State: Pennsylvania;
Year(s) service initiated or improved: 2006.
Service: San Joaquin, Capitol Corridor, and Pacific Surfliner
Corridors;
State: California;
Year(s) service initiated or improved: 1998-present.
Service: Cascades Service;
State: Washington;
Year(s) service initiated or improved: 1999-2000.
Higher speed on existing corridor:
Service: Keystone Corridor;
State: Pennsylvania;
Year(s) service initiated or improved: 2006.
Source: GAO.
[End of table]
Domestic passenger rail car manufacturing capacity has been in
decline, along with the decline in intercity passenger rail service,
since the 1950s. Foreign passenger rail car manufacturers have
established factories in the United States--although mainly for the
domestic rail transit market as Amtrak has not made a large capital
purchase of passenger rail cars since the Acela trains in the late
1990s.
FRA is the primary federal agency responsible for formulating and
enforcing railroad safety regulations and for distributing federal
funds for intercity passenger rail service. The agency sets
regulations for railroad safety, including rail car maintenance
standards and track standards for operating passenger and freight
trains at various speeds. Through grant agreements, FRA administers
federal operational and capital grants to Amtrak, which have averaged
between $1 billion and $1.3 billion per year since fiscal year 2003.
FRA also approves Railroad Rehabilitation and Improvement Financing
loans and Rail Line Relocation and Improvement Capital Grants, and is
the granting agency for the $120 million in fiscal year 2008 and
fiscal year 2009 capital funds to states for intercity passenger rail
projects.
In addition to the increase in federal funds, PRIIA and the Recovery
Act have created new responsibilities for FRA to plan, award, and
oversee the use of federal funds for intercity passenger rail. After
passage of the Recovery Act, FRA officials said that they set their
priorities to meet these responsibilities. According to these
officials, FRA's immediate priorities included quickly awarding the
funds responsibly and getting all of the Recovery Act funds obligated
within 2 years. They also stated that their intermediate and long-term
priorities included helping states advance their corridors and
projects and gauging the effectiveness of the federal investments,
respectively. FRA staff and management worked to meet these priorities
by releasing a notice of funding availability and interim guidance on
the high speed rail program,[Footnote 11] creating an overall
strategic plan for implementing federal grants for high speed rail
[Footnote 12] and releasing a preliminary national rail plan.[Footnote
13] FRA staff and management held informational sessions with states
and other stakeholders across the country and worked with state
applicants to answer questions, evaluate, and provide feedback on
preapplications for these funds. In the 5 months between the
application deadlines and the grant award announcement, FRA and other
department staff used criteria such as public return on investment,
economic recovery benefits, and timeliness to completion to evaluate
259 grant applications from 37 states and the District of Columbia.
In January 2010, FRA announced that 62 projects in 23 states and the
District of Columbia would receive approximately $8 billion in
Recovery Act funds.[Footnote 14] (See figure 1.) The announced awards
went to several types of intercity passenger rail projects--including
almost $2.3 billion for initial investments in the planned over 200
miles per hour service between Los Angeles and San Francisco and,
eventually, Sacramento and San Diego; $1.1 billion to increase top
speeds to 110 miles per hour for existing service between Chicago and
St. Louis; $400 million for new service with a top speed of 79 miles
per hour between Cincinnati and Cleveland; and $4 million for signal
timing improvements in Texas to benefit Amtrak's existing Heartland
Flyer service. All of the states that have initiated or improved
services over the last 15 years were awarded about 62 percent of all
Recovery Act high speed rail funds (about $4.9 billion of the $8
billion available).
Figure 1: Recovery Act High Speed Rail Awards:
[Refer to PDF for image: map of the continental United States and
accompanying data table]
State: California;
Award: $2,343 billion;
Project details: For new high speed rail service, purchase right-of-
way, construct track, signaling systems, and stations, and complete
environmental reviews and engineering. To improve conventional
services, track improvements, and new equipment emissions controls.
State: Connecticut;
Award: $40 million;
Project details: To improve existing conventional service, construct
new track.
State: District of Columbia;
Award: $3 million;
Project details: To improve existing passenger rail service.
State: Florida;
Award: $1.25 billion.
Project details: For new high speed rail, construct track, build and
improve stations, purchase equipment.
State: Illinois;
Award: $1.233 billion;
Project details: For higher speed service, improve track, improve
signal systems, improve stations, implement positive train control,
conduct planning studies.
State: Indiana;
Award: $71 million;
Project details: To improve existing conventional service, signal, and
track improvements.
State: Iowa;
Award: $17 million;
Project details: To improve existing conventional service, signal, and
track improvements.
State: Maine;
Award: $35 million;
Project details: To expand existing conventional service, track, and
crossing improvements.
State: Maryland;
Award: $69 million;
Project details: To improve existing passenger rail service.
State: Massachusetts;
Award: $70 million;
Project details: To improve existing conventional service, track,
station, and signal improvements.
State: Michigan;
Award: $40 million;
Project details: To improve existing conventional service, station
improvements, and build a new station.
State: Missouri;
Award: $31 million;
Project details: To improve existing conventional service, track, and
crossing improvements.
State: New Jersey;
Award: $39 million;
Project details: To improve existing passenger rail service.
State: New York;
Award: $150 million;
Project details: To improve existing conventional service, construct
new track, improve signals, crossings, and stations.
State: North Carolina;
Award: $545 million;
Project details: To improve existing conventional service, acquire
rolling stock, improve track and stations, mitigate congestion.
State: Ohio;
Award: $400 million;
Project details: For new conventional service, improve track,
crossings, stations, and maintenance facilities.
State: Oregon;
Award: $8 million;
Project details: To improve existing conventional service, upgrade
station, and engineering and environmental work for track and signal
improvements.
State: Pennsylvania;
Award: $26 million;
Project details: To improve existing higher speed service, eliminate
grade crossings, study extending service.
State: Rhode Island;
Award: $1 million;
Project details: To improve existing passenger rail service.
State: Texas;
Award: $4 million;
Project details: To improve existing conventional service, final
design, and grade and crossing improvements.
State: Vermont;
Award: $50 million;
Project details: To improve existing conventional service, and
infrastructure improvements.
State: Virginia;
Award: $75 million;
Project details: To improve existing conventional service, and
construct track.
State: Washington;
Award: $590 million;
Project details: To improve existing conventional service; construct
track; and track, signal, and safety improvements.
State: Wisconsin;
Award: $822 million;
Project details: To expand existing conventional service and to
improve existing conventional service to higher speed service; track,
signal, and station improvements; a new station, and positive train
control technology.
Sources: GAO analysis of FRA data; Map Resources (map).
[End of figure]
States Developed Services by Generating Support, Securing Funding,
Obtaining Equipment, and Managing Services:
Officials from states that initiated or improved intercity passenger
rail services in the recent past told us that their ability to start
or upgrade their services largely hinged on their ability to resolve a
number of issues. First, public and political support and funding
provided a foundation for initiating and improving their services.
Second, states acquired equipment for their services through
collaborative and cost-saving approaches. States also built consensus
with stakeholders, borrowed expertise, and developed state capacity to
effectively manage their rail services.
The activities that helped states initiate and improve their services
will be important for states seeking to initiate or improve services
in the future--including developing conventional passenger rail,
higher speed passenger rail, and high speed rail.[Footnote 15]
Learning ways to build support, secure funding, obtain equipment, and
effectively manage rail services will be even more crucial to states
developing high speed rail because they will face long time frames,
high costs, and a lack of experience in the U.S. passenger rail market
for all stages of developing and managing these new passenger rail
services. While other countries have experience with high speed
passenger rail service, no state currently supports high speed
intercity passenger rail service.[Footnote 16] While there are
differences between conventional passenger and high speed passenger
rail services, some of the lessons learned by states apply to both. As
such, our review of state experiences with conventional passenger rail
service could provide some insight into how states might accomplish
both initiating and improving conventional passenger rail services, as
well as developing higher and high speed passenger rail services.
