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Report to the Chairman, Committee on Banking, Housing and Urban 
Affairs, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

April 2006: 

Commuter Rail: 

Commuter Rail Issues Should Be Considered in Debate over Amtrak: 

GAO-06-470: 

GAO Highlights: 

Highlights of GAO-06-470, a report to the Chairman, Senate Committee on 
Banking, Housing and Urban Affairs. 

Why GAO Did This Study: 

Commuter rail agencies provide mobility to millions of people across 
the country, often using Amtrak infrastructure and services. Given 
these interactions, an abrupt Amtrak cessation could have a significant 
impact on commuter rail operations. Amtrak’s chronic financial problems 
and recent budget proposals make such a cessation a possibility. GAO 
was asked to examine (1) the extent to which commuter rail agencies 
rely on Amtrak for access to infrastructure and services, (2) issues 
that commuter rail agencies would face if Amtrak abruptly ceased to 
provide them with services and infrastructure access, and (3) the 
options available to commuter rail agencies should Amtrak abruptly 
cease to provide them services and infrastructure access. 

What GAO Found: 

Most commuter rail agencies rely on the National Railroad Passenger 
Corporation (Amtrak) for some level of access to infrastructure and 
services, particularly those that operate over Amtrak-owned portions of 
the Northeast Corridor (NEC). This reliance includes the use of key 
stations, access to the NEC, and equipment maintenance services (see 
figure below). Commuter rail agencies typically pay Amtrak for access 
to infrastructure and services, although their financial relationships 
with Amtrak vary and often lack clarity. Several issues contribute to 
the lack of clarity, including limitations in Amtrak’s accounting 
practices, the lack of transparency in Amtrak’s financial reports, and 
the structure of the financial arrangements between Amtrak and commuter 
rail agencies. This makes it difficult to fully understand the 
financial relationship between these agencies and Amtrak and whether 
they are contributing their fair share for improvements and maintenance 
of Amtrak’s infrastructure. Also, this lack of clarity hinders Amtrak 
management’s ability to make fully informed decisions about its 
commuter rail line-of-business. 

An abrupt Amtrak cessation would raise two critical operational issues 
for commuter rail agencies that rely on Amtrak. Specifically, agencies 
would face the potential loss of skilled Amtrak labor and access to 
Amtrak-owned infrastructure, which could make it difficult for some to 
avoid severe service disruptions. For example, agencies both on and off 
the NEC could not continue to fully operate their services without 
continued access to Amtrak-owned track and other facilities. 

Most commuter rail agencies that rely on Amtrak have identified ways to 
mitigate service disruptions in an abrupt Amtrak cessation. However, 
these options are largely dependent on retaining Amtrak employees and 
access to Amtrak’s infrastructure. Federal agencies could provide short-
term options to mitigate potential impacts on commuter rail agencies 
through their authority to order continued commuter service (called 
“directed service”), although federal officials stated that service 
disruptions are likely and the cost estimates are unreliable. Private 
transportation companies could provide options for commuter rail 
agencies in the long term; however, other issues would need to be 
addressed to ensure a smooth transition. 

Figure: Types of Services and Infrastructure Access Provided by Amtrak 
to Commuter Rail Agencies: 

[See PDF for Image] 

[End of Figure] 

What GAO Recommends: 

GAO recommends that the Department of Transportation (DOT) further 
refine cost estimates of commuter rail directed-service scenarios. GAO 
also recommends that Amtrak improve its accounting practices as well as 
its financial reports. DOT generally agreed with the report’s findings 
and the intention of the recommendation, but expressed concern about 
refining the cost estimate at this time because of data and resource 
limitations. Amtrak generally agreed with the report’s findings, 
conclusions, and recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-470]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact JayEtta Z. Hecker at 
(202) 512-2834 or heckerj@gao.gov. 

[End of Section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Most Commuter Rail Agencies Rely to Some Extent on Amtrak for Access to 
Infrastructure and Services: 

Abrupt Amtrak Cessation Could Raise Critical Issues for Some Commuter 
Rail Agencies: 

Some Options Are Available to Commuter Rail Agencies in the Event of an 
Abrupt Amtrak Cessation, but Service Disruptions and Financial 
Difficulties Would Be Likely: 

Conclusions: 

Recommendations: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Commuter Rail Agency Use of Amtrak Services and 
Infrastructure: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Key Aspects of Recent Amtrak Reform Proposals and Legislation 
That Could Affect Commuter Rail Agencies: 

Table 2: Percent of Commuter Rail Passengers Served by Railroad Service 
Providers: 

Table 3: Commuter Rail Agency Reliance on Amtrak Services: 

Table 4: Names and Locations of Commuter Rail Agencies, State 
Departments of Transportation, Class I Freight Railroads, and Private 
Non-Railroad Companies Interviewed: 

Table 5: List of Labor Unions: 

Table 6: Commuter Rail Agency Use of Amtrak Services and 
Infrastructure: 

Figures: 

Figure 1: NEC Ownership and Operations Map: 

Figure 2: Overview of Commuter Rail Agency Reliance on Amtrak for 
Infrastructure and Services: 

