DENVER, Colo. -- Greetings from Denver, Colorado and the USA Rail 2010 Conference. I will be liveblogging from the event today and tomorrow, as a mix of passenger and freight rail professionals will discuss the trends and directions in our nation's railroad network. So check back often for reports on topics such as passenger and freight integration, capital projects, Denver's Union Station redevelopment project and other issues.
4:20 p.m. – Continuing on the public-private partnerships theme of earlier sessions, a trio of presenters shared their experiences with projects that included significant contributions from – and relationships between – the public and private sectors. Adam Nicolopoulos lead off and spoke again on raising capital for infrastructure projects. On high-speed projects specifically, he noted the wide scope, high risk, low profitability and long construction periods inherent in these efforts that contribute to the high capital needs. Viability of services improve after initial period (ie 10-12 years).
Next, Bill James of the RTD provided additional details on their Eagle P3 project with Denver Transit Partners. Stemmed from 2004 vote to approve FasTracks and the ability to combine several corridor efforts into a single project to maximize federal investment, improve efficiency and reduce project schedules. Key issues: where control and risk lie within the agreement.
Finally, Michael Barron, Chairman and CEO of the Las Vegas Railway Express, Inc., described his firm's plans to initiate intercity passenger rail service between Los Angeles and Las Vegas. He explained their communication with Amtrak, BNSF and Union Pacific, along with private investors, and the dynamics between the players in order to identify their respective interests.
3:10 p.m. – Building on the earlier discussion of the Denver Union Station redevelopment project, representatives from Denver's Regional Transportation District (RTD) described their multi-year, multi-corridor infrastructure expansion campaign, FasTracks. RTD Director Bill James and Senior Manager John Shonsey explained the genesis of the effort. Shonsey explained that prioritizing corridors failed to generate overall community support. Instead FasTracks is a series of one new light rail corridor, three commuter rail lines and one BRT route, along with new transit centers and the Union Station redevelopment. In terms of the rail projects, two of the commuter lines and the new Gold Line light rail corridor will operate in existing rail corridors but on new, dedicated passenger tracks. He also described their partnerships with the various railroads which own the rail lines, and the communications efforts needed to bring projects to fruition.
James described the various investment streams that support FasTracks, including the .4% local sales tax and their Eagle P3 (public-private partnership) agreement with Denver Transit Partners. Construction on the project will begin this fall and amount to a total project of $2.3 billion. He noted the lengthy process needed to devise the proposal selection process and its uniqueness to date in the passenger rail industry.
2:15 p.m. – A quartet of speakers discuss attracting public investment for rail projects, moderated by Adam Nicolopoulos of ADN Capital Ventures. Cheryl Jones representing the TIFIA loan program of the U.S. Department of Transportation highlighted the differences between DOT grant programs and TIFIA. Using revenues from tolls and tax increment financing options, among other mechanisms, projects pay back the initial loan investment to support projects when straight grant-based investment is limited. Notes that the Transbay Terminal in San Francisco represented the first time that only tax increment financing would be allowed as a financing stream. Garvey Bonds are also an option to leverage future grant monies. TIFIA offers repayment terms more favorable than those available on the general market, and interest rate is irrespective of credit quality. TIFIA doesn't just want to be repaid, but wants to see the project built.
Matt Ginsberg of Chambers, Conlon & Hartwell, LLC in Washington which presents railroad interests discussed the financing opportunities for rail as marked by a good deal of interest, but not much vision. He discussed reauthorization of SAFETEA-LU and the prospects for Congressional action, along with various revenue options to support investment provided by the legislation.
Rodney Massman from the Missouri Department of Transportation describes how various states support rail projects and Missouri's efforts to increase investment in its St. Louis - Kansas City corridor. Multimodal programs in state DOTs are hard to define and often can be blocked by restrictions on use of funds. Many states' rail programs were burdened by small staffs and limited resources. He also noted that although ARRA offered 100% federal investment for high-speed and intercity passenger projects, the subsequent annual appropriations that required 20% state investment received significantly more requests than dollars available, indicating a willingness by many states to partner with the federal government to support new projects.