Public and Political Support and Funding Provided a Foundation for
States to Develop Passenger Rail Services:
State officials favoring investment in intercity passenger rail
services secured funding to initiate or expand such services by
achieving public and political support and by using innovative
approaches for funding both capital and operating costs. Support from
passenger rail proponents including governors, state legislators,
passenger rail advocacy groups, and communities helped develop public
and political support for committing state funds to capital and
operating costs of passenger rail services. For example, corridor
coalitions of grassroots supporters, advocates, and elected officials
aided Illinois' efforts to gain support for making improvements and
operating a new service.
Infrastructure improvements for these services required significant
investments from states to upgrade track, signals, crossings, and
stations. The costs of these improvements varied, from small
individual projects costing several million dollars to more extensive
projects totaling more than $100 million. States drew upon a range of
sources to supplement limited general funding available for capital
improvements. Four states we interviewed established dedicated funding
sources for capital improvements or acquired flexible federal funds to
develop infrastructure.[Footnote 17] For example, Virginia used its
rail enhancement fund, funded in part from a state rental car tax, in
cooperation with a freight railroad to make $33 million in capacity
improvements to initiate a new service. North Carolina used a
combination of federal transportation enhancement funds,[Footnote 18]
congressional directives (commonly called earmarks), and the state's
share of a federal Congestion Mitigation and Air Quality Improvement
Program grant for investments in capital improvements.[Footnote 19]
Some states shared costs or offered incentives to Amtrak, freight
railroads, and local governments to attract nonstate funds to support
intercity passenger rail service. For example, North Carolina
partnered with communities to redevelop train stations and Washington
state recently established grant and loan incentive programs for
public agencies and private right-of-way owners to help fund
improvements on railroad infrastructure to improve the passenger and
freight rail services in the state.
The capital costs of high speed rail systems are expected to be of a
magnitude far greater than for initiating or improving conventional
and higher speed passenger rail services.[Footnote 20] Based on
reported projections, construction costs to initiate new conventional
service on existing right-of-way between Cleveland, Columbus, and
Cincinnati, Ohio, would be about $1.4 million per mile.[Footnote 21]
Similarly, improving existing services to higher speeds could cost
about $1.9 million per mile for services in both Pennsylvania and
Michigan;[Footnote 22] $11.8 million per mile for service from New
York City to Niagara Falls, New York;[Footnote 23] and $15.2 million
per mile to establish higher speed service from Charlotte, North
Carolina, to Washington, D.C.[Footnote 24] These estimates are lower
than projections to develop new high speed rail services in Florida
and California, which would both require building new dedicated track
instead of using existing infrastructure. Based on reported
projections, final design and construction for high speed rail service
between Tampa and Orlando, Florida, would cost approximately $36.7
million per mile,[Footnote 25] and capital costs for high speed rail
between Los Angeles and Anaheim, California, would be about $75.5
million per mile.[Footnote 26]
To secure annual operating subsidies, state rail officials gained
support for their passenger rail services. According to state rail
officials, this reporting, as well as support from governors,
legislators, metropolitan planning organizations, or public grassroots
efforts helped rail proponents obtain operating funds for passenger
rail services. States reported performance indicators and other
metrics such as ridership, on-time performance, and customer
satisfaction to communicate the value of their services. A few states
reported these indicators on an annual basis.
States use state funds to support passenger rail operations, ranging
from $1.5 million to $32.2 million per service annually. Support from
these states covers 26 percent to 100 percent of the annual operating
costs for these services. (See table 2.) Three states established
dedicated state funding sources, and another two states used flexible
federal transportation funds to overcome funding limitations to
operate their services. For example, Pennsylvania established a public
transportation trust fund with a set-aside for passenger rail
operating expenses to avoid obtaining funding each year from the state
legislature, and California derives operating support from a portion
of the state sales tax on diesel fuel (with a portion of the state gas
tax supporting capital expenditures). In addition, Vermont and Maine
drew upon flexible federal funding from their states' Congestion
Mitigation and Air Quality Improvement Program allocation, which
provided 80 percent of initial operating costs. To meet its $13.5
million operating budget, Maine contributes $1.2 million from general
revenues and draws upon $4.8 million in federal Congestion Mitigation
and Air Quality Improvement Program funds.
Table 2: Annual State Operating Support:
State: California;
Service: Capitol Corridor;
Type of state funding: Dedicated fund;
Annual state operating support: $29.3 million;
Total annual operating cost: $29.3 million;
Percentage of annual operating cost supported by state: 100%.
State: California;
Service: Pacific Surfliner;
Type of state funding: Dedicated fund;
Annual state operating support: $24.9 million;
Total annual operating cost: $35.5 million;
Percentage of annual operating cost supported by state: 70%.
State: California;
Service: San Joaquin;
Type of state funding: Dedicated fund;
Annual state operating support: $32.2 million;
Total annual operating cost: $32.2 million;
Percentage of annual operating cost supported by state: 100%.
State: Illinois;
Service: Lincoln;
Type of state funding: General fund;
Annual state operating support: $11.9 million;
Total annual operating cost: $20.7 million;
Percentage of annual operating cost supported by state: 57%.
State: Maine;
Service: Downeaster;
Type of state funding: General fund and flexible federal funds;
Annual state operating support: $7.9 million;
Total annual operating cost: $15.1 million;
Percentage of annual operating cost supported by state: 52%.
State: North Carolina;
Service: Piedmont and Carolinian;
Type of state funding: Combination of dedicated funds;
Annual state operating support: $5.0 million;
Total annual operating cost: $19.0 million;
Percentage of annual operating cost supported by state: 26%.
State: Pennsylvania;
Service: Keystone;
Type of state funding: Dedicated fund;
Annual state operating support: $9.3 million;
Total annual operating cost: $17.1 million;
Percentage of annual operating cost supported by state: 54%.
State: Vermont;
Service: Ethan Allen;
Type of state funding: General fund and flexible federal funds;
Annual state operating support: $1.5 million;
Total annual operating cost: $3.7 million;
Percentage of annual operating cost supported by state: 41%.
State: Vermont;
Service: Vermonter;
Type of state funding: General fund and flexible federal funds;
Annual state operating support: $3.4 million;
Total annual operating cost: $7.6 million;
Percentage of annual operating cost supported by state: 45%.
State: Washington;
Service: Cascades;
Type of state funding: Combination of dedicated funds;
Annual state operating support: $14.3 million;
Total annual operating cost: $31.2 million;
Percentage of annual operating cost supported by state: 46%.
Source: GAO analysis of best available data provided by states.
[End of table]
States Used Collaborative and Cost-saving Approaches to Acquire
Equipment for Their Services:
To secure passenger rail cars, states worked with Amtrak to use
existing passenger rail cars efficiently or refurbished older
equipment. Several states partnered with Amtrak during early stages of
planning their services, which led to agreements for equipment and
operations. For example, Illinois developed agreements in which Amtrak
reallocated its equipment on other corridors to commit rail cars to
the state's service, and Virginia and Amtrak jointly developed an
operating service and capital improvement agreement in which Amtrak
committed out-of-service passenger rail cars to the state's new
service for which Virginia shared in the rehabilitation cost.
Refurbishing old equipment and pooling equipment orders were other
ways that states managed equipment costs. North Carolina officials
said that although purchasing used equipment and refurbishing it was
not the state's preferred approach, it reduced the cost of rail cars
by 50 percent and gave the state more control over the amenities and
appearance of its passenger rail cars. Additionally, some states
reduced their procurement costs by pooling equipment orders. For
example, California left options open on an order for new locomotives,
which allowed other states and commuter agencies to obtain locomotives
at a reduced per unit cost.
Procuring equipment for high speed rail systems will also be
difficult, in part because no equipment or specifications are
currently available for these systems in the United States. According
to FRA's High Speed Passenger Rail Safety Strategy, as a general best
practice, to travel at speeds exceeding 150 miles per hour, passenger
trains should operate on dedicated right-of-way.[Footnote 27] To
achieve these high speeds, rail cars are designed to weigh much less
than conventional intercity passenger rail equipment and are powered
by electric locomotives, which are much lighter than diesel
locomotives.[Footnote 28] Based on weight estimates from two
manufacturers, a high speed rail car could weigh as much as 29 percent
less than a conventional passenger rail car, depending on safety
standards and design factors, and an electric locomotive could weigh
as much as 33 percent less than a diesel locomotive. The cost of high
speed rail cars and locomotives would also depend on safety and design
factors that have not been defined by FRA.
