[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
FUNDING A ROBUST FREIGHT AND PASSENGER RAIL NETWORK
=======================================================================
(116-57)
HEARING
BEFORE THE
SUBCOMMITTEE ON RAILROADS, PIPELINES,
AND HAZARDOUS MATERIALS
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
MARCH 4, 2020
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
_________
U.S. GOVERNMENT PUBLISHING OFFICE
42-633 PDF WASHINGTON : 2021
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri ELEANOR HOLMES NORTON,
DON YOUNG, Alaska District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio RICK LARSEN, Washington
DANIEL WEBSTER, Florida GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky DANIEL LIPINSKI, Illinois
MARK MEADOWS, North Carolina STEVE COHEN, Tennessee
SCOTT PERRY, Pennsylvania ALBIO SIRES, New Jersey
RODNEY DAVIS, Illinois JOHN GARAMENDI, California
ROB WOODALL, Georgia HENRY C. ``HANK'' JOHNSON, Jr.,
JOHN KATKO, New York Georgia
BRIAN BABIN, Texas ANDRE CARSON, Indiana
GARRET GRAVES, Louisiana DINA TITUS, Nevada
DAVID ROUZER, North Carolina SEAN PATRICK MALONEY, New York
MIKE BOST, Illinois JARED HUFFMAN, California
RANDY K. WEBER, Sr., Texas JULIA BROWNLEY, California
DOUG LaMALFA, California FREDERICA S. WILSON, Florida
BRUCE WESTERMAN, Arkansas DONALD M. PAYNE, Jr., New Jersey
LLOYD SMUCKER, Pennsylvania ALAN S. LOWENTHAL, California
PAUL MITCHELL, Michigan MARK DeSAULNIER, California
BRIAN J. MAST, Florida STACEY E. PLASKETT, Virgin Islands
MIKE GALLAGHER, Wisconsin STEPHEN F. LYNCH, Massachusetts
GARY J. PALMER, Alabama SALUD O. CARBAJAL, California,
BRIAN K. FITZPATRICK, Pennsylvania Vice Chair
JENNIFFER GONZALEZ-COLON, ANTHONY G. BROWN, Maryland
Puerto Rico ADRIANO ESPAILLAT, New York
TROY BALDERSON, Ohio TOM MALINOWSKI, New Jersey
ROSS SPANO, Florida GREG STANTON, Arizona
PETE STAUBER, Minnesota DEBBIE MUCARSEL-POWELL, Florida
CAROL D. MILLER, West Virginia LIZZIE FLETCHER, Texas
GREG PENCE, Indiana COLIN Z. ALLRED, Texas
SHARICE DAVIDS, Kansas
ABBY FINKENAUER, Iowa
JESUS G. ``CHUY'' GARCIA, Illinois
ANTONIO DELGADO, New York
CHRIS PAPPAS, New Hampshire
ANGIE CRAIG, Minnesota
HARLEY ROUDA, California
CONOR LAMB, Pennsylvania
Subcommittee on Railroads, Pipelines, and Hazardous Materials
DANIEL LIPINSKI, Illinois, Chair
ERIC A. ``RICK'' CRAWFORD, Arkansas ALBIO SIRES, New Jersey
SCOTT PERRY, Pennsylvania DONALD M. PAYNE, Jr., New Jersey
RODNEY DAVIS, Illinois LIZZIE FLETCHER, Texas
BRIAN BABIN, Texas ANDRE CARSON, Indiana
MIKE BOST, Illinois FREDERICA S. WILSON, Florida
RANDY K. WEBER, Sr., Texas MARK DeSAULNIER, California
DOUG LaMALFA, California STEPHEN F. LYNCH, Massachusetts
LLOYD SMUCKER, Pennsylvania TOM MALINOWSKI, New Jersey
PAUL MITCHELL, Michigan GRACE F. NAPOLITANO, California
BRIAN K. FITZPATRICK, Pennsylvania STEVE COHEN, Tennessee
TROY BALDERSON, Ohio JESUS G. ``CHUY'' GARCIA, Illinois
ROSS SPANO, Florida ELEANOR HOLMES NORTON,
PETE STAUBER, Minnesota District of Columbia
GREG PENCE, Indiana EDDIE BERNICE JOHNSON, Texas
SAM GRAVES, Missouri (Ex Officio) ALAN S. LOWENTHAL, California
COLIN Z. ALLRED, Texas, Vice Chair
ANGIE CRAIG, Minnesota
CONOR LAMB, Pennsylvania
PETER A. DeFAZIO, Oregon (Ex
Officio)
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Daniel Lipinski, a Representative in Congress from the State
of Illinois, and Chairman, Subcommittee on Railroads,
Pipelines, and Hazardous Materials:
Opening statement............................................ 1
Prepared statement........................................... 2
Hon. Peter A. DeFazio, a Representative in Congress from the
State of Oregon, and Chairman, Committee on Transportation and
Infrastructure:
Opening statement............................................ 3
Prepared statement........................................... 4
Hon. Eric A. ``Rick'' Crawford, a Representative in Congress from
the State of Arkansas, and Ranking Member, Subcommittee on
Railroads, Pipelines, and Hazardous Materials:
Opening statement............................................ 4
Prepared statement........................................... 5
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Ranking Member, Committee on Transportation and
Infrastructure, prepared statement............................. 71
WITNESSES
Stephen Gardner, Senior Executive Vice President and Chief
Operating and Commercial Officer, National Railroad Passenger
Corporation (Amtrak):
Oral statement............................................... 7
Prepared statement........................................... 9
Hon. Sandra Bury, O.D., Mayor, Village of Oak Lawn, Illinois:
Oral statement............................................... 16
Prepared statement........................................... 18
Kevin S. Corbett, President and Chief Executive Officer, NJ
Transit Corporation:
Oral statement............................................... 19
Prepared statement........................................... 21
Robert J. Shanahan, Jr., Assistant to the President-Director of
Arbitration, Brotherhood of Maintenance of Way Employes
Division, International Brotherhood of Teamsters:
Oral statement............................................... 24
Prepared statement........................................... 26
Kevin Artl, President and Chief Executive Officer, American
Council of Engineering Companies of Illinois:
Oral statement............................................... 28
Prepared statement........................................... 30
Ian Jefferies, President and Chief Executive Officer, Association
of American Railroads:
Oral statement............................................... 33
Prepared statement........................................... 35
SUBMISSIONS FOR THE RECORD
Submissions for the record by Hon. Tom Malinowski:
Letter of March 3, 2020, from Bruce H. Bergen, Chairman,
Raritan Valley Rail Coalition.............................. 71
Letter of March 3, 2020, from County of Union, New Jersey,
Board of Chosen Freeholders................................ 72
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
February 28, 2020
SUMMARY OF SUBJECT MATTER
TO: LMembers, Subcommittee on Railroads, Pipelines,
and Hazardous Materials
FROM: LStaff, Subcommittee on Railroads, Pipelines, and
Hazardous Materials
RE: LSubcommittee Hearing on ``Funding a Robust
Freight and Passenger Rail Network.''
_______________________________________________________________________
PURPOSE
The Subcommittee on Railroads, Pipelines, and Hazardous
Materials will meet on Wednesday, March 4, 2020, at 10:00 a.m.
in 2167 Rayburn House Office Building to hold a hearing titled,
``Funding a Robust Freight and Passenger Rail Network.'' The
hearing will discuss the benefits of both freight and passenger
rail, examine the current state of the network, and address the
need for continued investment through federal programs. The
Subcommittee will hear testimony from Amtrak, Village of Oak
Lawn, NJ TRANSIT Corporation, Brotherhood of Maintenance of Way
Employees Division--International Brotherhood of Teamsters,
American Council of Engineering Companies of Illinois, and the
Association of American Railroads.
BACKGROUND
I. BACKGROUND
A. INTERCITY PASSENGER RAIL
The National Railroad Passenger Corporation, known as
``Amtrak,'' was created by the Rail Passenger Service Act of
1970.\1\ Prior to Amtrak's creation, privately-owned railroads
provided passenger rail transportation, pursuant to their
common carrier obligation that dated back to the late 1800s. As
the federal government supported the growth of airports and
invested heavily to develop the expansive interstate system,
travel by aircraft and car grew in popularity while passenger
rail mileage declined from 40 million in 1947 to less than 8
million just two decades later.\2\
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\1\ Public Law 91-518.
\2\ Wilner, Frank. Amtrak: Past, Present, Future. Omaha, Simmons-
Boardman Books, Inc., 2012. Page XIV.
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In 1970, with several major railroads in or nearing
bankruptcy, Congress relieved the private railroads from their
obligation to provide passenger rail service by creating Amtrak
as the Nation's passenger rail provider. Amtrak was established
under the corporation laws of the District of Columbia (DC) but
would receive government funding. Railroads bought into Amtrak
and the purchase price was satisfied either by cash or rolling
stock; in exchange, the railroads received common non-voting
stock. Amtrak began operating passenger service on May 1, 1971.
Amtrak operates much of its service over tracks that are
owned, maintained, and dispatched by the freight railroads. Due
to the historical bargain in which freight railroads were
relieved from their common carriage obligation for passenger
rail service, Amtrak trains have a statutory ``preference''
over freight transportation in using a rail line, junction, or
crossing, except in emergencies or unless the Surface
Transportation Board (STB) orders otherwise.\3\
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\3\ 49 U.S.C. 24308(c).
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B. COMMUTER RAIL
Rail transportation modes split into transit rail (heavy
rail, light rail, and streetcar) and commuter rail. Typically,
transit rail passengers use these services for shorter trips
and on closed rail systems; commuter rail services carry
passengers for longer trips on the Federal Railroad
Administration (FRA)-regulated general railroad system,
connected to the broader interstate railroad network. As such,
commuter rail is designed to provide a longer-distance,
regional service that connects riders from suburban areas to
city centers. Commuter rail typically operates with higher-
speed, higher-capacity trains and less-frequent stops, and
often operates on freight railroad right-of-way.
C. FREIGHT RAIL
The U.S. freight railroad industry operates a 140,000-mile
network across the country, delivering on average five million
tons of goods every day. This industry is composed of varying
sized railroads measured by their annual operating revenues
into three different classes. The largest railroads include the
seven Class Is, which are the biggest railroads that
collectively provide long-haul operations in 44 states and
D.C.\4\ The Class Is transport nearly 69 percent of U.S.
freight mileage.\5\
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\4\ The seven Class I railroads include Burlington Northern Santa
Fe Railway (BNSF); Union Pacific Railroad (UP); Norfolk Southern
Railway (NS); CSX Transportation; Canadian National Railway (CN);
Canadian Pacific Railway (CP); and Kansas City Southern (KCS).
\5\ Association of American Railroads https://www.aar.org/railroad-
101/.
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The 603 short line and regional railroads operate 38% of
the nation's rail network.\6\ Short lines are often the only
way rural America can connect to the rest of the national
freight network--playing an important role in providing first-
mile and last-mile service that extends the reach of the rail
network to rural communities, manufacturers, farmers, and
others.\7\ These smaller railroads range in size from small
operators handling just a few carloads a month, to others that
cross state lines and approach the size of the large Class I
railroads. The short line and regional railroads move about
one-third of all U.S. freight, and operate in every state
except Hawaii.
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\6\ American Short Line and Regional Railroad Association https://
www.aslrra.org/.
\7\ American Short Line and Regional Railroad Association https://
www.aslrra.org/web/About/Industry_Facts/web/About/
Industry_Facts.aspx?hkey=bd7c0cd1-4a93-4230-a0c2-c03fab0135e2.
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In 2018, the seven Class I freight railroads operating in
the U.S. spent $24.9 billion on infrastructure and equipment
throughout the country.\8\ In addition, states also make
investments in the rail network such as those that fund port
improvements, capacity preservation and expansion, and grade
crossing improvement projects. For example, the state of
Indiana developed the Local Trax Rail Overpass Program, in
which $125 million in state matching funds was made available
to cities, towns, and counties interested in pursuing high-
priority railroad grade separations, crossing closures, and
other safety enhancements at railroad intersections with local
roads.
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\8\ Association of American Railroads, ``Overview of America's
Freight Railroads,'' June 2019, Available at https://www.aar.org/wp-
content/uploads/2018/08/Overview-of-Americas-Freight-RRs.pdf.
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II. RAIL INVESTMENT NEEDS: A SNAPSHOT
Since Amtrak began operations in 1971, federal funds have
fluctuated, forcing Amtrak to cut services and defer
maintenance on equipment and infrastructure across its network.
Moreover, under the Railroad Revitalization and Regulatory
Reform Act of 1976, Congress gave Amtrak ownership of the
Northeast Corridor (NEC) after the Penn Central Railroad went
bankrupt.\9\ The heavy usage of the NEC combined with the age
of bridges and tunnels--many of which date back to the period
between the Civil War and the New Deal--has led to major needs
in maintenance and capital infrastructure improvements, in
order to remove bottlenecks and increase capacity along the
corridor. According to the revised Northeast Corridor
Commission's Capital Investment Plan for Fiscal Years 2020-
2024, more than $21 billion remains unfunded for major rail
infrastructure projects along the NEC. Some of these projects
include: the Baltimore & Potomac Tunnel ($4.59 billion project,
with $4.52 billion unfunded), which was built in 1873 and
requires replacing the Civil-War era tunnel with a newer curve-
moderated tunnel; replacement of the swing-span Portal North
Bridge ($1.78 billion project, with $811 million unfunded) over
the Hackensack River; and replacement of the Susquehanna River
Bridge ($1.88 billion project, with $1.86 billion
unfunded).\10\
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\9\ Railroad Revitalization and Regulatory Reform Act of 1976,
Public Law 94-210.
\10\ Northeast Corridor Capital Investment Plan, Fiscal Years 2020-
2024, Northeast Corridor Commission, Available at https://nec-
commission.com/app/uploads/2019/12/NEC-Capital-Investment-Plan-20-
24_Amended.pdf
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In addition to the NEC major projects, much of Amtrak's
fleet has aged and is in need of replacement. The average
passenger railcar that Amtrak owns or leases is nearing 34
years of age, and the average locomotive or trainset unit is
more than 20 years old.\11\ Amtrak defines equipment as having
a useful life of 30 years for locomotives and 40 years for
railcars.\12\ Aging equipment can negatively impact Amtrak's
services, such as when old road diesel locomotives suffering
from mechanical challenges cause train delays or when outdated
railcars lacking amenities like Wi-Fi and changing tables
degrade passenger satisfaction.\13\ As these locomotives and
railcars begin reaching the end of their useful life, Amtrak is
planning major initiatives to modernize its rolling stock by
replacing or refreshing locomotives and railcars currently in
service. While Amtrak is experiencing additional rolling stock
investment needs, Amtrak's FY 2021 grant request indicates an
additional $3.8 billion in federal funds is required for a
series of upgrades.\14\ This includes replacement of Amfleet I
railcars used throughout the network; Amfleet II railcars used
primarily on long-distance routes serving New York and some
state corridors; Superliner railcars used on a host of long-
distance routes; and new diesel locomotives that operate on
long-distance routes. Amtrak indicates these upgrades will
benefit train performance and customer experience, while also
achieving higher speeds, greater fuel range, and reduced
emissions by up to 90 percent.\15\
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\11\ Amtrak Five-Year Asset Line Plans, Fiscal Years 2020-2025
(Base and Five-Year Strategic Plan), Available at https://
www.amtrak.com/content/dam/projects/dotcom/english/public/documents/
corporate/businessplanning/Amtrak-Asset-Line-Plans-FY21-25.pdf. Pages
17-18.
\12\ Id. at 24.
\13\ Id.
\14\ Amtrak General and Legislative Annual Report and Fiscal Year
2021 Grant Request, Available at https://www.amtrak.com/content/dam/
projects/dotcom/english/public/documents/corporate/reports/Amtrak-
General-Legislative-Annual-Report-FY2021-Grant-Request.pdf Page 42.
\15\ Amtrak Five-Year Asset Line Plans, Fiscal Years 2020-2025
(Base and Five-Year Strategic Plan), Available at https://
www.amtrak.com/content/dam/projects/dotcom/english/public/documents/
corporate/businessplanning/Amtrak-Asset-Line-Plans-FY21-25.pdf Pages
17-34.
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More than 500 stations (owned by states, cities, host
railroads, and Amtrak) within Amtrak's network must be properly
maintained. Amtrak is investing in projects that enhance the
passenger experience, sustain the national passenger rail
network, provide much-needed additional capacity, and improve
reliability and safety.\16\ In 2016, Amtrak received a $2.5
billion Railroad Rehabilitation and Improvement Financing
(RRIF) loan to purchase 28 new trains, make station
improvements at Washington Union Station and Moynihan Station
in New York City, and improve track capacity and ride quality
in the NEC.\17\ Amtrak's FY 2021 grant request indicates an
additional $4.3 billion in federal funds is needed for select
station and facility improvements.\18\ Additionally, the
Americans with Disabilities Act (ADA) required that all
stations in the intercity rail transportation system be made
accessible to and usable by individuals with disabilities no
later than 2010.\19\ Amtrak has sole or shared financial
responsibility to bring 387 stations into compliance with ADA
requirements and estimates that it will cost over $1 billion to
complete this work.\20\
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\16\ Amtrak Five-Year Asset Line Plans, Fiscal Years 2020-2025
(Base and Five-Year Strategic Plan), Available at https://
www.amtrak.com/content/dam/projects/dotcom/english/public/documents/
corporate/businessplanning/Amtrak-Asset-Line-Plans-FY21-25.pdf Page 67.
\17\ Progressive Railroading, ``Amtrak Receives $2.5 Billion RRIF
Loan for Alstom Trains, Northeast Corridor Upgrades,'' Available at
https://www.progressiverailroading.com/amtrak/news/Amtrak-receives-25-
billion-RRIF-loan-for-Alstom-trains-Northeast-Corridor-upgrades--49275.
\18\ Amtrak General and Legislative Annual Report and Fiscal Year
2021 Grant Request, Available at https://www.amtrak.com/content/dam/
projects/dotcom/english/public/documents/corporate/reports/Amtrak-
General-Legislative-Annual-Report-FY2021-Grant-Request.pdf, Page 42.
\19\ 42 U.S.C. 12162.
\20\ Amtrak General and Legislative Annual Report and Fiscal Year
2021 Grant Request, Available at https://www.amtrak.com/content/dam/
projects/dotcom/english/public/documents/corporate/reports/Amtrak-
General-Legislative-Annual-Report-FY2021-Grant-Request.pdf page 43.
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Commuter railroads are also in need of significant
investments to maintain and upgrade infrastructure and rolling
stock and to expand service. In September 2019, the
Subcommittee heard testimony from several commuter railroads
about their investment needs, with one stating it has a $444
million backlog \21\ in unfunded maintenance and rehabilitation
state-of-good-repair projects and another needing to invest
more than $1 billion annually over the next decade to achieve
and maintain a state-of-good-repair.\22\ Commuter railroads
also continue working toward compliance with the positive train
control (PTC) mandate from 2008. According to the FRA's 2019
fourth quarter reporting, of the 28 commuter railroads required
to install PTC, six have fully implemented their systems and
another 22 expect to complete implementation in 2020. The
American Public Transportation Association estimates that
commuter railroads will spend approximately $160 million
annually in operations and maintenance of these systems.\23\
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\21\ Wiggins, Stephanie N., Southern California Regional Rail
Authority (Metrolink), Testimony before the House Subcommittee on
Railroads, Pipelines, and Hazardous Materials, September 24, 2019,
Available at https://transportation.house.gov/imo/media/doc/Testimony-
Wiggins.pdf, Page 8.
\22\ Derwinski, James., Metra, Testimony before the House
Subcommittee on Railroads, Pipelines, and Hazardous Materials,
September 24, 2019, Available at https://transportation.house.gov/imo/
media/doc/Testimony-Derwinski.pdf, Page 2.
\23\ Skoutelas, Paul P. American Public Transportation Association,
Testimony before the House Subcommittee on Railroads, Pipelines, and
Hazardous Materials, September 24, 2019, Available at https://
www.apta.com/wp-content/uploads/APTA-TESTIMONY-TI-Rail-Subc.-Hearing-
re-Commuter-Rail-09.24.2019.pdf Page 5.
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III. FUNDING AMTRAK
APPROPRIATIONS
Like several other transportation modes in the U.S., Amtrak
receives funding from the General Fund through the annual
appropriations process. The chart below indicates Amtrak's
funding levels authorized by the Fixing America's Surface
Transportation Act (FAST Act) and the amounts appropriated by
Congress:
------------------------------------------------------------------------
Northeast Corridor National Network
-----------------------------------------------------------
Authorized Appropriated Authorized Appropriated
------------------------------------------------------------------------
FY 16 $450,000,000 * $1,000,000,00 *
0
FY 17 $474,000,000 $328,000,000 $1,026,000,00 $1,167,000,00
0 0
FY 18 $515,000,000 $650,000,000 $1,085,000,00 $1,291,600,00
0 0
FY 19 $557,000,000 $650,000,000 $1,143,000,00 $1,291,600,00
0 0
FY 20 $600,000,000 $700,000,000 $1,200,000,00 $1,300,000,00
0 0
------------------------------------------------------------------------
* Amtrak received FY 16 appropriations in the format that existed prior
to FAST Act enactment: $288,500,000 in operating grants, and
$1,101,500,000 in capital and debt service grants.
STATE-SUPPORTED ROUTES, SECTION 209 OF PRIIA
Prior to enactment of the Passenger Rail Investment and
Improvement Act of 2008 (PRIIA 2008), most of the expenses
associated with state-supported routes were funded by the
federal government through Amtrak. However, PRIIA Section 209
shifted that funding responsibility to the states and required
Amtrak and its state partners to jointly develop a methodology
to determine operating and capital costs of state-supported
routes. The Section 209 methodology became effective in October
2013. Continued operation of these state-supported routes is
subject to annual operating agreements and state legislative
appropriations according to Section 209. In FY 2018, state
contributions to Amtrak for state-supported services totaled
$233.8 million for operations and $57.2 million for equipment
capital.\24\ Fueled by Amtrak's partnership with its state
partners, state-supported routes carried 15.438 million
passengers in FY 2019, a 2.4% increase from 15.079 million in
FY 2018.\25\
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\24\ FY 2018 is the most recent year for which data is available,
State-Amtrak Intercity Passenger Rail Committee, 2018 Annual Report,
Page 2.
\25\ Amtrak Route Ridership FY 2019 vs. FY 2018, Available at
http://media.amtrak.com/wp-content/uploads/2019/11/FY19-Year-End-
Ridership.pdf.
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State-supported routes have previously benefited from
additional investments through high-speed passenger rail
investment grants.\26\ These grants supported a broad range of
projects that increased speeds, added service frequencies,
extended service to new stations, and improved reliability of
aging infrastructure on state-supported routes.\27\ While many
improvements were made to state-supported routes under these
programs, additional opportunities for improvement remain.\28\
For instance, the State of Michigan used federal funds to
purchase and upgrade a track segment in the Chicago-Detroit
corridor, allowing 110-mph service. Planning studies identified
additional potential service improvements, but these projects
are on hold. Likewise, travel times and congestion on certain
portions of the Chicago-St. Louis corridor were improved
through use of $1.3 billion of federal funding. A federally
funded environmental study of the corridor identified
investments capable of doubling existing service levels and
reducing end-to-end travel time. The study estimated that such
investments would cost between $4.9 billion and $5.2
billion.\29\
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\26\ Goldman, Ben. Improving Intercity Passenger Rail Service in
the United States, Congressional Research Service R45783, June 25, 2019
Available at https://fas.org/sgp/crs/misc/R45783.pdf page 2.
\27\ Id. at 10.
\28\ Id.
\29\ Id. at 12.
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NORTHEAST CORRIDOR, SECTION 212 OF PRIIA
Moreover, under Section 212 of PRIIA 2008, the Northeast
Corridor Commission (Commission) is directed to develop a
standardized formula for determining and allocating operating
and capital costs to Amtrak and commuter rail agencies
operating in the NEC based on their proportionate share of
joint-benefit costs. The formula must also ensure that there is
no cross-subsidization of commuter, intercity, or freight rail
transportation on the NEC. In September 2015, the Commission
adopted the NEC Commuter and Intercity Rail Cost Allocation
Policy, which took effect in FY 2016 and remains effective
until the Commission replaces or annuls it.\30\ The total
amount that Amtrak and commuter operators have paid to the four
NEC infrastructure owners is more than $5.5 billion, of which
$4.3 billion has been paid to Amtrak by both commuter operators
and Amtrak itself.\31\
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\30\ Northeast Corridor Commuter and Intercity Rail Cost Allocation
Policy, Effective October 1, 2019. Available at https://nec-
commission.com/app/uploads/2018/04/2019-06-19_Cost-Allocation-
Policy_v09.00_Cmsn-Amended-2019-June-19-Clean.pdf
\31\ The four NEC owners include Amtrak, Connecticut DOT,
Massachusetts Bay Transportation Authority, and Metro-North Railroad.
Data is from the Northeast Corridor Commission.
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IV. GRANT OPPORTUNITIES FOR INTERCITY PASSENGER AND FREIGHT RAIL
Congress authorizes several federal discretionary grant
programs that can be used to support intercity passenger and
freight rail services, such as those discussed below.
FEDERAL RAILROAD ADMINISTRATION GRANT PROGRAMS
CONSOLIDATED RAIL INFRASTRUCTURE AND SAFETY IMPROVEMENTS
The FAST Act authorized the Consolidated Rail
Infrastructure and Safety Improvements (CRISI) grant program to
provide discretionary grants for projects that improve the
safety, efficiency, or reliability of freight and passenger
rail transportation systems.\32\ Short line and regional
railroads, any rail carrier (including Class Is) in partnership
with at least one state entity, public agencies or public
chartered authorities established by one or more states, states
or groups of states, interstate compacts, political
subdivisions of states, Amtrak, and others are eligible for
grants under the program, which the Federal Railroad
Administration (FRA) administers. Activities eligible for CRISI
funds include capital projects that improve short line and
regional railroad infrastructure; highway-rail grade crossing
improvements projects; and rail line relocation and improvement
projects, among others. The maximum federal share of total
project costs under the program is 80 percent. For FY 2020,
CRISI was authorized at $330 million,\33\ and the program was
appropriated $325 million.\34\
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\32\ 49 U.S.C. 24407.
\33\ Public Law 114-94 Sec. 11102.
\34\ Further Consolidated Appropriations Act of 2020, Public Law
116-94.
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FEDERAL-STATE PARTNERSHIP FOR STATE OF GOOD REPAIR
The FAST Act also authorized the Federal-State Partnership
for State of Good Repair grant program, which awards federal
funds for capital projects to replace or rehabilitate qualified
railroad assets to reduce the state of good repair backlog.\35\
Eligible applicants include states or their political
subdivisions, groups of states, interstate compacts, public
agencies or publicly chartered authorities established by one
or more states, Amtrak, or any combination of these entities.
Federal-State Partnership for State of Good Repair grants have
a maximum federal share of 80 percent.\36\ The FAST Act
authorized the program at $300 million in FY 2020,\37\ and it
was appropriated at $200 million.\38\
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\35\ Public Law 114-94 Sec. 11302.
\36\ 49 U.S.C. 24911.
\37\ Public Law 114-94 Sec. 11103.
\38\ Further Consolidated Appropriations Act of 2020, Public Law
116-94.
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RESTORATION AND ENHANCEMENT GRANTS
The FAST Act authorized the Restoration and Enhancement
grant program, which provides operating assistance grants to
initiate, restore, or enhance intercity rail passenger
transportation.\39\ Eligible entities include states or their
political subdivisions, groups of states, interstate compacts,
public agencies or publicly chartered authorities established
by one or more states, Amtrak or other intercity rail carriers,
rail carriers in partnership with any eligible entities, or a
combination thereof.\40\ For projects funded by a Restoration
and Enhancement grant, the grant may not exceed 80 percent of
the projected net operating costs for the first year of
service; 60 percent of the net operating costs for the second
year of service; and 40 percent of the projected net operating
costs for the third year of service. For FY 2020, the
Restoration and Enhancement grant program was authorized at $22
million,\41\ and it was appropriated $2 million in funding.\42\
---------------------------------------------------------------------------
\39\ 49 U.S.C. 22908.
\40\ Id.
\41\ Public Law 114-94 Sec. 11104.
\42\ Further Consolidated Appropriations Act of 2020, Public Law
116-94.
---------------------------------------------------------------------------
OTHER DEPARTMENT OF TRANSPORTATION (DOT) FUNDING
BUILD GRANTS
DOT awards grants for national infrastructure investments
under its ``Better Utilizing Investments to Leverage
Development (BUILD)'' grant program, formerly known as
``TIGER.'' Eligible applicants for BUILD transportation grants
are state, local, and tribal governments, including U.S.
territories, transit agencies, port authorities, metropolitan
planning organizations (MPOs), and other political subdivisions
of state or local governments. These grants are awarded on a
competitive basis for surface transportation infrastructure
projects that will have a significant local or regional impact,
with a balance between projects in rural and urban areas.\43\
In FY 2020, the BUILD program was appropriated $1 billion, and
required a maximum federal share of 80 percent for projects,
while giving the Secretary discretion to allow a higher federal
share for rural projects.\44\
---------------------------------------------------------------------------
\43\ Department of Transportation, https://www.transportation.gov/
BUILDgrants/2019-build-application-faqs.
\44\ Further Consolidated Appropriations Act of 2020, Public Law
116-94.
---------------------------------------------------------------------------
INFRA GRANTS
The FAST Act also created a new competitive grant program,
providing $4.5 billion over the life of the bill, to assist
states in funding nationally-significant highway, bridge, and
freight projects.\45\ The Nationally Significant Freight and
Highway Projects program (referred to as INFRA by this
Administration and FASTLANE by the previous Administration) is
funded by the Highway Trust Fund and is generally aimed at
large-scale and multi-jurisdictional projects that cannot be
funded with highway funding apportioned to the states.\46\ At
least 25 percent of the funding is reserved for projects in
rural areas, and 10 percent of the funding is reserved for
smaller projects (project costs of less than $100 million). Up
to $500 million over the life of the FAST Act may be used to
fund freight rail or intermodal projects if the projects will
significantly improve freight movements on the National Highway
Freight Network. For FY 2020, the INFRA program was authorized
at $1 billion,\47\ with an appropriation of $906 million.\48\
---------------------------------------------------------------------------
\45\ Public Law 114-94 Sec. 1105.
