PTC showdown looms for government, railroads

OREANDA-NEWS. September 14, 2015. The largest railroads serving North America this week warned Congress and federal regulators of widespread freight and passenger rail disruptions next year if the 31 December deadline to implement positive train control (PTC) is not extended.

All seven of the Class I railroads wrote US Senate Commerce Committee chairman John Thune (R-South Dakota), other members of Congress and heads of federal transportation agencies to warn of harsh impacts to the travelling public and US businesses if the deadline for installation of the \\$9bn safety system is not extended. The railroads are Union Pacific, BNSF, CSX, Norfolk Southern, Kansas City Southern, Canadian National and Canadian Pacific.

US railroads have said for several years they will be unable to meet the deadline to install PTC, a technology designed to prevent train-to-train collisions, but so far only the Senate has passed an extension. This week the railroads also warned customers of the situation.

While ultimately unlikely, stopping freight movements would severely disrupt the flow of critical commodities such as coal, crude, petroleum products, fertilizers and agricultural products such as corn and soybeans. It would also halt passenger trains that move on many lines owned by freight railroads and serve many of the major metropolitan areas in the US.

"Commuters, hazardous commodities and other freight in large cities like New York, Chicago and Boston would move back to already congested highways," CSX said in its 9 September letter. "Without proper development and testing, in the laboratory and in the field, the congressional mandate for PTC implementation by 31 December places the US economy in jeopardy."

The Rail Safety Improvement Act of 2008 required railroads to have the PTC system functional on lines that carry passengers and toxic inhalants by the end of 2015, but carriers say they are years behind on meeting that deadline. The Federal Railroad Administration (FRA) has promised to begin levying fines if railroads operate out of compliance with the law.

The railroads also face contractual and legal liabilities if they allow trains to run on non-PTC compliant lines after the deadline, but their common carrier obligation requires them to provide service upon reasonable request from shippers.

Berkshire Hathaway-owned BNSF said that it is "concerned that it is not reasonable to operate in violation of a legal safety requirement in order to fulfill its common carrier obligation." The carrier said that even if the government forced it to continue operating, there are other federal laws that protect employees who refuse to violate or assist in violating federal laws.

"Operations across our entire network will likely be compromised by congestion and effectively shut down," BNSF said. The carrier said it would do whatever is reasonably possible to mitigate this impact, but warned "consequences for the economy and for our company would be substantial."

Norfolk Southern said it "is considering taking legal action to invalidate the deadline as a violation of due process given its arbitrary nature and the potential to deprive the railroad of cash through fines imposed by FRA. This deadline appears to have been selected with no analysis or feasibility inquiry."

Major shippers including the American Chemistry Council have asked Congress for assurances their products will still move once the PTC deadline has passed. They have urged Congress to pass an extension.

But Congress faces possible public criticism if it extends the deadline, as PTC is seen as an imperative safety measure in light of recent passenger and crude train derailments that the National Transportation Safety Board has said would not have happened if PTC were installed. The 12 May derailment in Philadelphia of Amtrak Train 188 running between Washington, DC, and New York that killed eight people and injured more than 200 is among the accidents that recently brought back PTC to the forefront of public attention.

Congress also faces a packed legislative schedule through the end of this year, with other major issues to consider such as addressing a multi-year surface transportation funding bill.

A long-time industry observer and railroad consultant told Argus that he does not think the railroads would halt traffic to the extent they have described, but added that "I think that it is a good threat."

"The railroads do not want this to happen," he said of the service curtailments. "They are posturing just the way people on Capitol Hill posture." He called the railroads' warnings "part of an orchestrated Kabuki."

CSX said that it is formally notifying Amtrak and commuter agencies and warning customers of embargoes on hazardous materials traffic. Norfolk Southern also said its ability to operate on the Amtrak-owned Northeast Corridor is uncertain. Amtrak told Argus today no railroads have notified it of any service suspension.

Union Pacific said it anticipates issuing an embargo notice by Thanksgiving, and "all passenger operations on Union Pacific lines will be discontinued by year's end."

Surface Transportation Board chairman Dan Elliott also wrote Thune about the PTC deadline and its implications (see related story page 6.)