States Managed Services by Building Consensus with Stakeholders,
Borrowing Expertise, and Developing State Capacity:
States developed a variety of planning processes and approaches to
stakeholder involvement as a way to build consensus among freight
railroads, Amtrak, and other states. For example, California works
with railroads to ensure freight capacity is maintained and
accommodates projected freight growth through appropriate capital
improvements. Additionally, Virginia worked for 5 months with diverse
stakeholders such as Amtrak, freight railroads, a commuter rail
operator, and local communities to agree to memoranda of understanding
for using right-of-way and operating new services. Pennsylvania
developed a Web site, held public meetings, and used other outreach
activities to educate stakeholders about station area planning and
redevelopment processes to bridge potential communication gaps between
state passenger rail staff and public participants. In addition to
these approaches to working with stakeholders, states leveraged
outside expertise and built their own capacity to manage their
services. For example, Illinois obtained support from Amtrak, which
worked on the state's behalf to negotiate use agreements with freight
railroads; Pennsylvania received planning assistance from FTA and FRA
for its service; and Virginia worked with a freight railroad to
develop a technical model for forecasting the impacts of its new
passenger rail service on affected stakeholders.
Developing high speed rail systems would involve long time frames, in
part because acquiring dedicated right-of-way could involve many more
local communities and private interests, lengthy environmental
approval, and would require states to build consensus among a greater
number of stakeholders than developing conventional passenger rail
services on existing rights-of-way. We have reported that coordinating
high speed rail projects among numerous stakeholders without an
established institutional framework would make developing high speed
rail difficult.[Footnote 29]
Several states initiated their services with support from consultants
and later developed management capacity within their state departments
of transportation. These states developed their services by changing
their management approaches and by building technical expertise. For
example, Washington state revamped its passenger rail programs to
facilitate communication with freight railroads and reorganized its
rail division to more actively manage relationships with freight
railroads and Amtrak. Additionally, California rail officials learned
over time how to work most effectively with freight railroads on
passenger rail projects and developed their own technical expertise
and modeling knowledge over time. In addition to these approaches, two
states established independent authorities to oversee their intercity
passenger rail operations as a way to focus on the management needs of
their services. For example, Maine created an independent authority to
focus resources on managing its passenger rail service as well as
managing relationships with multiple states, Amtrak, and a commuter
railroad. Washington state rail officials reported that the state
department of transportation's management change was successful and
resulted in growth, improved on-time performance, and projects
completed on time and under budget.
Similarly, states that develop high speed rail services would need to
build capacity to manage their programs. The administrative structures
and technical expertise needed to manage these services would require
consideration from states and affected stakeholders. Several state
officials said that state departments of transportation would need
additional technical expertise and staff resources to develop new high
speed rail.
Industry Stakeholders View Federal Leadership as Important in Creating
a Robust Intercity Passenger Rail Market:
Rail industry stakeholders, such as passenger rail operators, freight
rail right-of-way owners, passenger rail car manufacturers, and
general contractors are optimistic that they can meet increased public
investment in intercity passenger rail, but they are looking for
federal leadership and funding to create a structure for developing
high speed rail. Additionally, stakeholders said that a stable federal
funding stream would encourage firms to enter and invest in the
intercity passenger rail marketplace. However, even after guidance is
given on the application of federal laws and states advertise
contracts, it could take several years to provide the necessary
infrastructure such as new passenger rail cars, potentially making it
difficult to spend Recovery Act high speed rail funds by September 30,
2017, as required by law.
Industry Stakeholders Are Optimistic They Can Meet Increased Public
Investment in Intercity Passenger Rail Given Federal Leadership:
Industry stakeholders said that the rail industry is in decline due to
the recession; however, once the federal government distributes
funding and establishes standards, rail industry stakeholders stated
that they can begin to increase capacity to meet the increased
investments. Stakeholders we interviewed stated that they are ready to
increase capacity because several rail industry companies have been
forced to lay off workers.
While industry stakeholders are optimistic, it may take some time to
build products and develop services to meet the increased public
investment. For example, passenger rail car manufacturers, the
Secretary of Transportation, and the FRA Administrator have stated
that the Recovery Act funding could revive the U.S. market for these
rail cars. Foreign passenger rail cars could not be used in this
country because U.S. safety standards focus more on crash survival
rather than crash avoidance, which is the norm for other countries'
safety standards. Most manufacturers we spoke with said that the
capacity to design and manufacture intercity passenger rail equipment
existed in the United States and that they were eager to have orders
placed. However, they also advised that it could take years to design
and test new rail cars before they can be manufactured.[Footnote 30]
(See figure 2.) For example, industry stakeholders told us that
design, testing, and production of new passenger rail cars can take
anywhere from almost 2.5 years to almost 9 years. Consequently, if
states do not place rail car orders relatively soon, it could be
difficult to spend Recovery Act funds before 2017. Some states that
were awarded funding may be able to spend these funds before 2017 more
easily than others. For example, Illinois' Chicago to St. Louis
corridor already has project plans and agreements with freight
railroads in place to use their federal funds to improve the rail
infrastructure, whereas Ohio's "3-C" corridor is still in the
preliminary planning stages.[Footnote 31]
Figure 2: Stages of New Rail Car Development and Manufacturing:
[Refer to PDF for image: illustrated timeline]
Phase: Design;
Minimum number of months: 12;
Potential additional months: 12;
Potential total: 25 months.
Phase: Prototype development;
Minimum number of months: 6;
Potential additional months: 14;
Potential total: 20 months.
Phase: Testing;
Minimum number of months: 3;
Potential additional months: 18;
Potential total: 21 months.
Phase: Production;
Minimum number of months: 8.5;
Potential additional months: 33.5;
Potential total: 42 months.
Total time:
Minimum number of months: 29.5;
Potential additional months: 77.5;
Potential total: 107 months.
Source: GAO interviews with rolling stock manufacturers.
[End of figure]
In addition, it may take some time for potential passenger rail
operators to build the capacity to operate services. With the
exception of Amtrak, potential U.S. passenger rail operating companies
only have experience operating commuter rail services, not intercity
or high speed passenger rail services. Potential foreign passenger
rail operating companies have extensive experience in operating
intercity passenger rail and even high speed intercity passenger rail
service, but they do not have experience operating those trains in the
U.S. market with its unique operating conditions, legal environment,
and infrastructure. Even Amtrak, with already established operations
and agreements with freight railroads and other railroads, may have to
amend its existing agreements or negotiate new agreements with each
state and freight right-of-way owner for any new service it operates.
The time required to negotiate these agreements can range from a few
months to several years.[Footnote 32] Some stakeholders stated that
Amtrak has advantages that might make it difficult for other potential
operators to compete in the intercity passenger rail market. For
example, Amtrak has three statutory rights that no other operator has:
(1) access to tracks and facilities of privately owned railroads and
regional transportation authorities, (2) access to that railroad
infrastructure at incremental cost, and (3) priority over freight
trains.[Footnote 33]
Stakeholders are looking for federal leadership and funding to create
a structure for high speed rail development, among other things.
[Footnote 34] Federal leadership is important as most passenger trains
operate over the national rail network and federal involvement could
help states work cooperatively to develop routes that cross state
lines. Aside from funding, stakeholders said that they were looking
for a stronger federal policy and programmatic role. For example,
stakeholders mentioned the need for a federal role in promoting
interagency and interstate cooperation, and identified other potential
federal roles, such as setting additional safety standards, promoting
intermodal models of transportation, and assisting with right-of-way
acquisition. The Recovery Act will provide a one-time infusion of
federal funds, and PRIIA, among other things, provided the basis for a
federal structure by mandating a national rail plan. However,
stakeholders suggested that more funding and structure is needed.