\46\ INFRA is funded through funds appropriated out of the Highway
Trust Fund other than the Mass Transit Account.
\47\ Public Law 114-94 Sec. 1101.
\48\ Further Consolidated Appropriations Act of 2020, Public Law
116-94.
---------------------------------------------------------------------------
RAILROAD REHABILITATION AND IMPROVEMENT FINANCING PROGRAM
The Railroad Rehabilitation and Improvement Financing
(RRIF) program was originally established by Congress in Title
V of the Railroad Revitalization and Regulatory Reform Act of
1976 and later amended in the Transportation Equity Act for the
21st Century (TEA-21). RRIF offers long-term, low-interest
loans for improving rail infrastructure. Eligible recipients
include railroads, state and local governments, government-
sponsored corporations, and joint ventures that include at
least one railroad. RRIF-eligible projects include the
following: acquiring, improving, and rehabilitating track,
bridges, rail yards, buildings, and shops; preconstruction
activities; PTC; transit-oriented development projects; and new
rail or intermodal activities. Under this program DOT is
authorized to provide direct loans and loan guarantees up to
$35 billion to finance development of railroad infrastructure.
Since 2002 the RRIF program has provided $6.286 billion in
financing. There is currently about $30.2 billion available in
loan authority under the RRIF program.
V. FUNDING COMMUTER RAIL
Ensuring the safety of commuter rail is the responsibility
of the Federal Railroad Administration (FRA), which establishes
minimum acceptable levels of railroad safety equipment and
operating practices. While FRA regulates safety, federal
funding for commuter rail transportation is provided by the
Federal Transit Administration (FTA).
Commuter rail agencies are eligible to receive FTA formula
funds, including funding under 49 U.S.C. Sections 5307
(Urbanized Area Formula Grants); 5337 (State of Good Repair
Grants); and 5340 (High Density States Formula funds). These
formula funds typically go to a regional transportation agency
(designated recipient) and are allocated by regional agreements
to various transit agencies operating commuter rail, heavy and
light rail, streetcars, ferries, and bus transit in the same
urban area. The FAST Act authorized approximately $38 billion
for these programs from fiscal year 2016 through fiscal year
2020.
Additionally, commuter railroads may compete for
discretionary grants under FTA's Capital Investment Grant (CIG)
program, which funds capital investments in commuter rail as
well as heavy and light rail, street cars, and bus rapid
transit projects. The FAST Act authorized $11.5 billion for the
CIG program over five years.
While commuter railroads are not statutorily eligible for
the FRA grant programs discussed above, in FY 2018, Congress
made commuter railroads temporarily eligible for $250 million
available under the CRISI program for PTC installation.\49\ Of
these funds, commuter railroads received $187 million,
according to the FRA.\50\ In the FAST Act, Congress also
authorized $199 million in fiscal year 2017 FTA funds to assist
financing the installation of PTC. Moreover, commuter railroads
are eligible for RRIF loans to support infrastructure
improvement projects.
---------------------------------------------------------------------------
\49\ FY 18 Consolidated Appropriations Act, 2018, Public Law 115-
141.
\50\ In determining this figure, the FRA does not consider the
Alaska Railroad to be a commuter railroad. Alaska Railroad received
$12.9 million under the program.
---------------------------------------------------------------------------
VI. SNAPSHOT: CHICAGO'S CREATE PROJECT
The city of Chicago's unique history as a rail hub has led
to modern-day congestion challenges. In 2003, a coalition of
private and government entities initiated the Chicago Region
Environmental and Transportation Efficiency (CREATE) project--a
$4.6 billion public-private partnership to address passenger
and freight rail congestion in the Chicago area rail
network.\51\ Chicago's rail congestion is partly due to the
fact that 25 percent of all U.S. freight rail traffic touches
Chicago.\52\ CREATE has three broad infrastructure focuses: 1)
increasing capacity, speed, and reliability for freight train
traffic; 2) separating freight and commuter trains at six key
junctions; and 3) eliminating 25 highway-railroad grade
crossings through grade separations to reduce the impact of
railroads on the surrounding local communities.\53\ Many of
these projects will benefit both passenger and freight trains
due to shared track.
---------------------------------------------------------------------------
\51\ http://createprogram.org/linked_files/CREATE_Overview.pdf.
\52\ Id. at 6.
\53\ Id. at 2.
---------------------------------------------------------------------------
CREATE partners include the U.S. DOT (Federal Highway
Administration and FRA), the Illinois Department of
Transportation, the Chicago Department of Transportation, Cook
County, the six largest Class I freight railroads, two
switching railroads (Belt and Indiana Harbor Railroads), and
two passenger railroads (Amtrak and Metra, Chicago's commuter
rail authority).\54\ The CREATE project received an initial
federal contribution of $100 million in 2005 through the
Projects of National and Regional Significance funding
established by the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users (SAFETEA-LU)
surface transportation reauthorization.\55\
---------------------------------------------------------------------------
\54\ http://createprogram.org/linked_files/CREATE_Overview.pdf. at
2.
\55\ https://ops.fhwa.dot.gov/freight/safetea_lu/
1301_pnrs_funding.htm.
---------------------------------------------------------------------------
As of August 2019, 30 of the 70 identified projects have
been completed with 21 projects underway in various stages
(construction, engineering, environmental review).\56\ These
projects have been funded through a variety of federal, state,
and local sources. For example, the 75th Street Corridor
Improvement Project, a major $474 million project that will
build a new double track rail connection between two rail lines
to increase freight and passenger rail capacity and upgrade
crossover speeds to allow for higher freight speeds, received a
$132 million INFRA grant in 2018. That $132 million will be
matched by $337 million in funds from other CREATE
partners.\57\ In total, the $4.6 billion CREATE public-private
partnership has a projected benefit over 30 years of $31.5
billion.\58\
---------------------------------------------------------------------------
\56\ http://createprogram.org/linked_files/status_map.pdf.
\57\ Id.
\58\ Id.
---------------------------------------------------------------------------
WITNESS LIST
LMr. Stephen Gardner, Senior Executive Vice
President and Chief Operating and Commercial Officer, Amtrak
LDr. Sandra Bury, Mayor, Village of Oak Lawn,
Illinois
LMr. Kevin Corbett, President and Chief Operating
Officer, NJ TRANSIT Corporation
LMr. Rob Shanahan, Assistant to the President,
Brotherhood of Maintenance of Way Employees Division-
International Brotherhood of Teamsters
LMr. Kevin Artl, President and Chief Operating
Officer, American Council of Engineering Companies of Illinois
LMr. Ian Jefferies, President, Association of
American Railroads
FUNDING A ROBUST FREIGHT AND PASSENGER RAIL NETWORK
----------
WEDNESDAY, MARCH 4, 2020
House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous
Materials,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
room 2167, Rayburn House Office Building, Hon. Daniel Lipinski
(Chairman of the subcommittee) presiding.
Mr. Lipinski. The subcommittee will come to order.
I ask unanimous consent that the chair be authorized to
declare recesses during today's hearing.
Without objection, so ordered.
I will begin by recognizing myself for 5 minutes for an
opening statement.
Good morning. Today's hearing is the last hearing before
the final drafting of the surface transportation
reauthorization bill. I am very proud of the subcommittee's
focus the last few months on several important topics in the
upcoming reauthorization. In September, we held a hearing for
the first time in the subcommittee's recent history on the
needs of commuter railroads and how we must address the state-
of-good-repair backlog for commuter rail while we also expand
passenger service.
In November, we held an oversight hearing on Amtrak and its
future vision, including how to protect long-distance train
services, and ensure Amtrak is respecting the rights of its
workers.
Finally, last month, we heard testimony on the importance
of improving grade-crossing safety and addressing other
community issues such as the hassles of blocked crossings and
the need for more quiet zones.
With January's release of infrastructure principles by
House Democrats, led by Chairman DeFazio, we include a robust
$55 billion investment for rail infrastructure, and today's
hearing will focus on how we can best utilize this proposed
investment to strengthen our passenger and freight rail
networks and what role the Federal Government should play as
part of this investment. I am pleased that we have multiple
perspectives today about this important topic.
I have spoken many times about the importance of the CREATE
program in Chicago and how it is enhancing both passenger and
freight service in the Chicago region by relieving rail
congestion. I look forward to hearing from Mr. Artl about
ACEC's perspective on the importance of programs like CREATE,
and how the Federal Government can advance the CREATE projects
not currently completed, which, disproportionately, are grade
separations. The need for more grade separations is one of the
top issues I hear about from my constituents.
I am delighted we also have Dr. Sandra Bury, mayor of the
village of Oak Lawn, who emphasized the importance of commuter
rail service to her community and others. Metra rail service is
the economic foundation of these communities, and it is
imperative that we do what we can to expand Metra service.
Part of building a more robust passenger rail network is
streamlining the process between local communities and freight
railroads on adding commuter rail service. It should not take
10 years or more to add additional commuter train service. I
look forward to the mayor's testimony on that issue, as well as
the real-world impact Oak Lawn is facing because of Metra's
state-of-good-repair backlog.
I am pleased that we have Rob Shanahan from the BMWED to
testify about the importance of labor protections as part of
any investment. While I am one of Congress' biggest advocates
for increased infrastructure investment, especially our rail
infrastructure, we must make sure that these investments don't
undermine the bedrock labor protections in our laws or
jeopardize the livelihoods of unionized men and women.
Recently, there has been a concerning amount of contracting
out of formerly union work in the Chicago area by Amtrak to
nonunion workers. I look forward to Mr. Shanahan's testimony on
the very serious and concerning safety implications of Amtrak's
actions.
America has a freight rail network that is the envy of the
world. While much of the investment in our freight rail network
is by private companies, Federal investments in recent years
have played a critical role in strengthening our national
freight network.
Some notable projects involving Federal funding and
leadership include the 75th Street corridor improvement program
project in Chicago and the Crescent and Heartland Corridor
projects that greatly expedited double-stacked freight
corridors in much of the Eastern United States. I am interested
in Mr. Jefferies' testimony on how the Federal Government can
continue to be a partner with freight railroads and build a
more robust freight rail network.
With that, I will yield back my time, and I will recognize
the chairman of the full committee, Mr. DeFazio, for an opening
statement.
[Mr. Lipinski's prepared statement follows:]
Prepared Statement of Hon. Daniel Lipinski, a Representative in
Congress from the State of Illinois, and Chairman, Subcommittee on
Railroads, Pipelines, and Hazardous Materials
Good morning. Today's hearing is the last hearing before the final
drafting of the surface transportation reauthorization bill. I am very
proud of the Subcommittee's focus the last few months on several
important topics in the upcoming reauthorization. In September, we held
a hearing for the first time in this Subcommittee's recent history on
the needs of commuter railroads, and how we must address the state of
good repair backlog for commuter rail while we also expand passenger
service. In November, we held an oversight hearing on Amtrak and its
future vision, including how to protect long distance train services
and ensure Amtrak is respecting the rights of its workers. Finally,
last month we heard testimony on the importance of improving grade
crossing safety and addressing other community issues such as the
hassles of blocked crossings and the need for more quiet zones.
With January's release of infrastructure principles by House
Democrats, which include a robust $55 billion investment for rail
infrastructure, today's hearing will focus on how we can best utilize
this proposed investment to strengthen our passenger and freight rail
networks and what role the Federal Government should play as part of
this investment.
I am pleased that we have multiple perspectives today about this
important topic. I have spoken many times about the importance of the
CREATE program in Chicago, and how it is enhancing both passenger and
freight service in the Chicago region by relieving rail congestion. I
look forward hearing from Mr. Artl about ACEC's perspective on the
importance of programs like CREATE and how the federal government can
advance the CREATE projects not currently completed which
disproportionately are grade separations. The need for more grade
separations is one of the top issues I hear about from my constituents.
I am delighted we also have Dr. Sandra Bury, mayor of the village
of Oak Lawn, who will emphasize the importance of commuter rail service
to her community and others. Metra rail service is the economic
foundation of these communities and it's imperative we do what we can
to expand Metra service. Part of building a more robust passenger rail
network is streamlining the process between local communities and the
freight railroads on adding commuter rail service. It should not take
10 years or more to add additional commuter train service. I look
forward to the Mayor's testimony on that issue as well as the real
world impact Oak Lawn is facing because of Metra's state of good repair
backlog.
Finally, I am pleased that we have Rob Shanahan from the BMWED to
testify about the importance of labor protections as part of any
investment. While I am one of Congress' biggest advocates for increased
infrastructure investment, especially in our rail infrastructure, we
must make sure that these investments don't undermine the bedrock labor
protections in our laws or jeopardize the livelihoods of unionized men
and women. Recently, there has been a concerning amount of contracting
out of formerly union work in the Chicago area by Amtrak to non-union
workers. I look forward to Mr. Shanahan's testimony on the very serious
and concerning safety implications of Amtrak's actions.
America has a freight rail network that is the envy of the world.
While much of the investment in our freight rail network is by private
companies, federal investments in recent years have played a critical
role in strengthening our national freight network. Some notable
projects involving federal funding and leadership include the 75th
Street CIP project in Chicago, and the Crescent and Heartland corridor
projects that greatly expedited double stack freight corridors in much
of the Eastern United States. I am interested in Mr. Jefferies'
testimony on how the federal government can continue to be a partner
with freight railroads and build a more robust freight rail network.
Mr. DeFazio. Thanks, Mr. Chairman.
This is a very timely hearing since we are in the midst of
drafting the rail title to the infrastructure investment plan,
and, in part, we will be informed by testimony we hear today.
As we know, moving people by rail or freight by rail is
much more efficient than road transportation by trucks or
single-occupancy vehicles, and I am pleased that both Amtrak
and the AAR are here today, and hopefully we can have a
dialogue on how we are going to improve on-time performance
with Amtrak and get their statutory preference, and talk about
a future where there is a more cooperative relationship for the
potential for the proposals that Amtrak has to do--city pair
corridor routes, which I am very excited about, potentially
taking away the need for a lot of regional air traffic and a
lot of highway traffic around the country.
So I am looking forward to the hearing, and, with that, I
yield back the balance of my time.
[Mr. DeFazio's prepared statement follows:]
Prepared Statement of Hon. Peter A. DeFazio, a Representative in
Congress from the State of Oregon, and Chairman, Committee on
Transportation and Infrastructure
Thank you, Chairman Lipinski and Ranking Member Crawford, for
calling today's hearing to discuss how the Federal government can be a
better partner in repairing and building-out robust national freight
and passenger rail systems. The needs of these systems are massive and
complex, the result of decades of underinvestment.
Climate change is one of the most important battles of our time.
The fact is, the transportation sector is the largest source of
greenhouse gas emissions in the U.S. and we need to act quickly to
reduce carbon pollution. As rail is one of the cleanest forms of
transportation, making significant investments in our rail network
should be part of our plan.
In 2017, the freight railroads comprised just 2 percent of
transportation-related greenhouse gas emissions and only 0.6 percent of
all greenhouse gas emissions in the U.S. Despite its lower
environmental impact, the freight rail industry packs a punch,
operating across a 140,000-mile national network to deliver an average
of almost 5 million tons of goods per day. The U.S. Department of
Transportation estimates that freight movements are expected to grow
across all modes and will increase 42 percent by 2040. It is critical
that our freight rail network is capable of keeping pace with demand.
Our passenger rail network also contributes to lower emissions.
According to their statistics, Amtrak is 47 percent more efficient than
car travel and 33 percent more efficient than domestic air travel, per
passenger mile. While demand for commuter and intercity passenger rail
has increased substantially in recent years, Federal investment has
lagged in support for the network that transports tens of millions of
passengers annually.
The average age of an Amtrak rail car traveling across the national
network is 34 years old. Amtrak projects an additional $3.8 billion in
Federal funds are needed for a series of planned fleet upgrades. As
these cars near the end of their useful lives, the infrastructure they
operate over isn't fairing much better. In the Northeast Corridor, the
backlog of major infrastructure projects totals more than $21 billion,
with some infrastructure dating back to the Civil War era in dire need
of replacement.
This is not sustainable. In order to meet future demands, reduce
congestion, and meet a state of good repair, now is the time to invest.
That is why I am proposing a $55 billion investment in rail projects
over 5 years in the next surface reauthorization.
In 2019 alone, China spent more than $165 billion on rail projects,
while countries across Europe are making huge investments in their rail
systems. And those numbers will only increase in the years to come as
roads become more congested.
So today, as we find ourselves in the middle of writing the rail
title of a surface reauthorization bill, I look forward to hearing from
our witnesses about how Congress can better support freight and
passenger rail projects through funding programs--benefitting current
and future generations.
Mr. Lipinski. Thank you.
And now I call on the ranking member of the subcommittee,
Mr. Crawford, for his opening statement.
Mr. Crawford. I thank the chairman for holding this hearing
today. And I also want to thank our witnesses for being here
today.
As the committee looks at reauthorizing surface
transportation programs, it will assess how best to fund our
railroad system to meet our Nation's future needs. It is
important to fairly balance the needs of freight and passenger
rail so that each industry may continue to grow in the coming
years.
We must ensure that our Nation's passenger rail systems run
efficiently and on time and use Federal funds in a way that is
transparent and best serves the needs of passengers.
Likewise, we must ensure that our freight rail networks can
operate effectively and that they have proper funding for
important maintenance and safety upgrades.
We must also balance the interests of busy urban areas like
Chicago with the needs of our rural areas. Focusing only on a
few large, congested hubs ignores the vast rural areas
throughout the country that are equally as important to
stability and success of the entire rail industry.
Finally, efficient and effective use of Federal funds is a
top priority. It is very important to make sure that money
appropriated is easily accessible and used effectively.
Once again, thank you to all of our witnesses for being
here, and I thank the chairman, and yield back the balance of
my time.
[Mr. Crawford's prepared statement follows:]
Prepared Statement of Hon. Eric A. ``Rick'' Crawford, a Representative
in Congress from the State of Arkansas, and Ranking Member,
Subcommittee on Railroads, Pipelines, and Hazardous Materials
As the Committee looks at reauthorizing surface transportation
programs, it will assess how best to fund our railroad system to meet
our Nation's future needs. It is important to fairly balance the needs
of freight and passenger rail so that each industry may continue to
grow in the coming years.
We must ensure that our Nation's passenger rail system runs
efficiently and on time and uses federal funds in a way that is
transparent and best serves the needs of passengers.
Likewise, we must ensure that our freight rail networks can operate
effectively, and that they have proper funding for important
maintenance and safety upgrades.
We also must balance the interests of busy urban areas like Chicago
with the needs of our rural areas. Focusing only on a few large,
congested hubs ignores the vast rural areas throughout the country that
are equally as important to the stability and success of the rail
industry.
Finally, efficient and effective use of federal funds is a top
priority. It is very important to make sure the money appropriated is
easily accessible and used effectively.
Mr. Lipinski. Thank you, Mr. Crawford.
Before I introduce all of our witnesses, I am going to give
a special introduction to three of our witnesses here who are
from back in the State of Illinois.
So let me begin with the introduction of Dr. Sandra Bury,
mayor of the village of Oak Lawn. Dr. Bury is the mayor of the
village of Oak Lawn, a first-tier suburb of Chicago with a
population of about 58,000. She was first elected in 2013 on a
platform of increased transparency, economic development, and
lower property taxes.
Under her administration, the local economy has added
thousands of jobs, and several more commercial projects are
under development. Municipal debt has been reduced by over $25
million, the municipal tax levy has been reduced 6 percent, and
first responder pension contributions have been increased over
800 percent from 2012.
Dr. Bury received her doctorate from the Illinois College
of Optometry in 1995 and owns Complete Vision Care, where she
practices full-scope primary eye care in addition to her role
as mayor. She is a past president of the Illinois Optometric
Association, the Chicago South Suburban Optometric Society,
Volunteer Optometric Services to Humanity-Illinois chapter, and
the Oak Lawn Rotary Club. She has been a senior clinical
examiner for the National Board of Examiners in Optometry. We
welcome Dr. Bury.
Mr. Robert J. Shanahan, Jr., proudly serves as the
assistant to the president-director of arbitration of the
Brotherhood of Maintenance of Way Employes Division of the
International Brotherhood of Teamsters. Mr. Shanahan was
appointed to this position last year after previously serving
as a labor advocate in the BMWED-IBT Arbitration Department.
Prior to his work in the Arbitration Department, Mr. Shanahan
was elected to serve as local chairman of BMWED-IBT Local Lodge
469.
He began his railroad career in April 2000 in the
Maintenance of Way Department of the Metra Commuter Railroad,
where he was assigned work throughout the Metropolitan Chicago
area performing various aspects of construction, maintenance,
and repair to the tracks, structures, and bridges.
A native of Manhattan, Illinois, Mr. Shanahan has
instructed various BMWED labor advocacy courses and completed
advocacy courses at the National Labor College located in
Silver Spring, Maryland.
Mr. Kevin Artl is the president and CEO of the American
Council of Engineering Companies of Illinois, where he
represents and advocates for over 200 engineering and
affiliated companies representing over 11,000 employees. Prior
to his current role at ACEC Illinois, Mr. Artl served as chief
operating officer of the Illinois Tollway, where he helped
manage and execute the tollway's $14 billion Move Illinois
capital program.
As the tollway's COO, Mr. Artl coordinated with industry
leaders on tollway policy and capital plans, emerging
technologies, and best business practices. In addition to his
work at the Illinois Tollway, Mr. Artl served in senior roles
for over 15 years in both the United States Senate and Illinois
General Assembly.
Mr. Artl served as State director for former United States
Senator Mark Kirk and as his director of communications and
later as the director of policy for former Illinois House
Minority Leader Tom Cross. Prior to his work in Government, Mr.
Artl served as the director of government affairs for Amtrak.
Welcome.
Now, I would like to welcome the remaining witnesses on the
panel.
First, Mr. Stephen Gardner, the senior vice president and
chief operating and commercial officer for Amtrak.
As I said, Dr. Sandra Bury, mayor of the village of Oak
Lawn, Illinois.
Mr. Kevin Corbett, president and chief executive officer of
New Jersey Transit Corporation.
Mr. Rob Shanahan, assistant to the president, BMWED.
Mr. Kevin Artl, president and chief executive officer of
ACEC Illinois.
And Mr. Ian Jefferies, president of the Association of
American Railroads.
Thank you all for being here today, and I look forward to
your testimony.
Without objection, our witnesses' full statements will be
included in the record, and, since your written testimony has
been made part of the record, the subcommittee requests that
you limit your oral testimony to 5 minutes.
Mr. Gardner, you may now proceed. I recognize you for 5
minutes.
TESTIMONY OF STEPHEN GARDNER, SENIOR EXECUTIVE VICE PRESIDENT
AND CHIEF OPERATING AND COMMERCIAL OFFICER, NATIONAL RAILROAD
PASSENGER CORPORATION (AMTRAK); HON. SANDRA BURY, O.D., MAYOR,
VILLAGE OF OAK LAWN, ILLINOIS; KEVIN S. CORBETT, PRESIDENT AND
CHIEF EXECUTIVE OFFICER, NJ TRANSIT CORPORATION; ROBERT J.
SHANAHAN, Jr., ASSISTANT TO THE PRESIDENT-DIRECTOR OF
ARBITRATION, BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYES
DIVISION, INTERNATIONAL BROTHERHOOD OF TEAMSTERS; KEVIN ARTL,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, AMERICAN COUNCIL OF
ENGINEERING COMPANIES OF ILLINOIS; AND IAN JEFFERIES, PRESIDENT
AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF AMERICAN RAILROADS
Mr. Gardner. Good morning, Chairman Lipinski, Chairman
DeFazio, Ranking Member Crawford, and all the members of the
subcommittee.
My name is Stephen Gardner, and I serve as Amtrak's chief
operating and commercial officer. It is my pleasure to testify
today on how an infrastructure bill and surface transportation
reauthorization could help lead to a new era of growth and
utility for intercity passenger rail.
Amtrak's recent successes prove that intercity passenger
rail service is working in America. The numbers speak for
themselves. Over the past 20 years, ridership and passenger
revenue have grown by 60 and 130 percent respectively, and we
have reduced our net operating loss to just under $30 million
last year, allowing us to spend far more of our Federal dollars
on addressing our huge capital needs instead of funding
operations, yet we can and must do more.
As a point of reference, Germany, a nation the size of New
Mexico with one-quarter of our population, international
railway Deutsche Bahn, just committed $96 billion to improve
their railway network. They did so to achieve their carbon
reduction targets, and to meet a surging demand for more
passenger trains. This 10-year program alone is nearly twice
what the United States Government has invested in Amtrak over
our entire 49-year history.
With better policy and reliable long-term funding,
intercity passenger rail could similarly become a much larger
part of our transportation system and a key aspect of our
climate response. In fact, I struggle to see any future where
this isn't a requirement given the lack of capacity on our
other transportation modes.
Our State-supported business, which provides roughly half
of our ridership and has been our biggest source of growth,
illustrates intercity passenger rail's potential. Thanks to
State sponsorship and financial support, these routes provide
effective transportation in many regions of our Nation, yet we
and our State partners have often been stymied in our efforts
to improve and expand services in many places for four basic
reasons.
First, there has been insufficient long-term Federal
funding to support frequency expansion, route improvements, and
new services.
Second, the high burdens on States to provide both capital
and operating funding right from the start of new service has
hampered growth, even when conditions clearly warrant it.
Third, decades of insufficient Federal funding for our
fleet means we lack the equipment to support growth, and we
incur higher costs and less reliability every day.
And, finally, we struggle with many of our host railroad
partners to gain reasonable access to their infrastructure and
preferential treatment over their railroad as required by
existing Federal law.
In response, Amtrak's reauthorization proposals, some of
which were recently released in our annual request to Congress,
calls for establishment of a long-term source of capital
investment for Amtrak expansion, fleet replacement, and
infrastructure renewal; funding for Amtrak to provide initial
capital and operating assistance for State-supported
expansions, and new routes nationwide; an expedited and fair
process for obtaining access to host railroads, including a
method to establish any necessary capital investments; and
better enforcement of our legal rights to dispatching
preference.
And, finally, significant funding for major rail mega
projects, like our proposal for a passenger-dedicated route
into Chicago to support growth and on-time performance.
We firmly believe that the Nation's 50 largest metropolitan
regions, at a minimum, should be served by high-quality
intercity passenger rail service, with many more communities
deserving it also. While we have great partnerships in place
today, there are so many underserved communities and corridors
in the Nation, places like Nashville to Atlanta, Colorado's
Front Range, or the Texas Triangle. They all deserve Amtrak
service.
For proof of how much more rail can do for the Nation, we
only need look to the Northeast Corridor, the continent's
busiest railroad, which provides 260 million trips a year
between commuter and intercity service, yet this success is in
jeopardy because of decades of deferred investment and the
ravages of age and high use.
Amtrak is fully committed to working with our NEC partners,
like Mr. Corbett and New Jersey Transit, to advance key renewal
capacity projects, like Portal Bridge and the Hudson Tunnel,
but achieving these monumental projects requires a long-term
partnership with the Federal Government and billions of
dollars' worth of reliable, consistent, and dedicated funding
for these efforts.
Finally, our long-distance network is in dire need of
Federal investment to replace our aging fleet, which is
dominated by equipment nearly as old as I am. We recognize the
importance of these routes to many communities across the
Nation, and modernizing our fleet and services is essential to
ensuring their long-term vitality.
So thank you for the chance to discuss these issues today.
I want to commend Chairman DeFazio, Chairman Lipinski, and the
House leadership for their recent bold proposal for passenger
rail infrastructure investment. As you can see from the German
example, $55 billion for rail is a reasonable and great start.
If Amtrak knew such amounts were available for a 10-year
period, we could rebuild our assets, dramatically expand
service, and make a significant contribution to enhancing
mobility and reducing our carbon footprint.
We are excited to work with the subcommittee and the full
committee, and urge you to increase funding for Amtrak and our
State partners so that we collectively can do more for the
Nation.
Thank you.
[Mr. Gardner's prepared statement follows:]
Prepared Statement of Stephen Gardner, Senior Executive Vice President
and Chief Operating and Commercial Officer, National Railroad Passenger
Corporation (Amtrak)
Good morning Chairman Lipinski, Ranking Member Crawford, and all
the members of this Subcommittee. My name is Stephen Gardner and I
serve as Senior Executive Vice President and Chief Operating and
Commercial Officer for Amtrak. It is my pleasure to testify here today
on behalf of Amtrak's many dedicated employees.
I look forward to discussing with you the many productive steps
that could be taken to support a robust passenger rail network in the
United States. In particular, there has been recent discussion by this
committee on the potential infusion of additional federal funding for
rail as part of an infrastructure bill, as well as new federal policy
and programs that could be considered as part of a multiyear surface
transportation reauthorization. Such opportunities can help ensure the
safety, reliability, and future growth of intercity passenger rail
throughout this nation and Amtrak wants to work with Congress to help
realize this potential.
My testimony today will focus on both the opportunities and
challenges that exist for Amtrak's National Network with includes the
state-supported services we partner with states to deliver and long
distance service, and the Northeast Corridor (NEC).
State Supported Service and Corridor Development
Amtrak's 27 state-supported routes--our short-distance services
outside of the NEC--illustrate both intercity passenger rail's enormous
potential and our nation's failure to realize it more fully.
In FY 2019, state-supported routes carried 15.4 million riders, 47%
of Amtrak's total ridership and a 19% increase from ten years ago.
State-supported revenues, including state payments, covered 93% of
operating costs, resulting in a federal operating funding requirement
of $58 million. States also contributed approximately $60 million for
equipment overhaul capital costs, and many states also made significant
capital investments in state-owned equipment, stations and
infrastructure. Most state-supported routes operate over heavily
populated short distance corridors ranging from approximately 100 to
400 miles in length.
