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Alaska Railroad safety project faces state's new fiscal reality

  • Author: Nathaniel Herz
  • Updated: September 28, 2016
  • Published February 2, 2015

JUNEAU -- A federally imposed deadline for an Alaska Railroad safety upgrade is butting up against the state's dire fiscal circumstances, as legislators Monday signaled that they may not be able to supply the money the railroad says it needs to finish the project.

Railroad executives told a state Senate committee Monday that they needed nearly $20 million in this year's budget to complete a $160 million system called positive train control, which is designed to automatically prevent collisions and derailments.

State officials have already put $34 million toward the project over the last two years. But the railroad says it needs another $18 million to finish the job, or the Federal Railroad Administration could impose fines or other penalties. The most severe penalty is to shut down passenger service.

"I don't know what they'll do," said Eileen Reilly, vice president for systems and technology at the railroad. "But they'll have all the cards in their basket."

The railroad's proposal is scaled back from an earlier plan and would be matched with $34 million in bonds, but it's still not a welcome one for legislators, who are contemplating a roughly $5.5 billion spending plan for next year while expecting just $2.6 billion in revenue.

Gov. Bill Walker has proposed a bare-bones, $150 million capital budget that stripped out funding for several other longstanding state megaprojects and didn't include money for positive train control. The railroad's request, if granted, would amount to a more than 10 percent increase of the entire capital budget, and legislators sounded skeptical after Monday's hearing.

"We certainly don't have $18 million to give them this year," said Sen. Pete Kelly, R-Fairbanks, the committee's co-chair. But he added: "We'll figure something out."

The federal deadline stems from a 2008 law passed by Congress in an effort led by a pair of California senators, Dianne Feinstein and Barbara Boxer, after more than two dozen people were killed in a train crash in Los Angeles that year.

The concept of positive train control wasn't new at the time, but the systems still present huge costs because they rely on technology that was "barely in existence" when the law was passed, said Brian Tynan, the director of government relations at the American Public Transit Association, an industry advocacy group.

The total cost of installing positive train control across the country has been estimated to be more than $10 billion. But the federal government granted just $50 million to fund the effort, Tynen said, leaving railroads with big holes in their budgets.

"Folks do believe that installing positive train control nationally will provide significant safety benefits to railroad operations," Tynan said. "But the one thing that hasn't come through is the money."

At Monday's committee hearing, however, both legislators and railroad executives said that they weren't convinced that the safety system was the most efficient use of money.

"It's really hard to get to a justification for that investment," said Sen. Peter Micciche, R-Soldotna. "The federal government, though their intentions are valuable, doesn't always understand how to best reduce risk."

Railroad officials didn't dispute the point, though they stressed that they don't have the ability to shut the project down. One slide in their presentation to the committee came with the heading "No Way Out."

"If I had $160 million to spend on the infrastructure of the Alaska Railroad, I would not put it into positive train control," said CEO Bill O'Leary. "It's just that I don't have any choice in the matter."

In an interview afterward, Reilly, the vice president, said that the last railroad death that could have been prevented by positive train control came in 1977, though there was also a "near-miss" in 1995.

O'Leary said the money being spent on the safety system could otherwise be spent for deferred maintenance, including on bridges and roadbed.

"We are not putting in as much as we need to be putting in, at this point, to our basic infrastructure," he said.

Similar concerns have been expressed at a national level — one official in Pennsylvania said a rail line there had to shut down a rotting bridge because the money it was forced to spend on positive train control didn't leave enough for repairs.

A 2009 study by the Federal Railroad Administration that took into account the statistical value of a human life estimated that the cost of installing the safety systems was some 20 times higher than the expected benefits over a 20-year period.

The railroad administration, however, stands behind the program.

"Positive train control implementation is our highest priority," said spokesman Michael Booth. "Our goal is continuous safety improvement, and positive train control will help us meet that goal."

The administration does, however, acknowledge that many railroads will not meet the current installation deadline for the technology, which is at the end of this year. The deadline can only be extended by Congress, where some members are pushing for an extension, but Booth said the FRA has discretion when it comes to penalties.

"We expect all railroads that must implement positive train control to be making a good faith effort," he said.

The Alaska Railroad will not make this year's deadline, O'Leary, the CEO, said in Monday's hearing. But it still needs the state money to show that it's making the required "good faith effort," Reilly told the committee.

It's possible that just asking the Legislature for the money could suffice, said Matt Shuckerow, a spokesman for Rep. Don Young, who sits on the House Transportation Committee.

Young is pushing for legislation to grant an extension to the deadline. But a full exemption for Alaska, which some legislators alluded to Monday, isn't possible, Shuckerow added.

"In part because there are different railroad systems across the country that are feeling the exact same pain that we are," he said.

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