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60 Minutes Loses Forest for Trees in PTC Story (Part 2)

March 12, 2019

Railroad investments are made largely for the sake of private gain, rather than public good

By Abe Zumwalt

Last week, instead of inserting needed nuance into the conversation surrounding 60 Minutes’ piece about American Railroad safety, there was first and foremost need for a reality check.

Passenger Trains in the United States are about 17 times safer than passenger automobiles, on a mile-per-mile basis. With a gap that big, we can say with certainty that passenger trains save American lives every year, given that about half of Amtrak’s millions of riders would otherwise drive private automobiles. Spreading a perception that American passenger trains are inherently unsafe will get people killed. However, passenger trains should be far safer than they presently are.

In Germany, trains are an amazing 56 times safer than driving on the autobahn, where driving is already 2 to 3 times as safe as it is here in the United States. Passenger trains in Germany average .035 fatalities for every billion kilometers traveled. In the United States, private automobiles kill 7.03 people for the same distance traveled. Passenger trains in Germany are therefore about 200 times safer than driving in the United States, a full magnitude of order safer than American passenger trains currently are in comparison.

The good news is that a substantial bite will be taken out of that gap with the full implementation of Positive Train Control (PTC). This is where the 60 Minutes piece made some worthwhile queries, even if the answers ultimately eluded them:

One issue has been the Federal Railroad Administration, FRA, the railroad's regulatory agency, criticized in government reports for not vigorously enforcing the PTC mandate. We tried to talk to the agency but they declined our interview request.

Its handling of PTC has been a source of frustration for Robert Sumwalt of the NTSB [National Transportation Safety Board].

Lesley Stahl: The regulatory agency, The Federal Railroad Administration, are they just not doing their job?

Robert Sumwalt: Well, we have issued recommendations to the FRA and they've not acted upon those.

Lesley Stahl: Why are they so lenient with the railroads? Somebody told us that in his opinion they're captive to the railroad system, to the industry.

Robert Sumwalt: The regulator needs to step up to the plate and do their job and regulate.

Lesley Stahl: Who's responsible?

Robert Sumwalt: Well, ultimately, it's up to the railroads to put this system in place. It's a steep climb for them. It's going to cost, depending on who you talk to, anywhere between $10 and $14 billion for the system to be implemented.

60 Minutes is making the classically American mistake of talking about transportation modes as if they exist in a vacuum. As written previously, they forgot about cars, and this exchange shows that they forgot about planes too.

In 1956, after a mid-air collision over the Grand Canyon between TWA and United passenger planes, President Eisenhower did not hesitate to require Congress to create and pay for the Air Traffic Control System (ATCS). After another collision over New York City in 1960, President Kennedy asked for and got additional funding for the Federal Aviation Administration (FAA) and the ATCS.

In 2008 Congress reacted similarly to the Chatsworth commuter rail disaster in California with the first legislation mandating Positive Train Control, but with a key difference of omitting any funding to pay for the multibillion-dollar project. It is shocking that we’d still allocated only $1.2 billion to PTC at the time of the Cascades 501 disaster a decade later, mostly to help smaller public operators pay for implementation. At the same time, we set legislative deadlines, only to blow through them because operators couldn’t meet the mandate due to real challenges in technology, funding and jurisdictional responsibilities.

In stark contrast, the FAA has a reliable stream of around $16 Billion coming in every year for the ATCS system from its own federal trust fund that pays for about 90% of its expenses and the 30,000 employees it needs, the rest coming from the general fund. Because of it, airplanes are 100 times safer than cars in the United States.

PTC contrasts with ATCS in every way, save for a shared mission to keep people safe. One is governmentally funded, and the other was initially expected to materialize out of a legislative mandate. The FAA developed the architecture and requirements of ATCS, while the FRA left that responsibility for private industry to work out on its own.

The questions left uncovered by 60 Minutes are: Why didn’t we fund Positive Train Control from the start? And why, if the ATCS has resulted in a world-class aviation safety record, didn’t we take a lesson from it and structure PTC implementation in a similar fashion?

The answers are in the very blind spot that the 60 Minutes piece overlooked: how railroads are fundamentally different from roads and aviation, even though they are part of the same American transportation network.

The key difference is that private Railroads pay for both their operations, and their capital plant without direct governmental assistance. It’s an impressive feat that most likely could not be repeated by the aviation industry, let alone by the commercial users of the national highway system. However, with few exceptions it frames capital infrastructure investment and potential capacity in any rail corridor first and foremost in terms of private gains, rather than the scope of socioeconomic impacts that drive every other kind of infrastructure investment in the United States. This status quo has an inertia that made it easy to not include funding, nor concrete direction, with the first mandate for PTC. If 60 Minutes' mistake was overlooking this disparity, Congress made it well before they did.

That said, all transportation in this country has benefitted from generous governmental support, but never in a coordinated or equal fashion. Railroads received massive governmental support in the 19th century, but the 20th century brought them taxation and regulation. When you tax one mode, and subsidize another competing mode, the latter dominates the marketplace. That is the fable of American mobility in the 20th century, when railroads were taxed to the brink of extinction, and roads were lavishly subsidized. American private railroads still have a chip on their collective shoulder about this history. After being wrung out over the course of the century, Railroads were gradually relieved of their burdens and obligations, first from the operation of passenger service in 1970 with the creation of Amtrak, and then in 1980 with comprehensive deregulation from the undeniably successful Staggers Act. It saved the industry from everything save for a touch of myopia.

It’s no coincidence that recently only one major private host railroad out of five, Burlington Northern Santa Fe (BNSF), is speaking at the upcoming “Passengers and Freight Unite” event, or proactively appeared as a stakeholder for passenger train operations in front of the House committee on transportation. BNSF is clearly differentiated from every other Class I railroad given that it is not publicly traded, thus it is uniquely suited to afford planning in long term increments. For the rest, there is little incentive to provide better public service, and not just in terms of safety.

Today’s freight railroads are profitable, and terribly congested. They project the appearance having more traffic than they can handle reliably, which perversely translates to success in the eyes of industry analysts that presuppose the existence of a fully developed facility, with adequate capacity, that is capable of handling all expected traffic. In fact, railroads don’t have those things. This is in large part because they have reduced their capacity through arguably excessive rationalization with the goal of minimizing capital assets – and maximizing shareholder return. This is why freight train interference is the biggest single cause of passenger train delays.

The real problem uncovered here is getting private railroads to acknowledge the implications of their myriad public benefits, let alone incentivizing a way to maximize those benefits, because doing so may run a real risk of reducing stockholder dividends. It means more capital infrastructure to maintain, and less desireable operating ratios. In this context, let's return to the conversation on 60 Minutes:

Robert Sumwalt: Well, ultimately, it's up to the railroads to put [PTC] in place. It's a steep climb for them. It's going to cost, depending on who you talk to, anywhere between $10 and $14 billion for the system to be implemented.

Lesley Stahl: Okay. So?

Robert Sumwalt: You're right.

Lesley Stahl: I mean, it's safety. You're, they're, they have people's lives in their hands.

Robert Sumwalt: Yes, and we're confounded by that as well. And for every day that goes by we are at continued risk.

And while it could happen faster, Lesley, you’ll have to help find a way to make it worth their while. We didn't expect as much from the airlines. If you're looking for sensationalism to save lives, it would be more honest to remind 60 Minutes viewers that they are in significantly more danger every time they get into a car or walk down the street.