Many of the state-supported routes benefited from various USDOT
competitive grant programs in recent years, often with the support of
state matching funds. While these grants funded several very worthwhile
intercity passenger rail projects, there has not been enough Federal
money to develop or significantly improve even a single corridor--or
for that matter to fund a single interstate highway interchange or
airport terminal expansion. Imagine for a moment what our highways or
our aviation system would look like if they were funded at the levels
at which we fund intercity passenger rail. Addressing this funding
deficit through a reliable and substantial source of Federal funding
remains the most important change needed to support a reemergence or
expansion of intercity passenger rail service in our nation.
The most immediate investment need on our state-supported routes is
new equipment. Most of the passenger cars and many of the locomotives
operating on our state-supported corridors are approaching or have
reached the end of their useful lives. The newest of the Amfleet I cars
built in 1975-1977 is 43 years old. In addition to providing our
Northeast Regional service between Boston and Washington, these cars
are utilized on all our Northeastern and Virginia state-supported
routes, and on several other state-supported routes. In January 2019,
we issued a Request for Proposals (RFP) for 75 new trainsets (or
railcar equivalents) to replace the 458 Amfleet I cars, as well as 16
of the original Metroliner railcars built a half century ago and the
five Talgo VI trainsets operated on the Amtrak Cascades service in the
Pacific Northwest. The RFP also called for options for up to 50
additional trainsets to provide equipment for new or additional short
distance services. Bids have been received and are being evaluated by
Amtrak and its state partners. An award is expected later in 2020.
The RFP contemplates the acquisition of equipment that will be bi-
directional, eliminating the need to turn trains at endpoints, and
dual-mode--capable of operating under electric power on the NEC between
Boston and Washington and the Philadelphia-Harrisburg Keystone Line and
with diesel power elsewhere. This will allow us to eliminate engine
changes on Northeast Regional and other trains that operate on both the
NEC and unelectrified state-supported routes, reducing trip times and
delays.
While the states that fund Amtrak's state-supported service welcome
the opportunities that a new equipment fleet will provide, they have
told us that they are unable to fund the entire capital cost of
wholesale replacement of the Amfleet I equipment operating on their
routes, acquired by Amtrak with federal funding over four decades ago.
Acquisition of new equipment will be severely constrained if no federal
funding is provided to match state investments. To address this, our
legislative and grant request proposes that Congress continue to set
aside at least $100 million annually for the upfront Amfleet I
replacement costs, as it did in FY 2020, to offset 50% of the states'
proportional share of acquisition costs.
The next highest investment priority for both existing state-
supported routes and future corridor development is infrastructure.
Four of Amtrak's ten highest ridership routes outside of the NEC--the
Oakland/Sacramento-Bakersfield San Joaquins; the Chicago-St. Louis
Lincoln Service; the Boston-Portland/Brunswick Downeaster and the
Amtrak and Michigan DOT-owned portions of the Chicago-Detroit/Pontiac
Wolverine route--are still predominantly single-track railroad. That
means that when two Amtrak trains going in opposite directions meet,
one must pull over onto a siding or passing track and cannot proceed
until the other train has passed. This increases trip times, and also
constrains increases in service frequency.
Only a few of our short distance routes offer trip times that are
truly competitive with driving or flying. Outside of the Boston-to-
Washington NEC, there are only four corridor routes--all owned and/or
operated and maintained by Amtrak--on which our trains exceed 90 miles
per hour. Stations in major cities where we have significant corridor
service like Chicago, or where we should have such service like Atlanta
and Cleveland, are inadequate to accommodate even our existing trains,
let alone much needed growth in passenger rail service.
As Amtrak explained in testimony before this committee last
November,\1\ because of lack of funding and a coordinated national
effort, we are missing out on enormous opportunities to expand
intercity passenger rail service. Amtrak could do, and needs to do, a
great more than we do today to offer effective connections between
communities in heavily populated corridors across America; alleviate
worsening congestion on highways and our aviation system; and encourage
use of a more sustainable transportation option that is more energy
efficient and environmentally friendly than travel by other modes. We
need to start pursuing those opportunities now.
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\1\ https://transportation.house.gov/imo/media/doc/
Anderson%20Testimony2.pdf
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We do not have to look very far to see what can be accomplished
when elected officials and policymakers decide to invest in intercity
passenger rail. When Amtrak was created in 1971, the only Amtrak trains
that rumbled through the tunnel beneath Capitol Hill that leads to the
Long Bridge to Virginia were three pairs of overnight long-distance
trains that stopped in Richmond on their way to Florida. In 2009,
Virginia began providing funding for expanded Amtrak service, which
ultimately included new trains from Washington to Richmond, Norfolk,
and Lynchburg/Roanoke. The number of passengers traveling on these new
services exceeded expectations: ridership on Amtrak's Virginia services
nearly doubled over the ensuing ten years. Demand for Amtrak in
Virginia has been so high that it could easily support doubling the
frequency of service we offer today.
So, Amtrak and the Commonwealth of Virginia are going to do exactly
that. Amtrak, Virginia, and our host railroad, CSX, have reached
agreements that will allow us to double the level of service we provide
between Washington and Richmond to near hourly by 2030, and to increase
service frequency to both Norfolk and Newport News. The agreements
provide for construction of 37 miles of additional track to increase
capacity, and of a new double-track bridge over the Potomac River. By
supplanting the existing Long Bridge, which is at 98% capacity during
peak periods, the new bridge will alleviate the major bottleneck to
increasing Amtrak and Virginia Railway Express commuter rail service
between Washington and Virginia. The additional capacity the new
Potomac River bridge will provide, and Virginia's acquisition of the
Virginia portion of a more direct, largely abandoned rail line from
Petersburg to Raleigh and of an east-west rail line from the Richmond
area to western Virginia, also set the stage for future expansion of
rail service throughout Virginia, and to Raleigh to link up to North
Carolina's Charlotte-Raleigh Piedmont Corridor Amtrak service.
The partnership between Amtrak and Virginia demonstrates what can
be accomplished when Amtrak and states partner to develop increased and
new Amtrak services on growing, heavily traveled corridors. For the
past two years, Amtrak has been working to identify the corridors with
the highest demand for multi-frequency, high-quality passenger rail
service. We have been analyzing data on demographics, population
density and growth, and travel demand on other modes; reviewing state
and regional rail plans; and talking with federal and state elected
officials, our state partners, and departments of transportation in
states with which we do not currently have state partnerships.
Through this analysis, we have identified more than two dozen
promising corridors we either do not serve at all or do not serve well,
today, and existing corridors on which there is significant unmet
demand for additional--and better--Amtrak service. We expect to finish
our analysis shortly and will share it with you and other stakeholders
to solicit your input. Our goal is to serve many more people and more
communities than we do today by developing a national network of
corridors with service that is trip time-competitive with other modes
and will link major and growing population centers in all regions of
the United States.
Realizing that goal is going to require new federal funding
mechanisms to jump start intercity passenger rail growth and give
states financial incentives to fund additional services. In the annual
grant requests and legislative proposals we submitted to Congress on
February 15, we recommended that Congress establish a Corridor
Development Program. Under this proposal:
the federal government would provide additional funding
to Amtrak that could be used to cover up to 100% of the initial capital
costs for new or additional services in high potential corridor routes;
the federal funding would also cover up to 100% of the
operating losses and ongoing capital costs for these services in the
first two years of operation, and up to 90%, 80% and 50% in years
three, four, and five, respectively; and
beginning in year six, these services would become state-
supported services, with states funding most operating losses and some
capital costs in accord with the methodology developed by Amtrak and
states pursuant to Section 209 of the Passenger Rail Investment and
Improvement Act of 2008 (PRIIA).
While our corridor development plan will require a significant
increase in federal funding for intercity passenger rail service, it
will also produce a much bigger ``bang for the buck'' by providing a
higher return for each dollar of federal investment. Offering services
that are trip time competitive with other modes and provide multiple
frequencies rather than just one round trip per day will generate
higher revenues from passengers and produce operational efficiencies
that lower costs. Our projections indicate that an expanded corridor
network would have a much lower federal operating funding requirement
per passenger than our existing services. It will also produce
thousands of additional well-paying, high-skilled permanent railroad
jobs, in addition to the jobs associated with construction of
infrastructure investments and manufacture of new equipment and all of
the jobs created by the enhanced economic activity resulting from new
and increased Amtrak services.
In addition to infrastructure and equipment, advancing a corridor
development program will also require increased federal funding for
major investments in station redevelopment and new station construction
to match investments by state, local, transit and private partners. The
greatest need is in Chicago. Chicago Union Station (CUS), the largest
station we own outside of the NEC CUS is a vital asset for both
Amtrak's existing National Network and future corridor development
efforts. It has the fourth highest ridership of any Amtrak station,
behind only New York, Washington, and Philadelphia. It is one of the
endpoints, and in many cases the highest ridership station, on Amtrak
routes serving 34 states stretching from Massachusetts to California.
CUS is the hub of our state-supported Midwest corridor network, our
nationwide long-distance network, and the future Midwest High Speed
Rail Network. It is also the most important of Chicago's four commuter
rail terminals, the Chicago terminus of six Metra commuter rail lines.
After working with other stakeholders to complete a Master Plan for
CUS, we have recently entered into a Master Developer agreement to
begin implementation of that plan. Among the key components are
numerous platform improvements, including additional platform access
and egress points that will improve access and walkability for
passengers, particularly commuters on crowded peak period trains. The
office tower that will be built on former Amtrak property across the
street from the station will accommodate the first block of a planned
two-block pedestrian connection to the Clinton Street Subway Station,
restoring a direct connection with Chicago's subway/elevated network
which CUS has lacked since the Chicago Elevated line serving the
station was abandoned in 1958. We are also evaluating the feasibility
of developing a new ``passenger route'' into CUS for trains from the
East and South.
Northeast Corridor (NEC)
Our Boston-to-Washington NEC services--the high-speed Acelas and
Northeast Regional--carried 12.6 million passengers in FY 2019, a 3.3%
increase over FY 2018. They generated $1.4 billion in revenues, over
half of Amtrak's total from intercity train operations, and had an
operating cost recovery of 170%, producing $569 million in net
operating revenues for NEC capital investments. To put those figures
into perspective, after Amtrak acquired the NEC in 1976 Congress
established a statutory goal of 55% operating cost recovery.
NEC ridership has increased 26%, and ticket revenues have grown
57%, over the past decade despite the fact that we have been able to
make only modest increases in capacity due to equipment and
infrastructure constraints. While we are still operating the same 20
Acela trainsets with just 299 seats per train we acquired two decades
ago, improved equipment utilization allowed us to introduce non-stop
Acela service between New York City and Washington last year, reducing
our fastest trip time to two hours and 33 minutes. During FY 2020, we
will complete the programs we began in FY 2018 to refresh the Acela
trainsets and the Amfleet I cars we operate on Northeast Regional
trains. These refresh programs, which include new seat cushions,
carpets and other interior improvements, have significantly increased
customer satisfaction scores.
Over four plus decades of Amtrak ownership, the NEC has been
transformed from a deteriorated rail line that was literally falling
apart into North America's only high-speed railroad and most heavily
trafficked commuter rail line, accommodating over 2,000 commuter trains
each weekday in addition to 140 Amtrak trains. While Amtrak's NEC is a
major success story--a vital cog in the transportation network of our
country's largest megaregions--it faces two major challenges:
infrastructure and stations in urgent need of investment to maintain
and improve existing services and provide much needed increases in
capacity, and an equipment fleet that has reached the end of its useful
life.
Infrastructure
Amtrak, states, and commuter railroads will contribute
approximately $3.1 billion for base capital costs over the next five
years through the NEC Commuter and Intercity Rail Cost Allocation
Policy developed in accord with Section 212 of PRIIA, helping create a
reliable source of funding for the capital renewal of basic
infrastructure assets. However, that funding will not address the NEC's
state-of-good repair (SOGR) needs, most recently estimated at $42
billion by the NEC Commission (including the non-Amtrak portions of the
NEC owned by states). The NEC has hundreds of miles of aging track bed,
hundreds of century-old small bridges, over a dozen century-old major
bridges and tunnels, and power supply and signal systems that still
rely on 1930s technology. Amtrak and the states alone do not have the
funds to reduce the NEC SOGR backlog, let alone address many of the
major projects that are so critical to the region and the nation.
Simply put, these infrastructure projects are perfect examples of why
we cannot wait to invest in our infrastructure.
The Subcommittee's members are very familiar with Amtrak's most
urgent NEC infrastructure needs, which Amtrak and its NEC state
partners have detailed in testimony and reports for well over a decade.
I will therefore provide only a brief update on the progress Amtrak and
our partners have in preparing to construct these critical projects
when then the necessary federal, and in some cases other, funding is
made available.
I did not say ``if and when'' because none of these projects is
discretionary. The infrastructure, all more than a century old, these
projects will replace or reconstruct is increasingly unreliable. At
some point it will no longer be usable in whole or part. Therefore,
these multi-year projects must be initiated over the next few years if
we are to avoid dramatic degradations and reductions in Amtrak and
commuter service on the NEC. In fact, for some of these projects, it
may turn out to be too late.
Portal North Bridge
This 109-year old swing bridge over the Hackensack River in New
Jersey is used by the up to 450 Amtrak and NJ Transit (NJT) trains that
travel each day between Newark, New Jersey, and New York Penn Station,
more trains than any other rail bridge in the Western Hemisphere even
though it only has two tracks. Trains must slow down to a maximum speed
of 60 miles per hour before they cross and come to a stop when the
bridge rotates open for maritime traffic in the Hackensack River below.
Sometimes the bridge will not close thereafter, shutting down the NEC.
Early construction work for its replacement began in 2017. Amtrak and
NJT have committed funding for approximately 50% of the estimated
project cost of $1.6 billion. The Federal Transit Administration (FTA)
has recently approved moving the project into the engineering phase,
which makes it eligible for FTA funding. Future construction of an
additional two-track bridge is a key component of the Gateway Program
that would change the NEC's greatest bottleneck--the predominantly two-
track, 10-mile line between Newark and New York Penn Station--into a
four-track railroad, doubling capacity on the NEC segment with the
highest train density.
Hudson Tunnel Project
More than nine years have passed since Super Storm Sandy flooded
both of the two single-track tubes of the North River Tunnels beneath
the Hudson River that have served as the only rail link between New
York Penn Station and New Jersey since 1910. The corrosion of the track
structure, the concrete bench walls that line the tunnels, and the
critical high-voltage cables within the bench walls that power NEC
trains resulting from the tunnels' inundation with millions of gallons
of brackish sea water continues to progress. Failures of the tunnels'
deteriorated infrastructure are a frequent occurrence, resulting in
multi-hour delays for Amtrak and NJT passengers. We do not know for
sure the point at which one, and eventually both, of the existing North
River Tunnels will have to be taken out of service for an extended
period of reconstruction. But we do know that it will take about seven
years to construct the new tunnels, and if they are not ready in time
the number of trains Amtrak and NJT can operate between Penn Station
and New Jersey will decrease by as much as 75%. Amtrak, New York and
New Jersey agreed last year to increase their combined funding
commitment to $5.9 billion, 56% of the project's projected cost. We
await federal action on the updated draft of the Final Environmental
Impact Statement (EIS) for the project that NJT submitted in 2018, and
to provide the federal funding needed to advance this vital project.
Given the delays in advancing the Hudson Tunnel Project, we have
begun considering what steps may be possible to ensure the reliability
of the existing tubes while we await construction of the new tunnel
which is a precursor to completing full rehabilitation. We are
currently undertaking a review of whether we can advance some elements
of tunnel rehabilitation or undertake other stabilization efforts in
the near term, to bolster reliability without incurring major impacts
to service. A new Hudson River Tunnel remains critical to the NEC and
the nation and we look forward to our continued work with the USDOT to
advance this project.
East River Tunnels Reconstruction
The tunnels that carry the NEC beneath the East River to Queens
were also severely damaged by Hurricane Sandy. These four single-track
tunnels were constructed in 1910 and are used each day by up to 810
Amtrak and Long Island Rail Road trains and NJT trains stored and
serviced at Amtrak's Sunnyside Yard. Amtrak expects to complete design
work for their reconstruction next year and plans to take each tunnel
out of service for extended periods beginning in 2023. The latest cost
estimate for the tunnel repair project is over $1 billion and we are
actively exploring ways that we might advance elements of this work
prior to tunnel closure to limit outage durations and accelerate
repairs.
Baltimore & Potomac (B&P) Tunnel Replacement
Amtrak is currently in design phase for a four-track tunnel to
replace the two-track B&P tunnel that carries the NEC south from
Amtrak's Baltimore station. Built in 1873, the B&P Tunnel is among the
oldest infrastructure along the NEC: a soggy, two-track, 1.4-mile
bottleneck through which high speed Acela trains must slow to just 30
miles per hour. It is literally sinking, requiring frequent repairs,
and it constrains any significant expansion of Amtrak and MARC commuter
rail services. The projected cost of the new tunnel is approximately $5
billion, and funding has not been identified.
Susquehanna River Bridge
Following environmental reviews, FRA issued a Finding of No
Significant Impact in March 2017 for replacement of the two-track swing
bridge over the Susquehanna River between Havre de Grace and
Perryville, Maryland. The current bridge is 4,000 feet long and was
built in 1906. Each opening for maritime traffic requires a large crew
and significantly disrupts train operations even if there is not a
breakdown of the bridge's ancient operating mechanisms. The new bridge
design includes two new high-level, fixed bridges with a total of four
tracks, one of which will be designed for 160 miles per hour high speed
operations, and 60 feet of vertical clearance that will eliminate
bridge openings for maritime vessels. Funding is needed to finish
design and for the estimated $1.7 billion cost of constructing the new
bridge.
While securing the funding for and constructing all these projects
is a major challenge, it is also an opportunity. In addition to
addressing urgent SOGR needs, these projects and the other major NEC
SOGR projects Amtrak is advancing with our state and federal partners
will significantly improve reliability and on-time performance for all
NEC services. Many will also provide much needed additional capacity
and increased speeds, reducing trip times.
There are also significant investment needs and opportunities
between New York and Boston. Acela trip times between those cities are
a full hour longer than between the nearly identical distance between
New York and Washington due to slower speeds on many segments. As a
result, Amtrak carries just over half of the travelers who use air or
rail between New York and Boston, versus more than 75% between New York
and Washington.
Stations
As those who ride Amtrak in the NEC are well aware, many of its
most important stations have inadequate track capacity and concourses
and customer waiting areas and lounges that are overcrowded, poorly
designed, and outdated. While we invested $114 million in FY 2019 to
improve NEC stations, much higher levels of investment are needed to
transform these stations into the world class facilities our passengers
and major Northeast cities deserved. To jump start that process, we
have commenced Major Station Asset Development Programs at the four
Amtrak-owned NEC stations with the highest ridership to advance
projects for which funding is available and develop plans for more
comprehensive future investments when funding allows.
In New York, in partnership with New York's Empire State
Development, the Moynihan Train Hall in the James A. Farley Post Office
building across the street from Penn Station is expected to open by the
end of this year. In addition to relieving severe overcrowding in the
current subterranean passenger concourse, it will provide an enhanced
passenger experience within a grand space featuring a sky-lit atrium
approximately the size of the Grand Central Terminal's Main Hall.
Additionally, we are working with our partners to advance Penn Station
expansion, known as Penn South, which would increase the number of
tracks at Penn Station for the first time since it opened 110 years
ago.
At Washington Union Station, we are working with other
stakeholders to advance the Washington Union Station Expansion Project
to transform this vital transportation hub while preserving the iconic
historic station building, which is owned by the Federal Railroad
Administration and managed by the Union Station Redevelopment
Corporation. This project, when completed, will provide significantly
more concourse space and improved passenger facilities; new tracks and
platforms to accommodate increased Amtrak, MARC and Virginia Railway
Express services; a new train hall over the tracks; and new bus and
parking facilities.
In Philadelphia we are continuing initiatives to
integrate the William H. Gray III 30th Street Station with the
surrounding 30th Street Station District, improve customer amenities
and create an easy to navigate pedestrian path between the Station and
SEPTA's adjacent Subway/Trolley Station.
At Baltimore Penn Station, we reached commercial close
last year for $90 million of improvements that will expand and modify
the station and facilitate redevelopment of the surrounding
neighborhood.
Equipment
With the exception of the new ACS-64 locomotives acquired in 2014-
16 to replace the NEC's electric locomotive fleet, virtually all the
equipment used in Amtrak's NEC services requires replacement. Next
year, we expect to mark Amtrak's 50th anniversary by placing in service
the first of the new 28 high-speed Acela trainsets that will replace
the 20 original Acela trainsets. In addition to providing significantly
enhanced customer amenities and accessibility improvements that go
beyond Americans with Disabilities Act (ADA) requirements, the
increased number of trainsets, each with 30% more capacity than the
current Acela fleet, will enable us to add Acela frequencies and
accommodate additional passengers on trains that frequently sell out
today. The new trainsets are primarily funded through a Railroad
Rehabilitation and Investment Financing (RRIF) loan from the FRA, which
will be repaid from incremental net revenues generated through
increased Acela ridership.
As I have already mentioned, we are also working with our state
partners to procure a new equipment fleet to replace the Amfleet I
equipment currently used on Northeast Regional trains. We welcome the
opportunity this procurement, the largest in Amtrak's history, will
provide to transform the operation, schedules and customer experience
on Northeast Regional, our highest ridership route. However, funding
this procurement will be more of a challenge than the Acela procurement
because of the state funding constraints I have noted and the lower
yields per passenger mile attainable from upgrading our Northeast
Regional service.
Long Distance
Amtrak long distance trains--the 15 routes over 750 miles in
length--carried 4.6 million customers in FY 2019, 14% of our total
ridership. These services create important connections between our
major metropolitan centers and communities in the various regions of
our nation.
Long distance faces two major funding challenges. The first is
that, unlike the NEC and State-Supported Service Lines, it is dependent
upon federal funding to cover significant operating losses and
virtually all its capital costs. Revenues covered 53% of long distance
operating costs last year, producing a federally funded operating loss
of $475 million that accounted for 89% of Amtrak's FY 2019 operating
loss. Long distance capital costs, funded almost entirely by Amtrak's
National Network grant, totaled $542 million last year.
The second major funding challenge confronting long distance is
that most of the long-distance equipment fleet is at or nearing the end
of its useful life and requires replacement with modern equipment. The
majority of our long-distance passengers travel on cars built between
1979 and 1983: the bi-level Superliner I cars used predominantly on our
Western trains and the single level Amfleet II cars used on Eastern
long-distance routes. The P42 diesel locomotives that power long
distance trains are on average 20 years old, have traveled an average
of over 3.3 million miles, and burn more fuel and produce more
emissions than modern locomotives. Forty-year old passenger cars do not
provide the accommodations or amenities today's travelers expect, which
negatively impacts long-distance revenues, and both cars and
locomotives are increasingly expensive to maintain and prone to
breakdowns.
Two long distance equipment procurements are currently underway. In
December 2018, we awarded an $850 million contract for 75 new ALC-42
diesel locomotives, which we plan to use primarily to replace some of
the P42s operating on long distance trains. These units are being
funded with cash reserves and our National Network grant. During 2020,
we also expect to receive the last of the long delayed 130 single level
Viewliner II cars we ordered in 2010 that replaced the last of the 60-
70-year-old passenger cars Amtrak inherited when it took over
operations from private railroads in 1971.
As discussed in the most recent update to our comprehensive fleet
strategy, included in the FY 2021-2025 asset line plans we recently
provided to Congress,\2\ replacement of Superliner I, Amfleet II, and
remaining P42 long distance fleet is predicated on both policy
decisions and funding. We anticipate that the upcoming reauthorization
will provide guidance to Amtrak from Congress regarding the future
long-distance route network that the new long-distance fleet must
support, and that Congress will provide the level of funding needed to
acquire that fleet. We estimate that complete replacement of this
equipment to maintain service on all current long-distance routes would
require an over $2 billion federally funded financial commitment.
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\2\ https://www.amtrak.com/content/dam/projects/dotcom/english/
public/documents/corporate/businessplanning/Amtrak-Asset-Line-Plans-
FY21-25.pdf
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In addition to equipment, there are also significant funding
requirements to bring long distance stations, 230 of which are served
solely by long distance trains, into full compliance with ADA
requirements, and to renew track and signals and install positive train
control on the 200-mile portion of the Southwest Chief route in
Colorado and New Mexico on which the Chief is the only train operating.
Infusion of federal funds through an infrastructure bill could help
Amtrak address these and other long distance capital funding
challenges.
Amtrak and Freight Railroads
I would be remiss if I did not end by addressing two great threats
to the continued operation and growth of our state supported and long
distance routes: abysmally poor on-time performance (OTP) on some of
our host railroads and the extreme difficulty Amtrak faces in adding
new routes or expanding existing services on host railroad track.
Amtrak's creation relieved the railroads now referred to as
``freight railroads'' of their legal obligation to provide themselves
intercity passenger rail service, on which they were incurring huge
financial losses. In return, federal law (49 U.S.C. 24308(c)) requires
them to give Amtrak's trains preference over their freight trains, and
to accommodate increases in Amtrak train operations. Too often today,
host railroads are ignoring these legal obligations, to the detriment
of our passengers, our employees, the state partners who fund our
state-supported services and the taxpayers who provide Amtrak's federal
funding.
Amtrak's on time performance (OTP) on many host railroads is poor
and has gotten worse, even though freight rail traffic has declined by
more than 10% since 2006. In FY 2019, only 42% of long distance
passengers arrived at their destination on time. Host-railroad
responsible delays account for 67% of the delays to Amtrak trains
operating over host railroad lines. Freight train interference is the
largest cause of such delays: during FY 2019, it accounted for over one
million minutes of delays on host railroads.
By statute, currently only the U.S. Department of Justice (DOJ) can
enforce preference in a civil action before a District Court judge. In
Amtrak's entire history, DOJ has initiated only one enforcement action,
against the Southern Pacific in 1979. Amtrak supports continued
authority for the DOJ to initiate an action, but we request that this
authority be supplemented by authorizing Amtrak to enforce preference
in federal court.
In addition, changes in the statutory provisions governing Amtrak's
right to operate additional trains over host railroads are necessary to
ensure a fair and expeditious process. The Rail Passenger Service Act
(RPSA) of 1970 gave Amtrak broad rights to operate over any rail line.
In recent years, however, some railroads have resisted Amtrak requests
to add additional trains through delay and imposition of unreasonable
and unilaterally determined demands for excessive capital investments.
Updating the RPSA provision Congress enacted in 1980 provide an
``expedited procedure'' for Amtrak to add additional trains \3\ to
conform it with the procedures of the Surface Transportation Board
(STB), which received jurisdiction over it in PRIIA, and to specify a
process for determining whether and what capital investments are
necessary to accommodate the additional trains, is necessary to address
this problem.
---------------------------------------------------------------------------
\3\ House Conference Rep. No. 96-1041, May 20, 1980, p. 42,
reprinted in 1980 U.S. Code Congressional & Administrative News at
1183, 1203-04.
---------------------------------------------------------------------------
As demonstrated last year, Amtrak has experienced record ridership
and revenue, and we are confident that these trends will continue.
There is clearly a demand for intercity passenger rail service and
Amtrak is ready to do its part to meet this demand. We believe our
performance in recent years is proof of our good stewardship of
taxpayer dollars, and we hope to earn your continued support so that we
can lead a passenger rail renaissance in the United States.
I thank you again for inviting me to speak here today, and I look
forward to your questions.
Mr. Lipinski. Thank you, Mr. Gardner.
I now recognize Dr. Bury for 5 minutes.
Dr. Bury. Good morning.
My name is Dr. Sandra Bury. I am the mayor of the village
of Oak Lawn and a practicing optometrist. It is an incredible
honor to be asked to present to you the perspective of a local
mayor and describe the impact rail service and rail
infrastructure has on our residents.
Thank you very much, Congressman Lipinski, for the
invitation, and I would like to thank the members of the
subcommittee for their kind attention as well.
In our area, the rail was laid out about 1880 when we were
just farmland. By 1909, 287 people were living around our small
train station, and the village of Oak Lawn was incorporated.
One hundred eleven years later, we are a bustling first-tier
suburb of about 58,000 people, and that rail line continues to
be an economic engine of growth and opportunity. As our
community has evolved, our rail service has evolved.
We still have freight traffic, but, these days, commuter
traffic is really the majority. Thirty trains move thousands of
commuters through Oak Lawn every day, and our residents enjoy
affordable access to high-paying jobs, and the service helps
reduce traffic, pollution, improve home values, and enhance
quality of life. Our train station is the heart of our
community.
We have a strategic plan in our village to develop the area
further. By adding a traffic signal near this train station, we
could bring commuter traffic finally onto our main streets,
away from our neighborhood streets. It has taken more than a
decade, but I am happy to say Illinois Department of
Transportation approvals are in place, and construction is
finally proceeding.
The one hurdle we face is our rail line. You see, our
commuter rail service, Metra, must upgrade every signal on the
line before our traffic signal can be turned on, and they just
don't have the funding for it.
They have said it would be 2020; then said, well, let's try
2021. Now they are asking for 2022. We have a building in the
center of our town waiting to be built, a traffic nightmare for
our residents that could be eliminated, and a public safety
problem of the antiquated signals that should not exist at all.
This is a very specific and telling instance of how lack of
rail funding has impacted our local economy, public safety, and
quality of life.
The Illinois State Legislature passed a capital bill in
2019 that has helped, and municipalities like Oak Lawn have
invested their own funds, but Federal help is needed for us to
address the enormous backlog of critical needs. Metra spends
millions of dollars maintaining obsolete equipment. The signals
that must be upgraded on our line are so antiquated, you can't
even get parts for repairs anymore.
They receive steady funding for operations, but they have
no steady reliable capital funding, and this has created a
precarious situation from a safety and operational standpoint.
