(The following story by John Boyd appeared on the Journal of Commerce website on March 17, 2010.)
WASHINGTON, D.C. — The Chlorine Institute, fearing freight railroads could pass along potentially large costs for new crash-avoidance technology to shippers, is asking the Federal Railroad Administration to fix what it calls a “faulty cost-benefit analysis” of the systems.
The FRA, in its Jan. 14 regulation concerning how carriers must implement positive train control systems by the end of 2015, included analysis that railroad executives say shows the high costs outweigh the benefits of the technology.
Congress, in a 2008 rail safety law, ordered the use of PTC — integrated locomotive tracking and remote override gear — for passenger trains, freight rail lines that interface with passenger operations and for carriers hauling toxic inhalation hazard chemicals that can form deadly clouds when released into the air.
While the FRA said its own analysis did not try to calculate likely productivity benefits the railroads would harvest over time from the new equipment it deploys, carrier representatives have since said the agency’s study shows PTC is not worth the investment. So they have said they will ask Congress to help cover the cost.
Shippers also hear another warning from rail executives: “Railroads have already announced that they will attempt to recover their investment in PTC from those shippers offering TIH materials for rail movement,” Chlorine Institute President Arthur Dungan wrote in a filing to the FRA.
The group said the FRA rule “drastically underestimates the rule’s benefits,” as counted by a separate cost-benefit study the institute commissioned. The chlorine lobby said the FRA’s analysis “could foster a situation that would allow railroads to impose on (TIH) shippers . . . an unfairly large share of the costs of applying PTC technology.”
The group specifically asked the FRA to re-issue its PTC rule “with a corrected cost-benefit analysis” that counts what it says are billions of dollars in savings from such things as fuel burn, better train utilization, reduced costs for all rail shippers due to more reliable transit times, and a related reduction in highway accidents as more efficient freight trains draw more freight away from trucks.
“To arbitrarily exclude vast sums on the benefit side of the cost/benefit analysis is to fatally prejudice the result in a manner that is wholly unacceptable,” the institute said in its petition.