Figure 3: Amtrak's Key Facilities for Selected Commuter Rail Agencies: 

Figure 4: Sound Transit Trains in Amtrak's Holgate Yard, Seattle, WA: 

Abbreviations: 

AAR: Association of American Railroads: 
Amtrak: National Railroad Passenger Corporation: 
APTA: American Public Transportation Association: 
ASLRRA: American Short Line and Regional Railroad Association: 
CETC: Centralized Electrification and Traffic Control: 
CSX: CSX Transportation: 
DELDOT: Delaware Department of Transportation: 
DOT: Department of Transportation: 
FRA: Federal Railroad Administration: 
FTA: Federal Transit Administration: 
ICC: Interstate Commerce Commission: 
LIRR: Long Island Rail Road: 
MARC: Maryland Rail Commuter Service: 
MBCR: Massachusetts Bay Commuter Railroad Company: 
MBTA: Massachusetts Bay Transportation Authority: 
NEC: Northeast Corridor: 
NICTD: Northern Indiana Commuter Transportation District: 
NJT: New Jersey Transit: 
PENNDOT: Pennsylvania Department of Transportation: 
RFP: request for proposal: 
SEPTA: Southeastern Pennsylvania Transportation Authority: 
SLE: Shore Line East: 
STB: Surface Transportation Board: 
TRE: Trinity Railway Express: 
VRE: Virginia Railway Express: 

United States Government Accountability Office: 

Washington, DC 20548: 

April 21, 2006: 

[See PDF for image] 

[End of figure] 

The Honorable Richard Shelby Chairman, Committee on Banking, Housing 
and Urban Affairs United States Senate: 

Dear Mr. Chairman: 

Commuter rail is an important component of regional transportation 
systems throughout the country, accounting for over 400 million 
passenger trips in 2004. While most of these trips occurred in the 
densely populated Northeast, commuter rail services are now provided in 
eight urban areas outside of the Northeast. A total of 18 commuter rail 
agencies now exist, and seven more commuter rail systems are in 
planning or design stages throughout the country according to the 
Federal Transit Administration (FTA). Regardless of location, most 
commuter rail agencies interact with the National Railroad Passenger 
Corporation (Amtrak) for access to infrastructure or services, such as 
train crews and equipment maintenance. Given these interactions, there 
is concern that if Amtrak abruptly ceased to provide services and 
infrastructure, commuter rail operations could be adversely affected. 
Amtrak's chronic financial problems and recent budget proposals make 
such a cessation a possibility. 

Although commuter rail agencies are typically owned and operated by 
state and local governments, there are several federal agencies 
involved in rail transportation and in specific aspects of commuter 
rail service. The Surface Transportation Board (STB) is responsible for 
the economic regulation of freight railroads and also has the authority 
to order other rail carriers to provide infrastructure and service(s) 
to commuter rail agencies (called "directed service") if Amtrak were to 
shut down. The Federal Railroad Administration (FRA), which is 
primarily focused on ensuring the safe operation of railroads, 
including commuter rail, would provide funding to STB to direct 
commuter rail service if ordered by STB. FTA helps fund the planning 
and development of commuter rail projects. 

In response to your request, we examined (1) the extent to which 
commuter rail agencies rely on Amtrak for access to infrastructure and 
services, (2) issues that commuter rail agencies would face if Amtrak 
abruptly ceased to provide them with services and access to 
infrastructure, and (3) the options available to commuter rail agencies 
should Amtrak abruptly cease to provide them services and access to 
infrastructure. To address these objectives, we interviewed officials 
at all 18 existing commuter rail agencies and two of the seven proposed 
commuter rail services. We also visited seven commuter rail agencies 
and one proposed commuter rail service. During these site visits, we 
interviewed senior-level management and toured operation, dispatching, 
and equipment maintenance facilities. We interviewed officials at STB, 
FRA, FTA, and Amtrak, as well as representatives from the largest Class 
I railroads,[Footnote 1] 10 of Amtrak's 15 railroad labor unions, all 
of the private transportation companies that currently operate commuter 
rail service in the U.S., and industry associations. Additionally, we 
reviewed federal laws, internal documents from the STB, FRA, and 
Amtrak, and contracts between Amtrak and various commuter rail 
agencies. 

Our report focuses on the impact of an abrupt Amtrak cessation on 
commuter rail operations. For example, if policy makers acted on 
legislative proposals that end or substantially reduce federal funding, 
an Amtrak bankruptcy or shutdown could quickly follow. However, 
multiple bills to reform intercity passenger rail have been proposed in 
recent years--and these bills, if enacted, could result in outcomes 
other than an abrupt Amtrak cessation. We did not examine how other 
potential outcomes would impact commuter rail operations. We conducted 
our work from July 2005 through April 2006 in accordance with generally 
accepted government auditing standards. (See app. I for a more detailed 
discussion of the report's scope and methodology.) 

