Of guidance and growing pains: FRA, states, freight-rail hosts aim to iron-out stakeholder agreement issues (6/21/2010)
6/21/2022The issue’s been there since the $8 billion high-speed ball began to bounce back in February 2009: What’ll it take for state high-speed-rail planners and their freight railroad hosts to come terms on what the freights will and won’t allow on their tracks or rights of way? For starters, it’ll require communication, attention to detail and patience, as Angela Cotey noted in Progressive Railroading's June 2010 cover story. And the significance of those requirements continues to surface on the slow road to high-speed rail.
Last month, the Federal Railroad Administration posted new high-speed-related guidance on its website. Dated May 12, the document — titled “Re: High-Speed Intercity Passenger Rail Program – Stakeholder Agreements” — appeared without fanfare; the FRA did not issue a public statement regarding the guidance. The agency also didn’t seek input from the freight host railroads or let them know that the new guidance was coming.
“It first came to my attention May 25,” said Association of American Railroads President and Chief Executive Officer Ed Hamberger.
That there’d be any new guidance at all was attention-getting enough.
“Each railroad had operated for just about a year — 11 months — with what they believed was the final guidance, and that’s what they negotiated over,” Hamberger said. “Now, FRA was saying that maybe these [guidelines] aren’t good enough. But that’s not what we agreed to.”
The language in the newly posted guidance also suggests host roads potentially would be on the hook for a lot more than they originally bargained for, Hamberger added, citing the following passage as an example:
“The agreement must provide that, if the [host railroad] fails to provide maintenance for the project property for a period of time in excess of six months, at any time during the 20 years from the date such property was placed in service, the [state grantee] may require the [host railroad] to repay a pro-rata share of the FRA grant funds received under the Agreement, based on the percentage of the 20-year period remaining at the time of such original default, in no later than 18 months, to the [state grantee].”
“In our interpretation, it made it look like [host] railroads would be responsible for maintaining track if the speed were 110 mph, even if the agreement was that the state would be responsible for it,” Hamberger said.
Class I execs also were surprised to learn the extent to which their roads now would be penalized for failing to meet on-time performance standards for intercity passenger traffic — traffic that they haven’t exactly been itching to carry, as it is.
“In most of these instances, the freight railroad believes it is being a good corporate citizen, helping the President achieve his [high-speed-rail] vision, so they want to work with states on this,” Hamberger said. “But these grants are not like a TIGER grant, where there are clear public and private benefits. Here, there are minimal freight benefits. … Given that, freight railroads do not really expect to be on the hook for the next 20-30 years to repay a grant that’s being used to move people.”
How to get to ‘yes’?
On June 9, Class I CEOs, who were in Washington, D.C., to attend an AAR board meeting, met with U.S. Transportation Secretary Ray LaHood to express their concerns. Hamberger characterized the discussion as “good,” and said he believes Secretary LaHood would use a similar adjective.
“The Secretary said, ‘I feel better … I can tell you are committed, that you want to get to ‘yes’ on these projects,’” Hamberger said.
The official DOT/FRA discussion assessment came from FRA Administrator Joseph Szabo, who summed up the June 9 summit thusly in a prepared statement: “I am pleased with the result of today’s meeting. It was a constructive discussion and we are fully committed to working with states and freight railroads to help them reach mutually beneficial agreements that promote the public interest and satisfy private-sector interests.”
So: The May 12 guidance isn’t set in stone, but just how much chiseling there’ll be to the new stakeholder agreement language wasn’t clear as of June 21.
“I’m cautiously optimistic that this will work itself out,” Hamberger said.
The working-itself-out process should begin soon; host railroads are under the impression that the new guidance will be issued some time this summer, Hamberger said. This time, the rail contingent will have an opportunity to offer feedback and suggestions, Hamberger and FRA spokesman Warren Flatau said. One initial host-road suggestion already may have fallen on deaf ears. The host roads have suggested using the 2009 agreed-upon guidance for those nearly completed agreements and apply the new guidance to the next round.
"I’m not sure that was seen as a good idea," Hamberger said.
Life in the slow lane
Suffice it to say, change of some kind is going to come, guidance-wise, although predicting it based on recent newspaper reports or blogs is risky business. Shock — that host railroads have a stake (not to mention a say) in all this — has been a commonly reported theme. Another: The implication that the stakeholder agreement guidance flap has derailed the high-speed revolution, even though it never could be anything but an evolution. States always have needed to come to terms with what freight railroad hosts will and won’t allow on their tracks or rights of way; it’s but one of several hurdles that pragmatic planners always have known they’d need to clear.
Regardless, there’s been at least one immediate consequence to the guidance flap. A few stakeholder agreements that were nearing completion now are on hold.
“Chalk it up to growing pains,” as one federal official put it. “There’s a lot of learning to be done here.”
— Pat Foran
Source: Progressive Railroading Daily News