Although industry stakeholders are optimistic regarding intercity
passenger rail implementation, they told us federal guidance could
help provide structure to the intercity passenger rail market.
According to industry stakeholders, there are several areas where
federal guidance could help provide that structure: liability laws,
safety regulations, Buy America requirements,[Footnote 35] and
equipment standardization. (See table 3.) For example, industry
stakeholders cited liability against accident and other train-related
risks as a major challenge to high speed intercity passenger rail.
This is a challenge because federal law provides limited protection to
the operator or right-of-way owner since it only covers the claims of
passengers, not third-party claims.[Footnote 36]
Table 3: Issues Identified by Rail Industry Stakeholders for Federal
Action:
Issue: Liability;
Stakeholder concern: Potential passenger rail operators said they
might not bid on projects because:
* Operator liability increases at higher speeds;
* Uncertainty about and limitations of the federal $200 million
liability limit;
* Potential of states to seek additional liability coverage for
intercity passenger rail operators;
Stakeholder-identified federal solution: Industry stakeholders
proposed a variety of solutions including:
* public insurance;
* public funding for insurance;
* pooled insurance; and;
* additional liability caps;
FRA told us that the Administration has not yet taken a position on
these liability issues.
Issue: Safety standards;
Stakeholder concern: Manufacturers may wait to design passenger rail
cars because:
* There are no standards for intercity passenger rail cars to operate
at speeds greater than 125 miles per hour;
* Designs may be discarded if they do not meet future regulations;
Stakeholder-identified federal solution: FRA should establish the
safety standards for high speed passenger rail service. FRA is
developing guidance to be provided by June 2011 that will involve a
series of several different passenger rail car and other safety
standards.
Issue: Buy America;
Stakeholder concern: Industry stakeholders may be unable to enter the
marketplace because:
* FRA does not have a passenger rail car exemption similar to FTA's
exemption;
* They might be unable to meet the 100 percent manufactured in the
United States requirement;
Stakeholder-identified federal solution: FRA should issue guidance
related to passenger rail cars in accordance with the FTA
requirements. FRA has stated that it will only fund projects for which
the steel, iron, and manufactured goods used in the project are
produced in the United States--unless a waiver justification applies,
is submitted, and approved.
Issue: Equipment standardization;
Stakeholder concern: Industry stakeholders generally agreed that
standardization of design would be beneficial to the industry because
it would allow them to quickly and easily fill orders;
Stakeholder-identified federal solution: FRA should establish a
standard design requirement and conduct an oversight and approval
process to ensure that all vehicles met these requirements. FRA
officials told us that they are working with other stakeholders to
develop specifications for new passenger rail equipment.
Source: GAO interviews with various rail industry stakeholders and FRA.
[End of table]
Freight railroads, for example, do not want to allow such service on
their rights-of-way unless they are protected from liability. Freight
railroads' liability insurance policies cover accidents related to
their freight operations; however, when a freight railroad allows
passenger rail service to operate over its right-of-way, it is exposed
to additional risks as passengers may sue the passenger rail operator,
as well as the right-of-way owner. As a result, freight railroad
officials believe that passenger rail operators must contractually
indemnify freight railroads against all liability and obtain insurance
as a guarantee that payments will be made for any damages. The costs
of providing this coverage could present a hurdle for new passenger
rail operators.
Potential operators were also concerned that Congress might be willing
to raise the $200 million per accident federal liability limit which
could make it even more expensive for new passenger rail operating
firms to enter the marketplace. Because the application of this
liability cap has been untested in court, many freight and passenger
railroads are hesitant to rely upon this statute to cover the full
extent of their potential liability. In addition, the federal
liability limit does not cover third-party claims, such as from
bystanders or property owners along the rights-of-way. As a result,
liability agreements between freight railroads and commuter rail
operators can range from $75 million to $500 million per accident.
[Footnote 37]
The proposed high speed rail corridors also present new liability
issues that will increase costs as, according to one right-of-way
owner, operator risk and damage will likely increase at higher speeds.
In addition, some freight railroads are requesting that operator
agreements include covering third parties (such as bystanders) which
would also increase operator costs. For example, CSX Corporation and
Norfolk Southern Corporation have requested liability insurance of
$500 million per incident as an element of new access agreements with
Virginia Railway Express commuter rail service in the Washington,
D.C., area. Furthermore, changes in state liability law may influence
negotiations between passenger rail operators and freight rail right-
of-way owners. Commuter railroads face similar issues to intercity
passenger rail operators because they run trains over the same rail
network and have to negotiate with the same freight railroads. Options
for facilitating negotiations on liability and indemnity provisions
could include amending current law; exploring alternatives to
traditional commercial insurance; providing commuter rail agencies
with more leverage in negotiations; and separating passenger and
freight traffic, either physically or by time of day. With regard to
high speed rail, some stakeholders suggested a variety of solutions to
this issue, including (1) publicly provided passenger rail insurance
coverage, (2) government funding of passenger rail insurance to
provide an additional layer of protection to railroad-purchased
insurance, (3) pooled insurance across railroads,[Footnote 38] and (4)
additional liability caps.
Industry Stakeholders Noted the Importance of a Stable Public Funding
Source for a Robust Intercity Passenger Rail Marketplace:
Industry stakeholders agreed that the time frame for building more
intercity passenger rail capacity in the United States depends upon
the level of public funding committed. They further stated that a
stable federal funding stream would encourage firms to enter the
marketplace and to make investments. For example, passenger rail car
manufacturers discussed the time commitment involved in designing,
testing, and manufacturing passenger rail cars. As a result, they
stated that they need to ensure that funding will be available
throughout the entire process. While the Recovery Act funding waives
the PRIIA nonfederal match requirements for capital investments, the
fiscal year 2010 appropriation for intercity passenger rail projects
requires at least 20 percent of the project's capital costs to come
from nonfederal funding sources. If states or other grantees do not
come up with their share, they will be unable to use the federal
funds. Industry stakeholders stated that, in order to be successful,
intercity passenger rail service would need stable state operating
support in addition to capital funding provided by the federal
government because all of the passenger rail systems we studied
required some level of public operational and capital
subsidy.[Footnote 39] One freight railroad official noted that,
historically, state fluctuations in ridership and inaccurate ridership
and revenue predictions have resulted in a financial shortfall that
put private railroads at risk, leaving right-of-way owners concerned
about the potential sunk costs of underutilized passenger rail
equipment and higher speed rail infrastructure. However, during the
current economic environment, it is uncertain the extent to which
states will be able to provide funding support--capital or operating--
as simulations show near-term projected state and local deficits
continuing for several years into the future.[Footnote 40]
Industry stakeholders said that it is important to recognize that
effective high speed rail operations will require a long-term
investment of resources for ongoing maintenance and operations.
Without long-term public funding commitments for capital investments
and operations, projects may not be completed and the intercity
passenger rail market may not stabilize. The current level of public
funding for high speed rail is not as stable as industry stakeholders
said it would need to be to create a robust industry. For example,
after the initial one-time $8 billion infusion of Recovery Act
funding, $2.5 billion was appropriated in fiscal year 2010 and, most
recently, the administration's fiscal year 2011 budget proposed $1
billion for high speed rail. These funds are derived from general
funds rather than a dedicated funding source. Future federal
appropriations for intercity passenger rail projects from general
funds will have to compete annually with other transportation and
nontransportation expenditures, such as national defense and health
care. Industry stakeholders did not view this level of funding as
enough to sustain a high speed passenger rail system. However,
industry stakeholders commented that, although small, the Recovery Act
funding for high speed rail has created an interest in the U.S.
passenger rail market.
Both current and former domestic high speed rail project sponsors have
sought private financing but found it difficult to obtain private
sector participation, given the significant financial risks high speed
rail projects pose. Other countries have had success implementing
public-private partnerships in which foreign governments' shared the
financial risks of their expanding high speed rail systems with
private partners.[Footnote 41] Some state officials said there was
greater interest in entering public-private partnerships with regard
to station development, train operation, and track maintenance before
the economic downturn. In addition, a potential passenger rail
operator said that the private sector could not provide enough money
to meet the initial capital costs of starting intercity passenger rail
service; the vast majority of funding would have to come from the
public sources.