Results in Brief: 

Most existing 18 commuter rail agencies rely on Amtrak for some level 
of access to infrastructure and services. Although the level of 
reliance varies among these commuter rail agencies, access to Amtrak's 
infrastructure or Amtrak services is critical to the operations of many 
commuter rail agencies. For example, seven of the nine commuter rail 
agencies in the Northeast operate over Amtrak-owned portions of the 
Northeast Corridor (NEC). According to officials from these agencies, 
access to Amtrak's infrastructure is essential to their services. 
Commuter rail agencies typically pay Amtrak for access to 
infrastructure and providing services, although the financial 
relationships between commuter rail agencies and Amtrak vary widely and 
often lack clarity. Several issues contribute to the lack of clarity, 
including limitations in Amtrak's accounting practices, the lack of 
transparency in Amtrak's financial reports, and the structure of the 
financial arrangements between Amtrak and commuter rail agencies. The 
lack of clarity makes it difficult to determine the full extent of the 
financial relationship between commuter rail agencies and Amtrak and 
whether commuter rail agencies are contributing their fair share to the 
cost of capital improvements to Amtrak-owned infrastructure. Amtrak's 
fiscal year 2006 appropriation directs the Secretary of Transportation 
to assess a fee on commuter rail agencies that use the NEC. This fee is 
designed to compensate Amtrak for maintenance and capital expenditures 
resulting from commuter rail agencies' use of the NEC and has important 
budgetary implications for some commuter rail agencies. 

An abrupt Amtrak cessation could raise two critical operational issues 
for commuter rail agencies that rely on Amtrak services and 
infrastructure. Specifically, commuter rail agencies would be 
confronted with the potential loss of skilled Amtrak labor and access 
to Amtrak-owned infrastructure. For example, some commuter rail 
agencies could not take over train operations or dispatching services 
provided by Amtrak employees because they do not have the workforce 
capabilities or expertise to do so in a short time period. 
Additionally, some commuter rail agencies on the NEC and in other parts 
of the country could not continue to fully operate service--or would 
cease service--without the ability to access Amtrak-owned tracks and 
other key facilities. Commuter rail agencies also identified other 
issues they would face if Amtrak abruptly ceases to provide services 
and infrastructure, such as the loss of revenue from Amtrak for the 
services or infrastructure that a few commuter rail agencies provide to 
Amtrak. 

Most commuter rail agencies that rely on Amtrak services and 
infrastructure have identified options to mitigate service disruptions 
if Amtrak abruptly ceased to provide services and infrastructure 
access. However, these options are largely dependent on the ability to 
retain Amtrak employees and access Amtrak-owned infrastructure, 
particularly in the short term. STB could provide short-term options to 
mitigate potential impacts on commuter rail agencies in the event of an 
abrupt Amtrak cessation by using their directed-service authority to 
gain access to Amtrak's infrastructure and equipment, and, with the 
FRA, continue to fund affected commuter operations. Although directed 
service could be used as a short-term solution, federal officials 
stated that commuter rail service disruptions are likely under any 
directed-service scenario. Further, the costs of providing directed 
service are unknown, and the logistics and time required to implement 
directed services are unknown because STB has never issued directed- 
service orders for passenger rail. According to FRA officials, the 
major concern in a directed service scenario is whether former Amtrak 
employees will agree to work for the new provider. A longer-term 
solution in the event of an abrupt Amtrak cessation is for commuter 
rail agencies to contract with private transportation companies for the 
services currently provided by Amtrak. Private transportation companies 
with whom we spoke expressed interest in providing the services that 
Amtrak currently provides to commuter rail agencies. However, 
transitioning from Amtrak to private transportation companies would 
take months, not weeks. Moreover, labor and liability issues would need 
to be addressed to ensure a smooth transition. 

To help ensure that policy makers have the needed information to make 
fully informed decisions, we recommend that the Department of 
Transportation (DOT), in consultation with STB and commuter rail 
agencies, further refine cost estimates of directed-service scenarios 
and that Amtrak improve its accounting practices--and financial 
reporting--to clearly show the revenues and costs of providing services 
and infrastructure access to commuter rail agencies. We provided draft 
copies of this report to DOT and Amtrak for their review and comment. 
DOT officials generally agreed with the draft report's findings and the 
intention of the recommendation. However, FRA officials expressed 
concerns about limitations in the data required to refine the estimates 
as well as limited staff resources to devote to such an effort. 
Consequently, FRA officials indicated their preference to focus on 
other priorities. We recognize that FRA, like other federal agencies, 
has resource constraints and must focus those resources on certain 
priorities. However, given previous and current debate over the future 
of Amtrak, we believe providing policy makers with accurate information 
as to the implications of directed service--including the costs of such 
services--is a worthwhile investment of agency resources and deserves 
some level of attention. Further, we believe that refinements to the 
cost estimates could be made using existing information from Amtrak and 
commuter rail agencies. DOT officials acknowledged that the current 
estimates are inaccurate, and most likely significantly underestimate 
the true costs of directed service. Therefore, any refinements would be 
a step in the right direction in providing better information to policy 
makers. Amtrak generally agreed with the report's findings, 
conclusions, and recommendations. 