The towns our train line serves in Illinois have the highest
rate of growth and increase in population in the State, but we
have seen no increases to the minimal Saturday service
Congressman Lipinski worked so hard to get us back in 2009, and
we still have no Sunday service.
Everyone wants to take a train into the city on the
weekends and take advantage of the amazing events in Chicago,
but, with the present service, it is just not possible.
It is not only the funding I want to talk about. More
weekend service or additional weekday service requires the
cooperation of the freight railroads, and it has been, frankly,
a frustrating and drawn-out process to get them to agree to
more service. There must be a better way to add commuter rail
service that our communities need, and I hope that Congress can
address this issue.
Freight railroads must also commit to being community
partners and maintain their crossings, bridges, and property to
acceptable standards. This is not currently done.
Please fund the infrastructure that supports commuter rail.
An additional parking tower in our downtown would spark
economic investment, add business, add vibrancy, and encourage
more ridership. We also need funding to train our first
responders in dealing with rail disasters and the hazardous
materials moving through our community. Better rail
infrastructure is urgently needed to expand the service. The
CREATE program which Congressman Lipinski supports and has
gotten funding for is a perfect example of a public-private
partnership which benefits everyone. Please use additional
funding for rail to invest in programs like CREATE.
So, in summary, I want to thank you again for the
opportunity to speak. Adequate funding for our passenger and
freight rail service is a critical thing for improving safety,
livability, and growing our economy, and, in addition to the
improved rail service, please don't forget to fund
infrastructure, training, and require all parties to work
together.
Thank you.
[Dr. Bury's prepared statement follows:]
Prepared Statement of Hon. Sandra Bury, O.D., Mayor, Village of Oak
Lawn, Illinois
Good morning. My name is Dr. Sandra Bury. I am the mayor of the
Village of Oak Lawn and a practicing optometrist. It is an incredible
honor to be asked to present you with the perspective of a local mayor
and describe the impact rail service and rail infrastructure has on our
residents. Thank you Congressman Lipinski for the invitation and I
would like to thank the members of this Subcommittee for their kind
attention.
In our area, the rail line was laid around 1880 when we were just
farmland. By 1909, a small community of 287 had formed around a station
on that line and the Village of Oak Lawn was incorporated. One hundred
and eleven years later, we are a bustling first-tier suburb of about
58,000 and that rail line continues to be an economic engine of growth
and opportunity. As our community has evolved, our rail service has
evolved.
We still have freight traffic, but these days commuter traffic is
the majority. Thirty trains move thousands of commuters through Oak
Lawn every day. Our residents enjoy affordable access to high-paying
jobs and the service helps reduce traffic, pollution, improve area home
values, and enhance quality of life. Our train station is the heart of
our community.
We have a strategic plan to develop the area further. By adding a
traffic signal near the train station, we could bring commuter traffic
onto our main streets away from our neighborhood streets. It has taken
more than a decade but I am happy to say Illinois DOT (IDOT) approvals
are in place and construction is finally proceeding. The one last
hurdle we face is from our rail line.
You see our commuter rail, Metra, must upgrade all signals on the
line before our new traffic signal can be turned on and they don't have
the funding for it. They have said it would be 2020, then 2021 and now
are asking for 2022. We have a building in the center of our town
waiting to be built, a traffic nightmare for our residents that could
be eliminated, and the public safety problem of antiquated signals that
should not exist at all. This is a very specific and telling instance
of how lack of rail funding has impacted our local economy, public
safety, and quality of life.
The Illinois State Legislature passed a capital bill in 2019 that
has helped, and municipalities have invested their own funds, but
federal help is needed for us to address the enormous backlog of
critical needs. Metra spends millions of dollars maintaining obsolete
equipment. The signals that must be upgraded on our line are so
antiquated that you can no longer get parts for repairs. They receive
steady funding for operations but they have no steady, reliable capital
funding and this has created a precarious situation from a safety and
operational standpoint.
The towns our train line services have the highest rate of growth
and increase in population in Illinois, but we have seen no increases
to the minimal Saturday service Congressman Lipinski worked so hard to
get us in 2009, and we have no Sunday service. Everyone wants to take a
train into the city on the weekend to take advantage of Chicago's
amazing events, but the present service doesn't make that possible.
It's not only about funding. More weekend service or additional
weekday service requires the cooperation of the freight railroads. It
has been a frustrating and drawn-out process to get them to agree to
more service. There must be a better way to add the commuter rail
service that our communities need and I hope that Congress can address
this issue. Freight railroads must also commit to being community
partners andmaintain their crossings, bridges and property to
acceptable standards, which is not currently done.
Please fund the infrastructure that supports commuter rail. An
additional parking tower in our downtown would spur investment from
business and add vibrancy while encouraging more riders. We also need
funding to train our first responders in dealing with rail disasters
and the hazardous materials moving through our community.
Better rail infrastructure is urgently needed to expand service.
The CREATE program, which Congressman Lipinski supports and has gotten
funding for, is a perfect example of a public-private partnership which
benefits everyone. Please use additional funding for rail to invest in
programs like CREATE.
In summary, adequate funding of our passenger and freight rail
infrastructure is critical for improving safety, livability and in
growing our economy. In addition to additional and improved rail
service, please fund infrastructure, training, and require all parties
to work together. Thank you very much for this opportunity to testify.
Mr. Lipinski. Thank you, Mayor.
And, before I recognize Mr. Corbett, I just want to make
sure I showed it. I have the New Jersey Transit app on my phone
[indicating his cell phone]. Love taking that from Penn Station
out to the airport, so--but, Mr. Corbett, I now recognize you
for 5 minutes for your statement.
Mr. Corbett. Thank you very much. Very impressed.
Good morning, Chairman Lipinski, Ranking Member Crawford,
and members of the subcommittee.
I am Kevin Corbett, president and CEO of New Jersey
Transit. Thank you for holding this hearing on a topic of vital
national interest, funding of a robust freight and passenger
rail network.
Let me also thank Chairman DeFazio and all the members of
the Transportation and Infrastructure Committee for the
invitation to speak today.
As some of you may know, I also serve as cochair of the
Northeast Corridor Commission with FRA Administrator Ron
Batory. And, while I don't speak for the Commission as a whole,
I know that many of my fellow Commission members face similar
challenges to those I will discuss today.
But, first, I would like to set the stage with some basic
facts about New Jersey Transit. We are the third largest
transit agency in the Nation operating in the most densely
populated U.S. State. By total population, New Jersey is the
Nation's 11th largest State, and New Jersey Transit is also the
Nation's largest statewide transit agency and third largest
overall in the country.
In this sense, our operation is a great asset, but also a
significant burden on New Jersey's resources and must support
an asset orders of magnitude greater than its population and an
asset that is a legacy of a number of 19th-century private
railroads with all the challenges of an aging infrastructure
system.
Every weekday, we provide more than 925,000 passenger trips
across a service region that spans more than 5,300 square
miles. We have more than 2,200 buses, 1,200 train cars, and 90
light rail vehicles. We run 251 bus routes, 3 light rail lines,
and 12 commuter rail lines throughout New Jersey, linking major
points in New York, Philadelphia, and everywhere in between.
Through our rail service on the Northeast Corridor, we work
and coordinate closely with Amtrak, which owns, operates, and
maintains the entire corridor, relied on by many of our
customers to get in and out of New York.
New Jersey Transit rail service is also growing. Despite
low gas prices and declining nationwide rail ridership trends,
our rail ridership went up 3 percent year over year.
Our operations run virtually 24 hours a day, 7 days a week,
leaving us a small window to accomplish vital maintenance and
improvement work. We also provide an extensive paratransit
network called Access Link throughout the State.
All together, we are the lifeblood of New Jersey and a
central element of the New York metropolitan region's $1.7
trillion economy, which accounts for about 10 percent of the
entire Nation's GDP. Every year, on average, New Jersey Transit
receives about $604 million in various Federal formula funds.
This money is vital for construction projects, including
station rehabilitation, track replacements, and other
infrastructure projects, and community transportation and other
vehicles. We depend on Federal funding, which is a key
component of many of our capital projects.
New Jersey Transit is also eligible to apply for Federal
funds through FRA's Federal-State Partnership for State of Good
Repair program. Last year, New Jersey Transit received more
than $18 million through this program to renovate platform D at
Newark Penn Station, which is a critical transfer point for
Amtrak and New Jersey Transit customers.
New Jersey Transit appreciates all the support we get from
the FRA and FTA, and take extremely seriously our
responsibility to use these funds as responsibly and
efficiently as possible.
As grant recipients, we are collaborating with the FRA and
FTA in discussing ways in which the grant process can be
improved, commonsense solutions to get projects across the
finish line faster.
We strongly support an increase in flexibility for FRA
grants to allow grant recipients, whose projects come in under
budget, to use unexpended funds to advance other elements of
the project integral to that project's success. For example,
there is currently nearly $3 million in unexpended FRA grant
funds, thanks to Portal North Bridge early action construction
work that was completed under budget. We would like to use
these funds to advance the project even further.
This sort of procedural change already in place under FTA's
Capital Investment Grant program would be usually beneficial
for New Jersey Transit and to commuter railroads nationwide. In
recent discussions, we are pleased that there is a willingness
to consider ways that this can be accomplished.
Just a few weeks ago, U.S. DOT issued an improved rating
for the Portal North Bridge project on the Northeast Corridor,
and we are now entering the engineering phase, which is the
next step to a full-funding grant agreement and getting shovels
in the ground. This project, estimated at $1.7 billion, is in
addition to more than $1 billion in projects we have already
committed in just the past few years under Governor Murphy when
I first came, took this position.
Replacing the Portal North Bridge is critically important,
but it is just one component of New Jersey Transit's much
larger goal to dramatically increase trans-Hudson capacity.
Right now, our region and the State and the regional economy
depend on two centory-old tunnels into and out of New York
City. If just one of those tunnels goes out of service for any
number of reasons, the amount of trains into and out of New
York drop by 75 percent. Just 1 month ago, an incident occurred
shutting one of those tunnels at the worst possible time, in
the middle of the evening rush hour.
Absent additional tunnels, major regional halting incidents
like the one I just referenced will continue to occur,
depressing regional productivity and economic growth,
disrupting regional travel, and profoundly inconveniencing our
customers. Aside from the risk of continuing to rely on these
aging tunnels, the current situation is clearly a constraint on
economic growth--regionally and even nationally. To be blunt,
our current capacity to and from Penn Station New York is maxed
out critically during rush hour.
I would also like to comment as well on the Positive Train
Control effort, which is a federally mandated but largely
federally unfunded responsibility that has been put on all the
national railroads, including commuter rail.
We have spent over $340 million on the project to date, and
we estimate the full cost of installation to be approximately
$500 million when it is fully operational. The FRA has made
available PTC project delivery money, but it comes without
preaward authority, and it represents just a small portion of
the overall costs for our railroads.
Overall, we have a long list of projects going back for a
century-old infrastructure in addition to beyond the Hudson----
Mr. Lipinski. Mr. Corbett, if you could wrap up.
Mr. Corbett. Sorry. We have extensive rail stations, high-
level platforms for ADA compliance, and a long list of other
projects that require funding, like many of the older rail
systems.
So, in closing, that is why I strongly support Chairman
DeFazio's new infrastructure bill and the investing $55 billion
in national rail infrastructure, and we certainly look forward
to working with the committee in advancing that.
[Mr. Corbett's prepared statement follows:]
Prepared Statement of Kevin S. Corbett, President and Chief Executive
Officer, NJ Transit Corporation
Introduction
Good morning, Chairman Lipinski, Ranking Member Crawford, and
members of the Subcommittee.
I'm Kevin Corbett, President and CEO of NJ TRANSIT.
Thank you for holding this hearing on a topic of vital national
interest: Funding a robust freight and passenger rail network.
Let me also thank Chairman DeFazio and all the members of the
Transportation and Infrastructure Committee for the invitation to speak
today.
As some of you may know, I also serve as Co-Chair of the Northeast
Corridor Commission with FRA Administrator Ron Batory.
And while I don't speak for the Commission as a whole, I know that
many of my fellow Commission members face similar challenges to those
I'll discuss today.
NJ TRANSIT ``Fast Facts''
To begin, I'd like to set the stage with some basic facts about NJ
TRANSIT--the third largest transit agency in the nation, operating in
the most densely populated U.S. state.
By total population, New Jersey is the nation's 11th largest state,
yet NJ TRANSIT is also the nation's largest state-wide transit agency--
and third largest overall in the country.
In this sense, our operation is a great asset but also a
significant burden on New Jersey's resources, as it must support an
asset orders of magnitude greater than its population--and an asset
that is a legacy of a number of 19th Century private railroads, with
all the challenges of an aging infrastructure system.
Every weekday, we provide more than 925,000 passenger trips across
a service region that spans more than 5,300 square miles.
We have more than 2,200 buses, 1,200 train cars, and 90 light rail
vehicles.
We run 251 bus routes, three light rails lines, and 12 commuter
rail lines throughout New Jersey--linking major points in New York,
Philadelphia, and everywhere in between.
Through our rail service on the Northeast Corridor, we work and
coordinate closely with Amtrak, which owns, operates, and maintains the
entire corridor--relied on by many of our customers to get in and out
of New York.
NJ TRANSIT rail service is also growing.
Despite low gas prices and declining nationwide rail ridership
trends, our rail ridership went up three percent year-over-year.
Our operation runs virtually 24 hours a day, seven days a week--
leaving us a small window to accomplish vital maintenance and
improvement work.
We also provide an extensive paratransit network called Access
Link.
All together, we are the lifeblood of New Jersey and an essential
element of the New York Metropolitan region's $1.7 trillion economy,
which accounts for about 10 percent of our entire nation's GDP.
Every year, on average, NJ TRANSIT receives about $604 million in
various federal formula funds. This money is vital for construction
projects including station rehabilitation, track replacements andother
infrastructure projects, and community transportation and other
vehicles.
We depend on federal funding, which is a key component of many of
our capital projects.
NJ TRANSIT is also eligible to apply for federal funds through the
FRA's Federal-State Partnership for State of Good Repair Program.
Last year, NJ TRANSIT received more than $18 million through this
program to renovate Platform D at Newark Penn Station, which is a
critical transfer point for Amtrak and NJ TRANSIT customers.
NJ TRANSIT appreciates all the support we get from the FRA and FTA,
and takes extremely seriously our responsibility to use these funds as
responsibly and efficiently as possible.
FRA and FTA Grant Efficiencies
As grant recipients, we are collaborating with the FRA and FTA and
discussing ways in which the grant process can be improved--common
sense solutions to get projects across the finish line faster.
We strongly support an increase in flexibility for FRA grants to
allow grant recipients--whose projects come in under budget--to use
unexpended funds to advance other elements of the project, integral to
that project's success.
There is currently nearly $3 million dollars in unexpended FRA
grant funds, thanks to Portal North Bridge early action construction
work that was completed under budget.
We would like to use these funds to advance the project even
further.
This sort of procedural change--already in place under the FTA's
Capital Investment Grants Program--would be hugely beneficial to NJ
TRANSIT and to commuter railroads nationwide.
In recent discussions, we are pleased that there is a willingness
to consider ways that can accomplish this.
Portal North
Just a few weeks ago, USDOT issued an improved rating for the
Portal project, and we're now entering the engineering phase, which is
the next step toward a Full Funding Grant Agreement and getting shovels
in the ground.
This project--estimated at $1.7 billion--is in addition to the more
than the one billion dollars in projects we've already committed in
just the past two years.
Replacing the Portal North Bridge is critically important, but it's
just one component of NJ TRANSIT's much larger goal to dramatically
increase trans-Hudson capacity.
Right now, our region--and the state and regional economy--depends
on two century-old tunnels into and out of New York City.
If just one of those tunnels goes out of service--for any number of
reasons--the amount of trains into and out of New York drops by 75
percent.
Just one month ago, an incident occurred shutting one of the
tunnels at the worst possible time--in the middle of the evening rush
hour.
Absent additional tunnels, major, region-halting incidents like the
one I just referenced, will continue to occur--depressing regional
productivity and economic growth, disrupting regional travel, and
profoundly inconveniencing our customers.
Aside from the risk of continuing to rely on these aging tunnels,
the current situation is clearly a constraint on economic growth--
regionally and even nationally.
New tunnels will not only eliminate the railroad bottleneck, but
they will bring even greater economic growth, similar to the way
MidTown Direct service on our Morris & Essex Lines led to strong
increases in property values and economic productivity. This is the
kind of benefit new tunnels will bring to other areas of our rail
system, like our Raritan Valley Line and rail lines in Bergen County.
But to be blunt, our current capacity to and from Penn Station New
York is maxed out, particularly during rush hour.
Every year, the urgency for action--the urgency for additional
tunnels--increases.
PTC
As we work to replace the Portal North Bridge, we're advancing one
of the most complicated, most time- and resource-consuming projects in
NJ TRANSIT's history: the federally-mandated rail safety enhancement
project, Positive Train Control, or PTC.
NJ TRANSIT met the December 2018 interim milestone for this
project, and last month, we received approval from the FRA to enter
into Revenue Service Demonstration, or RSD testing.
That means we'll begin testing PTC on trains in revenue service
ahead of our previously projected start date.
Meeting the December 2020 deadline will still require a monumental,
behind-the-scenes effort, but based on our success in 2018, the recent
approval to enter into RSD testing, and the continued support from the
FRA, I'm confident we're going to make it.
PTC is a meaningful safety enhancement for our system, but the
costs for this federal mandate are not insignificant.
We've spent about $340 million on the project to date, and we
estimate the full cost of installation to be approximately $500
million.
The FRA has made available PTC project delivery money, but it comes
without pre-award authority.
That means it can only be used for costs expended in the future, as
opposed to the substantial costs we've incurred to date.
In addition, application periods take about a year to resolve, but
in one year the project will no longer be eligible for the grant.
Following full PTC installation, we will continue to incur
significant annual costs to maintain and operate the system--including
software and equipment upgrades, licensing, labor, and other costs--and
the nation prepares the next phase of evolving PTC safety technology.
We are encouraged by opportunities to apply for federal monies to
offset some of these costs. However, current opportunities represent
just a small percentage of the total capital and operating PTC costs
for us and most railroads.
NJT Finances / The Need
Like almost ever transit agency in the country, NJ TRANSIT requires
public support, both federal and state.
As we await movement on the additional Hudson River tunnels, there
are many other areas where the federal government can support NJ
TRANSIT.
We have extensive needs in regards to the Americans with
Disabilities Act--about half of our 165 rail stations are not currently
accessible.
Other needs include high-level platforms, public address and
signage upgrades.
NJ TRANSIT bridges need to be modernized and replaced.
Major NJ TRANSIT facility upgrades require backup power generation.
Signal systems systemwide need to be upgraded, as do several power
substations.
In short, our needs are great at a time when demand is surging and
resources are limited.
The needs and challenges we're facing are significant, and they're
likely challenges Congress will see more and more. As the U.S.
population trend continues to shift from rural to urban settings, more
metropolitan areas are competing for transits dollars than ever
before--and that trend will only continue.
Conclusion
Esteemed members of Congress . . . A strong NJ TRANSIT means a
strong New Jersey . . . a strong metropolitan region--are integral to a
healthy national economy.
The federal government has good reason to invest in NJ TRANSIT's
network--to sustain and support economic vitality.
You can't have a first-world economy on third-world infrastructure.
That's why NJ TRANSIT strongly supports Chairman DeFazio's new
infrastructure bill, which calls for investing $55 billion in the
national railroad network.
We also strongly support an increase in flexibility for FRA grants
to allow unexpended funds to advance other elements of projects.
We also support efforts to broaden FRA grant programs for freight
rail to include commuter rail, and to broaden safety grants to include
infrastructure spending.
I want to once again thank you, Chairman DeFazio, Chairman
Lipinski, and Ranking Member Crawford, for inviting me to join you
today.
NJ TRANSIT very much looks forward to working with all of you to
build on the progress we've made.
Mr. Lipinski. Thank you, Mr. Corbett.
I now recognize Mr. Shanahan for 5 minutes.
Mr. Shanahan. Thank you, Chairman DeFazio, Chairman
Lipinski, Ranking Member Crawford, and members of the
subcommittee.
I am Robert Shanahan, Jr., and I am a member of the BMWED-
IBT. The BMWED represents railroad workers who perform
inspection, construction, maintenance, repair, and dismantling
of tracks, roadbeds, bridges, structures, facilities, and
appurtenances on railroads throughout the United States.
Since 2013, I have worked in the BMWED Arbitration
Department located in Chicago. I am currently assigned as the
assistant to the president-director of arbitration, where I
have the honor of representing BMWED members in various
contract disputes, discipline disputes, and contract
negotiations.
Prior to working in the Arbitration Department, I worked
for 13 years in the Maintenance of Way Department at the
commuter railroad Metra. During my time with Metra, I was
assigned to perform various maintenance of way duties
throughout the Chicago metropolitan area.
While working in the field at Metra, I encountered numerous
situations where tracks, bridges, and/or catenary structures
needed drastic repair or, in many instances, complete
replacement. I was particularly concerned by the number of
railroad bridges in disrepair. I frequently observed bridges
with crumbling concrete, rotten steel, and decomposed timbers.
Metra claims it has nearly 500 bridges that are over a century
old. I don't think I need to explain to you the safety threat
inherent in 100-year-old infrastructure that is deteriorating.
When working in the field, I can recall several instances
of repairing the rotting steel decks on ballast deck bridges.
This situation can result in large stone raining down on
streets, cars, people, or whatever may lie below.
Another area of bridge repair I often encountered involved
the concrete support systems. There were many instances where I
found that sections of the concrete support systems were able
to be removed with a small hammer and, in some cases, even with
bare hands.
There is no question that BMWED members are the most
qualified and highly trained to perform this work. My
experience in the field at Metra shows the urgent need for
greater infrastructure funding for passenger railroads, but any
infrastructure package needs to add protections to ensure that
the work is performed by union members who have been properly
trained on FRA safety rules.
I would like to quickly go over some of the trends
currently affecting our membership in arbitration. From 2016
through 2018, our Arbitration Department saw an 84-percent
annual increase in files received as compared to the period
from 2006 through 2015.
The significant reason for the spike in arbitration filings
can be attributed to the rail carriers increasingly assigning
workers of BMWED members to nonunion rail contractors. For
example, multiple carriers are now electing to assign nonunion
contractors to perform on-track protection. On-track protection
is work assigned to an employee who is responsible for the
communication with train dispatchers, train crews, and work
groups to ensure the safety of all individuals present within
the area of track protection.
Last month, Amtrak assigned on-track protection work for a
major project occurring in Chicago to nonunion contractors. The
problem with this decision is that the nonunion contractors are
subject to a qualification process that minimally complies with
FRA regulations.
BMWED members, on the other hand, are extensively trained
and tested on FRA safety rules governing how work on or near
railroad tracks must be conducted. These safety rules are not
arbitrary, and many have been instituted as a result of
accidents, some fatal, all avoidable.
Our primary concern is that the FRA safety rules are not
being properly administered by Amtrak in Chicago. Looking to
achieve a minor cost savings, Amtrak is putting anyone in the
immediate vicinity of this project at risk. We should not be
putting profitability ahead of safety.
Another area of our concern for our members is the recent
implementation of unvetted technologies. In January 2020, at
the NRC conference in San Diego, FRA representatives were
actively encouraging rail carriers to seek waivers to implement
automated track inspection technology on their mainline tracks.
Moreover, at the RSAC meeting on April 20, 2019,
Administrator Batory stated that he was instructing his staff
to grant every technology waiver that the railroads request.
Not only are they replacing physical track inspections with
automated technologies; they are allowing the data obtained to
be reviewed by individuals who are not FRA-qualified track
inspectors.
As you can imagine, many train derailments, collisions, and
other incidents that jeopardize human lives are the result of
deteriorating track conditions. Without the guarantee of
qualified BMWED members reviewing the data, it is only a matter
of time before these types of catastrophic incidents become
commonplace.
We urge the FRA to operate as an agency tasked with
ensuring the safe operation of railroads rather than an agency
concerned with implementing unvetted technology at the
potential cost of human lives.
I would like to thank Chairman Lipinski and this
subcommittee for inviting me to testify on behalf of the tens
of thousands of BMWED members. They are the best railroaders
this country has to offer, and they stand poised and ready to
complete this much-needed railroad infrastructure project.
As a BMWED member who worked on the railroad, I can
personally attest that employing anybody else to accomplish
this massive infrastructure project would be a fool-hearted
endeavor.
Thank you for your time today, and I welcome any questions.
[Mr. Shanahan's prepared statement follows:]
Prepared Statement of Robert J. Shanahan, Jr., Assistant to the
President-Director of Arbitration, Brotherhood of Maintenance of Way
Employes Division, International Brotherhood of Teamsters
Thank you, Chairman Lipinski, Ranking Member Crawford and members
of the Subcommittee.
I am Robert J. Shanahan Jr., and I am a member of the Brotherhood
of Maintenance of Way Employes Division of the International
Brotherhood of Teamsters (BMWED-IBT). The BMWED-IBT represents railroad
workers who perform inspection, construction, maintenance, repair, and
dismantling of tracks, roadbeds, bridges, structures, facilities, and
appurtenances on railroads throughout the United States, including the
major Class 1 freight railroads as well as many of the largest commuter
lines in the country.
Currently, I work as the Assistant to the President-Director of
Arbitration within the BMWED-IBT Arbitration Department located in
Chicago. Prior to that appointment, I worked as a BMWED-IBT Arbitration
Labor Advocate. In my experience as the Director of Arbitration, as
well as an Arbitration Labor Advocate, I have had the honor of
representing BMWED Members in various contract disputes, discipline
disputes and contract negotiations.
Prior to working in the BMWED-IBT Arbitration Department, I worked
in the Maintenance of Way Department for 13 years on the Northeast
Illinois Regional Commuter Railroad Corporation, otherwise known as
Metra, in Chicago. During my time with Metra, I was assigned to perform
various aspects of construction, maintenance and repair to the tracks,
structures and bridges, working throughout the Chicago Metropolitan
Area.
My Observations of the Railroad Infrastructure While Working in the
Field
While working in the field at Metra from 2000-2013, I encountered
numerous situations where tracks, bridges and/or catenary structures
were in need of drastic repair, or in many instances, complete
replacement. As many of you are probably aware, the Chicago area is the
largest rail hub in the nation. Railroad construction began in Chicago
in 1848 and railroad traffic has continued to boom to date.
One area of particular concern is the amount of railroad bridges in
the Chicago region that are close to, or even over, a century old.
Metra alone claims to operate nearly 500 bridges that are over a
century old. In my experience, their age shows. I frequently observed
crumbling concrete, rotten steel and decomposed timbers that are in
desperate need of repair or complete replacement. I don't think I need
to explain to you the safety threat inherent in 100-year-old
infrastructure that is deteriorating.
Clearly, the heavy rail traffic and Chicago winters have taken
their toll on the 100-year-old bridges. When working in the field, I
can recall several instances of repairing the crumbling steel decks on
ballast deck bridges. When bridge decks are failing, it can result in
large stone raining down on streets, cars, people, or whatever may lie
below. This falling stone poses an obvious threat to anyone walking or
driving below the problem area.
Another area of bridge repair I often encountered involved the
concrete support system found under bridges. There were many instances
where I found that sections of the concrete support system were able to
be removed with a small hammer and in some cases even with bare hands.
In addition to decaying concrete and steel supports, it was also common
to perform repairs to rotten and missing bridge timbers on many
bridges. These large timbers would often break with little effort when
being removed to make repairs. From my experience bridge timbers were
often the most deteriorated portion of bridge structures.
Only the most qualified and highly trained railroad maintenance of
way workers possess the ability to recognize the vital work that needs
to be performed on rail infrastructure. And only the most qualified and
highly trained railroad maintenance of way workers possess the ability
to best perform the work that needs to be completed. There is no
question that the most qualified and highly trained workers to perform
this work are BMWED-IBT represented railroad workers. We request that
the funding in this infrastructure package have protections to ensure
that there are stipulations requiring that the work be performed by
union members who have been properly trained on Federal Railroad
Administration (FRA) safety rules and policies.
My Observations of the Current Trends Impacting the Lives of BMWED-IBT
Members
Now that I'm heading our organization's arbitration department, I'd
like to go over with you some of the trends I've been seeing affecting
our membership. From 2016 through 2018, the BMWED-IBT Arbitration
Department received on average two thousand thirty-seven (2037) files
per year to be considered for Arbitration, with an average of eight
hundred eighteen (818) files involving BMWED-IBT work being assigned to
outside contractors. This is an 84% increase in files received compared
to the period from 2006 through 2015, where we averaged one thousand
one hundred thirty (1130) files per year to be considered for
Arbitration, with an annual average of four hundred sixty-eight (468)
files involving BMWED-IBT work being assigned to outside contractors. A
significant reason for the spike in arbitration filings can be
attributed to both private and public rail carriers increasingly
assigning work reserved to BMWED-IBT members to non-union rail
contractors.
A recent example of this development involves multiple rail
carriers who have elected to assign non-union contractors to perform
the work of providing on-track protection for passengers, employees,
the general public, and various other machinery that could be impacted
by a train collision. One such rail carrier is Amtrak.
Last month, Amtrak chose to start assigning the work of providing
on-track protection for a major project occurring in Chicago to non-
union contractors. On-track protection is work assigned to an employee
who is responsible for the communication with train dispatchers, train
crews and work groups to ensure the safety of train crews, passengers,
work groups and the general public. The problem with this decision by
Amtrak is that non-union contractors are subject to only bare bones
qualification processes that minimally comply with federal regulations.
BMWED-IBT members on the other hand are extensively trained and tested
on FRA safety policies and rules governing how work on or near railroad
tracks must be conducted. These safety policies and rules are not
arbitrary and many have been instituted as a result of incidents or
accidents--some fatal, all avoidable. Our concerns in this instance are
that the FRA safety rules are not being properly administered by Amtrak
in Chicago. Looking to achieve minor cost savings, Amtrak has
potentially endangered rail passengers, the general public, employees
and the surrounding infrastructure. We should not be putting
profitability ahead of safety.