FRA's New Responsibilities Have Held Back Developing a National Rail
Plan, Strategic Vision, and Grant Oversight Plan:
FRA's responsibilities and federal funding for intercity passenger
rail investments significantly increased under PRIIA and the Recovery
Act--posing risks for the use of federal intercity passenger rail
funds. Among other things, recent legislation required FRA to draft a
preliminary national rail plan and quickly develop a strategic vision
for high speed rail while creating a new federal program to distribute
and oversee a large increase in federal funds. A national rail plan,
consistent with state rail plans, as required in federal law, that
defines goals, roles for stakeholders, and objectives for federal
investment in rail projects could help FRA develop an oversight
program that would ensure accountability for these funds. Inclusion of
sound grants management principles could also enhance FRA's grant
oversight program to ensure grantees use federal funds effectively,
measure and demonstrate success, and regularly assess and enhance
program performance.
Federal and State Capacity to Accommodate Dramatically Increased Funds
and New Responsibilities Poses Risks for the Use of High Speed Rail
Funds:
The confluence of several factors resulting from the Recovery Act's
funding for intercity passenger rail projects pose risks for the use
of federal funds for investments in high speed rail projects. First,
the act dramatically and quickly increased the amount of funds
available for federal investment in high speed rail projects. The $8
billion in funding along with the $2.5 billion fiscal year 2010
appropriation for intercity passenger rail projects represent an
increase of over 87 times the $120 million appropriated for intercity
passenger rail projects in fiscal years 2008 and 2009 combined.
Second, FRA officials have been simultaneously carrying out several
new responsibilities, including:
* developing a preliminary national rail plan and strategic vision for
high speed rail service;
* creating a rail development program to use Recovery Act funds;
* soliciting and evaluating applications and making award decisions;
* negotiating letters of intent and cooperative agreements with states
awarded grants;
* creating a grants oversight plan;
* hiring new personnel for grants oversight; and:
* determining awards for fiscal year 2010 high speed rail capital
grants.
As a result, FRA officials stated that they have been working to meet
these new responsibilities and have had personnel from other
Department of Transportation agencies, such as FTA and the Research
and Innovative Technology Administration, help them review state
applications for Recovery Act funds.
Third, while federal law requires a project management oversight
program be in place for one of the three federal intercity passenger
rail grant programs, the other two federal rail grant programs do not
have this requirement.[Footnote 42] However, according to FRA
officials, its high speed rail program will outline how the agency
will administer and oversee all federal high speed rail grants. FRA
officials stated that they are drawing from a number of resources in
developing a robust oversight and monitoring program for high speed
rail projects, including existing agency procedures and new high speed
intercity passenger rail program-specific protocols. For example, FRA
is planning to use letters of intent with grantees which will define
milestones and conditions that must be satisfied prior to the
obligation and disbursement of federal funds. FRA is also planning to
use cooperative agreements with its grantees which will allow for
greater federal participation in risk management, oversight, and
technical assistance than under standard grant agreements.
In addition, FRA is planning to incorporate best practices and lessons
learned from other major federal transportation investment programs in
its oversight program, including those employed by FTA and the Federal
Highway Administration. FRA is adopting several project oversight
tools similar to those employed by FTA's New Starts Program--
specifically through the required development of Project Management
Plans for major capital projects, and the use of project management
oversight contractors to aid FRA staff in project oversight.[Footnote
43] FRA officials stated that they are planning to hire consultants to
provide on-site, day-to-day project management oversight and to ensure
that the development and implementation of each project complies with
all applicable statutes, regulations, and FRA guidance. FRA will
establish a point of contact for each state for additional oversight
and to provide coordination for any other federal funds for these
projects. FRA will also adopt the Federal Highway Administration's
Major Projects risk management approach, using three primary risk
management tools: a project management plan, a financial plan, and a
comprehensive risk-based cost-estimate review. FRA anticipates its
internal grant management manual describing this program to be ready
in June 2010. This program's development is critical as it is
important to hold grantees accountable by verifying that they are
making progress toward stated objectives and ensuring that grant funds
are used efficiently to support the program's objectives.
FRA officials stated that as FRA strives to meet these new
responsibilities, it is increasing its staff dedicated to high speed
passenger rail. Before the Recovery Act, FRA officials said that it
had 23 staff dedicated to passenger rail activities. FRA officials
stated that FRA received funding for 20 additional personnel, for its
passenger rail program in fiscal year 2010. FRA will need to dedicate
resources over the next months and years to hire and train these
additional personnel as well as find and acclimate the project
management consultant firms it plans to retain to oversee the day-to-
day project management for each state grantee or large project.
Other federal agencies have faced a similar increase in new
responsibilities in critical situations or in quickly handling
unprecedented amounts of federal funds. For example, as the federal
Office of Financial Stability's assumed responsibility for the $700
billion Troubled Asset Relief Program, it faced a key challenge of
developing comprehensive oversight procedures as it had to quickly
react to financial market events, increase staff at the newly created
agency, and attempt to develop and communicate a strategy for the
federal role in the financial marketplace while simultaneously
developing and implementing a program to carry out the strategy.
[Footnote 44] Similar issues existed at the Department of Commerce and
the Department of Agriculture as they hired contractors to handle
their multiple new award and oversight responsibilities that
accompanied a Recovery Act increase in funding of 97 times the
previous annual average amount for broadband infrastructure grants.
[Footnote 45] FRA's efforts to meet these responsibilities could also
be complicated in the near term. Although funds available for
oversight of Recovery Act projects expire in September 2014, FRA funds
for projects funded with fiscal year 2010 appropriations are available
until expended.
Finally, according to FRA officials, no state or federal agency
currently has the management capability to oversee such a large
passenger rail program so recently established. They noted that while
FRA is building its own capacity to initiate and sustain this program,
some state departments of transportation are even further behind in
developing their capacity to apply for grants and manage passenger
rail projects. While they found that some states are more advanced in
their planning for passenger rail projects than others, some have no
state resources dedicated to rail and many do not have a state rail
plan to guide their efforts.
Development of a National Rail Plan Consistent with State Rail Plans
Could Increase the Accountability and Transparency of Federal High
Speed Rail Funds:
FRA's Preliminary National Rail Plan recognizes the importance of
these state rail plans and anticipates coordinating its National Rail
Plan with them into an "efficient national system—meeting both
regional and national goals." However, FRA officials stated that as
the agency is developing its capacity and processes to manage this new
intercity passenger rail program, some states are further behind in
developing their capacity and processes to apply for passenger rail
funds. For example, a California department of transportation official
stated that it has been planning for and running its intercity
passenger rail service since 1976. In contrast, Ohio commissioned
Amtrak to conduct a feasibility study for its "3-C" service in late
2008 and received it in late 2009. As a result, Congress specifically
exempted projects funded with Recovery Act funds and fiscal year 2010
appropriations from this requirement to speed their distribution and
use. In addition, this exemption allowed those states without state
rail plans to apply for and receive federal funding awards without
establishing statewide strategies, priorities, capital investments, or
possible public benefits for rail service.
Due to the pace and scale of the Recovery Act grants, FRA officials
have not been able to develop a detailed strategic plan for how high
speed rail fits into the national transportation system or the federal
role in high speed intercity passenger rail, as required in the act.
FRA has published a strategic vision and a preliminary national rail
plan as it concentrated on preparing for and then awarding the
Recovery Act funds. The strategic vision outlined FRA's proposed
strategy to implement the act's funding for high speed rail corridors;
however, it did not define the goals, roles of stakeholders, or
objectives for federal involvement in high speed intercity passenger
rail. The Preliminary National Rail Plan, while offering broad
objectives for high speed intercity passenger rail, did not offer
specific recommendations for future action and is designed to serve as
a "springboard for further discussion" with states and freight
railroads.