Background: 

Commuter rail is a type of public transit that is characterized by 
passenger trains operating on railroad tracks and providing regional 
service (e.g., between a central city and adjacent suburbs). Commuter 
rail systems are traditionally associated with older industrial cities, 
such as Boston, New York City, Philadelphia, and Chicago. However, over 
the past decade, commuter rail systems have been inaugurated in such 
cities as Dallas and Seattle, and seven new systems are in various 
stages of planning in cities across the country. Currently, there are 
18 commuter rail agencies throughout the country, and, in 2004, these 
agencies provided an average of 1.1 million passenger trips each 
weekday. Advocates of commuter rail contend that it provides a number 
of public benefits, including reductions in highway congestion, 
pollution, and energy dependence. Moreover, commuter rail service can 
operate on existing railroad rights-of-way,[Footnote 2] which 
eliminates the time and significant expense associated with 
constructing new infrastructure. 

Most commuter rail service uses rights-of-way (to run over tracks) that 
are owned by Amtrak, freight railroads, or are publicly owned. Amtrak 
owns most of the NEC between Boston, MA, and Washington, D.C., but 
there are several portions of the NEC owned by either commuter rail 
agencies or states. The NEC is also the busiest rail corridor in the 
U.S. For example, on an average weekday, over 1,800 commuter rail and 
Amtrak trains operate on the NEC.[Footnote 3] Figure 1 shows the 
ownership of--and Amtrak and commuter rail operations on--the NEC. 
Commuter rail agencies located outside of the NEC for the most part use 
rights-of-way owned by freight railroads. 

Figure 1: NEC Ownership and Operations Map: 

[See PDF for image] 

Note: Only service on the main portion of the NEC between Washington, 
D.C., and Boston is shown. This represents commuter rail agencies' 
primary operating routes on the NEC and does not include smaller 
segments of their service operating over the NEC. For example, New 
Jersey Transit also operates over 7 miles of the NEC between Shore 
Interlocking and 30TH Street Station in Philadelphia, and VRE operates 
over a small portion of the NEC into Washington Union Station. Amtrak's 
right-of-way from Harrisburg, PA, to Philadelphia, over which PENNDOT 
service operates, is not shown on this graphic. SEPTA also operates 
service over this portion of Amtrak's right-of-way between Philadelphia 
and Parkesburg, Pennsylvania. 

[End of figure] 

Three federal agencies--FRA, STB, and FTA--are responsible for 
different aspects of federal rail transportation policy, including 
freight, intercity passenger, and commuter rail service. FRA 
administers and enforces the federal laws and related regulations that 
are designed to promote safety on railroads, such as track maintenance, 
inspection standards, equipment standards, and operating 
practices.[Footnote 4] Commuter rail agencies are subject to FRA 
regulations. FRA provides funding for Amtrak's operating and capital 
improvements, and since fiscal year 2003 has administered these funds 
through grants. STB is responsible for the economic regulation of 
freight railroads, which encompasses those instances when there is an 
impasse in negotiations over Amtrak's access to freight rail 
facilities. STB also has authority to issue directed (or emergency) 
service orders to continue rail service if a rail carrier is unable to 
provide service to its customers.[Footnote 5] In 2004, this authority 
was amended to authorize such orders in the event that there is a 
failure of freight or commuter rail service due to a cessation of 
service by Amtrak. Directed-commuter-service orders could enable one or 
more operators to gain access to Amtrak's facilities and equipment. In 
addition, directed-service orders could provide these operators the 
ability to offer employment to former Amtrak personnel for the 
provision of essential commuter service.[Footnote 6] The Secretary of 
Transportation, through the FRA, would be the funding agency for any 
STB directed-service order for commuter rail operations.[Footnote 7] 
According to STB staff, while the STB (and its predecessor agency, the 
Interstate Commerce Commission) have directed freight service in the 
past when freight railroads have experienced service failures, STB has 
not issued any directed-service orders explicitly for passenger rail 
service. Unlike FRA and STB, FTA is not principally a regulatory 
agency. FTA is the primary federal financial resource for supporting 
locally planned, implemented, and operated transit capital investments. 
As a form of public transit, commuter rail projects are eligible for 
FTA funding. 

Amtrak has struggled to become financially solvent since its founding 
in 1971, receiving over $29 billion in federal funds for operational 
and capital improvements. Despite federal subsidies, Amtrak's financial 
situation reached critical points when it had to mortgage Pennsylvania 
Station in New York City in 2001 and obtain an emergency loan of $100 
million in 2002 to meet expenses and continue operations. Although 
Amtrak has made progress in containing its operating expenses, its 
operating losses have increased to over $1 billion a year.[Footnote 8] 
In light of Amtrak's continuing financial difficulties, different 
Amtrak reform proposals and legislation have been introduced, some of 
which could impact commuter rail agencies. For example, the 
administration's fiscal year 2006 budget proposal for Amtrak did not 
include any federal funds for Amtrak, however it did include $360 
million to maintain commuter and freight service operated by 
Amtrak.[Footnote 9] Other proposals and legislation included, among 
other things, curtailing money-losing operations and transferring 
Amtrak assets to other companies or directly to the federal government. 
(See table 1.) 