12:18 p.m. – Project officials involved with the Denver Union Station redevelopment effort (see rendering below) present about the project and some of its unique elements. Elbra Wedgeworth, President of the Denver Union Station Project Authority provided some history of the 1894 facility and how the redevelopment project has moved forward. Meanwhile, Bill Mosher, Project Manager for the project discussed the gradual effort to return activity to the station and the FasTraks Program which will bring to Union Station commuter rail lines to Denver International Airport and three other routes, a new West corridor light rail line and a 22-bay regional bus facility. Moreover, the project will introduce over 3 million square feet of development space to the west of the train platforms and the creation of a public plaza. The project involves extensive investment and financing options, including a mix of federal, state and local support as well as private investment through the nearby development. The key to bringing the project closer to reality has been the blend of a regional transit vision, community place-making and the utilization of public-private partnerships.
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| Denver Union Station redevelopment |
Scott Witt of the Washington Department of Transportation discusses the continued growth of the Cascades service in the Pacific Northwest. ARRA grant has been a challenging process; MOU with BNSF recently agreed-to; will lead to advanced signilization and corridor reliability efforts. Multiple players in partnerships required is not easy, but essential. Need to find common interest. Terminology has been a huge issue (ie. "operationally complete"). Second train to Vancouver was very well received and exceeded expectations for ridership. FRA traditional regulatory/safety role is now transitioning into grant-making role, with a limited staff and resources, so it will take time for them to get up to speed.
Mark Bristol of Union Pacific mentions his railroad's work on the Illinois project and how similar projects will be dealt with in the future. Smaller projects in Missouri and California. FRA provisions in May were especially surprising and changed the risk profiles for the railroads. Being "on the hook" for project outcomes was a non-starter for Union Pacific and other railroads. Good relationships with state partners, but new federal regulations are difficult. Illinois situation is favorable because there are alternate routes between Chicago and St. Louis, so can take the risk of passenger capacity. Full vision is for a full 2-track railroad and certain sections of 3-track to support 18 total passenger trips each day at 110 mph. Also, geography is good for high-speed operation. Communication is key with partners, minimize contact through consultants. Also need realistic expectations to deal with railroad's motivations and challenges. Avoid premature cost estimates. Reimburse railroads to build capacity plans to improve buy-in, and take advantage of their institutional expertise. Not much constructive involvement with FRA.
Bruce Hillblom of Amtrak discusses how freight and passenger entities must work together to build a larger market for rail. "Transformational misconception on high-speed rail at 220 mph and tsunami of 110 mph trains to be forced, but markets evolve gradually, and it will be new services where none exist, increased frequency where limited and reliability improved everywhere." Amtrak respects franchise of freight railroads and partnership is key. A new set of economic challenges requires new partnerships to meet them. PRIIA and ARRA are just the first steps. If potential corridor already has Amtrak service, access Amtrak's expertise and build on existing relationships.
11:05 a.m. – A balanced panel of passenger and freight rail officials discuss how to improve cooperation between the two sectors. Mark Hinsdale from CSX mentions the challenge of maintaining the freight franchise and still provide the passenger benefit that seems to be growing in numbers and interest. Not much freight can take advantage of higher speeds. Only co-mingled operation at over 79 mph is on Hudson Line in New York. Opportunity of former New York Central, 4-track right-of-way between Schnectady and Buffalo. Luxury not available elsewhere, especially in the south. Difficult to mix 100 mph passenger trains and 40 mph freight trains without additional capacity added. European systems usually do not mix freight and passenger operations. CREATE is rare public-private partnership that has benefits for everyone to improve reliability and frequency, not speed.
10:27 a.m. – Clark Robertson from CSX Transportation notes the numerous regulatory and legislative challenges facing the freight industry: re-regulation, positive train control (PTC) and passenger rail interaction. Re-regulation should not backslide from gains made after Staggers. PTC: series of technologies to prevent human errors. PTC will create safer railroads, but only prevent 4% of all accidents (can't prevent track failures, equipment failures or grade crossing collisions). Well-intentioned, but unfunded $10 billion mandate with technology that's still being developed. Consequence is significant delay to capital investment. High-speed and passenger rail: CSX hosts more passenger trains than any other railroads. Federal funding does not yet match vision and forces freight to shoulder too much of the burden. Key elements for freight-passenger integration: safety (30ft separation and dedicated corridors over 90 mph), capacity, liability and compensation.