We have reported that the United States is not well positioned to
reform its intercity passenger rail system as the goals and expected
outcomes of U.S. rail policy are ambiguous, stakeholder roles are
unclear, and funding is limited.[Footnote 46] A national rail plan
could define several important aspects of such a rail policy by
describing:
* the vision and goals for U.S. high speed rail;
* how passenger rail might fit into the national transportation
system; and:
* the appropriate federal role in achieving the established goals.
[Footnote 47]
As a result, we recommended that the Department of Transportation
prepare a strategic vision for high speed rail, particularly in
relation to the role that high speed rail can play in the national
transportation system, that clearly identifies potential objectives
and goals for high speed rail systems and the roles that the federal
government and others can play in achieving each objective and goal.
With the federal interest clearly defined, policymakers can clarify
the goals for federal involvement and the roles of all stakeholders
toward those goals.[Footnote 48] FRA officials stated that the
National Rail Plan to be released in September 2010 will attempt to
better define the role of passenger and freight rail in the national
transportation system, as well as appropriate roles for rail
stakeholders.
Sound Grants Management Practices Could Also Help FRA in Developing
Its Oversight Efforts:
A well-designed and implemented grant oversight program is critical to
ensuring effective use of federal grant funds. In addition to meeting
agency and congressional goals and providing public benefits,
effective use of federal funds is important in light of the federal
government's long-term fiscal imbalance. Simply monitoring and
reporting performance may encourage accountability and grant
guidelines can establish uniform outcome measures for evaluating
grantees' performance toward specific goals.[Footnote 49] Incentives
or penalties in the grant agreements can also create clear links
between performance and funding which help hold grantees accountable
for achieving desired results.
Some grants management practices identified by the Comptroller
General's Domestic Working Group could help FRA in developing these
aspects of its grant management program.[Footnote 50] The Domestic
Working Group identified several promising practices which could
improve grants management including: managing grantee performance,
using results of the grant program, and assessing and developing
performance measures for grantees.[Footnote 51] These specific
principles will become important as FRA transitions from awarding
grants to overseeing their performance. FRA is planning to address
these principles in its grant oversight approach. (See table 4.)
Table 4: FRA's Oversight Plan in Relation to Selected Grant Oversight
Principles:
Principle: Managing grantee performance;
GAO Grants Working Group description: Agencies need to ensure grants
are used for the intended purposes by:
* monitoring the grants' financial status;
* monitoring performance of grantees and subgrantees; and;
* using audits to gain information about grantees;
FRA's planned oversight approach: FRA is planning to incorporate
programmatic, financial, and administrative reviews of grantee reports
and documentation, as well as perform site visits. Audits will be used
to identify project-specific corrective actions.
Principle: Assessing and using results of the grant program;
GAO Grants Working Group description: Agencies should be able to:
* demonstrate grants' successes by surveying grantees or inspecting
projects; and;
* identify ways to improve program performance using outside experts
to assess and evaluate programs;
FRA's planned oversight approach: FRA is planning to aggregate its
project reviews and site visits to identify trends and to preempt
potential issues and concerns with the program.
Principle: Measuring performance;
GAO Grants Working Group description: Agencies should develop outcome-
related performance measures with its grantees;
FRA's planned oversight approach: FRA officials stated that they are
developing tools to measure these outcomes. FRA officials stated that
they will require time and focused resources to fully develop accurate
and useful metrics to measure public benefits.
Source: Guide to Opportunities for Improving Grant Accountability and
GAO analysis of FRA information.
[End of table]
As FRA is working on agreements with states to monitor their
performance on Recovery Act projects, FRA officials have stated that
their grant oversight program will incorporate reviews and site visits
to measure grantees' performance; the development of a tool to track
grantees' performance; and processes to use the results of the
reviews, site visits, and tracking tool to improve the overall
program. Although some performance measures, such as ridership,
revenue, and revenue-to-cost metrics exist, FRA officials told us that
they are developing more robust metrics for accurately measuring the
public benefits of passenger rail investments. FRA's high speed rail
interim program guidance includes such potential benefits as
congestion reduction, environmental quality, safety, energy
efficiency, and the creation of livable communities. We have
recognized that the valuation of public benefits is difficult and have
recommended that the Department of Transportation develop specific
policies that include performance measures of public benefits in its
intercity passenger rail grant award decisions.[Footnote 52] In
addition, assessing the grant program and incorporating the results of
that assessment could be critical as FRA gains experience with this
new program and as future federal funds are appropriated for high
speed intercity passenger rail projects.
Concluding Observations:
The federal government has embarked on a new role in transportation by
designating an unprecedented amount of federal funds for high speed
passenger rail. Federal, state, and local officials have welcomed the
investment and have cited the possible public benefits of passenger
rail service for the nation, regions, states, and communities.
However, this new opportunity will come with many years of planning,
testing, and construction, and brings new concerns. While the rail
industry and some states are ready to take advantage of this
opportunity, the federal government and many states do not have any
experience in contracting for intercity passenger rail service. States
that have established intercity passenger rail service have taken
years to build public support, secure funding, obtain equipment, and
manage their services. More passenger rail service, especially
services at higher and high speeds, will require new safety rules,
constant public capital investment and operating subsidies, and
balance with freight rail service and the rest of the national
transportation system--and currently only some of these elements are
in place.
While the recent federal funds may serve as a catalyst for many
projects and have generated high public expectations, the planning
necessary to meet the many concerns outlined above has not yet
occurred. In particular, some states do not have a state rail plan
that identifies the states' strategies, priorities, and possible
public benefits of public investment in rail transportation. While it
is understandable that Congress exempted projects funded by the
Recovery Act from this requirement to stimulate the economy, it
remains nonetheless important to know how states plan to use federal
funds for passenger rail projects over the long term. PRIIA
established that states should plan how they use federal passenger
rail funds and we believe this kind of planning can provide the basis
for sound investment of federal funds. Additionally, on a national
level, FRA's definition of federal role, goals, and objectives, in
conjunction with a robust grant oversight program, are critical to
making sound federal investments. These elements will become even more
important as more federal funds are appropriated and distributed and
as states and the federal government gain experience in investing and
managing intercity passenger rail service. We are not recommending
that FRA include these elements in its next version of its National
Rail Plan at this time, as the agency appears to be on a path to doing
so. We will continue to monitor FRA's efforts in this regard.
Agency Comments:
We provided a draft of this report to the Department of Transportation
for review and comment. The department did not express an overall view
on the draft report. It did provide technical comments and
clarifications, which we incorporated.
We are sending copies of this report to congressional subcommittees
with responsibilities for surface transportation issues; the Director,
Office of Management and Budget; the Secretary of Transportation; and
the Administrator of the Federal Railroad Administration. In addition,
this report will be available at no charge on GAO's Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact me at (202) 512-2834 or flemings@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made key contributions
to this report are Heather Chartier, Gregory Hanna, James
Ratzenberger, and Caitlin Tobin.
Signed by:
Susan A. Fleming:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Scope and Methodology:
To report on how states successfully initiated or improved their
intercity passenger rail services over the past 15 years, we reviewed
documentation about states that provided operational support to
intercity passenger rail services; interviewed state, association, and
industry officials; and identified parallels between developing
conventional passenger rail and higher and high speed passenger rail
services. (For a list of the organizations interviewed, see table 5 at
the end of this appendix.) We identified states that initiated or
improved intercity passenger rail services over the last 15 years by
reviewing reports and background information about recent intercity
passenger rail services, as well as by conducting interviews with the
Federal Railroad Administration (FRA), National Railroad Passenger
Corporation (Amtrak), and association officials knowledgeable of state-
supported passenger rail services. We conducted semistructured
interviews with state rail officials from 8 states, including 4 states
that initiated new services and 4 states that improved existing
services, including 1 state that improved an existing service to
higher speeds. We also reviewed documentation provided by states about
these passenger rail systems and conducted semistructured interviews
with industry officials about these state-supported services.