Commuter Railroads: 

Long Island Rail Road (LIRR) Maryland Rail Commuter Service (MARC) 
Massachusetts Bay Transportation Authority (MBTA) Metro North Commuter 
Railroad (MNCR) New Jersey Transit (NJT) Connecticut Department of 
Transportation's Shore Line East service (SLE) Southeastern 
Pennsylvania Transportation Authority (SEPTA) Virginia Railway Express 
(VRE): 

Departments of Transportation: 

Connecticut Department of Transportation (CDOT) Pennsylvania Department 
of Transportation (PENNDOT): 

Table 1: Key Aspects of Recent Amtrak Reform Proposals and Legislation 
That Could Affect Commuter Rail Agencies: 

Key aspects of reform proposals: Zero funding; 
Description of proposed change: * No operating or capital federal 
funding for Amtrak; * $360 million provided to STB to fund directed 
commuter and freight service. 

Key aspects of reform proposals: Infrastructure separation; 
Description of proposed change: * Separate Amtrak operations from 
infrastructure into different companies; * Separate Amtrak 
infrastructure from operations by creating a subsidiary company under 
Amtrak's Board of Directors. 

Key aspects of reform proposals: NEC commuter rail fee; 
Description of proposed change: * Fee for maintenance and capital costs 
assessed on commuter rail agencies that use the NEC. 

Key aspects of reform proposals: Multi-state NEC compact; 
Description of proposed change: * Passenger rail operations on the NEC 
would be transferred to multi-state compact of Northeastern states. 

Key aspects of reform proposals: DOT ownership of NEC; 
Description of proposed change: * Ownership of NEC would be transferred 
to the Secretary of Transportation, who, in turn, would competitively 
procure contractors for maintenance and operations of NEC. 

Key aspects of reform proposals: Cost-reduction proposals; 
Description of proposed change: * Would require Amtrak to reduce losses 
on sleeper car, and food and beverage service. 

Key aspects of reform proposals: Accounting reforms; 
Description of proposed change: * Would require Amtrak to acquire a new 
accounting system that would enable Amtrak to assign revenue and 
expenses to each of its lines of business and to distinguish 
infrastructure revenue and expenses from its operational revenue and 
expenses. 

Source: GAO analysis of U.S. House and Senate bills from the first 
session of the 109TH Congress. 

[End of table] 

Most Commuter Rail Agencies Rely to Some Extent on Amtrak for Access to 
Infrastructure and Services: 

Most commuter rail agencies rely on Amtrak to some extent for access to 
infrastructure and services. This dependence can range from heavy use 
of Amtrak infrastructure and services to limited reliance on Amtrak 
infrastructure and services. (See fig. 2.) Having access to Amtrak- 
owned infrastructure, rights-of-way, stations, platforms, equipment 
maintenance facilities, and storage yards is critical to many commuter 
rail agencies' operations. The reliance on Amtrak for infrastructure 
and services by many commuter rail agencies has led to a variety of 
financial relationships between commuter rail agencies and Amtrak. In 
general, these financial relationships are complicated and lack 
clarity. This lack of clarity makes it difficult to determine if 
commuter rail agencies are paying their fair share for access to 
infrastructure and services. Amtrak's fiscal year 2006 appropriation 
directs the Secretary of Transportation to levy a fee on commuter rail 
agencies that use the NEC as compensation for maintenance and capital 
expenditures resulting from their use of the NEC. This fee has 
important budgetary, and other, implications for commuter rail 
agencies. 

Figure 2: Overview of Commuter Rail Agency Reliance on Amtrak for 
Infrastructure and Services: 

[See PDF for image] 
Note: This figure indicates whether a commuter rail agency relies on 
Amtrak for services or access to infrastructure. Darkened figures do 
not necessarily mean that Amtrak is the primary provider of a service; 
rather, it means that Amtrak provides some level of service or access 
to infrastructure. See appendix II for detailed data on the extent to 
which each commuter rail agency relies on Amtrak. 

[End of figure] 

Access to Amtrak-owned Infrastructure Is Critical to Many Commuter Rail 
Agencies' Operations: 

Most existing commuter rail agencies (12 of 18) rely on Amtrak-owned or 
Amtrak-operated infrastructure, such as stations or platforms; rights- 
of-way; and maintenance facilities. Amtrak owns most of the NEC, which 
runs from Washington, D.C., to Boston. Of the nine commuter rail 
agencies in the Northeast, eight agencies--including the Long Island 
Rail Road (LIRR) and New Jersey Transit (NJT), two of the largest 
commuter rail agencies in the country--operate over Amtrak-owned 
infrastructure.[Footnote 10] Seven of these nine commuter rail agencies 
operate on the NEC between Washington, D.C., and Boston.[Footnote 11] 
On an average weekday, these seven commuter rail agencies run 
approximately 1,630 trains on the NEC, which represents over 90 percent 
of all passenger train traffic on the NEC. According to officials from 
the commuter rail agencies that operate over Amtrak-owned portions of 
the NEC, access to this infrastructure is essential for their services. 
In addition to providing access to the Amtrak-owned portions of the 
NEC, Amtrak also maintains its rights-of-way and dispatches all trains 
on its rights-of-way, including commuter rail traffic; these are 
critical services for commuter rail agencies using the NEC. For 
example, from its centralized dispatching center in Boston, Amtrak 
dispatches all of the Massachusetts Bay Transportation Authority's 
(MBTA) trains on one of its lines and provides initial dispatching for 
two-thirds of all other MBTA trains, as well as its own intercity 
trains. Amtrak also distributes power to commuter rail agencies that 
use electrically powered trains on the NEC. These trains, which may be 
hauled by locomotives or made up of self-propelled, multiple-unit cars, 
require electric power (called "traction power") delivered directly 
from overhead power lines.[Footnote 12] 