10:09 a.m. – Peter Gilberston, CEO of Anacostia & Pacific railroad consultants considers how the renaissance of the freight rail industry can continue. Renaissance embodied by Warren Buffet's acquisition of BNSF. Staggers Act was a massive transformation of the industry (see below chart). Productivity, volume, revenue and rates all significantly improved. Prior to Staggers, many industry leaders did not have confidence in their own industry. New leaders, some from outside, changed the culture. Similar confidence is now growing for passenger rail.
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| Source: Association of American Railroads |
9:41 a.m. – John Gray of the Association of American Railroads talks about putting large numbers of passenger trains on freight railroads. Freight rail industry has maintained capital spending despite economic recession, and increasingly on infrastructure rather than equipment. New passenger service must compete with freight growth. "High-speed is up to a lot of interpretation as to what it means, but generally it's lines at – or moving towards – 110 mph." Initial agreements for new projects will require a lot of individuality for each project. Issues: passenger rail should compliment, not conflict with freight; liability protection; full compensation (not Amtrak incremental cost model); no forced access; some uses not compatible with freight infrastructure (especially very high speed). Also, people access to rights-of-way and station facilities significant concern. How to improve: look at light density lines; train management conflicts and maintenance/safety enhancements; separate facilities above 110 mph; de-bottleneck chokepoints; upgrade terminal access routes; and increasing average overall speeds, not top speeds. "Frequency is one of the most important aspects in acceptance of passenger rail, but frequency comes at the expense of capacity and capacity is expensive to build and maintain."
9:26 a.m. – Judy Mitchell, Director of Strategic Initiatives for Canadian Pacific, speaks of her company's efforts involving passenger rail. Cites TEA-21 as beginning of progress for reforming rail network; led to projects like the Hiawatha light rail and Northstar commuter rail in Minneapolis. "Canadian Pacific has worked closely with Wisconsin DOT to advance projects." Freight mandate is to improve our operations; public projects can learn lessons from freight sector on how to transition to a vibrant industry. Have to make difficult investment choices. "A long-term plan for the passenger network is crucial." Intermodal connections can be modeled off freight multi-modal facilities developed over the last several decades. How to improve the network: Make safety a priority; Fill trains you have and then make them longer; Increase speed, reduce dwell and idle time, and ensure reliable scheduling. "Fast, predictable service is important for customer satisfaction, whether they're passengers or freight."
9:10 a.m. – A trio of public, private and association speakers discuss how to bring North America's passenger rail network into the 21st Century. Donna Brown, the Passenger Rail Planning Manager of the Wisconsin Dept. of Transportation focuses on the sustainability of the network. "Transit or passenger rail should not have to justify their existence more than any other mode...to provide benefits to all citizens of our state." Similar doubts about Interstate Highway System at its inception as high-speed and intercity rail today. Milwaukee - Chicago Hiawatha Service indicates model for success for Milwaukee - Madison project. New service will be successful because residents will consider their options. Goal is to improve quality of life and to improve mobility options, not to make a profit. ARRA grant will buy equipment, upgrade Canadian Pacific route and build stations. Opportunity to return passenger rail to Madison. "We were ready to produce a shovel-ready high-speed rail at 110 mph by 2016." Working with Canadian Pacific to identify needs, improve signaling and communications and share aspects of training programs. Focusing on a Wisconsin workforce address immediate need for construction and long-term maintenance program.
8:50 a.m. – Former FRA Administrator Gil Garmichael sets the state with an overview of the future of the U.S. transportation network and how we got here, and the opportunities of not just a national rail plan, but a North American rail plan. Also mentions how airports should become key centers for intermodalism, much as discussed in RAIL Magazine #24. "We should double or triple track rail lines with full grade separation. We should electrify as much as possible, as well."
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