To gain some insight into the types of infrastructure improvements
states would need to invest in to increase speeds and improve the
performance of intercity passenger rail service, we visited railroad
projects in Indiana, projects on Amtrak-owned infrastructure in
Michigan which will soon allow a top speed for passenger trains of 110
miles per hour, and projects on various freight railroad rights-of-way
in Illinois designed to reduce rail congestion and increase train
speeds, respectively. Additionally, we reviewed information about
states and projects awarded Recovery Act funding and reviewed our
previous work about intercity passenger rail and high speed rail to
determine how state experiences developing intercity passenger rail
can be applied to developing conventional intercity passenger rail and
high speed rail services.
We met with industry stakeholders to obtain their views regarding how
the rail industry plans to accommodate the increased investment in
passenger rail service. To identify these stakeholders, we met with
railroad associations, attended rail conferences, and drew upon
internal and external subject matter experts to identify companies in
each area. We conducted semistructured interviews with potential
operators, right-of-way owners, passenger rail car manufacturers, and
general rail industry contractors to obtain their views on the
capacity of the rail industry to accommodate the increased public
investment and to identify issues related to this increased
investment. We reviewed and analyzed federal laws and regulations such
as the Buy America provision in the Recovery Act, and FRA's Passenger
Rail Safety Study, to describe the rules that govern the industry. We
reviewed information from our reports related to stakeholder-
identified rail industry challenges to see if these challenges have
changed with the onset of the Recovery Act funding.
We reviewed federal laws including the Recovery Act and the Passenger
Rail Investment and Improvement Act of 2008 to describe FRA's new
responsibilities regarding passenger rail investment. To provide grant
oversight principles that could be used by the FRA in its grants
management program, we identified important grant oversight elements
from the Comptroller General's Domestic Working Group report on grants
management and from our reports evaluating various federal grant
programs. We compared them to statements made by FRA officials
regarding their oversight program. We analyzed FRA's strategic vision
for high speed rail, its preliminary national rail plan, and its
interim guidance for its high speed passenger rail program for
information on the stated federal role in intercity passenger rail and
how it fits within the national transportation system. We also
interviewed FRA officials responsible for passenger rail development
to determine how FRA is planning to oversee the use of Recovery Act
and other federal funds for intercity passenger rail investments.
We focused on the state, industry, and federal efforts to fund capital
investments in state-supported intercity passenger rail corridors and
projects as these projects were the types of projects eligible for
Recovery Act and subsequent federal funding.
Table 5: Organizations Contacted:
Federal agency:
Department of Transportation, Federal Railroad Administration.
State departments of transportation:
California;
Illinois;
Maine;
North Carolina;
Pennsylvania;
Vermont;
Virginia;
Washington.
Passenger rail operators:
Amtrak;
Herzog;
JR Central (Central Japan Railway Company);
SNCF;
Veolia.
Freight railroads:
BNSF Railway Company;
Canadian National Railway Company;
Canadian Pacific Railway;
CSX Transportation Incorporated;
Union Pacific Railroad.
Rail car manufacturers and rail industry firms:
Alstom Transport;
Bombardie;
Kawasaki Rail Car;
Parsons Brinckerhoff;
Talgo;
URS Corporation.
Associations:
American Association of State Highway and Transportation Officials;
Association of American Railroads;
Coalition of Northeastern Governors;
States for Passenger Rail Coalition.
Source: GAO.
[End of table]
[End of section]
Footnotes:
[1] For the purpose of our work, we considered the recent past as the
15-year period between 1995 and 2009 so that we could concentrate on
those states that established intercity passenger rail service during
and after the most recent changes in Amtrak and freight railroad
policies toward expanding intercity passenger rail.
[2] Domestic Working Group, Grant Accountability Group, Guide to
Opportunities for Improving Grant Accountability (Washington, D.C.,
October 2005). This group consisted of 19 federal, state, and local
audit organizations to identify current and emerging challenges of
mutual interest and explore opportunities for greater collaboration
within the intergovernmental audit community.
[3] These three programs are Section 301-Capital Assistance for
Intercity Passenger Rail Service Grants, Section 302-Congestion
Grants, and Section 501-High Speed Rail Corridor Program. State rail
plans are required for Sections 301 and 501, but not mentioned in
Section 302.
[4] By comparison, the fiscal year 2008 and fiscal year 2009
appropriations for the department included $30 million and $90 million
respectively for intercity passenger rail grants to states.
[5] Department of Transportation, Vision for High-Speed Rail in
America (Washington, D.C., April 2009).
[6] This proposal also includes $4 billion for a national
infrastructure fund that could also be used for intercity passenger
rail projects.
[7] As per 49 U.S.C. 24102(5)(C) and (D), Amtrak defines short
distance routes as being 750 miles or less in length and routes 750
miles or more to be long distance. Commuter rail service is generally
defined as regional service between a central city and its suburbs.
[8] Amtrak owns tracks connected to the corridor between Philadelphia
and Harrisburg, Pennsylvania, and between New Haven, Connecticut, and
Springfield, Massachusetts.
[9] In addition, several transit authorities have purchased rights-of-
way on which to operate their commuter rail service. For more
information, see GAO, Commuter Rail: Many Factors Influence Liability
and Indemnity Provisions and Options Exist to Facilitate Negotiations,
[hyperlink, http://www.gao.gov/products/GAO-09-282] (Washington, D.C.:
Feb. 24, 2009).
[10] However, Amtrak's fastest scheduled Acela Express service takes 2
hours and 42 minutes to go 225 miles between Washington, D.C., and New
York City for an average of 84 miles per hour.
[11] 74 Fed. Reg. 29900, June 23, 2009.
[12] Department of Transportation, Vision for High-Speed Rail in
America (Washington, D.C., April 2009).
[13] FRA, Preliminary National Rail Plan (Washington, D.C., October
2009).
[14] For ease of presentation, we combined the individual Recovery Act
awards by state. In addition to the Recovery Act awards, another 20
projects in 15 states and the District of Columbia were also awarded
$27 million in fiscal year 2008 and 2009 funds for intercity passenger
rail assistance grants in January 2010.
[15] We considered conventional passenger rail service to include
trains traveling up to 79 miles per hour; higher speed passenger rail
service to include trains traveling up to 150 miles per hour; and high
speed passenger rail service to include trains traveling 150 miles per
hour or more. In PRIIA, Congress defined high speed rail service as
intercity passenger rail service that is reasonably expected to reach
speeds of at least 110 miles per hour. We are making this additional
differentiation to show the different levels of planning, investment,
and safety considerations required to achieve these top speeds.
[16] GAO, High Speed Passenger Rail: Future Development Will Depend on
Addressing Financial and Other Challenges and Establishing a Clear
Federal Role, [hyperlink, http://www.gao.gov/products/GAO-09-317]
(Washington, D.C.: Mar. 19, 2009).
[17] Flexible funds are federal funds that, by statute, may be used
for transit or highway purposes. They allow a local area to choose to
use certain federal surface transportation funds--including from the
Surface Transportation Program, the Congestion Mitigation and Air
Quality Improvement Program, and through Urban Formula funding--based
on local planning priorities, not on a restrictive definition of
program eligibility. The Federal Highway Administration and the
Federal Transit Administration (FTA) administer these programs.
[18] The Transportation Enhancement Program, administered by the
Federal Highway Administration and first authorized by the Intermodal
Surface Transportation Efficiency Act of 1991, provides funding
opportunities to states to help expand transportation choices and
enhance the transportation experience through 12 eligible activities,
including the rehabilitation and operation of historic transportation
buildings, structures, or facilities.
[19] The Congestion Mitigation and Air Quality Improvement Program is
jointly administered by the Federal Highway Administration and FTA.
The program provides funding to state departments of transportation,
metropolitan planning organizations, and transit agencies to invest in
projects that reduce regulated air pollutants from transportation-
related sources.
[20] These cost estimates can include several different types of
investments, such as constructing stations and platforms, acquiring
locomotives and passenger rail cars, improving existing railroad
rights-of-way, and building new railroad rights-of-way. The types and
mixtures of investments may vary across corridors and some investments
may be less variable than others due to the length of the corridor.
Nonetheless, expressing cost estimates using route miles as a common
denominator helps show how costs for higher and high speed service are
significantly greater than for conventional service.