In addition to owning most of the track comprising the NEC, Amtrak also 
owns or controls a number of key facilities both on and off the NEC, 
many of which are critical to commuter rail service. (See fig. 3.) 

Figure 3: Amtrak's Key Facilities for Selected Commuter Rail Agencies: 

[See PDF for image] 

[End of figure] 

These facilities include many of the busiest passenger stations in the 
country, such as Pennsylvania Station in New York City and Chicago 
Union Station, as well as the platforms and train storage facilities 
outside of Washington Union Station. For example, according to LIRR 
officials, LIRR and NJT trains account for 87.4 percent of the trains 
coming into Pennsylvania Station in New York City, while Amtrak 
intercity trains represent the remaining 12.6 percent.[Footnote 13] 
Amtrak also owns or controls a number of equipment maintenance and 
storage yards that are strategically located near key urban or downtown 
stations. For example, some commuter locomotives and coaches used by 
Virginia Railway Express (VRE) and Maryland Transit Administration, 
which owns Maryland Rail Commuter Service (MARC), are maintained at 
Amtrak's Ivy City Yard, just north of Washington Union Station. These 
trains are also stored in Washington, D.C., during midday so that they 
can make evening rush hour trips. This allows VRE and MARC to avoid 
running trains back out to storage yards in outlying areas during the 
middle of the day--a practice officials from both agencies said would 
make the service too costly to provide. Similarly, Sound Transit in 
Seattle relies on Amtrak to maintain and store its trains during the 
midday at Holgate Yard, an Amtrak maintenance facility near Sound 
Transit's King Street Station in downtown Seattle, which serves both 
Sound Transit and Amtrak trains. (See fig. 4 for a picture of Holgate 
Yard.) According to Sound Transit officials, the use of Amtrak's 
facility saved Sound Transit the one-time cost of building its own 
multi-million dollar maintenance facility. 

Figure 4: Sound Transit Trains in Amtrak's Holgate Yard, Seattle, WA: 

[See PDF for image] 

[End of figure] 

Many Commuter Railroads Rely on Amtrak for Services, with Reliance on 
Amtrak Greater along the NEC: 

Out of the 18 existing commuter rail agencies, 14 rely on Amtrak for 
some level and type of service--including the operation of commuter 
trains, maintenance of equipment (i.e., locomotives and train cars), 
maintenance-of-way (i.e., track and related infrastructure), train 
dispatching, and other services such as ticketing and security. 
Although most passengers ride commuter rail lines that use their own in-
house employees for services critical to the operation of their 
service, Amtrak is a key player when commuter rail agencies do contract 
with other providers for services, compared to other individual 
companies (see table 2). 

Table 2: Percent of Commuter Rail Passengers Served by Railroad Service 
Providers: 

Commuter rail agency in-house employees; 
Dispatching: 51.2%; 
Maintenance of equipment: 71.5%; 
Maintenance-of-way: 64.4%; 
Train operations: 74.7%. 

Amtrak; 
Dispatching: 30.4%; 
Maintenance of equipment: 8.2%; 
Maintenance-of-way: 11.7%; 
Train operations: 4.7%. 

Freight; 
Dispatching: 17.9%; 
Maintenance of equipment: 7.2%; 
Maintenance-of-way: 14.1%; 
Train operations: 8.1%. 

BNSF Railway; 
Dispatching: 1.7%; 
Maintenance of equipment: 1.7%; 
Maintenance-of-way: 1.6%; 
Train operations: 2.1%. 

Union Pacific Railroad; 
Dispatching: 6.0%; 
Maintenance of equipment: 5.2%; 
Maintenance-of-way: 6.3%; 
Train operations: 5.2%. 

Other freights; 
Dispatching: 10.1%; 
Maintenance of equipment: 0.3%; 
Maintenance-of-way: 6.2%; 
Train operations: 0.8%. 

Private operators; 
Dispatching: 0.6%; 
Maintenance of equipment: 13.2%; 
Maintenance-of-way: 10.0%; 
Train operations: 12.6%. 

Herzog; 
Dispatching: 0.6%; 
Maintenance of equipment: 1.6%; 
Maintenance- of-way: 2.8%; 
Train operations: 1.3%. 

Massachusetts Bay Commuter Railroad; 
Dispatching: N/A; 
Maintenance of equipment: 8.9%; 
Maintenance-of-way: 7.2%; 
Train operations: 8.9%. 

