Last week’s report by the GAO confirmed what the freight and commuter railroads have been telling Congress for months, that neither group will be ready to fully implement PTC by the December 31 deadline. According to the report, most railroads need an additional one to five years to complete the work. BN likely to be the earliest major railroad to complete its installation, and that may not be until the end of 2017. The inability to meet the deadline is certainly not a result of lack of effort. The AAR estimated that Class I railroads alone will spend over $9 Billion implementing PTC, and APTA estimates that the commuter rails will spend over $3.5 Billion in doing so. Of course, none of this is being funded by the Federal government and finding the capital for the project, along with determining how the cost will be allocated among the many users of each of the rail lines to be improved, is also a factor in delaying the process of implementation. Other factors cited by the railroads for the delay in implementation include a shortage of suppliers for the equipment necessary for PTC, the need for interoperability with other railroads and integration with the host railroads’ own systems, and the significant delays the railroads incurred in the FCC permitting process for the communications equipment necessary for PTC.
Some leaders in Congress are recognizing the need for an extension, but like so many other issues on the Hill, the progress has been slow. In the meantime, the freights and the commuter railroads are making contingency plans in the event the deadline is not extended, and warning their customers and the commuting public. No railroad can afford the risk of operating on January 1 without PTC if the regulatory deadline is not deferred. In addition to the hefty fines that may be imposed by the FRA if they opt to operate without it, there is the enormous risk that one accident while operating without a Federally mandated safety device could result in financially devastating litigation claims. The freights and the major commuter rail systems (including Metra here in Chicago as recently as last evening) are warning all, including Congress, that they will simply shut down effective January 1 if the deadline is not extended. A rail shutdown would have a devastating effect on the US economy – even more so than a Federal government shutdown if Congress fails to raise the debt ceiling. All of the industry pundits assume that, absent another catastrophic rail incident, Congress will extend the deadline at some point prior to the end of the year, but contingency plans for a shutdown like this take months to prepare. Precious resources that could be allocated to advancing the development of PTC are being spent by the rails and those who use them on planning for a shutdown that should not occur. Hopefully Congress will act quickly to implement a reasonable extension of the deadlines, so the freight and passenger rail providers can go back to putting their energy into keeping the country’s freight and passengers moving.
For more on this topic, please click here.