Another area of concern for our members is the recent
implementation of unvetted automated technologies. In January 2020, at
the National Railroad Construction & Maintenance Association Conference
(NRC) held in San Diego, FRA representatives were actively encouraging
rail carriers to seek waivers to implement automated track inspection
technology on their main line tracks. From the reports of our officers
in attendance at the Rail Safety Advisory Committee (RSAC) on April 20,
2019, Administrator Batory stated that he was instructing his staff to
grant every technology waiver that the railroads request. Not only are
they replacing physical track inspections with automated technologies,
they are allowing the data obtained to be reviewed by individuals who
are not FRA-qualified track inspectors. As you can imagine, many train
derailments, collisions and other incidents that jeopardize public
lives are the result of deteriorating track conditions. Without the
guarantee of a qualified BMWED-IBT member making determinations
regarding the data obtained by the new technology, it is only a matter
of time before these types of catastrophic incidents become
commonplace. We urge the FRA to return to operating as an agency tasked
with ensuring the safe operation of railroads, rather than an agency
concerned with implementing unvetted new technology at the potential
cost of human lives.
Conclusion
In conclusion, I would first like to thank Chairman Lipinski and
this Subcommittee for inviting me to testify on behalf of tens of
thousands of BMWED-IBT railroad construction and maintenance
professionals. They are the best railroaders this country has to offer
and they stand poised and ready to tackle and complete this much-needed
railroad infrastructure project. I am a BMWED-IBT member, I worked on
the railroad in the Maintenance of Way department alongside other
members, and I can personally attest that employing anyone else to
accomplish this massive infrastructure project would be a fool-hearted
endeavor.
There are infrastructure issues on our Nation's railroads, some of
which are serious and have been patch worked or completely neglected
for far too long. We need to fix them before they result in something
catastrophic. I hope that this body will agree to the appropriate
funding to remedy these problems and that you will see to it that BMWED
members, with their collective expertise, knowledge, timeliness and
attention to safety, will be the workers employed to accomplish the
task.
Thank you for your time today and I welcome any questions.
Mr. Lipinski. Thank you, Mr. Shanahan.
I now recognize Mr. Artl for 5 minutes.
Mr. Artl. Thank you, Chairman DeFazio, Ranking Member
Graves, Chairman Lipinski, and Ranking Member Crawford. Thank
you for inviting me here today to discuss infrastructure
improvements to the Nation's rail network.
I would like to especially thank Chairman Lipinski for all
of his work and engagement on Illinois infrastructure issues.
Chairman Lipinski has been a strong advocate at the Federal
level for greater investments in our infrastructure, especially
in improving the Chicagoland passenger and freight rail
systems. In addition, his staff has always been recognized for
their effectiveness and responsiveness.
I would also like to thank and recognize Congressman Garcia
and Congressman Davis, both of whom have been strong and
reliable advocates for infrastructure improvements in Illinois.
Congressman Davis' district encompasses one of the most
critical rail projects in our State, and his support of the
10th Street corridor project has been instrumental in its
advancement.
As Chairman Lipinski mentioned, I am the president and CEO
of the American Council of Engineering Companies of Illinois.
We are the voice of the engineering industry in Illinois,
representing over 200 engineering firms and affiliates and
their over 11,000 employees. Our primary mission is to
strengthen the business environment for our member firms
through Government advocacy, political action, and business
education.
In addition, Illinois is a member of the national ACEC,
where we join with 51 other State and regional councils,
representing more than 600,000 engineers, architects, land
surveyors, and other specialists.
ACEC member firms in Illinois and nationally are engaged in
a wide array of engineering and related professional services
for public and private sector rail clients.
Looking at Illinois, in the beginning of 2019, Illinois'
road and transit system was facing nearly $30 billion in
deferred maintenance. Our infrastructure was graded at C minus,
and we had not had a multiyear capital plan since 2009.
In response to those challenges last year, the Rebuild
Illinois capital plan that was approved by the legislature and
signed into law by Governor Pritzker. The plan is a $45 billion
infrastructure investment with over $33 billion going into
Illinois' transportation system. But, after decades of neglect,
it doesn't solve the entirety of Illinois' transportation
challenges, and that is why it is so critical that a national
infrastructure funding program be approved. With the State of
Illinois now having now stepped up and done its share to
improve infrastructure, I urge Congress to do the same.
At ACEC Illinois, we see every day the need for more
infrastructure investment, including in our passenger and
freight rail system. Funding and completion for projects like
the 75th Street corridor project in Chicago or the 10th Street
corridor project in Springfield are critical, but currently
lack the funding to be completed.
Therefore, the proposed investment from the House
Transportation and Infrastructure Committee in rail of $55
billion over 5 years is necessary to complete these critical
projects and address the state-of-good-repair backlog in the
Nation's rail system.
From an engineering and business perspective, having the
funding and project certainty provided by the Federal
Government is critically important. It is hard for one of
ACEC's members to complete a project or keep it on time and
budget for that matter if it is not clear how the project will
be funded. The Federal Government is a vital part of funding
and partnering on infrastructure projects, and that must
continue.
Overall, Illinois is the second largest rail system in the
Nation. In all, 41 railroads provide service throughout the
State and to every part of the Nation. We are the only State
home to every Class I railroad, and 25 percent of all U.S. rail
traffic touches Chicago.
The expansiveness of Illinois' rail network led to the
formation of the CREATE program in 2003. The CREATE program is
a leading example of the progress we can make on infrastructure
if freight railroads, passenger railroads, local communities,
and State and Federal Government all work together.
Since 2003, over $1.6 billion has been spent and 30
projects have been completed through the CREATE program,
including projects that required creative engineering solutions
from ACEC members like the Englewood flyover and the ongoing
75th corridor improvement project.
Last year, Illinois committed an additional $400 million
for the CREATE program from its newly enacted capital bill. As
successful as the CREATE program is, it still needs to be fully
funded. In particular, most of the planned 25 grade separations
have not been completed yet, with many of those projects not
started at all. Underscoring that is that Illinois ranks in the
top five of grade-crossing accidents and fatalities nationally.
Grade separation is a local issue with national
implications. A focus on grade separation will not only
increase safety, but also mobility on a global scale. More
efficient truck movement means getting goods and services to
market across the world quicker. New incentives, greater
flexibility, and increases in funding for grade-crossing
separation should be considered a priority in the new Federal
bill. Funding these grade-crossing separations and similar
projects will provide not just mobility and economic benefits,
but save lives.
Overall, programs like CREATE are essential for improving
safety, alleviating congestion, and enhancing mobility in the
economic competitiveness of our region, but, ultimately, for
their continued success, they need your continued support.
In conclusion, I want to thank Congressman Lipinski and the
subcommittee again for the opportunity to testify. It was a
momentous achievement last year when the State of Illinois
passed the capital bill for the first time in 10 years, and I
am hopeful this year will be the year Congress steps up to the
plate as well.
Our Nation deserves nothing less than a world-class
transportation system, and ACEC Illinois and its member
companies stand ready to help and figure out how to get there.
We just need your partnership.
Thank you.
[Mr. Artl's prepared statement follows:]
Prepared Statement of Kevin Artl, President and Chief Executive
Officer, American Council of Engineering Companies of Illinois
Chairman DeFazio, Ranking Member Graves, Chairman Lipinski, and
Ranking Member Crawford, thank you for inviting me here today to
discuss infrastructure improvements to the nation's rail network.
I'd like to especially thank Chairman Lipinski for all of his work
and engagement on Illinois infrastructure issues. As Illinois' senior
member on the Transportation and Infrastructure Committee, our state
benefits greatly from both your leadership and your deep understanding
of the issues, especially on the transportation side. In addition, the
Congressman's staff has always been knowledgeable and responsive to
agency and local concerns.
I'd also to like to thank and recognize Congressman Garcia and
Congressman Davis, both of whom have been strong and reliable advocates
for infrastructure improvements in Illinois. Congressman Davis'
district encompasses one of the most critical rail projects in our
state and his support of the 10th street corridor project has been
instrumental in its advancement.
As Chairman Lipinski mentioned, I'm the President and CEO of the
American Council of Engineering Companies of Illinois--we are the voice
of the engineering Industry in Illinois, representing over 200
engineering firms and affiliates and their over 11,000 employees. Our
primary mission is to strengthen the business environment for our
member firms through government advocacy, political action, and
business education. In addition, Illinois is a member of the national
ACEC, where we join with 51 other state and regional councils
representing more than 600,000 engineers, architects, land surveyors
and other specialists.
ACEC member firms in Illinois and nationally are engaged in a wide
array of engineering and related professional services for public and
private sector rail clients, including Amtrak, Class I and short line
railroads, and state and local governments overseeing passenger rail
programs and facilities. Our members perform track design, bridge and
tunnel inspections, right-of-way and surveying, and grade separations,
as well as planning and design for intermodal facilities, terminals,
and yards, just to name a few.
I find it only fitting that Illinois is represented at this table
given our state's deep roots in the development of the national rail
network. By signing the Pacific Railway Act of 1862, President Lincoln
began the process of bringing planning and design to this critical
industry.
Let me briefly outline why this conversation and discussion of
funding is so critical for Illinois and probably for every other state
in the Union.
At the beginning of 2019, Illinois' road and transit system was
facing nearly $30 billion in deferred maintenance. Our infrastructure
was graded at a C-.
Illinois had not had a multi-year capital plan since 2009--and that
plan had many serious shortcomings.
In May of 2019, during the waning days of the state legislative
session, the Rebuild Illinois Capital Plan was approved by the
legislature and signed into law by Governor Pritzker.
The plan is a $45 billion infrastructure investment with over $33
billion going into Illinois' transportation system. It was critical, it
was necessary, it is historic in its size and scope and it would not
have been possible without the bi-partisan leadership of Governor
Pritzker, and both Democrat and Republican leaders in the House and
Senate.
But, after decades of neglect, it doesn't solve the entirety of
Illinois's transportation challenges and that is why it is so critical
that a national infrastructure funding program be approved. With the
State of Illinois having now stepped up and done its share to improve
infrastructure, I urge Congress to do the same.
At ACEC-IL, we see everyday in Illinois the need for more
infrastructure investment, including in our passenger and freight rail
system. Currently, Illinois has the second largest rail system in the
nation with 41 railroads, including all seven class I railroads,
providing service throughout the state, and from Illinois to every part
of the nation. About 500 freight trains and 700 passenger trains
including commuter lines, pass through Chicago every day. Overall, 25%
of all US rail traffic touches Chicago, making Chicago the undisputed
rail-hub of the United States.
However, given the age of the infrastructure, the high level of
rail congestion, and the desire for more passenger and freight rail
service throughout the State, more funding is needed. Projects like the
75th Street Corridor project in Chicago or the 10th Street Corridor
project in Springfield are critical to the future of the States' rail
system, but currently lack the funding to be completed.
Therefore, the proposed investment from the House Transportation
and Infrastructure Committee in rail of $55 billion over five years is
necessary to complete these critical projects and address the state of
good repair backlog in Illinois's and our nation's rail system.
It is critical that the federal government be a reliable partner
for the rehabilitation and replacement of public infrastructure assets.
Federal funds are typically the catalyst that brings together state,
local, and private sources of additional funding to address major
projects.
That is certainly the case in my home state of Illinois, where
federal funds for the CREATE project help drive additional investment
from state and local partners. In the state infrastructure funding
package that we enacted last year, we made sure to include transit and
rail funding in addition to the increases for highways. In fact,
passage of that bill would not have been politically possible if we had
not included rail programs. And the need to match federal funds with
state dollars was a driving factor.
Larger rail projects, including those in Chicago in particular, are
tough to advance because of the magnitude of funding required and the
partnerships needed to accomplish the project. For these projects in
particular, the federal government plays an important role in helping
bring the projects to fruition. From an engineering and business
perspective, having the funding and project certainty provide by the
federal government is critically important. It's hard for one of ACEC's
members to complete a project, or keep it on time and budget for that
matter, if it is not clear how the project will be funded or if the
right partners are not part of the project. The federal government has
long been a vital part of funding and partnering on infrastructure
projects and needs to continue to be.
I want to touch on one notable example in the Chicago region that I
believe could be a model for the Subcommittee, the Chicago Region
Environmental and Transportation Efficiency or CREATE Program, which
was launched in 2003.
And let me outline, from an Illinois perspective, just how critical
that investment is.
Currently, Illinois has the second largest rail system in the
nation. In all, 41 railroads provide service throughout the state, and
from Illinois to every part of the nation. About 500 freight trains
(totaling about 37,500 freight cars) and 700 passenger trains including
commuter lines, pass through Chicago every day.
The role Chicago plays in the national rail network is substantial:
1. 25% of all US rail traffic touches Chicago
2. 46% of all intermodal units in the US touch Chicago
3. 54% of intermodal units to/from the ports of Seattle touch
Chicago
4. 26% of intermodal units to/from Los Angeles/Long Beach touch
Chicago
Freight rail trade (by value) within Chicago will more than double
from 2012 to 2045. Region must improve freight movement and minimize
passenger, motorist delays, and mitigate negative impacts.
Freight movement is a national and international issue, hence the
CREATE Program was formed in 2003.
A $4.6B Public Private Partnership (PPP) designed to improve
transportation flow through Chicago. Partnership includes the
following: USDOT (FHWA & FRA); IDOT; CDOT; Cook County: 6 Major North
American Freight Railroads and 2 Switching Railroads; 2 Passenger
Railroads (Amtrak and Metra).
The Program consists of 70 freight and passenger projects focusing
on:
a. Increase capacity, speed, and reliability for freight train
traffic
b. Separation of freight and commuter trains at six key junctions
c. Elimination of 25 roadway/rail grade crossings (grade
separations)
The CREATE program is a leading example of the progress we can make
on infrastructure if freight railroads, passenger railroads, local
communities and state and the federal government all work together.
Since 2003, over $1.6 billion has been spent and 30 projects have been
completed through the CREATE program including projects that required
creative engineering solutions from ACEC members like the Englewood
flyover and the ongoing 75th CIP project. Just this last year, Illinois
committed an additional $400 million for the CREATE program as a result
of its newly enacted capital bill.
Key Program Benefits (Full Implementation of CREATE program)
Economic Development--
30-year benefits (2015$) at $31.5 Billion
Generate an estimated 44,000 job years*
Mobility--
Passenger train delay will be reduced by over 1.3
million passenger hours annually by 2051
Average 92,000 hours of truck delay and 230,000 hours of
motorist and bus passenger delay will be avoided due to elimination of
at-grade crossings.
Safety--Avoid estimated 200 vehicle crashes with trains
over 30 years
Environmental--2,800 metric tons per year of avoided
emissions from idling vehicles waiting for trains to pass
Transportation--Improve rail system capacity will enable
an extra 50,000 freight trains to travel through Chicago rail network
annually in 2051 compared to no improvements.
As successful and data-driven as the CREATE program is, it still
needs to be fully-funded to achieve the efficiencies and advantages
outlined above. Not just mobility and economic--but safety. In
particular, most of the 25 grade separations have not been completed
yet, with many of those projects not started at all.
Illinois ranks in the top 5 of grade crossing accidents and
fatalities. New incentives, greater flexibility and increases in
funding for grade crossing separations, should be considered a priority
need in the new Federal bill. ACEC IL members have been working on
innovative approaches to grade separations and are ready for the
challenge. Funding these grade crossing separations, and similar
projects across the country, will provide not just mobility and
economic benefits--but save lives.
Grade separation is a local issue with national implications.
Locally, it's a quality of life and safety issue for communities. The
lack of grade separations creates longer commutes and poses safety
risks for commuters, pedestrians as well as threatening access for
first responders.
A focus on grade separation will not only increase safety, but also
mobility on a global scale. More efficient truck movement means getting
goods and services to markets across the nation and the world quicker.
The Illinois Department of Transportation, under Acting Secretary
Omer Osman, operates one of the most substantial, efficient and
effective passenger rail programs in the United States, but
implementing multi-year freight and passenger programs that can meet
rising consumer demand is a challenge for the industry with future
funding remains inconsistent or unknown. Tackling real infrastructure
needs in a timely and efficient manner requires a high level of
consistent and plannable investment.
As the amount of competitive grant program applicant submittals to
USDOT over the last decade or so indicate, the capital need in our rail
industry is large, and we certainly struggle to meet that demand, for
both freight and passenger rail. The entire mode of transportation
would truly benefit from robust, sustained and dedicated annual
funding, similar to other modes of transportation.
In addition, Congress should look at the need for new rolling stock
equipment for passenger rail in this country, and do what they can to
support both Amtrak and the states' ongoing efforts to revitalize the
passenger rail experience with new fleet replacements. This support
shouldn't be limited to just initial capital procurement, but also
carry through the life cycle capital overhauls of that equipment as it
ages in service.
Other Project Delivery and Procurement Recommendations
Finally, allow me to bring three policy recommendations to your
attention that impact the rail programs that are the subject of today's
hearing, but also have broader implications for all transportation
agencies and clients.
I would urge you to oppose policies that restrict the ability of
public agencies to contract with private sector firms. From my
experience working for a public agency, I viewed consultants and
engineers as a trusted advisor and they played an essential role in
every aspect of our work--from planning to design to inspection to
quality control. From my experience, the access to private sector
experts allowed my public agency to become more innovative, more
efficient and more forward-thinking.
Second, I would encourage you to promote contracting and selection
policies that ensure qualified engineering services. Federal statutes
and most state laws require procurement of engineering services through
Qualifications-Based Selection (QBS), a competitive procurement process
that puts emphasis on identifying the most experienced and technically
qualified firms at a fair and reasonable cost. This has been the law of
the land for nearly 50 years, and it is the gold standard for
professional services procurement.
The surface transportation reauthorization should maintain and
expand public procurement rules that require the use of QBS to
emphasize innovation and qualifications to facilitate successful
project delivery.
Third, ACEC would like to promote the utilization of more lump sum
contracting by federal, state, and local agencies. Lump sum is a
negotiated payment method that provides for a fixed price not subject
to adjustment because of changes encountered in the performance of the
work. The consultant assumes responsibility for costs over or under the
negotiated price assuming there is no change in the scope of the
project. This payment method increases the firm's flexibility to manage
the project (relative to a traditional cost-plus-fixed-fee contract
using hourly rates), including the assignment of staff and utilization
of advanced technologies. During my term as COO of the Illinois
Tollway, we executed a pilot lump sum contract program that was
immensely successful. Overall, we found lump sum contracting to be
incredibly more efficient--reducing the amount of paperwork and staff
time while also reducing the payment cycle.
There are no statutory barriers to lump sum; it is an authorized
payment method under federal regulations. However, ACEC would support
efforts inside the reauthorization bill that might include provisions
to encourage its use on federally funded projects for state and local
transportation agencies when utilizing federal-aid funds.
In conclusion, I want to thank Congressman Lipinski and the
Subcommittee again for the opportunity to testify. At ACEC-IL, we see
the need for greater infrastructure investment every day across our
state, including in our freight and passenger rail systems. It was a
momentous achievement last year when the State of Illinois passed a
capital bill for the first time in 10 years and I'm hopeful this will
be the year Congress steps up to the plate as well. Our nation deserves
nothing less than a world-class transportation system and ACEC-IL and
its member companies stand ready to help and figure out how to get
there. We just need your partnership.
Mr. Lipinski. Thank you, Mr. Artl.
And now I recognize Mr. Jefferies for 5 minutes.
Mr. Jefferies. Thank you.
Chairman Lipinski, Chairman DeFazio, members of the
committee, thank you for the opportunity to be here
representing America's freight railroads. Today's hearing
coincides with our annual fly-in, where more than 400 employees
representing railroads, suppliers, and labor are conducting
some 300 meetings with Members of Congress on both sides of the
Capitol, and their central message is clear. Thanks to
sustained private investments, today's freight rail network is
head and shoulders above the rest of the world.
With freight demand projected to grow some 30 percent by
the year 2040, we are excited to help meet the challenges and
opportunities of tomorrow.
As you know, freight railroads operate almost exclusively
on infrastructure they own, build, and maintain. From 2015 to
2019, railroads spent an average of $26 billion a year--put
another way, $72 million a day--to maintain and upgrade their
networks.
The result: Inflation-adjusted rail rates in 2018 remain
virtually the same as they were in 1992. We support some 1.1
million U.S. jobs, directly employing 150,000 employees, who
are among America's best compensated industrial workers. And,
while railroads move nearly one-third of long-distance freight
volume, they account for just 2 percent of transportation-
related emissions. On top of that, our sustained investments
also provide sound infrastructure for passenger railroads who
operate over freight lines.
While freight railroad is almost entirely privately funded,
robust Federal funding to local and State governments,
passenger railroads, and other partners is critical. These
partnerships work best when everyone has skin in the game, and,
Mr. Chairman, as you know, and under your leadership, a perfect
example of this is Chicago's CREATE program, funded by
railroads of both passenger and freight, city, State, county,
and other government entities. The program is improving the
flow of goods and people in the region where, as mentioned, 25
percent of U.S. freight rail traffic begins, ends, or traverses
and 760 passenger trains pass through daily.
To date, some $1.6 billion has been spent or authorized on
CREATE projects, on top of the $6.5 billion spent by railroads
in the Chicagoland region since 1998. The result is that 30 of
the 70 projects are complete with 21 in progress. Certainly
more work to be done, but we are already seeing the benefits of
CREATE, creating more reliable passenger train operations and
increased mobility for motorists.
Policymakers can take several steps to build on successes
like CREATE. First, successful grant programs, such as INFRA,
BUILD, and CRISI, which just awarded a $12.9 million grant to
CREATE this week, should be fully funded. Congress should also
expand the section 130 grade program, increasing incentive
payments for closures from the current cap of $7,500 to
$100,000. And Congress can build on its recent success by
extending the 45G short line tax credit by making the incentive
permanent.
As I mentioned, freight railroads enable passenger rail
operations, which also enhance mobility and reduce congestion.
While myriad examples exist of successful collaboration between
host freights and passenger tenants, no one-size-fits-all
solution exists. But, at a high level, successful freight and
passenger rail agreements abide by several key principles. One,
safety must always come first and be priority number one. Two,
current and future capacity needs of shippers and railroads
must be preserved. Three, whether it is Amtrak or any other
passenger railroad, sufficient funding on the passenger side
and to the passenger side is an absolute necessity for any
additional expansion that may be necessary. And, fourth,
mutually agreed-upon timetables and service levels must be
established from the outset.
So, in closing, while railroads are evolving to meet future
commands and advance safety, our commitment to investment is a
constant. Our guiding principle is safety, and our job is not
complete until we achieve an accident-free future.
Now, while the 2019 FRA safety data showed such statistics
as employee fatalities at an all-time low and significant
improvements in track-caused accidents, other categories
demonstrate that our work is not done, especially regarding
human-caused incidents. But we are investing each day in
initiatives and technologies that will make a real impact, such
as Positive Train Control, which was mentioned before, which is
now in operation across 98.5 percent of the 54,000 Class I
required route-miles. Indeed, a well-maintained railroad is a
safe railroad.
Thank you, and we look forward to working with Congress to
develop and implement policies that best meet this Nation's
transportation needs.
[Mr. Jefferies' prepared statement follows:]
Prepared Statement of Ian Jefferies, President and Chief Executive
Officer, Association of American Railroads
Introduction
On behalf of the members of the Association of American Railroads
(AAR), thank you for the opportunity to testify today. AAR members
account for the vast majority of America's freight railroad mileage,
employees, revenue, and traffic. Amtrak is a member of the AAR, as are
various commuter railroads that in aggregate account for more than 80
percent of U.S. commuter railroad trips.
Freight railroads operating in the United States are the best in
the world, connecting businesses with each other across the continent
and with markets overseas over a network spanning close to 140,000
miles. Their global superiority is a direct result of a balanced
regulatory system that relies on market-based competition to establish
rate and service standards, with a regulatory safety net available to
rail customers who need it. This balanced regulation has allowed
America's railroads to spend huge amounts on improving their networks
and meeting their customers' needs.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
I'm proud to point out that the date of this hearing corresponds
with our annual ``Railroad Day on the Hill,'' during which more than
400 railroaders from all over the country will fan out across the
Capitol. They will meet with over 300 members of Congress to urge them
to support pro-rail policies that will help ensure railroads are able
to meet our nation's transportation needs safely and efficiently now
and in the future. Specifically, they will discuss the following
topics:
Make the short line railroad 45G tax credit permanent.
While the recent extension of this important tax credit through 2022 is
much appreciated, making it permanent would help preserve and upgrade
rail service for thousands of rail customers and communities,
especially in rural areas, across the country. We urge you to cosponsor
HR 510, the Building Rail Access for Customers and the Economy (BRACE)
Act, to make this tax credit permanent.
Oppose increases in truck length and weight limits,
including pilot programs or special exemptions for commodities. Raising
truck length and weight limits would mean billions of dollars in higher
taxpayer costs to repair damage to our highways and bridges; more
highway gridlock; and more harm to the environment. The taxes and fees
that big trucks pay today are far less than the damage they cause to
our highways. This multi-billion-dollar annual underpayment--which
others have to make up through higher taxes--would become even greater
if truck length and weight limits were increased. Rail is the safest
and most environmentally friendly way to move freight over land and new
policies should be avoided that would artificially shift traffic away
from rail.
Oppose legislative or regulatory efforts that would upset
the existing balanced regulatory structure regarding railroad rates and
service. Today's balanced system protects rail customers against
unreasonable railroad conduct while allowing railroads to largely
decide for themselves how to manage their operations. The current
system ensures railroads can continue to provide safe, reliable, and
sustainable service to their customers. We ask members of Congress to
write and urge the Surface Transportation Board (STB) to maintain the
balanced framework established by Congress that has been the bedrock of
STB decisions for almost 40 years.
Modernize the Railroad Retirement Board (RRB), the
independent agency that administers retirement, survivor, unemployment,
sickness, and Medicare benefits to more than 750,000 railroad
beneficiaries. Wholly funded by railroad workers and the nation's
railroads, the RRB is in dire need of congressional approval to access
its trust fund dollars to fully staff the agency and modernize its
antiquated computer systems.
The hundreds of railroaders visiting Congressional offices today
are making other important points about freight rail, including the
following:
Railroads are the environmentally sound way to move
freight. On average, railroads are three to four times more fuel
efficient than trucks. Moving freight by rail instead of truck reduces
greenhouse gas emissions by up to 75 percent, on average. And because a
single train can replace several hundred trucks, railroads reduce
highway gridlock and the need to spend scarce taxpayer dollars on
highway construction and maintenance.
The affordability of freight rail saves rail customers
billions of dollars each year and enhances the global competitiveness
of U.S. products. Average rail rates (measured by inflation-adjusted
revenue per ton-mile) were 44 percent lower in 2018 than in 1981.
Millions of Americans work in industries that are more competitive in
the tough global economy thanks to the affordability and productivity
of America's freight railroads.
An October 2018 study from Towson University found that,
in 2017 alone, the operations and capital investment of America's major
freight railroads supported approximately 1.1 million jobs, $219
billion in economic output, and $71 billion in wages.
America's approximately 150,000 freight rail employees
are among America's most highly compensated workers. In 2018, the
average U.S. Class I freight rail employee earned total compensation of
$130,200. By contrast, the average full-time equivalent U.S. employee
in 2018 had total compensation of $78,800, 61 percent of the rail
figure.
Without railroads, American firms and consumers would be
unable to participate in the global economy anywhere near as fully as
they do today. International trade accounts for around 35 percent of
U.S. rail revenue, 27 percent of U.S. rail tonnage, and 42 percent of
the carloads and intermodal units that U.S. railroads carry.
What Policymakers Can Do to Support Rail Funding
America's freight railroads operate overwhelmingly on
infrastructure that they own, build, maintain, and pay for themselves.
By contrast, trucks, airlines, and barges operate on highways, airways,
and waterways that are overwhelmingly publicly financed. From 1980
through 2019, America's freight railroads spent more than $710
billion--of their own funds, not taxpayer funds--on capital
expenditures and maintenance expenses related to locomotives, freight
cars, tracks, bridges, tunnels and other infrastructure and equipment.
From 2015 through 2019, railroads poured an average of $72 million
every day back into a rail network that keeps our economy moving.
Railroads are much more capital intensive than most industries.
Over the past decade, the average U.S. manufacturer spent about three
percent of revenue on capital expenditures. The comparable figure for
U.S. freight railroads is close to 19 percent, or about six times
higher.
Capital Spending as % of Revenue
------------------------------------------------------------------------
------------------------------------------------------------------------
Average all manufacturing 2.9%
Food 2.2%
Petroleum & coal products 2.4%
Machinery 2.6%
Fabricated metal products 3.1%
Primary metal products 3.1%
Wood products 3.1%
Motor vehicles & parts 3.2%
Chemicals 3.4%
Plastics & rubber products 3.6%
Paper 4.0%
Nonmetallic minerals 4.8%
Computer & electr. products 5.1%
Class I Railroads 19.1%
------------------------------------------------------------------------
Avg. 2007-2016
Source: Census Bureau, AAR
The Federal Highway Administration forecasts that U.S. freight
tonnage will rise 30 percent from 2018 to 2040. For railroads, meeting
this demand requires having adequate capacity and using it well. Thanks
to their massive investments over the years, their infrastructure today
is in its best overall condition ever. The challenge for railroads, for
members of this committee, and for other policymakers is to ensure that
the current high quality of rail infrastructure is maintained; that
adequate freight rail capacity exists to meet our nation's future
transportation needs; and that the many public benefits of freight rail
continue to accrue.
Today's balanced rail regulatory system is critical to enabling
freight railroads to provide capacity for shippers and rail passengers
alike. If artificial regulatory or legislative restraints were put into
place that unnecessarily and unreasonably restricted rail earnings,
rail spending on infrastructure and equipment would shrink. Either
taxpayers would have to make up the difference or the rail industry's
physical plant would deteriorate, needed new capacity would not be
added, and rail service would become slower, less responsive, and less
reliable.