Other; 
Dispatching: N/A; 
Maintenance of equipment: 2.7%; 
Maintenance- of-way: N/A; 
Train operations: 2.4%. 

Total; 
Dispatching: 100.1% [A]; 
Maintenance of equipment: 100.1%; 
Maintenance-of-way: 100.2%; 
Train operations: 100.1%. 

Source: GAO analysis of commuter rail agency information. 

Note: This table estimates the percentage of services provided by the 
various railroad service providers to commuter rail agencies. In order 
to account for the relative size of the commuter rail agencies, we 
weighted the percentages in our calculations. Specifically, we used the 
total number of passengers riding each commuter rail agency during July 
- September 2005 as a rough proxy for the size and service requirements 
of each agency. Totals may not add to 100% due to rounding. 

[A] Data on dispatching was not available for MBTA, and MBTA was 
excluded from the dispatching column. MBTA data was available, and was 
included in the other service categories. 

[End of table] 

However, the extent to which commuter rail agencies rely on Amtrak for 
services varies. In general, those commuter rail agencies that use 
Amtrak-owned segments of the NEC have a greater level of reliance on 
Amtrak for services than those who do not. For example, all eight 
commuter rail agencies that use Amtrak-owned portions of the NEC rely 
on Amtrak for services related to that infrastructure--specifically, 
dispatching and maintenance-of-way--and they also are more likely to 
contract with Amtrak for additional services. Five of the eight 
commuter rail agencies accessing the Amtrak-owned NEC also contract 
with Amtrak for train operation and maintenance of equipment. By 
comparison, three of the ten commuter rail agencies, which do not 
operate over Amtrak-owned portions of the NEC, contract with Amtrak for 
train crews and maintenance of equipment.[Footnote 14] 

As shown in table 3, we classified the commuter rail agencies we 
contacted based on their level of reliance on Amtrak for services in 
one of four categories--heavy reliance, moderate reliance, limited 
reliance, or little to no reliance on Amtrak. Specifically: 

Table 3: Commuter Rail Agency Reliance on Amtrak Services: 

Existing commuter rail agencies; 

Altamont Commuter Express (ACE); 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: X; 
Little to no reliance: [Empty]. 

Connecticut Department of Transportation's Shore Line East and New 
Haven Lines (SLE); 
Heavy reliance: X; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Maryland Transit Administration (MARC); 
Heavy reliance: X; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Massachusetts Bay Transportation Authority (MBTA); 
Heavy reliance: [Empty]; 
Moderate reliance: X; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

MTA Long Island Rail Road (LIRR); 
Heavy reliance: [Empty]; 
Moderate reliance: X; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

MTA Metro-North Rail Road; 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: X. 

New Jersey Transit Corporation (NJT); 
Heavy reliance: [Empty]; 
Moderate reliance: X; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

North County Transit District (Coaster); 
Heavy reliance: X; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Northeast Illinois Regional Commuter Railroad Corporation (Metra); 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: X; 
Little to no reliance: [Empty]. 

Northern Indiana Commuter Transportation District (NICTD); 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: X. 

Peninsula Corridor Joint Powers Board (Caltrain); 
Heavy reliance: X; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Pennsylvania Department of Transportation (PENNDOT); 
Heavy reliance: X; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Sound Transit, Central Puget Sound Regional Transportation Authority 
(Sounder); 
Heavy reliance: [Empty]; 
Moderate reliance: X; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Southeastern Pennsylvania Transportation Authority (SEPTA); 
Heavy reliance: [Empty]; 
Moderate reliance: X; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Southern California Regional Rail Authority (Metrolink); 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: X; 
Little to no reliance: [Empty]. 

Tri-County Commuter Rail Authority (Tri-Rail); 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: X. 

Trinity Railway Express (TRE); 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: X. 

Virginia Railway Express (VRE); 
Heavy reliance: X; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Proposed commuter rail agencies; 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: [Empty]. 

Nashville Music City Star; 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: X. 

New Mexico Rail Runner Express; 
Heavy reliance: [Empty]; 
Moderate reliance: [Empty]; 
Limited reliance: [Empty]; 
Little to no reliance: X. 

Source: GAO analysis. 

Notes: 

(1) We determined the level of reliance on Amtrak for services through 
interviews with commuter rail agencies in which we discussed to what 
extent Amtrak provided services critical to the commuter rail 
operations, the results of which are summarized in appendix II. For the 
purposes of this classification, we considered train operation crews, 
maintenance of equipment, maintenance-of-way, and dispatching, as 
services critical to commuter rail operations. 

(2) We used the following definitions to classify the commuter rail 
agencies: 

Heavy reliance: Commuter rail agency contracts with Amtrak for at least 
half of two (or more) of the services critical to the commuter rail 
agency's operations. 

Moderate reliance: Commuter rail agency contracts with Amtrak for at 
least half of one service critical to the commuter rail agency's 
operations. 

Limited reliance: Commuter rail agency contracts with, or in some other 
way relies on, Amtrak for less than half of any service critical to the 
commuter rail agency's operations. 