[21] Ohio Rail Development Commission, High Speed Intercity Passenger
Rail Track 2 Application: OH-3C-QuickStart (October 2009).
[22] Pennsylvania Department of Transportation, High Speed Intercity
Passenger Rail Track 2 Application: PA - Keystone Corridor - High
Speed (October 2009), and Michigan Department of Transportation, High
Speed Intercity Passenger Rail Track 2 Application: MI-CHI Hub, CHI-
DET/PNT (October 2009).
[23] New York State Department of Transportation, High Speed Intercity
Passenger Rail Track 2 Application: NY-EC2-Empire Corridor-NYC-NFL
(October 2009).
[24] North Carolina Department of Transportation, High Speed Intercity
Passenger Rail Track 2 Application: NCT2.4 - SEHSR - Charlotte to DC/
NEC (October 2009).
[25] Florida Department of Transportation, High Speed Intercity
Passenger Rail Track 2 Application: Florida High Speed Rail Express:
Tampa-Orlando (October 2009).
[26] California High Speed Rail Authority, Report to the Legislature
(December 2009).
[27] Dedicated rail right-of-way refers to railroad track reserved for
the exclusive use of high speed rail passenger trains, whereas shared
rail right-of-way refers to track used by both passenger and freight
trains.
[28] Conventional passenger rail trains and higher speed passenger
rail trains are usually powered by diesel locomotives and operate over
rail right-of-way shared with freight trains. Of the states we
interviewed, only Pennsylvania improved service on an electrified,
rail right-of-way in the recent past.
[29] [hyperlink, http://www.gao.gov/products/GAO-09-317].
[30] However, one passenger rail car manufacturer stated that there
are many factors that affect the time it takes to deliver rail cars,
such as, the type of equipment, whether there are new design features
that require extensive testing, and requirements in the customer's
technical specifications.
[31] Ohio's "3-C" corridor is approximately 256 miles long and will
connect Cleveland, Columbus, and Cincinnati.
[32] GAO, Intercity Passenger Rail: National Policy and Strategies
Needed to Maximize Public Benefits from Federal Expenditures,
[hyperlink, http://www.gao.gov/products/GAO-07-15] (Washington, D.C.:
Nov. 13, 2006).
[33] For these reasons, Amtrak's access costs cannot be directly
compared with any other potential intercity passenger rail operator.
However, commuter rail costs are the same as to as much as 10 times as
much as Amtrak pays for rail infrastructure access.
[34] [hyperlink, http://www.gao.gov/products/GAO-09-317].
[35] The Buy America provisions set forth in 49 U.S.C. 24405(a)
provides that the Secretary of Transportation may obligate Recovery
Act funds for a High Speed Rail/Intercity Passenger Rail or congestion
project only if the steel, iron, and manufactured goods used in the
project are produced in the United States. The Secretary has the
authority to waive this requirement under certain circumstances and
the requirement is only applicable to projects which exceed $100,000.
[36] Federal law limits overall damages from passenger claims to $200
million and explicitly authorized passenger rail providers to enter
into indemnification agreements. For more information, see [hyperlink,
http://www.gao.gov/products/GAO-09-282].
[37] [hyperlink, http://www.gao.gov/products/GAO-09-282].
[38] A liability insurance pool can be described as a group of
organizations with similar characteristics, such as a group of
commuter rail agencies that pool their assets to obtain a single
commercial insurance policy, rather than obtaining individual
commercial insurance policies.
[39] In 2006, we studied the passenger rail systems of Canada, France,
Germany, Japan, and the United Kingdom. We selected these systems as
they had reformed to try to become more cost-effective and value-added
for the level of subsidies spent. For more information, see
[hyperlink, http://www.gao.gov/products/GAO-07-15].
[40] GAO, State and Local Governments' Fiscal Outlook: March 2010
Update, [hyperlink, http://www.gao.gov/products/GAO-10-358]
(Washington, D.C.: Mar. 2, 2010).
[41] [hyperlink, http://www.gao.gov/products/GAO-09-317].
[42] One of the federal grant programs established in PRIIA that will
be used to distribute Recovery Act high speed rail funds has a project
management oversight requirement (Section 301-Capital Assistance for
Intercity Passenger Rail Service Grants); whereas the other two
programs do not (Section 302-Congestion Grants and Section 501-High
Speed Rail Corridor Program). However, FRA is requiring all
construction projects funded under the Recovery Act or with future
federal passenger rail funds to develop an FRA-approved project
management plan prior to awarding the funds.
[43] Through its New Starts program, FTA identifies and recommends,
based on financial and programmatic criteria, new fixed-guideway
transit projects, including heavy, light, and commuter rail projects,
for federal capital funding.
[44] GAO, Troubled Asset Relief Program: Status of Efforts to Address
Transparency and Accountability Issues, [hyperlink,
http://www.gao.gov/products/GAO-09-296] (Washington, D.C.: Jan. 30,
2009).
[45] GAO, Recovery Act: Agencies Are Addressing Broadband Program
Challenges, but Actions Are Needed to Improve Implementation,
[hyperlink, http://www.gao.gov/products/GAO-10-80] (Washington, D.C.:
Nov. 16, 2009).
[46] GAO, Intercity Passenger Rail: National Policy and Strategies
Needed to Maximize Public Benefits from Federal Expenditures,
[hyperlink, http://www.gao.gov/products/GAO-07-15] (Washington, D.C.:
Nov. 13, 2006).
[47] [hyperlink, http://www.gao.gov/products/GAO-09-317].
[48] [hyperlink, http://www.gao.gov/products/GAO-09-317]. The
Department of Transportation did not take a position on this
recommendation and stated that the Recovery Act accelerated its work
on high speed intercity passenger rail. At the time, the department
indicated that its upcoming strategic plan may include its vision on
implementing high speed intercity passenger rail services.
[49] GAO, Grants Management: Enhancing Performance Accountability
Provisions Could Lead to Better Results, [hyperlink,
http://www.gao.gov/products/GAO-06-1046] (Washington, D.C.: Sept. 29,
2006).
[50] We have also reported on oversight of several federal grant
programs such as: Department of Justice juvenile justice grants, GAO,
Juvenile Justice: A Time Frame for Enhancing Grant Monitoring
Documentation and Verification of Data Quality Would Help Improve
Accountability and Resource Allocation Decisions, [hyperlink,
http://www.gao.gov/products/GAO-09-850R] (Washington, D.C.: Sept. 22,
2009); Transportation Security Agency and Federal Emergency Management
Agency first responder grants, GAO, Transit Security Grant Program:
DHS Allocates Grants Based on Risk, but Its Risk Methodology,
Management Controls, and Grant Oversight Can Be Strengthened,
[hyperlink, http://www.gao.gov/products/GAO-09-491] (Washington, D.C.:
June 8, 2009); overall grant performance management, GAO, Grants
Management: Enhancing Performance Accountability Provisions Could Lead
to Better Results, [hyperlink,
http://www.gao.gov/products/GAO-06-1046] (Washington, D.C.: Sept. 29,
2006); and Environmental Protection Agency grant oversight, GAO,
Grants Management: EPA Needs to Strengthen Efforts to Address
Persistent Challenges, [hyperlink,
http://www.gao.gov/products/GAO-03-846] (Washington, D.C.: Aug. 29,
2003).
[51] Domestic Working Group, Grant Accountability Project, Guide to
Opportunities for Improving Grant Accountability, October 2005. This
guide states that it is designed to provide government executives at
the federal, state, and local levels with ideas for better managing
grants. The guide focuses on specific steps taken by various agencies.
The intent is to share useful and innovative approaches taken, so that
others can consider using them.
[52] [hyperlink, http://www.gao.gov/products/GAO-09-317]. The
Department of Transportation did not take a position on this
recommendation and stated that the Recovery Act accelerated its work
on high speed intercity passenger rail. At the time, the department
indicated that its upcoming strategic plan may include its criteria
for selecting projects and an evaluation process that will be used to
measure effectiveness.
[End of section]
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