Policymakers can help by enacting policies, including the
following, that encourage railroads to make investments in their
networks; that do not discourage private rail investment; and that
enhance modal connectivity in critical areas.
Expand Public-Private Partnerships like CREATE
Public-private partnerships offer a mutually beneficial way to
enhance rail capacity for freight and passenger railroads. Under
public-private partnerships, public entities devote public dollars to a
project equivalent to the public benefits that will accrue, while
private railroads contribute resources commensurate with expected
private benefits. Without a partnership, many projects that promise
substantial public benefits (such as increased rail capacity for use by
passenger trains) in addition to private benefits (such as enabling
faster freight trains) are likely to be delayed or never started at all
because neither side can justify the full investment needed to pursue
them. Cooperation makes these projects feasible.
The most well-known public-private partnership involving railroads
is the Chicago Region Environmental and Transportation Efficiency
Program (CREATE). Chicago is the epicenter of the nation's rail
system--about 25 percent of all U.S. freight rail traffic goes through
the region--so what happens in Chicago impacts rail operations
nationwide.
CREATE is a program of long-term capital improvements aimed at
increasing the efficiency of the region's rail and roadway
infrastructure. A partnership among various railroads, the city of
Chicago, the state of Illinois, the federal government, and Cook
County, CREATE comprises some 70 projects, including 25 new roadway
overpasses or underpasses; six new rail overpasses or underpasses to
separate passenger and freight train tracks; 35 freight rail projects
including extensive upgrades of tracks, switches and signal systems;
viaduct improvement projects; grade crossing safety enhancements; and
the integration of information from the dispatch systems of all major
railroads in the region into a single display. To date, 30 projects
have been completed, four are under construction, and 17 are in various
stages of design. Some $1.6 billion has been spent or authorized so far
on CREATE projects.
In recognition of Chicago's importance to the rail industry, in
December 2015 the industry established the Chicago Integrated Rail
Operations Center (CIROC). CIROC represents a significant expansion of
what had been known as the Chicago Transportation Coordination Office.
Staffed around the clock by rail operations experts, CIROC monitors
freight rail traffic going to, from, and through the Chicago region and
helps coordinate the operations of the many railroads serving the
region to ensure optimal safety and efficiency.
In addition to making operational changes, from 1998 through 2018
freight railroads spent some $6.5 billion on infrastructure projects in
the Chicago region outside CREATE. This spending, CIROC, and the
development and implementation of highly advanced information
technology that allows railroads to measure real-time traffic flows and
proactively identify potential problems throughout the region speak to
railroads' willingness to address head-on the challenges associated
with improving their fluidity and resiliency.
CREATE has already yielded incalculable public benefits, including
much more efficient and reliable Amtrak and commuter train operations
and tens of thousands of fewer hours of delay for motorists at
previously congested rail-highway grade crossings. CREATE has
benefitted from the strong support that Congress has given to
discretionary grant programs that enable the public sector to partner
with private railroads. For example, CREATE was named one of the first
``projects of national and regional significance (PNRS)'' when Congress
created the PNRS program in 2005. The $100 million funded through PNRS
jumpstarted the CREATE program. Since then, federal grant programs such
as the American Recovery and Reinvestment Act (ARRA), the
Transportation Investment Generating Economic Recovery (TIGER) program,
the Better Utilizing Investments to Leverage Development (BUILD)
program, Infrastructure for Rebuilding America (INFRA) and Consolidated
Rail Infrastructure and Safety Improvements (CRISI) grants have all
supported this highly successful collaborative effort.
This partnership is already demonstrating results nationally,
regionally and locally. According to USDOT, the volume of imported and
exported goods transported via rail to, from, or through Chicago is
forecast to increase nearly 150 percent between 2010 and 2040. More
high value products will be shipped via rail in the coming years, so
efficient and reliable service will be increasingly important.
Infrastructure improvements planned through CREATE are critical to
fully unlocking the potential of the national freight rail system to
serve significant future demand.
Locally, CREATE means a better quality of life for northeastern
Illinois, enhancing passenger rail service, reducing motorist delays,
increasing public safety, improving air quality, and creating and
retaining jobs. When fully completed, CREATE will reduce the time
Chicago-area motorists spend waiting at railroad crossings by thousands
of hours a day; potential crashes and injuries at 25 existing grade
crossings will be eliminated; police and fire emergency vehicle routes
will be improved in neighborhoods with new overpasses or underpasses of
rail lines; travel times for commuters on many Metra lines will improve
and schedules will become more reliable; and capacity on Metra's
SouthWest and Heritage lines will increase. CREATE also will permit the
increased use of LaSalle Street Station, freeing capacity at Union
Station. And importantly, emissions from cars, trucks and locomotives
will be greatly reduced, improving air quality and reducing noise from
idling or slow-moving trains in residential neighborhoods.
Members of this committee are invited anytime to visit CIROC to see
firsthand what railroads are doing to improve transportation flow in
the region and learn how CREATE is helping.
Support Grade Crossing Safety Programs
The intersection of rail tracks and roadways is an important
element of rail infrastructure that often involves a public-private
cooperative approach, in Chicago and elsewhere. Under the federal
``Section 130'' program, approximately $245 million in federal funds
are allocated each year to states for installing new active warning
devices, upgrading existing devices, and improving grade crossing
surfaces. The program also allows for funding to go towards highway-
rail grade separation projects. Without a budgetary set-aside like the
Section 130 program, grade crossing needs would fare poorly in
competition with more traditional highway needs such as highway
construction and maintenance.
I respectfully suggest that Congress should take steps to help
improve grade crossing safety as part of the FAST Act reauthorization.
For example, in addition to at least maintaining (or, better yet,
increasing) dedicated funding for the federal Section 130 program,
Section 130 incentive payments for grade crossing closures could be
increased from the current cap of $7,500 to $100,000. In addition, FAST
reauthorization could incentivize states to bundle grade crossing
projects into a single grant application under applicable discretionary
grant programs.\1\
---------------------------------------------------------------------------
\1\ As part of the FAST Act reauthorization, Congress could take
other actions that would make crossings safer. For example, it could
expand flexibility in the use of Section 130 funds by eliminating the
existing arbitrary 50 percent cap on spending for hazard elimination
projects, and by allowing Section 130 funds to be used to replace
functionally obsolete warning devices at crossings. A more detailed
discussion of the AAR's FAST Act priorities for grade crossings is at
https://www.aar.org/article/freight-railroad-industry-fast-act-
reauthorization-priorities/.
---------------------------------------------------------------------------
Improve First-Mile and Last-Mile Connections
One of the main reasons why the United States has the world's most
efficient total freight transportation system is the willingness and
ability of firms associated with various modes to work together in ways
that benefit their customers and the economy. Policymakers can help
this process by implementing programs that improve ``first mile'' and
``last mile'' connections where freight is handed off from one mode to
another--for example, at ports from ships to railroads or from ships to
trucks, from railroads to trucks at intermodal terminals, or from short
line railroads to Class I railroads. These connections are highly
vulnerable to disruptions. Improving them would lead to especially
large increases in efficiency and fluidity and forge a stronger, more
effective total transportation package.
Some multimodal connection infrastructure projects that are of
national and regional significance in terms of freight movement could
be too costly for a local government or state to fund. Consequently,
federal funding awarded through a competitive discretionary grant
process is an appropriate approach for these needs.
More generally, freight railroads support funding for grant
programs that enable the public sector, including state and local
governments and passenger railroads, to partner with freight railroads
to advance projects of mutual interest. These include projects to help
reduce road and port congestion, enhance safety at highway-rail grade
crossings, improve port connectivity, facilitate intercity passenger
and commuter rail service, and improve the quality of life for
communities. We suggest that the following programs should continue to
be authorized at existing or increased levels:
INFRA Discretionary Grants ($1 billion in FY 2020). Caps
should be upwardly adjusted or removed on multimodal freight
eligibility in proportion to general fund contributions to the Highway
Trust Fund;
BUILD Discretionary Grants (not authorized, but typically
$1 billion appropriated);
CRISI Discretionary Grants ($330 million in FY 2020);
Federal-State Partnership for State of Good Repair ($300
million in FY 2020); and
Funding and authorization for Amtrak and state-supported
passenger routes.
Address Modal Inequities
No one, and certainly not railroads, disputes that other
transportation modes are crucial to our nation, and the infrastructure
they use should be world-class--just like U.S. freight railroad
infrastructure is world-class. That said, public policies relating to
the funding of other modes have become misaligned.
With respect to federally funded capacity investments in public
road and bridge infrastructure, the United States has historically
relied upon a ``user-pays'' system. Unfortunately, the user-pays model
has been eroded as Highway Trust Fund (HTF) revenues have not kept up
with HTF investment needs and so have had to be supplemented with
general taxpayer dollars. General fund transfers to the HTF since 2008
have totaled almost $144 billion, according to the Congressional Budget
Office (CBO). Not long ago, the CBO estimated that between 2020 and
2029, the HTF will require an additional $191 billion to keep it
solvent.
Moving away from a user-pays system distorts the competitive
environment by making it appear that trucks are less expensive than
they really are and puts other modes, especially rail, at a
disadvantage. This is especially problematic for railroads precisely
because they own, build, maintain, and pay for their infrastructure
themselves (including paying well over a billion dollars in property
taxes each year on that infrastructure).
This committee could help ameliorate this modal inequity by
reaffirming the ``user pays'' requirement. Through application of
existing technologies, the current fundamental imbalance could be
rectified by ensuring that commercial users of taxpayer-financed
infrastructure pay for their use. This could be done through several
different mechanisms. An increase in the fuel tax could be helpful as a
short-term bridge to a longer-term future that should include a vehicle
miles traveled fee or a weight-distance fee.
Make the Short Line Infrastructure Tax Credit Permanent
The freight rail industry congratulates and thanks the many members
of this committee who were instrumental in the recent passage of H.R.
1865, which extended the Section 45G short-line tax credit for five
years, making it retroactive to 2018 and effective through 2022.
Section 45G creates a strong incentive for short line railroads to
invest private sector dollars on freight railroad track rehabilitation.
Railroads urge this committee to continue to support this tax credit,
which is vital to preserving the first and last mile of rail
connectivity to factories, grain elevators, power plants, refineries,
and mines in rural America and elsewhere.
Principles for Successful Freight and Passenger Rail Partnerships
Passenger railroads play a key role in enhancing mobility, reducing
congestion, decreasing dependence on foreign oil, and reducing
emissions. Today, freight railroads provide the foundation for much of
our nation's passenger rail. Nearly all of Amtrak's more than 20,000-
mile system outside the Northeast Corridor consists of tracks owned and
maintained by freight railroads. In addition, hundreds of millions of
trips occur each year on commuter rail systems that operate at least
partially over tracks or right-of-way owned by freight railroads.
Looking ahead, America can--and should--have both safe, effective
passenger railroads and safe and productive freight railroads. Mutual
success for railroads of all types requires collaboration and a
recognition of the challenges, especially capacity, they face.
Once passenger trains begin operating over freight rail lines, it
is in both the host freight railroad and passenger entity's interest
for the service to work as intended. And while there is no one size
fits all model as each situation presents unique challenges and
opportunities, success will be more likely if certain overarching
principles are followed to ensure what all of us want: the long-term
success of passenger rail and a healthy freight rail system that
shippers all over the country rely on every day.
First and foremost, safety comes first. Railroads are an extremely
safe way to move people and freight, and we must keep it that way.
Second, current and future capacity needs of both shippers and
passenger railroads must be protected. Freight corridors are expensive
to maintain, and many freight corridors today lack excess capacity.
Passenger rail use of freight rail corridors must be balanced with
freight railroads' need to provide safe, reliable service to present
and future customers. If adding new infrastructure is necessary to
expand passenger service, which is usually the case, freight railroads
should not be responsible for funding that expansion.
Third, policymakers should provide passenger railroads with the
dedicated funding they need to operate safely and effectively, and to
pay for expanded capacity when they require it. It's not reasonable to
expect Amtrak or other passenger and commuter railroads to be able to
plan, build, and maintain an optimal network when it doesn't know what
its capital and operating funding will be from one year to the next. If
Congress provided predictable and needed levels of federal support,
Amtrak and its state partners could better deliver a future of improved
reliability, enhanced capacity, more service, and reduced trip times.
Fourth, many factors--such as bad weather, heavy traffic,
accidents, and equipment failures--can adversely affect fluidity on the
nation's railroad network. All parties must recognize that the
preference given to Amtrak's trains over freight trains does not mean
there will never be delays to Amtrak trains. Amtrak is given
preference, but preference does not mean a guarantee.
These principles have served railroad customers and passengers well
over the years and have led to many successful results. For example,
CSX and the VRE recently announced an agreement with Virginia that will
enable the expansion of passenger rail service, both commuter and
intercity, to serve the growing demands of the Washington D.C. region
while preserving CSX's ability to serve the current and future freight
demands of the Interstate 95 corridor.
Union Pacific (UP) has a robust partnership with the Capital
Corridor Joint Powers Authority (CCJPA), which operates 28 trains a day
between Sacramento and Oakland, CA, and the Altamont Corridor Express
(ACE) between Stockton and San Jose, CA, which operates eight trains a
day. These are model partnerships because the agencies understand the
value of capacity and invest in infrastructure improvements necessary
for on-time service. Both agencies spend millions of dollars every year
to maintain shared infrastructure used by commuter and freight trains
and when challenges have arisen they have worked cooperatively with UP
on capacity planning studies and capital improvements resulting in
improved speeds and schedules for their commuters.
In Chicago, BNSF and the Commuter Rail Division of the Regional
Transportation Authority (Metra) have worked closely for decades in
safely moving up to 60,000 weekday riders between Chicago and Aurora,
Illinois. With commuter trains operating at 96.55 percent on-time
during February 2020, BNSF operates and dispatches the service;
maintains the tracks, signals, structures, and rolling stock; and,
coordinates every day with Metra's management team. Of equal
importance, together with BNSF, Metra continues to provide millions of
dollars in annual funding for its share of the cost of replacing and
upgrading the railroad's infrastructure, like rail, ties, and ballast,
to keep it in an excellent state of good repair.
Norfolk Southern (NS) also works closely with Metra to enhance
commuter performance in the Chicago area. The two railroads hold
regular calls to discuss in detail any freight attributable delays to
the Southwest service and the Heritage Corridor. They also work closely
together in real time as delays are incurred so that NS can coach and
train dispatching personnel to make the best and most efficient
operating decisions. Metra also recently installed a full-time
superintendent in the Chicago Integrated Rail Operations Center, a
facility that monitors and facilitates efficient rail operations
through Chicago, who works closely with his NS counterpart to address
tactical and strategic issues affecting both railroads.
Positive Train Control Update
Before I close, I want to provide an update on railroad efforts to
implement PTC. The seven Class I freight railroads all met statutory
requirements by having 100 percent of their required PTC-related
hardware installed, 100 percent of their PTC-related spectrum in place,
and 100 percent of their required employee training completed by the
end of 2019. In aggregate, Class I railroads had 98.5 percent of
required PTC route-miles in operation as of the beginning of this year.
Each Class I railroad expects to be operating trains in PTC mode on all
their PTC routes no later than 2020, as required by statute. In the
meantime, railroads, in coordination with Amtrak, other passenger
railroads, and other tenant railroads, are continuing to test and
validate their PTC systems thoroughly to ensure they are interoperable
and work as they should.
Conclusion
Of the many different factors that affect how well a rail network
functions, the basic amount and quality of infrastructure is among the
most significant. That's why U.S. freight railroads have been
expending, and will continue to expend, enormous resources to improve
their capacity base. Policymakers too have a key role to play, though.
Freight railroads look forward to working with this committee, others
in Congress, and other appropriate parties to develop and implement
policies that best meet this country's transportation needs.
Mr. Lipinski. Thank you, Mr. Jefferies.
We now will begin questioning, and I will defer to Chairman
DeFazio for the first questions, so I recognize the chairman
for 5 minutes.
Mr. DeFazio. Thank you, Mr. Chairman.
Mr. Gardner, I was a bit confused by Secretary Chao's
appropriations testimony that you are going to begin
rehabilitating the North River Tunnels under the Hudson River,
and, when I toured those tunnels, it was pretty definitively
said that there is no really feasible way to rehabilitate them
significantly while given the pressure and utilization.
What has changed?
Mr. Gardner. Thank you, Mr. Chairman.
Well, let me confirm your view. Our rehabilitation of the
North River Tunnel is an extensive, complete rehabilitation of
vital elements of the tunnel, and what the Secretary, I think,
was referring to is our recent efforts to look at options to
bring forward some elements of that rehabilitation given the
delays associated with advancing the Hudson Tunnel project.
So our goal here is to see if there are----
Mr. DeFazio. Well, she is delaying the Hudson Tunnel
project because EIS is lost somewhere on her desk, which I am
sure she is very busy, and so now she is recommending we begin
to do some patchwork stuff on one of the tunnels, which really
isn't going to do much.
Mr. Gardner. Well, I think our view is that we have got--at
this stage, given the delays, we are looking at somewhere along
the lines of 10 years until we have the full new tunnels built
which will allow a complete rehabilitation, so----
Mr. DeFazio. OK.
Mr. Gardner [continuing]. We think it is incumbent upon us
to ensure----
Mr. DeFazio. I would like to know what you are actually
planning, if you can be more specific, because, again, given
the tour----
Mr. Gardner. Sure.
Mr. DeFazio [continuing]. Given the spalling and the
deterioration of the knee wall, the 12,000-volt cable that run
through there, the frequent failures, the sinking track--I
mean, all sorts of things. I would just like to know what
critical elements you think you can address while still using
the tunnels 20 hours a day, which is what I understand you have
to do.
Mr. Gardner. That is right. So we are looking at, right
now, to see if there are any elements of that work that we can
do----
Mr. DeFazio. Right. Thank you.
Mr. Gardner [continuing]. On those nights and weekends, but
we don't yet have the answer.
Mr. DeFazio. OK. Thank you. But, when you come up with
something because of the delay by the Secretary, let me know.
You mentioned in here two dozen promising corridors do not
serve or do not serve well today, and existing corridors of
unmet demand, and you are going to have an analysis soon? We
would like to see the list.
Mr. Gardner. Absolutely. We will be releasing that in----
Mr. DeFazio. Right.
Mr. Gardner. In this spring.
Mr. DeFazio. There are two major issues I have raised with
Mr. Jefferies. I will raise them with you----
Mr. Gardner. Yep.
Mr. DeFazio [continuing]. Which are preference, which I
think you said 67 percent of delays on long-distance trains
were due to freight?
Mr. Gardner. Freight interference, yes, sir.
Mr. DeFazio. Yes. OK. And what progress are we making on
the issue of integrating schedules better and preference? Are
we making any?
Mr. Gardner. So we have worked collaboratively with the
Federal Railroad Administration to have the metrics of
standards that were----
Mr. DeFazio. Uh-huh.
Mr. Gardner [continuing]. Prescribed under PRIIA to be
advanced. Those, I think, are waiting for final issuance. And
we remain in conversations with our host partners, but,
fundamentally, we think, as you said, we need to ensure there
is an effective way to enforce the preference statute, and we
need a better way to get our access rights translated into
actual service, because, today, there is no clear path for us
to add service----
Mr. DeFazio. OK. Thank you.
Mr. Gardner [continuing]. For our railroad.
Mr. DeFazio. Mr. Jefferies, what can AAR do to help
facilitate this process?
Mr. Jefferies. Sure. So we certainly agree that we need
metrics and standards in place. Obviously, the hosts and the
tenants all have contracts that they are bound to abide by, and
I certainly don't have a window into those contracts, but they
have performance metrics in them, and that is what is the basis
of incentive payments, whether they are paid or not.
Currently, the statute provides a path if Amtrak wants to
access--excuse me--freight facilities, there is a path laid out
in the statute at the Surface Transportation Board. To the best
of my knowledge, that hasn't been used in over 20 years, so I
would say let's try that path that is there. Whether that can
be improved or not, I certainly can't comment on that, because
it hasn't been used.
Mr. DeFazio. It seems like CSX has been working with
Amtrak. How do we get UP to even begin a discussion about
additional routes of these city pairs? I mean, I have been in a
number of States where their people have proposals, and they
are saying, UP won't even talk to us, period, zero. What is
going to hurt them to have a little discussion?
Mr. Jefferies. Certainly. Not having been a part of any of
those discussions, I will point to the fact that I think, you
know--and you just referenced the--I think the developments in
Virginia, and I know that UP, for example, has very positive
relationships with several of the railroads in California.
Whether or not there is a series of best practices out
there, I think that is worth examining, because I think all
sides would agree, when both parties come to the table and
agree that, OK, here is the capacity desired, here is the
investment needed to make sure that capacity is available, and
here is what everyone is willing to step up and contribute, and
here is the agreed-upon timetables and service metrics, I think
that is when everything works best, and works best when those
parties can do it on their own.
So I think it is important to figure out why does this work
really well in some situations, and why hasn't it worked as
well in other situations, and----
Mr. DeFazio. OK.
Mr. Jefferies [continuing]. I certainly don't have a read
into----
Mr. DeFazio. Well, I hope we can facilitate that gently
without something indiscriminate, so I look forward to further
discussions.
Thank you.
Mr. Lipinski. Thank you, Mr. Chairman.
I now recognize Mr. Weber for 5 minutes.
Mr. Weber. Thank you, Mr. Chairman.
I am going to follow up on something you were saying, Mr.
Jefferies, but, before I do that, in your prepared remarks you
said that the rail line system and carrying freight was
responsible for 2 percent of emissions while carrying a
percentage of freight, and I missed that percentage. You said
we carry X amount of freight, but we only are responsible for--
--
Mr. Jefferies. So freight rail carries 30 percent of long-
distance freight and accounts for 2 percent of transportation-
related emissions.
Mr. Weber. OK. Thank you for that.
Mr. Jefferies. Yes, sir.
Mr. Weber. My question--my prepared question is: What are
the railroads' capital expenditure priorities? But, before we
go there, I want to follow up on what Chairman DeFazio was
talking about, where you have a system--a situation where you
all sat to come to the table, whether it is UP, whoever it is,
and I guess have an agreed-upon system of working together in
that particular instance.
Does AAR have a--do they have a system in place where, when
something like this comes up, they bring in those parties and
they kind of facilitate that?
Mr. Jefferies. So we do not have a formal system in place,
and, given that most of these relationships are bound in
contracts, those are certainly between the individual host
railroad and the passenger tenant and privy to those two
parties.
Now, we certainly collect information on positive
relationships and successful projects that have worked
together, whether it is passenger, whether it is broader things
like the CREATE program, but we don't have a formal, I guess,
adjudication or mediation role.
Mr. Weber. Well, I wouldn't expect there to be an
adjudication or legal, formal binding, I guess, but just a
system where the members all come together and say, let's work
on this.
Mr. Jefferies. Well, so I would certainly say that, at a
broad level, that is part of the role of the AAR, is the fact
that whether it is this issue we are talking about or whether
it is any issue related to rail, the AAR has probably got a
committee focused on that where each of our members are working
together towards an end goal.
This one is probably a more challenging issue because of
the unique needs, capacity needs for each rail line, host rail
line out there, versus the needs that the passenger railroad
desires as well, so that is why I say a one-size-fits-all
solution is probably not something that is viable when it comes
to these types of agreements, that you do have to take into
account the individual traffic demands, et cetera.
Mr. Weber. OK. Well, that is going to be in case by case, I
am sure.
So my question is: What are, in your estimation, the
railroads' capital expenditure priorities? What should they be?
Mr. Jefferies. So those are certainly dictated, I think, by
each railroad based on its capital needs. At a broad level, the
industry has averaged over $25 billion in capex and maintenance
back into their networks. So, when you look at some of the
major projects that have occurred around the country, a lot of
that is opening up capacity to increase throughput, whether it
is allowing for double-stacking of trains through major
corridors like we have seen on the east coast, whether it is
double-tracking areas--in the past several years, double-
tracking across the northern tier to account for increased
movements, whether it is technology investments and ports and
other rail yards to allow for a quicker or----
Mr. Weber. Or tunnels. Don't forget tunnels.
Mr. Jefferies. And don't forget tunnels, certainly.
We see the Federal Government as having a major role there.
But, you know, it is--so you have what is called kind of the
core maintenance, which is track and rail, is making sure the
system that we have now is functioning at the highest level
possible, and then expanding where appropriate.
Mr. Weber. I don't mean to put you on the spot, but you
have watched this from a broad view, and surely you see the
areas of the country and things that need to be priorities, so
if you can name one or two or three priority areas, what would
they be?
Mr. Jefferies. Well, you certainly mentioned the tunnels
under the Hudson, and, if you are looking at the passenger side
and where the Feds can play a major role, it is in the
Northeast Corridor. I think Stephen outlined the investment
needs there, and that is certainly a major public role to play.
When it comes to the freight side, each of our companies
are looking at individual projects based on their long-term
projections, their capacity needs, and, again, a lot of that is
certainly at the first mile, last mile, moving things in and
out of ports and yards at a faster clip, but also building out
just the capacity that is necessary in certain areas as well,
whether it is to allow for double-stacking, et cetera.
Mr. Weber. OK. Well, you are a politician. That is a broad
answer. I was wanting specific examples, but my time has
expired.
Mr. Chairman, I yield back.
Mr. Lipinski. Thank you, Mr. Weber.
I now recognize myself for 5 minutes.
Mr. Artl, your testimony focused on the need for more grade
separations. There was a grade separation that was funded by
Illinois last year, $150 million for grade separation at 65th
and Harlem. I was just out there this past week talking about
it. It is going to be a much-needed help both for the people
driving on 65th and 63rd there, but also for the businesses and
for the beltway area there.
So I wanted to ask: What are some recommendations that you
have for what Congress can do to help advance these projects
such as this?
Mr. Artl. Certainly, and I think a starting point is the--
--
Mr. Lipinski. Can you pull your microphone closer?
Mr. Artl. A starting point would be the effort you took
during the last FAST Act to ensure that grants for grade
separations would be eligible under CREATE, so that was a huge
first step in advancing a lot of grade separation projects.
In addition, what we support, what Mr. Jefferies outlined,
full funding of section 130, and increasing funding through
that would be helpful to enable additional funds to go to our
grade separation program projects.
We would support increasing the incentive payments for
grade crossing closures from the current cap of $7,500 upwards
up to $100,000, and then expanding the flexibility by
eliminating the arbitrary 50-percent cap on spending for hazard
elimination projects. Those three would be good, but ensuring
that CREATE still has access to grants for grade separation
projects.
Mr. Lipinski. And Mr. Jefferies, just to be clear, this is
also something that the railroads want and find helpful,
correct? Grade separations?
Mr. Jefferies. Oh, absolutely. And that is certainly a huge
part of CREATE over the next several years as you know as well.
Mr. Lipinski. Thank you. I want to ask Mr. Shanahan. Back
in September last year, I had sent a letter to Amtrak that
touched on some of the issues in your testimony about the
third-party contract workers Amtrak is using and I received a
letter back in October from Amtrak saying that these workers,
third-party contract workers Amtrak uses have provided an equal
or higher degree of protection than BMWED workers. Why do you
say that that is not the case?
Mr. Shanahan. Well, specifically, FRA regulation 243 was
amended January 1, 2020, and right now currently BMWED
employees working on Class I railroads are subject to more
stringent FRA testing than contractor employees who could be
working right next to them.
Mr. Lipinski. And what is it about the training that you
receive that--you have the experience, what was it about that
that made you better at doing the job at making sure you
maintain safety?
Mr. Shanahan. Well, the training is--one example I guess I
can use is, the training is always ongoing. When you are an
employee for the railroad, you are not there for just one job.
You are there day in and day out for multiple years myself
being there for 13 years. You are constantly engaged in safety
training processes that the contractors generally are not.
Mr. Lipinski. Thank you. And I am going to ask Dr. Bury.
You had talked about adding more service to the Metra line.
What would this mean for your community and have you--what has
it been like in terms of working with the railroads in terms of
adding more service?
Is your microphone on?
Dr. Bury. No it was not. Thank you. Thank you. Sorry. Our
train line has the worst service, I would say, on the weekends
of the entire regional area. We have absolutely no Sunday
service, no Saturday service that is really viable. There is, I
think, three trains in, three trains out on Saturday. So if you
want to go to an event with your family, you want to make sure
you can get home, you know. You need a variety of times. Most
people find it easier, sadly, to just get in their gas-guzzling
car, go down, and add to the smog, the congestion, and, you
know, it is just not viable.
Asking for more service, it is a chicken and egg issue a
little bit. They say, well, look at your ridership on Saturday,
why should we add more? You don't have enough and you want
more. You always want more. Other lines in the same system have
dozens of weekend trains and so it really holds our community
back in terms of property values, in terms of what we can do.
The economic development around our train station is nice,
but it could be so much more than it is. And that lack of
funding is the primary thing and it would just mean a lot to
our community. We feel like the poor stepsister, you know.
Everyone else gets the really fancy stuff, we get the scraps.
And we are, again, if you look at the population growth, the
fastest growing area in the State is serviced by the line. So
it is kind of silly that we can't get the fastest growing
service to correspond.
Mr. Lipinski. You do have a very nice station, though,
there, the Patriot Station there.
Dr. Bury. Yes, yes. The train station, yes.
Mr. Lipinski. All right. My time is expired.
I will now recognize Mr. Perry for 5 minutes.
Mr. Perry. I thank the chairman. Mr. Jefferies, I thank the
panel for being here. Mr. Jefferies, Executive Order 13868
requires PHMSA to finalize a rulemaking that permits the
transportation of LNG by rail setting a mid-May deadline.
Giving the growing domestic supply of natural gas and the
increasing number of communities underserved due to regulatory
barriers, this regulatory change I think is a step in the right
direction.
Rail transportation offers a safe alternative pathway to
get natural gas to export markets, underserved communities, and
to provide alternative fuels for the maritime industry. The
industry already carries most hazardous materials throughout
the Nation without incident. I am just curious, once this
rulemaking is finalized, what economic, environmental, and
safety benefits do you foresee and how will access to the
additional business opportunities due to the policy shift
impact the industry's capacity to reinvest in rail
infrastructure?
Mr. Jefferies. Thank you, Congressman.
Look, you certainly hit the nail on the head. If this
product's going to move, rail is by far the safest mode of
transportation to transport that to market. And the Department
has made it very clear, they want to move forward with this
rule and we are supportive of that rule.
We have the most stringent tank car standards that exist
and certainly specific tank cars for moving LNG as well. And
the business opportunities, I think there is certainly a market
in the Northeast, as you said, given the lack of pipeline
capacity to heat those homes and there is certainly an interest
in export as well.
So railroads have the obligation to move that, we will move
it safely, and we will be ready when that business demand
develops.
Mr. Perry. And about reinvestment quickly. Have you made a
calculation in anticipation of rulemaking about what kind of
opportunities this will provide or are you just waiting to see
what it does?
Mr. Jefferies. So I think our companies are always looking
at their capacity and potential demand and business as it
develops. I don't have a read into the specific commercial
decisions, but I think those calculations and discussions are
certainly being had inside our companies.
Mr. Perry. OK. Thank you, Mr. Jefferies.
Mr. Gardner, on March 2, so that is, what, yesterday or day
before, Amtrak said that in fiscal year 2019 Amtrak set new
records in ridership, revenue, and earnings. In 2020, Amtrak is
on pace to achieve operational break even for the first time in
the company's 49-year history.
I think your written testimony echoes that claim. Fiscal
year 2019 set the Amtrak record for revenue reporting only a
$29.8 million loss as a result of record ridership where Amtrak
claimed the fiscal year 2019 operating revenues covered 99.1
percent of operating costs.
With all due respect, it seems like these claims are
disputed and it looks like, basically, due to two reasons.
Included in Amtrak's reported passenger revenue are all State
subsidies, at least $235 million a year. So subsidies aren't
passenger revenue, that is another round of subsidies. And
then--so that is number one.
Number two, Amtrak's press release highlights net revenue
figures that fail to account for depreciation despite its
inclusion in the audited financial statements for 2019. This
was $870 million or 20 percent of operating costs. Combined,
these errors, if you will, hide the significant actual loss for
Amtrak. Once addressed, I think, and included, Amtrak's actual
loss exceeded $1 billion or 35 times the figure cited in
Amtrak's press release.
I am just curious if there is a reason that Amtrak
published the figures the way they did? Do you see this as
misleading at all, or is this all-inclusive and Amtrak's going
to continue to stand by that and not include the two issues of
the subsidy in the depreciation?
Mr. Gardner. Thank you, Congressman.
First, State payments are done pursuant to section 209 of
PRIIA, the authorization that covers this portion of our action
that end business with the States and those payments are
absolutely transparent. Through all of our reporting, we issue
service line and asset line documents. We are, I think, very
clear about the State-supported business being a partnership
between States who fund a portion of operating costs and a
portion of the capital costs and then Amtrak using its Federal
dollars.
So we, actually under the accounting rules, I think we do
consider it revenue and that is consistent with the approach it
has taken and has been for a long time. So we haven't changed
our approach to accounting for these payments and they are
contributions from the States from these services, but pursuant
to the--essentially the rules set out by Congress for us to
develop a common cautionary methodology of the States.
As it relates to depreciation, we have long reported on
essentially the revenues and operating performance outside of
depreciation. As you said, we do issue our full gap standard
reporting so that that is completely transparent, but the
depreciation is cost associated with primarily our vast
Northeast Corridor infrastructure funded by the Federal
Government. And our requests, essentially, for funding for that
comes through our legislative and grant requests.
So we are--I think we are showing very clearly incremental
improvement on our operating performance. Do we still require
Federal funds to operate? Absolutely. And we are very clear
about that. You have heard my testimony today, but I want to
put it in perspective. As part of our fiscal year 2021 request,
we have a $7 billion spend. Out of that $7 billion, we are
asking from all of our public partners, our States, our
commuter railroads who use our assets like Mr. Corbett's New
Jersey Transit, and the Federal Government for only 40 percent
of that $7 billion spend.
So the vast majority of our investment comes from our
ticket revenue and our other commercial revenue that we are
plowing back into this business so that we can operate as many
trips and provide service to the Nation for as little public
subsidy and taxpayer support as possible, which is our mission
per statute.
Mr. Perry. I thank the gentleman. The time'sexpired.
I yield.
Mr. Lipinski. Thank you.
And I recognize Mr. Payne for 5 minutes.
Mr. Payne. Thank you, Mr. Chairman.
Mr. Corbett, how are you? Good to see you today. The
collection of infrastructure projects known as the Gateway
Program is the single most critical infrastructure need facing
this country. One of those projects is creating a new tunnel
under the Hudson River connecting New Jersey and New York while
also repairing the existing 110-year-old tunnel which is
rapidly decaying due to damage from Hurricane Sandy.
Last week during the appropriations hearing, Transportation
Secretary Chao stated that it may be possible to repair the
existing tunnel now while it is still in use and then build the
new tunnel later. I had a comment. That is as bad as the
President asking all of those drug companies and medical people
if you could use their normal flu shot for coronavirus, but she
asked it and so did he.
What is your opinion on this and how do you think repairing
the existing tunnel while still in use will affect commuters?
Mr. Corbett. Yes, Congressman. Thank you.
I think there are two aspects that are sort of joined. One
is the state of good repair on those tunnels, even if there was
no demand for increased capacity, 100-year-old tunnels they
would need to be repaired. And certainly we work very closely
with Amtrak. We see that with single or ET work. There is a lot
of work to be done to the degree that it can be done within the
limited windows without major disruptions.
In my opening statement, I referred to an incident, what
happened when we had several hours' disruption and the chaos
that caused--overcrowding and the situation that happens
periodically. Last year I know the Gateway Committee came out
and gave incident reports of how severe those damages are every
time there is an outage. So to the degree that it affects, it
impacts that repair, impacts rush hour, or our regular service
that would be very significant.
Certainly anything that can improve the existing repairs. I
know Stephen and our technical people are working together to
try to maximize those windows, but there is a limited
opportunity. I will let Stephen speak to that.
But certainly there is nothing--the major issue, really, is
the capacity. We have outgrown our capacity. The growth in our
region is way outstripped. We are in the transit hunger games
in New Jersey. We have much more demand than we have capacity,
particularly going into New York.
So the tunnels, we need those tunnels. We could use those
tomorrow independent of the repair work. The repair work only
complicates the matter as far as any potential outages until
those tunnels are built.
Mr. Payne. I just don't understand how the Secretary has
not been able to understand as it has been articulated many
different ways how that cannot be done that way, but maybe we
will find somebody that can get her to understand you can't do
that.
Also Mr. Corbett, PTC deadline, as you know, you are aware
that December 2020 deadline for New Jersey Transit to have PTC
operational is rapidly approaching. Understand that the FRA has
expressed concern that New Jersey Transit may be at risk of
potentially not meeting this deadline. However, you have made
significant progress in the past few weeks on PTC and I am
committed to ensuring that you have the necessary tools in
order to meet that deadline.
In what ways can Congress assist New Jersey Transit in
fully implementing PTC?
Mr. Corbett. Thank you, Congressman.
I think there are two aspects: One, we are succeeding. We
have excellent cooperation from the FRA and from Amtrak on the
Northeast Corridor and our freight railroads where we
intersect, so we are confident we will make that deadline. As
you know, we recently went into revenue service demonstration
so we are comfortable, but the financial burden is heavy.
And also, I think, after everyone makes the 2020 deadline,
we have to look at what is the future of PTC going forward and
what does Congress want because certainly the way this is
originally intended and the way it ended up, I think, has been
a bit of a, sort of, Tower of Babel with all the different
railroads having different systems.
So the integration, certainly interoperability is a real
challenge for, particularly, the Northeast, and we have freight
railroads, we have Amtrak system, we have our own, we have
Metro-North, MTA. So that integration, I think, we have to look
after 2020 what does Congress expect and how do we make it a
more effective, more efficient system.
Mr. Payne. OK. Thank you, sir.
I yield back.
Mr. Lipinski. The Chair will now recognize Mr. Smucker for
5 minutes.
Mr. Smucker. Thank you, Mr. Chairman.
Mr. Jefferies, as you well know as has been discussed here,
railroad infrastructure is critical for moving consumer goods,
energy resources for connecting people to their families,
employment opportunities, and much more. Certainly true in the
district that I represent, Pennsylvania's 11th Congressional
District, which is home to each of the modes of rail
transportation.
Lancaster's Amtrak station is the second busiest in the
State carrying close to 600,000 passengers annually. Lancaster
and York Counties' heavy manufacturing base there also move
products and goods via short line regional and Class I rail
systems operated by Norfolk Southern and Genesee & Wyoming.
While all of these lines are vital for the local and State
economy, investment is needed to ensure that each line can
continue to function efficiently. The American Society of Civil
Engineers, unfortunately, gave Pennsylvania's rails a C-minus
noting that much of my home State's rail infrastructure is over
80 years old.
So updating this infrastructure I know is important, will
require investment by the rail line owners and operators, but
it also really is an ``all hands on deck'' requiring all
levels, including there is a role for State government and a
role for the Federal Government as well.
You talked in your testimony, you discuss some of the ways
that Congress can spur greater investment in our railway
infrastructure, including making the short line tax credit
permanent, which is a bill that I support and have cosponsored
as well. Just wondered, if you could, again, just highlight
some of the top ways that you think Congress can incentivize
rail investment?
Mr. Jefferies. Certainly. Thank you.
So I think it is a multipronged answer. For the short
lines, you hit the nail on the head: the short line tax credit
is I think, the life blood to reinvesting back in their
infrastructure and the evidence is demonstrable over the years
that the credit's been in place. Specifically, when it comes to
tie replacement, et cetera, along those lines, the core
infrastructure. When it comes to our passenger partners, fully
funding Amtrak, fully funding other passenger grant programs
that might be out there is critical.
I think Mr. Gardner commented on the operating revenues and
the positive on the operating side. The infrastructure deficit
still needs significant investment, whether it is Amtrak,
whether it is NJT, whether it is SEPTA. So ensuring that the
Federal Government is playing a robust role there. And then
when it comes to the Class I side, I think, it is twofold. One,
we are fortunate that we can reinvest our own revenues and that
is because we have got a healthy economic regulatory structure
that allows us to earn the revenues necessary to invest back
into our networks and it is absolutely critical we keep that in
place because the result of that is the billions and billions
that go back into our network to meet our customers.
And then, where appropriate, grant programs that support
public-private partnerships, whether it is BUILD, whether it is
INFRA, whether it is CRISI, in certain circumstances, I think,
plays a positive role as well especially in those core
interconnected regions where you have different types of rail
all coming together. There are certainly opportunities there.
Mr. Smucker. Thank you. I do want to mention specifically a
bill that I recently introduced with Representative Kuster from
New Hampshire, the Invest in American Railroads Act. It is,
again, a bipartisan bill, makes the Railroad Rehabilitation and
Improvement Financing or RRIF program more accessible by
addressing one of the major challenges associated with the
credit risk premium by authorizing the U.S. Department of
Transportation to cover the cost of up to $300 million in RRIF
credit risk premiums annually.
Just want to get your reaction to that, maybe talk a little
bit about your member's use of the RRIF program and
opportunities for the greater use of the program.
Mr. Jefferies. So I certainly credit you for trying to make
that program more effective. It is something that folks have
been trying--a nut, folks have been trying to crack, for a long
time. I spent time trying to work on that when I worked on the
Hill because I think there is such an untapped potential there
and such a robust funding source that just hasn't, for a
variety of reasons, whether it is the credit risk premium issue
or others, hasn't really lived up to its potential.
So the Class I's, I think, are not necessarily the best
customers for that, but certainly the short line railroads see
it as a huge possibility when it comes to supporting
infrastructure funding. I know Amtrak several years ago went
through the process which was fairly arduous at that point to
get a RRIF loan.
So certainly the opportunities are there and the need is
there and the resources are there, it is just, like you said,
making that program work.
Mr. Smucker. Thank you. I know I am out of time, but just
love to continue to discuss that and work with you to try to
make that program more effective.
Mr. Jefferies. Glad to.
Mr. Smucker. Thank you.
Thank you, Mr. Chair.
Mr. Lipinski. The Chair now recognizes Mr. Lynch for 5
minutes.
Mr. Lynch. Thank you, Mr. Chairman, for holding this
important hearing.
I also want to thank the full committee chair, Mr. DeFazio,
for his attention to this issue.
And I want to thank our witnesses for helping the committee
with its work.
As a matter of full disclosure, before coming to Congress,
I was an ironworker, union ironworker for about 20 years. So
worked on--we have 42,000 structurally deficient bridges across
the United States of America right now. So Mr. Shanahan, I
certainly empathize with your position.
Also after leaving the ironworkers, I became legal counsel
to International Brotherhood of Teamsters Joint Council 10 in
Massachusetts. Also represented Teamsters Local 633 in New
Hampshire and Local 42 in Lynn, Massachusetts. So I just want
to express my unbiased viewpoint from where I sit.
Mr. Shanahan, I know the full benefits of going through a
union apprenticeship program. I went through myself and I
honestly say, I wouldn't be where I am now had I not gone to
the ironworkers apprenticeship program, training program,
safety program. That really not only benefited me as a worker,
but I also think made the jobs I worked on safer and made the
public safer, lowered the cost price for the end user on those
projects.
And I know that Chairman DeFazio has a bill that we are
considering right now to provide $55 billion to rail. We don't
have anybody better in Congress than Dan Lipinski on rail, but
he is working closely with our chairman in order to get that
done.
Could you talk a little bit about--and, by the way, nothing
shakes my confidence in Amtrak more than hearing that they are
dividing the workforce by bringing in people who are less
qualified to work on rail projects. That just--that just
destroys my confidence in Amtrak, frankly. It is part of the
reason why, for our commuter rail, we got rid of Amtrak a
number of years ago in Massachusetts and now we went with
another company.
But with all of the challenges we have, do you really want
to pick that fight to try to save a couple of bucks by bringing
in less trained workers who are not trained on FRA standards
that don't have that experience and that regular training,
ongoing training, on working on rail systems. It is a very
different--as an ironworker, it is a very different environment
when you are working on a live transportation system on rail,
when you got the public coming through that system, and so many
things that could go wrong if you don't have skilled workers in
place.
So Mr. Shanahan, could you talk about what that means for
the American rail passenger and American workers? You know, IBT
workers and Brotherhood of Locomotive Engineers and Trainmen
are also within your bargaining unit as well, what that means,
that $55 billion provided, provided we have skilled workers on
that job?
Mr. Shanahan. Yes. Thank you.
That funding creates stability in our workforce, it
provides an opportunity for the American public to rest assured
that, assuming our members are involved in performing that work
and union members as well, to rest assured that it is being
done in a safe and efficient manner.
I agree with you wholeheartedly when you say, you know, is
this a place where we want to worry about saving a couple
pennies, but jeopardizing the general public or the employees.
It is just--I think it is a long overdue--these projects, and
specifically the Chicago region, are long overdue and it
would--it needs to be done. It really, really does.
Mr. Lynch. Right. And I know, as I said, we have 42,000
structurally deficient bridges across the country right now,
many of those are rail, you know, that carry rail, but I think
generally, we need to be on the same page and that means Amtrak
as well. We put great responsibility on Amtrak to really
spearhead our rail operations, at least our passenger rail, and
I just hope that they will step up and do the right thing.
Mr. Chairman, I yield back.
Mr. Lipinski. Thank you. The Chair now recognizes Mr. Pence
for 5 minutes.
Mr. Pence. Thank you, Chairman Lipinski. Thank you all for
being here today and happy Railroad Day. I am thrilled to have
450 industry attendees from railroads, rail labor, rail
contractors, and rail supply companies on Capitol Hill today
for Railroad Day. I look forward to meeting with fellow
Hoosiers who operate in my Indiana Sixth Congressional District
this afternoon.
In my home State of Indiana, 22 regional railroads span
over 1,200 miles in the crossroads of America, 6 of those Class
III short lines run through my district in southeast Indiana.
Bordering the Kentucky State line at the tip of my district,
Madison Railroad in Madison, Indiana, is a Class III short line
railroad with 26 miles of operational tracks. Over the years,
Madison Railroad has competed for funding from multiple Federal
grant programs to improve the safety of their tracks and
bridges in rural America--in rural Indiana.
Of the numerous programs Madison Railroad applied for last
year, they received one grant, the Consolidated Rail
Infrastructure and Safety Improvement grant, or CRISI. This
grant provided $4.2 million to update the aging Graham Creek
Bridge, which was built in 1880 to ensure heavy commercial
freight loads can be accommodated.
With short line freight accounting for nearly 30 percent of
all freight rail, these grants have substantial impact on rural
economies like those in Madison, Indiana. Mayor Bury--who is
from the city my grandparents lived in for many years; I spent
a lot of time in there in that town--can you speak to any
initiatives like the CRISI grant that support short line
railroads such as 45G tax credit and INFRA grants?
Dr. Bury. Thank you for your question. I am sorry I don't
have expertise on those items. I am very sorry.
Mr. Pence. OK. That is OK. Thanks. Thank you, Mayor. I just
want to get in that shout for Oak Lawn.
Dr. Bury. It is good to give a shout-out to Oak Lawn. We
have a saying here, all roads lead to Oak Lawn, and you would
be amazed how many connections we have. Thank you. I am sorry I
can't help you, sir.
Mr. Pence. Well, let me ask a different question then of
some of you. At our last hearing, I highlighted the impact of
railroad crossing blockages on Hoosier day-to-day lives in my
district. Just last weekend, my wife spent over an hour waiting
and was finally rerouted about a mile from our house. This
particular crossing became such a particular problem for
Columbus, Indiana, that the city, the State, the railroad, and
Cummins Engine Company located in our town all got together and
put funds to address this problem by building a bridge over the
rail.
If it weren't for all their generosity, this crossing would
likely still be waiting on public funding. Unfortunately, this
story is common in rural America, my district, Indiana
specifically.
Mr. Jefferies and Mayor Bury, in your testimony you cite
the CREATE program, a public-private partnership grant program,
is a valuable tool for revitalizing local infrastructure. With
my town's project as an example of successfully leveraging
public-private investment, how can we encourage more public-
private partnerships to address the critical gap in funding for
infrastructure projects in small, rural communities?
Mayor Bury.
Dr. Bury. Thank you. The CREATE program really brings all
partners to the table with a little skin in the game and, you
know, it is how Government should work. Everyone should kind of
participate, contribute, and in a rural community it is a
little harder, I imagine, to get all those parties together,
but I know when, for example, we are trying to upgrade our
signal, we had some money from the mayor's caucus that we could
contribute and that got Metra's attention. And they said, well,
if you have money, we can get money and it just moved the
project along. The CREATE program should be the model for
funding to get things done.
Mr. Pence. OK. Thank you.
Mr. Jefferies.
Mr. Jefferies. Certainly. I certainly credit the State of
Indiana and your community specifically for looking at
innovative ways to deal with grade crossings and separating
crossings because, you know, as the mayor said, when everybody
comes to the table and everybody puts skin in the game, then
that is how you get real results and real buy-in.
On the Federal side, certainly the BUILD grants or the
INFRA grants are certainly viable options and I believe--I am
getting a little out of my lane here--I believe they have rural
set-asides. If not, certainly something to look at when it
comes to, like you said, smaller communities.
And when it comes to grade crossing specifically, while
road and rail intersecting is a natural tension, the best is
where there is no intersection, but understanding that it is
impossible to close or to separate every grade crossing out
there. It is key that we have the most up-to-date crossing
protection equipment, through the section 130 grant program for
where those crossings that do exist especially in rural
communities to make sure they are safe for motorists and
railroaders alike.
Mr. Pence. Thank you, Mr. Chairman.
Mr. Lipinski. I thank Mr. Pence for his shout-out there for
recognition of Oak Lawn there.
I now will recognize Mr. Malinowski for 5 minutes.
Mr. Malinowski. Thank you, Mr. Chairman.
I would like to use my time, and you won't be surprised, to
talk a bit about the importance of the Gateway Program, ask
some questions about it. And recognizing this is a very
expensive project and sometimes my colleagues, especially from
across the aisle, ask, you know, why is it that their
constituents should be subsidizing such an expensive program in
a Northeastern State and I remind them that the State I
represent gets about $0.82 back from the Federal Government for
every dollar that our taxpayers send.
To pick a few other States, seemingly at random, Texas, the
figure's about a $1.03. Indiana, who just had Mr. Pence here,
it is about a $1.30, Arkansas is about a $1.77 for every dollar
they send they get that amount back from the Federal
Government.
So it feels to my constituents as if we are actually
subsidizing infrastructure and other services in other States
while contributing a lot of the economic growth that sustains
our country. And we are happy to do that because we are all
Americans and we all benefit from each other's success.
So with that in mind, I wanted to start with Mr. Corbett
and Mr. Gardner and ask you about the national significance of
this project. This is the busiest rail corridor or passenger
rail corridor in the country.
Is that not correct?
Mr. Corbett. So maybe Stephen, I will take the first view.
Certainly, Congressman, from the New Jersey perspective, when
you mentioned the subsidy, but I look at the tunnels and Portal
Bridge, those are investments that give a return to the State,
Federal, local. If you look at the economic growth, you see in
London what the Crossrail project did through multiple
administrations over there has boomed the economy, and I think
that is how our Nation grew and where we get to create the
actual wealth.
So I would argue that is a very good investment. As far as,
as I said in my opening, the tunnels and the approach we have
very limited capacity as you well know. We have 24 trains an
hour that can go through the tunnels. We need right now, aside
from the safety and the repair and all those concerns, for such
tunnels. If you think of what happened on 9/11 when we had to
close lower Manhattan, the impact--our national impact to our
economy.
So we are constrained in our growth. We could really be
growing certainly in your district if we had more capacity in
those tunnels.
Mr. Malinowski. So we need the growth, but on the negative
side, what would be the consequence to the regional and
national economy if the Hudson--one of the tunnels, one of the
tubes, failed for a significant period of time or if there was
significant disruptions to traffic on the Northeast Corridor as
a result of this?
Mr. Corbett. I think as the center of global capitalism,
New York, or obviously New Jersey right across the river, but
we are all part of that regional economy, center of global
capitalism. We saw what happened after 9/11 when we had a
significant adverse impact in our ability to get trans-Hudson
capacity. It would be in that order of magnitude.
Mr. Malinowski. Thanks. And let me build on some of the
questions that you heard from Congressman Payne about Secretary
Chao's testimony recently. This idea that we might be able to
repair the existing tunnel without closing it. And I think what
she suggested was, we might be able to, quote, ``take a page''
from New York City's efforts to repair the Canarsie Tunnel in
that same manner, but my understanding is that there are key
differences between the Canarsie Tunnel and the Hudson River
Tunnels. So for example, the power cables in Canarsie are 600-
volt cables; whereas, the Hudson River Tunnel, if I am not
wrong, is 12,000 volts and, therefore, needs to be encased in
concrete.
There is a difference in the tracks that really repair the
Hudson River Tunnel. We have wooden ties that degrade when they
are wet and need to be replaced by a more modern system.
Can you talk a little bit more about that because I think
that is really specifically why we think this wouldn't work?
Mr. Gardner. Yes, Congressman. And just to echo Mr.
Corbett's answer as well, 2 percent of the land mass in the
Northeast, 20 percent of the GDP, a loss to the Northeast
Corridor for a day produces about a $100 million impact. It is
absolutely the main line of passenger railroading in North
America. More than 200,000 daily trips between New Jersey
Transit and Amtrak on the Northeast Corridor.
So it is an essential conduit for quality of life,
commerce, and mobility in the region. And to your point, there
are many significant differences between the Canarsie tube on
the MTA subway and Amtrak's Northeast Corridor tunnels, those
East River and North River tunnels.
And I think to be clear, what Amtrak's position is, is that
we absolutely need a new tunnel and we need to rehabilitate the
existing tunnel, both to protect current services and to create
long-term opportunity for growth.
We, however, are facing a situation where it is unclear
when we will start to build a new tunnel and we need to
preserve reliability for the benefit of Amtrak's passengers and
New Jersey Transit's passengers. And Kevin and I talk all the
time about the needs to make sure that his trains and all of
his passengers are able to successfully complete their trips.
So the work needed to be done in the North River tubes
includes, as you said, addressing the high-voltage cables which
are, as you say, high-voltage, 12,000-volt cables. The subway
tunnels have DC third rail, very low-voltage situation.
In addition to replacing those cables, modernizing them, we
also need to change entirely the track structure. And this is
the main difference that requires a very different approach
because we have to be able to excavate the current track
structure, repair the drainage underneath the track structure,
also inspect the invert, the tunnel lining, and bottom there,
which hasn't been looked at, frankly, in 109 years behind the
bench walls or underneath this in any comprehensive way.
We need to make sure that those repairs are made and to do
that on a 4-hour slot in the evening or on several 55-hour
outage scenarios on the weekend could present credible
difficulty. It is just not clear that there is any way to do
that kind of comprehensive work, which is why we have always
proposed to do a full rehabilitation of the tunnels once new
tunnels are in place, allowing us to maintain all of New Jersey
Transit's and Amtrak's current service and to be able to do the
full rehabilitation of this 100-year-old asset so that it can
provide utility and reliability for the decades to come.
Mr. Malinowski. Thank you. We want it to last another 100
years.
And I yield back.
Mr. Lipinski. The Chair now recognizes Mr. Balderson for 5
minutes.
Mr. Balderson. Thank you, Mr. Chairman, and thank you all
for being here this morning and to this afternoon. My first
question will be to Mr. Jefferies.
Mr. Jefferies, my question is, you mentioned that forecast
from the Federal Highway Administration show that U.S. freight
tonnage will rise 30 percent from 2018 to 2040. Can you expand
on the current state of freight rail infrastructure, the
investments your companies have made in the past 10 years, and
the investments freight rail will need to make in the next 10
to 20 years to meet this growing demand?
Mr. Jefferies. Sure. Thank you, Congressman.
So over the past--you are certainly right about the
projected increase in freight movements and it is something
that everybody has been planning for, but over the past 10
years, railroads have averaged--the Class I's have averaged
about $25 billion back into their networks every year, so it is
about $250 billion and that trend continues and that is two
types of investment.
That is core maintenance, that is ensuring the
infrastructure that you have is at a high level of performance,
that it can handle the capacity that is there, and then it is
also expansion or capital expenditures, whether that is track
expansion, whether it is increasing--or rehabilitating tunnels
to allow for double stack, but, you know, as we look forward, I
think this is something all of our companies are constantly
evaluating.
So, you know, each company is looking at its commodity mix.
Certainly when you look at historically, coal played such a
massive part in rail revenues. That is much less the case than
it was. Coal continues to decline based on a variety of
factors, but as railroads continue to invest in new track and
new ways of operating and new technologies, they get more
competitive with other types of traffic.
So truck competitive traffic. Railroads are competing in
much shorter distances than they used to and the goods economy
is certainly an area of growth into the future. So that is
going to be an area of certainly focus. And, of course, you are
always going to have, you know, rail being the primary way to
move most chemicals, grain, construction materials, et cetera.
So there is a certain level of predictability there and
there is also a lot of scenario analysis looking at what is out
over the long-term, but I think the important thing is that our
railroads--the consistency of the investments that have
occurred--have the network and really strong shape and they
have all taken steps to optimize operations and so our folks
feel comfortable that we are ready to meet, you know, whatever
demand does arise and when it arises.
Mr. Balderson. Thank you. Appreciate that answer.
My next question is for Mr. Artl. Thank you for being here
today also.
In your testimony, you note that having the funding in
projects certainty from the Federal Government is critical in
your operations. You go on to say that it is difficult for
ACEC's members to complete a project on time or on budget if it
is not clear how the project will be funded or if the right
partners are not part of the project.
I have heard concerns numerous times from my State and
Department of Transportation, construction and engineering
companies in my district in planning organizations about
various Federal rules and regulations complicating surface
transportation projects.
Some of these regulations haven't been updated in decades
and can create significant project delays and increased cost.
Do your member companies face any similar issues when it comes
to completing rail projects?
Mr. Artl. I think one of the most--the largest concern is
just oncertainty and timing overall. When applying for grants,
if the grants aren't properly funded--each time we have to
apply for a grant, we have to go through a series of
environmental reviews and environmental paperwork. If that
grant doesn't get funded and then we apply, again, the next
year, all that work has to be redone.
So clearly on that issue the ability to fully fund grants
and make them available will alleviate a lot of the work
upfront and could achieve some cost savings overtime.
Mr. Balderson. Thank you very much.
Mr. Chairman, I yield back my remaining time.
Mr. Lipinski. Thank you.
The Chair will now recognize Mr. Cohen for 5 minutes.
Mr. Cohen. Thank you, Chairman, and I appreciate your
holding this hearing today and all the witnesses who come and
testified.
One issue that probably pales in comparison to the tunnels
under the Hudson and some of the other issues that have been
addressed, but one that I am concerned about and continue to be
concerned about, in my long-standing support of Amtrak--and I
have been a long-standing supporter of Amtrak--is the threat to
the dining car service on Amtrak, an integral and iconic part
of a passenger train experience that I experienced quite often
as a child, young person, which many in America appreciate and
would like to see continued, and that is part of the
experience.
It is disappointing to see Amtrak eliminate this popular
tradition on several of its long-distance routes. And while I
know transportation is getting from point A to point B is
important, part of it with the trains is the experience. And
the experience is the dining car and having your ham and eggs
and Carolina and all those kind of things.
So it is worrisome that Amtrak has done this and continues
down what I believe is a misguided path eroding the passenger
experience and, therefore, hurting Amtrak. We should be working
together to make Amtrak more attractive to customers, not just
miserable when you go in those dining cars.
I have heard from many people that say millennials don't go
in there and shun them, but the millennials really like to talk
to them. It is one of the few places Bernieites and Bidenites
get to meet, speak, and learn something.
So Mr. Gardner, Mr. Anderson was against this dining
experience. He tried to eliminate traditional dining service on
long-distance carriers. When he testified before the committee,
he mentioned that the survey market data influenced and
justified these changes. When he was asked to follow up with
the subcommittee and provide said data, he was unable to do so.
Mr. Gardner, what will Amtrak's food and beverage service
look like under your new CEO William Flynn, who I look forward
to working with? I think he will be a breath of fresh air and a
provider of good ambience on the train and food. Does Amtrak
intend to restore traditional dining service on its long-
distance routes?
Mr. Gardner. Thank you, Congressman.
And thank you for mentioning our new CEO. William Flynn
will be joining the company on April 15th, so he is not yet
with us, but will be coming in about 6 weeks and he certainly
looks forward to meeting with all of you.
I completely agree with you that part of the benefit of
rail is the unique experience, sort of, the generosity that I
like to think of that we create. We have a more spacious
environment, more flexible environment, one in which the
journey is part of the trip and absolutely food service is part
of this.
I would say that we are trying to find the continual
upgrade and modernization of our products across our network.
We have a 46-State network, a variety of different services, a
variety of different needs, and that requires us to continue to
experiment and try new ways to meet the requirements and needs
of our traveling public.
As you are well aware, there are major demographic shifts
underway, major population change, and our population of riders
is changing over time. And we look to find new ways to attract
and meet the expectations and needs of our passengers. That
does mean that we have changed some of our service for our
single night overnight meal service on our long-distance
trains. There are, however, almost an equal number of trains
for which we still have the traditional dining service.
And we are going to continue to experiment and try to find
the right mix, the right balance. For sure we know passengers
expect a much broader set of food options. Healthier choices,
different options than sort of the historic railroad menu that
had been offered. And so we have to upgrade and provide more
choice. We also know that people prefer a variety of different
environments to eat in.
Some folks and, in fact, it has become quite clear that
many people prefer to be served in their own rooms on long-
distance trains or to be able to use the dining car in a more
flexible way. Historically, it had been limited to just a few
couple--a few hours of duration of meal period and closed to
passenger use, and we have opened that up----
Mr. Cohen. I think I get the drift. And I appreciate it,
Mr. Gardner. We are about out of time, but let me ask you this:
Can you give us the customer survey market data that justified
this reasoning that Mr. Anderson did not give us when we asked
for it?
Mr. Gardner. I understand you have written us a letter. I
think we will have a response to you by the end of this week.
Mr. Cohen. Good. And I will just say for this, all of these
experiments, all I have heard from the public is they don't
like the food. It is all premade. It is put into a microwave.
It is not good food. They don't like it.
I don't care millennials, they may like to look at their
phones, they don't like bad food either. And if they don't know
it is bad food because they haven't had the opportunity they
should be given some regular, good cooked food. They will
learn. They will like it. They will appreciate it. They will
ride on Amtrak. They will talk to older people. They will
learn. They will experience things.
The Rocky Mountaineer, Canada, the food, it is great. You
see the bobtail deer or whatever. That is fine too, but the
food--and you need to put that back and make Amtrak what it
used to be and you will attract more customers and you are not
going to get, you know--so welcome, Mr. Flynn.
Mr. Gardner. I appreciate that and we are investing more in
the food. We want to have great food on board. We are trying to
do that. Tastes are changing. We are trying to capture those in
our service.
Thank you.
Mr. Cohen. You are welcome.
And I yield back the balance of my time and hope that
people get to eat good food.
Mr. Lipinski. I now recognize Mr. Babin for 5 minutes.
Dr. Babin. Yes, sir. Thank you, Mr. Chairman, and thank you
witnesses for being here today.
The first question I have would be for Mr. Jefferies. The
main focus of this hearing, I think, or one of the main focuses
is examining rail issues in large hubs like Chicago. And while
urban areas are very important, rural areas are also just as
important, especially if you live in a rural area.
As we look to the surface transportation reauthorization,
what are some of the ways that we can strengthen and protect
our rural railroad infrastructure? I would like to hear some of
your ideas.
Mr. Jefferies. Thank you for that, Congressman. And
certainly, railroading is as much if not more of a rural
industry as it is an urban industry, so certainly served both
areas.
A few things come to mind. Given that the short line rail
population is certainly prevalent in rural America, the
Congress, you know, did the right thing and extended the short
line tax credit for 5 years and the spending bill at the end of
2019. There is an effort to make that permanent moving forward,
and I think that makes sense. The results of it are undeniable
and that reaches that segment of the rail industry that
certainly needs that help in reinvesting back into its
infrastructure.
When we look at grant programs, larger grant programs, be
it INFRA, be it BUILD, be it CRISI. I mentioned earlier I
believe they have rural set-asides. I apologize for my lack of
indepth knowledge, but that is certainly an area worth
considering. And when it comes to rural grade crossings, the
section 130 program, I think, is critical as well to ensure
that those crossings are safely maintained.
Dr. Babin. OK. Thank you very much.
Second question for Mr. Gardner. When you prioritize
investments, is there a cost-benefit analysis conducted with
ridership and economic benefits to the local, State, and
Federal entities that are involved?
Mr. Gardner. Well, so it depends, sir. I would say we
obviously in our capital programming, we receive funds from
Congress, we request those funds, we give the list of our
priorities, we receive those in two grants, a grant for the
national network and a grant for the Northeast Corridor. And
then we go through a detailed capital prioritization process
and the company, our board of directors, approves our capital
plan. The FRA provides a grant to implement those projects.
When we do partner with States and localities on projects,
oftentimes, of course, a benefit cost is part of the
development of a project. So when we are looking at new service
we will look at revenue, ridership, economic impact, impact on
congestion, mobility, the environment.
So those are all things that we would undertake typically.
It depends obviously on State requirements, but our decisions
around where we prioritize investments are based on our
analysis of the benefits to the corporation and obviously our
ability to fulfill the mission that Congress has set for us.
Dr. Babin. All right. Thank you so very much.
And I will yield back the balance of my time, Mr. Chairman.
Thank you.
Mr. Lipinski. Thank you, Mr. Babin.
The Chair will recognize Ms. Norton for 5 minutes.
Ms. Norton. Thank you, Mr. Chairman. And I certainly
appreciate this hearing from which I have learned much, but
notice that this is the Subcommittee on Railroads, Pipelines,
and Hazardous Materials.
And I want to speak to or ask a question about hazardous
materials, especially since there was a derailment just a
couple of years ago here in the Nation's Capital which I
represent.
Dr. Bury, you specifically mentioned training for first
responders and rail disasters in this context. I was so
concerned about a disaster here that I actually put a bill in
requiring railroads and rail transit to take the safest route.
The only reason I didn't press it is because of regulations
which appear to require that anyway.
Imagine what is the safest route in a great big city like
this. There really is no safest route if you have to go through
the city and we concede that you do have to go through the
city.
So this question is for anyone, particularly, though, for
the representatives from Amtrak, New Jersey Transit, and, of
course, the Association of American Railroads. This accident
occurred near a Metro stop here in the District of Columbia, 14
cars were derailed and one of the substances that was leaked
was sodium hydroxide.
This is a highly corrosive substance to the skin and eyes.
So you can imagine our concern. So I would like to ask
certainly those of you involved in transit, any of you may have
ideas or answers, what are you doing?
What strategies are you employing to mitigate these risks,
particularly in high-density areas like the one where we are
meeting, where you don't have alternative routes? So what are
you doing to mitigate these risks?
Let me begin with Mr. Gardner of Amtrak.
Mr. Gardner. Thank you, Congresswoman.
Well, two things I would say. First, Amtrak has----
Ms. Norton. This was a CSX train.
Mr. Gardner. Yep. Amtrak has a complicated and some
detailed relationship with our freight partners. We are a
tenant on their railroads across the Nation, and they are a
tenant, in fact, on our Northeast Corridor. So we work very
closely with our freight partners to make sure that we have----
Ms. Norton. Well, as tenants, whose responsibility is it?
Mr. Gardner. So, in the Northeast Corridor environment,
where we are the host railroad, we have an obligation to permit
freight traffic on our lines, so our responsibility is twofold.
One is to make sure that the infrastructure is safe. We have
that responsibility and to make sure, through the
implementation of Positive Train Control and our safety
management system, that we are elevating our safety abilities
and trying to drive improvements across our infrastructure.
The freight railroads have the right to carry their
commodities on our railroads, so we cannot restrict or control
their routing or their commodities that they carry. But we do
work closely with the freight railroads to make sure that we
have--for our Amtrak police department and our emergency
response team to make sure that we have good coordination and
training so that we can respond if things occur.
But, fundamentally, I would say the goals of the industry
need to be to adopt a safety management program, a system that
drives continual improvement across our network, and Positive
Train Control is a very important step to ensuring that things
like train collisions or misaligned switches are avoided.
But there are more and--more efforts necessary, I am sure,
across our whole industry to improve the safety margins,
particularly when carrying both people, which is our business,
and hazardous materials, which is our colleague's business.
Ms. Norton. Well, OK. Given--any of the rest of you have
any mitigation ideas given the inevitability we have got to go
through high-density areas like the Nation's Capital?
Yes, sir?
Mr. Jefferies.
Mr. Jefferies. So thank you for that.
So, currently, under agreement, I think you referenced
hazmat does not move through freight through the capital of DC.
Certainly that doesn't mean it doesn't move through other urban
corridors. So, when it does, it is, I think, a three-pronged
approach. It is prevention through track maintenance, making
sure the track is in good shape, making sure the operating
practices are safe, implementation of Positive Train Control.
Most hazmat has to move over a PTC route, so that will be in
place.
It is mitigation. It is having up-to-date, safe tank cars.
In the 2015 FAST Act and also working with DOT several years
ago, we upgraded all of the tank car standards for moving
petroleum products and related, and then it is response----
Ms. Norton. That is the new tank cars?
Mr. Jefferies. Yes. Phasing out older tank cars and putting
new requirements in place.
And then it is response. It is working with first
responders. It is training first responders so, if something
happens, they know how to respond.
And one thing we are really proud of is an app we have
developed that we are deploying to first responders where, if
there is an incident, on the app, they enter the railcar. It
says what is in the car, and it says how to respond, and it
says who to contact.
So it is a three-pronged approach for us.
Ms. Norton. Thank you very much, and thank you, Mr.
Chairman.
Mr. Lipinski. The Chair now recognizes Mr. Lowenthal for 5
minutes.
Mr. Lowenthal. Thank you, Mr. Chair. My first question--I
have a couple of questions.
My first question is to Mr. Jefferies, and it is kind of
the most recent of the impacts, and the reason I raise this
question, as we all know, the COVID-19 outbreak has disrupted
the entire global economy, especially the supply chains that
consumers and manufacturers have come to rely on.
In our southern California ports--and I represent the port
of Long Beach--we have observed container volume decreases of
25 percent in February, 40 sailings to the port of Los Angeles
have been canceled.
So my question is: How has this--have you seen this
impacting the rail and, especially, what impact has it had on
your stakeholders? Have there been decreases in rail? Have
their employees been affected at all by the COVID-19? And I
would love to know----
Mr. Jefferies. Thank you for that. It is a very relevant
question.
So it is--I put it to two answers there. One, you hit on
the port volumes that are seeing real decreases and real----
Mr. Lowenthal. Real decreases.
Mr. Jefferies [continuing]. And the head of the port
association said nationwide, potentially a 20-percent reduction
for Q1, certainly more pronounced on the west coast ports.
So, you know, that certainly translates in a downtick in
container traffic moving on the rails, and, in conversations I
have had with some of our members, they are communicating with
their intermodal customers, because I think some of the focus
is, this traffic is going to come eventually, and making sure
that, when that uptick does occur, that everyone is ready and
can flex into full capacity to get folks what they need.
But I think--so planning is in place, and certainly
monitoring is in place, and we continue to evaluate, because I
think we are all trying to determine what the overall impact
is, and certainty the longer the shutdowns in Asia occur, the
more pronounced that might be.
But there is also the internal, inward-looking preparation
as well for the railroads, so--and having conversation--I had
conversations with our members. They are going through a lot of
scenario planning on different potential outcomes that can
result from the virus. But a lot of it is what you are seeing
in other companies and other industries, is, one, travel
advisories, it is hygiene advisories, things as simple as that,
but also looking at where our assets are and being prepared to
adjust those as needed.
Now, when you get out into the field, railroading is a
fairly decentralized industry, so you don't have folks working
in--you know, in big crowds, so to speak, so certainly, that
could impact the size of the impact if we get down that road,
but I know our folks have pandemic task forces. They all have
emergency response plans based on any sort of incident, whether
it is a natural disaster, a pandemic----
Mr. Lowenthal. Have there been any layoffs of employees?
Mr. Jefferies. Because----
Mr. Lowenthal. Has it impacted the employees of railroads
if there has been declining amounts of container traffic at
this moment? I am just trying to see the overall----
Mr. Jefferies. Right. I am not aware of any layoffs as a
result of the virus, no.
Mr. Lowenthal. Thank you. Thank you, and I appreciate your
candid answer.
Mr. Corbett, southern California's commuter rail service,
Metrolink, has a $444 million backlog of the state-of-good-
repair projects. What kind of backlog do you have at New Jersey
Transit?
Mr. Corbett. Thank you, Congressman.
Certainly, I am somewhat jealous of my colleagues in
Washington particularly and the dedicated funding stream that
California has provided for him. Unfortunately, I came into my
seat 2 years ago, and we did not have a 5-year capital plan. We
live with a tin cup going to the legislature.
Half our revenue comes through fare box, a little other
extra income, real estate, et cetera, parking, and the rest, we
have to get from our State legislature, other than the capital
funding we get or the other funding I mentioned in my opening
comments.
So it is really--our backlog is, you know--capital projects
is billions in the last 2 years, and, this year, our State
budget, we have been able to bring up our operating, but there
was a decade of where we were raided capital. About a half a
billion dollars a year of capital funding went to cover
operating, which is a very insidious practice, I would----
Mr. Lowenthal. So you are having issues about state-of-
good-repair----
Mr. Corbett. Yeah.
Mr. Lowenthal [continuing]. Projects. So my question is:
Has that backlog affected the reliability and quality of
service that you offer?
Mr. Corbett. Absolutely. There is no--we have 50-year-old
engines, you know, older than Stephen, I think. Our coaches are
40 years, so we had no investment in our PTC program. When I
came in, we were only 12 percent complete.
So all those things--we weren't training crews or
engineers. So we had a huge backlog. All those things affected
service. And, if you bring down the average age of your fleet--
there is a healthy average--where your mean distance between
failure, number of annulments, those kinds of things, become
virtuous.
Mr. Lowenthal. So, if we increase the amount of Federal
Government aid to commuter rail for use, if that increased in
this coming budget, could you spend that on state-of-good-
repair projects?
Mr. Corbett. Absolutely. We touched on bridges, ADA. You
know, where the ADA making it so all platforms--it can't just
be partial platforms now with the ADA changes. So we have a
huge backlog.
And I would say it is also tough because there is more
competition now, even with, you know, increase in funding,
where the national population shift from more rural to more
centralized around urban areas, there is more of us competing
for--even if there are slight increases in dollars, there is
more of us competing for the same pot, so it is----
Mr. Lowenthal. Thank you for that.
Mr. Corbett. Yeah.
Mr. Lowenthal. And, Mr. Chair, I yield back.
Mr. Lipinski. Thank you.
I now will recognize Mr. DeSaulnier for 5 minutes.
Mr. DeSaulnier. Thank you, Mr. Chairman. Thank you for the
hearing. This is enormously important. It may be boring to
nonengineers and people who are not interested in rail
infrastructure.
My question--and Alan, Mr. Lowenthal, and I have similar
pressures in our district, Mr. Lowenthal with the Port of Long
Beach and L.A. and the Alameda Corridor, which is such a
successful project on multiple levels, and our increasing
demand for exurban trips, and so this first to Mr. Jefferies
and Mr. Corbett. We have all this pressure in the urbanized
areas as you were saying.
For us, it is goods movement out of the Port of Oakland
through the Altamont Pass in particular, and then the exports
hopefully that will start to continue again, and there are
capital improvements there that are very old, and some of them
lay dormant.
So, for instance, in my district, we were adding workforce
housing in the eastern part of the East Bay. We extended the
Bay Area Rapid Transit system, but, when we were in
negotiations for that, we were negotiating with UP for a line
that was largely dormant because that area had gone from
industrial shipping of wheat 100 years ago to largely urbanized
suburban.
As soon as we got that funding source, the negotiations got
very difficult. We had to switch the capital infrastructure to
the middle of a 4-lane freeway that became a 10-lane freeway,
but that added a lot of expenses, and that spur is still empty.
Now, I understand--I have another issue with Burlington
Southern and an old line that used to go into the Port of
Richmond but doesn't anymore through this section of spur,
because it is open space now, and it is not going to be
industrialized.
So my question is: How do we work better knowing that we
value both, that there is fixed opportunities in terms of
right-of-way and increasing capacity? And I appreciate the
comments by Amtrak about the operational coordination, but more
about expanding capacity, and that can be in the existing
corridors as well as we use technology to move more freight and
more passenger rail.
I have--in the San Francisco Bay area, we have 4 of the 10
largest commutes in the country, and that is all people that we
want to get out of their single-passenger cars and into
passenger rail, but we also want to move products.
So, Mr. Jefferies, could you talk about opportunities where
the Federal Government could help facilitate what shouldn't
really be a conflict in my view, but I understand why the
private sector wants to hold on and get the best return for
their investment on capital resources.
Mr. Jefferies. Thank you, Congressman.
I think the first thing that we all recognize, capacity is
finite, especially in those urban areas, so I think the freight
railroad is going to be very deliberate as it evaluates
potentially giving up some of that capacity or turning over
that capacity to increase passenger throughput, because, once--
you know, you just can't--it is kind of like highways in the
Northeast. In L.A., you can't just add more lanes.
So I think that is certainly part of it, and these are very
long-range decisions, and, like you said, hopefully we will be
able to be moving a whole lot of product back out of those
ports soon.
But certainly the Federal Government can play a role when
there is capacity expansion necessary for the public partner by
providing that funding source, because, again, with the host
railroad is really going to be--so safety is going to be first,
but number two is going to be making sure they can serve their
customers, and you don't want to end up in a situation where
you have turned over part of that capacity and you are unable
to meet your customer demands, present day or forecasted.
So examining what additional capacity is necessary and then
finding that funding source, I think, is a huge step forward,
and then the--you know, none of these--none of these are easy
processes. There is a great story that came out of Virginia
here, but it was over several years with the VRE, and Amtrak,
and CSX, and adding to the right-of-way and building out some
long-term capacity that is going to benefit everybody.
But I think just the recognition that, are there best
practices that can be taken? One hundred percent. Money needs
to be there for that capacity, and then all sides need to agree
about kind of what the outcomes are and what the measure--the
service level metrics are.
Mr. DeSaulnier. I would love to have a further
conversation. I am sure the committee staff has had these
conversations, but wherever we can at least provide best
practices rather than let it go, because there is an urgency
both for you to move freight, but for us to move passengers,
and maybe, Mr. Corbett, you could just--if you have similar
experiences in New Jersey, I am unaware.
Mr. Corbett. Yeah. Some of that balance obviously, for us,
the freight market is very important for New Jersey. We operate
on--we have Norfolk Southern, Conrail, et cetera, so getting
that right, that balance, where we are very sensitive to that.
Certainly PTC has been a driver behind that cooperation, so it
is very similar in New Jersey. You know, high density, that
tradeoff, that triage process.
And, frankly, really it comes down to the question that
Congressman Lowenthal said. It is funding. There is only a
limited amount of funding. Freights have to make their profit.
They have their shareholders, and, us, we have to have fares
that are reasonable, and so that gap is--you know, that starts
that sort of a triage process.
Mr. DeSaulnier. Thank you.
I yield back, Mr. Chairman
Mr. Lipinski. The Chair recognizes Mr. Garcia for 5
minutes.
Mr. Garcia. Thank you, Mr. Chairman, and Ranking Member
Crawford, and thank you to all the witnesses.
I am glad to be joined by three witnesses from Illinois
today at our hearing. Thank you, Dr. Bury, Mr. Shanahan, and
Mr. Artl for your testimonies.
As I said before, Chicago is America's transportation hub.
With over 7,400 miles of railroad tracks and thousands of rail
crossings, we are quite familiar with rail and all the benefits
and challenges that come with it.
Mr. Gardner, I would like to start with you on Amtrak
accessibility. In December 2019, Amtrak charged two of my
fellow Chicagoans $25,000 each to remove seats to accommodate
their wheelchairs. This was discriminatory and unacceptable, as
conveyed by a letter from our Illinois delegation.
And, briefly, the following questions: Can you tell me the
status of your seat removal policy? Additionally, have you
accounted for these accessibility needs in the new car
procurements that are planned for the future?
Mr. Gardner. Thank you, Congressman.
So, to describe that incident a little further, we did, in
fact, have some miscommunication between this organization and
our Amtrak staff. What the $25,000 was, was not a charge for
tickets and travel, per se. It was the cost of modifying and
changing out the interior of a piece of equipment, and that, it
turned out, was not necessary for us to be able to move this
group. We were able to accommodate them on a train with a--by
adding a series of coaches and being able to provide them.
In fact, that is our obligations under the ADA, is to
provide equipment that is ADA accessible. As we look to the
future, we are continuing to work with Access Living to try and
figure out ways to meet their needs for their trips. They have
been a group with a long tradition of using Amtrak. We want to
keep them as good customers.
And we are, in fact, meeting our ADA requirements and going
beyond them with our new Acela train sets and as we look to
procure additional sets to be able to meet the needs of our
passengers consistent with the requirements of the law.
Mr. Garcia. Are you reviewing any policies beyond seat
removal to avoid other incidents that prevent Americans with
disabilities from accessing Amtrak? Briefly, please.
Mr. Gardner. Well, we are--we are looking, as Mr. Corbett
said, at our access on the platform side to create good
additional access for our equipment within the trains to be
able to have the right level of width and the right level of
seat availability. And these are common across the
requirements, including retrofitting additional equipment where
we can, we have today.
Mr. Garcia. Your written testimony noted that Amtrak must
bring 230 long-distance stations into compliance with ADA
requirements. In fact, you have sole or shared responsibility
for 387 stations. Yet, as of February 2020, Amtrak reported it
has completed all of its ADA responsibilities at only 39
stations.
When do you plan to bring all 387 stations into 100 percent
compliance with ADA?
Mr. Gardner. So I think our current plan has that being
accomplished in 2024. We are, in fact, spending record amounts
and achieving our program--we have a program that is developed
with the Federal Railroad Administration and required, but it
is important to note, Congressman, most of those or many of
those stations, while we have responsibility, we may not have
ownership, or we may not have the rights to actually execute
the work.
So part of what we will be looking for help from Congress
is how do we advance projects at facilities we don't own but
have responsibility for?
Mr. Garcia. Are you investing any revenue, including
Federal appropriations, in getting stations to meet ADA
requirements?
Mr. Gardner. Absolutely. We are given $50 million every
year through appropriations, and we are spending more than that
in the fiscal year.
Mr. Garcia. OK. Thank you.
Mr. Artl, you spoke to safety concerns related to blocked
crossings at grade crossings. I too am concerned with the
safety and also the resulting air quality issues that can arise
from idling trucks.
I thank Chairman Lipinski for raising this issue earlier.
Do you believe that, if the Federal Government could
provide a more dedicated funding stream to build grade-
separated crossings, we could both reduce blocked crossing
congestion and accidents?
And, before you answer that, I just want to add I am
currently working on legislation to create a dedicated funding
stream for grade-crossing separations.
Mr. Artl. Yes, absolutely. A multiyear program with funding
would give engineers, IDOT, the CREATE program the ability to
plan forward for years and provide the proper balance of
funding and teamwork and partnership that would be needed to
address many of the grade separation problems.
Mr. Garcia. Thank you so much. Wow, I still have 10
seconds, and, with that, I yield back, Mr. Chairman.
Mr. Lipinski. Thank you, Mr. Garcia. Thank you for your
work in Illinois and on this committee.
We want to thank all of our witnesses. We have now run
through all the questions, and your testimony today has been
very helpful as we head into--this is our last hearing before
we will be finishing up the final draft of the surface
transportation reauthorization, and your comments today will be
very helpful as we write the bill and figure out how best to
ease congestion for both freight and passenger rail.
This is something that is very important, especially as we
are talking about climate change and greening our
transportation sector. Rail is a big part of doing that, both
passenger and freight rail.
So I want to ask unanimous consent that the record of
today's hearing remain open until such time as our witnesses
have provided answers to any questions that may be submitted to
them in writing.
And unanimous consent that the record remain open for 15
days for any additional comments and information submitted by
Members or witnesses to be included in the record of today's
hearing.
Without objection, so ordered.
And this subcommittee now stands adjourned.
[Whereupon, at 12:20 p.m., the subcommittee was adjourned.]
Submissions for the Record
----------
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on
Transportation and Infrastructure
I want to thank Chairman Lipinski for holding this hearing, and I
want to thank our witnesses for attending.
Today's hearing is a good opportunity to assess the future needs of
freight and passenger rail services and to discuss opportunities for
improving the infrastructure used by these industries.
As this Committee looks at reauthorizing surface transportation
programs, it is critically important to examine the needs of the rail
industry, including critical maintenance and upgrades that ensure that
our railroads remain safe and strong.
One important factor when considering the future needs of our
railroads is the relationship between freight and passenger rail. We
must ensure that the interests of both industries are adequately
addressed in a manner that best serves the public.
While I am encouraged by the success of the CREATE Program [Chicago
Region Environmental and Transportation Efficiency] in alleviating rail
congestion in Chicago, we must also consider issues facing our rural
communities. Furthermore, we should examine growing cities and regions
to ensure that they are able to accommodate future increases in rail
traffic.
The rail industry relies on grants from the federal government to
help with safety, upkeep and growth in the industry. We must look at
how this money can be most effectively deployed to keep our rail system
strong.
Thank you again to our witnesses, and I look forward to our
discussion.
Letter of March 3, 2020, from Bruce H. Bergen, Raritan Valley Rail
Coalition, Submitted for the Record by Hon. Tom Malinowski
March 3, 2020.
Subcommittee on Railroads, Pipelines, and Hazardous Materials,
House Committee on Transportation and Infrastructure,
2167 Rayburn House Office Building, Washington, DC.
RE: Raritan Valley Rail Line of New Jersey Transit
Dear Hon. Subcommittee Members;
The Raritan Valley Rail Coalition represents in excess of 23,500
daily riders and more than a million residents who live in the 28
municipalities, across 4 counties along the Raritan Valley Line of New
Jersey Transit. For more than 2 decades, this organization has lobbied
and fought to secure direct service for our riders to New York
Pennsylvania station--what we call the ``one seat ride.'' Although our
line carries a significant number of commuters, comparable to other
lines, we are totally denied this important service during rush hour,
and have just a handful of non-peak direct trains.
Direct service to Manhattan, without changing trains in Newark, is
a basic quality of life issue. Our constituents are entitled to the
speed, convenience and comfort of direct rail service, be it for work
or pleasure, just like riders on every other NJ Transit line. It is a
matter of fairness and equity. Further, it has been shown that direct
rail service is an economic benefit to the entire community, increasing
property values and commerce in general.
Yet, the ultimate solution to this problem rests with a much larger
issue, and that is the Gateway Project. We cannot afford to continue to
gamble our collective future, by failing to promptly approve, fund and
construct this project. The long-term health and growth of the
municipalities along our line, no less the entire north east, is
threatened by the condition of the existing Hudson River Tunnels, and
the ongoing failure of the federal authorities to provide funding. It
has been well documented that the Hudson River tunnels are critical to
the passage of both passenger and freight rail, affecting not only this
region but the country as a whole.
We urge you to move forward with funding of the many and varied
infrastructure projects that are needed across this country, but in
particular, to fund the Gateway Project which we believe is one of the
most critically important.
Respectfully yours,
Bruce H. Bergen,
Chairman, Raritan Valley Rail Coalition.
Letter of March 3, 2020, from County of Union, New Jersey, Board of
Chosen Freeholders, Submitted for the Record by Hon. Tom Malinowski
County of Union, New Jersey,
Board of Chosen Freeholders,
Administration Building,
Elizabethtown Plaza,
Elizabeth, NJ, March 3, 2020.
Subcommittee on Railroads, Pipelines, and Hazardous Materials,
House Committee on Transportation and Infrastructure,
2167 Rayburn House Office Building, Washington, DC.
Re: Gateway Tunnel Project
Dear Hon. Subcommittee Members;
New Jersey's Union County is served by 16 train stations on four
commuter rail lines carrying thousands of daily commuters, along with
those seeking recreation and culture, to New York City. Each of those
trains, along with those from Amtrak and for freight service, must now
travel through the two more than 100-year-old tunnels under the Hudson
River. Meanwhile, the Gateway Tunnel Project remains unfunded.
Should just one of those two aging tunnels be forced out of
service, it will cut rail traffic by about 75%, creating an economic
and human disaster for Union County and the entire northeastern region.
A 2019 report by the Regional Plan Association estimates that a tunnel
failure could cost as much as $13 billion over 4 years and reduce
property values by as much as $22 billion, in addition to the
significant effect on the work, personal and family lives of hundreds
of thousands of people.
Further, the RPA report details how a tunnel closure would directly
affect Amtrak service from New York to Washington and beyond, spreading
significant costs through Maryland, Virginia and Connecticut, as well
impacting the ability to move freight within and beyond the region.
Construction of the Gateway Tunnel and related projects will have
the most significant positive economic impact of any of the
infrastructure projects in the nation. This is a national, not a local
or regional issue. We urge you to include the Gateway Project in the
next round of funding so we can eliminate this potential disaster as
soon as possible and ensure safe travels between New York and New
Jersey for our constituents.
Sincerely,
Alexander Mirabella,
Freeholder Chairman.
Angel Estrada,
Freeholder Vice-Chairman.
Bette Jane Kowalski,
Freeholder.
[all]