Little to no reliance: Commuter rail agency does not contract with, or 
in some other way rely on, Amtrak for any services critical to the 
commuter rail agency's operations. 

[End of table] 

² Heavy reliance on Amtrak: We classified six commuter rail agencies as 
having a heavy reliance on Amtrak for services. For example, Caltrain-
-a commuter rail service connecting San Francisco and San Jose-- 
contracts with Amtrak for all train operations, maintenance of 
equipment, and dispatching services. In addition, Amtrak provides 
maintenance-of-way services for about 65 percent of the track Caltrain 
uses. Commuter rail agencies that rely heavily on Amtrak services told 
us they would face significant challenges, such as having to conduct 
emergency procurement for replacement service providers and potential 
service shutdowns, if Amtrak suddenly ceased to provide these services. 
Of these six agencies, four use the Amtrak-owned NEC. 

² Moderate reliance on Amtrak: We classified five agencies as having a 
moderate reliance on Amtrak for services. For example, the Southeastern 
Pennsylvania Transportation Authority (SEPTA), a service linking 
Philadelphia to its outlying suburbs and Newark/Wilmington, Delaware, 
contracts with Amtrak to maintain almost 40 percent of the track that 
SEPTA traverses, and to dispatch more than half of SEPTA's 
trains.[Footnote 15] Amtrak also provides traction power for many SEPTA 
trains. One of these five agencies classified as having moderate 
reliance on Amtrak--Sound Transit in Seattle, which contracts with 
Amtrak for all of its maintenance of equipment service--does not travel 
on Amtrak-owned NEC tracks. The impact of an abrupt Amtrak shutdown on 
agencies with moderate reliance is the most uncertain and depends on 
the particular circumstances of a shutdown. For example, if an Amtrak 
shutdown included discontinuation of propulsion power to the NEC, 
SEPTA's service would cease. However, if power remained, SEPTA could 
potentially operate its service, although other challenges such as 
dispatching services currently provided by Amtrak would still need to 
be addressed. 

² Limited reliance on Amtrak: We classified three agencies as having 
limited reliance on Amtrak for service. None of these agencies use the 
NEC, and these agencies could likely cope with an abrupt shutdown of 
Amtrak services by using existing resources until more resources became 
available. For example, Metra, a commuter rail agency in Chicago, 
relies on Amtrak for dispatching services and access to infrastructure 
in and around Chicago Union Station--a key station for several of 
Metra's lines that is owned and operated by Amtrak. Provided that Metra 
was granted the authority to assume responsibility for Chicago Union 
Station and obtained information regarding the employees it would need 
to hire to operate the station, a senior Metra official stated that it 
would be able to take over the operation of the station, and could do 
so over a weekend if necessary. 

² Little to no reliance on Amtrak: We classified six commuter rail 
agencies, including two proposed commuter rail services, as having 
little to no reliance on Amtrak. These agencies either have their own 
in-house employees or they contract for services with private 
transportation companies or freight railroads. For example, the 
Northern Indiana Commuter Transportation District (NICTD) operates 
commuter rail service from South Bend, Indiana, to Chicago with its own 
employees and equipment on its own track. In addition, none of the 
agencies require access to Amtrak-owned NEC tracks, and all reported 
that they could continue service with minimal or no disruption in the 
event of an abrupt Amtrak cessation of services. Although these six 
agencies do not rely on Amtrak for services, most of these agencies 
have some kind of relationship with Amtrak. For example, the Fort Worth 
Transportation Authority--one of the two transit agencies that owns 
Trinity Railway Express (TRE)--built a multi-modal transportation 
facility that serves as a train, bus, and cab station for commuters in 
Fort Worth, Texas. In developing the center, Amtrak requested a number 
of features that would allow its intercity trains to use the station, 
and in turn Amtrak agreed to a 10-year operating lease of the station. 
According to TRE officials, the transportation authority would stand to 
lose a revenue stream of more than $500,000 per year if Amtrak ceased 
to use the station. 

Financial Arrangements between Amtrak and Commuter Rail Agencies Vary 
and Lack Clarity: 

The reliance on Amtrak for infrastructure and services by many commuter 
rail agencies has led to a variety of financial arrangements between 
these parties. While information on these arrangements could help 
decision makers in their efforts to reform Amtrak, these arrangements 
vary significantly and frequently lack clarity. As a result, it is 
difficult for Amtrak's internal and external stakeholders to identify 
the overall amount of revenues Amtrak generates, and the costs it 
incurs, in providing services and infrastructure access to commuter 
rail agencies. Several factors contribute to the lack of clarity, 
including limitations in Amtrak's accounting practices, lack of 
transparency in Amtrak's financial reports, and the structure of some 
of the arrangements. Amtrak's fiscal year 2006 appropriations bill 
directs DOT to levy a fee on commuter rail agencies that use the NEC to 
compensate Amtrak for maintenance and capital expenditures resulting 
from their use of the NEC. This fee could increase the transparency of 
Amtrak's--and commuter rail agencies' financial--arrangements, but it 
does pose some challenges. 

Financial Arrangements between Commuter Rail Agencies and Amtrak Vary: 

The financial arrangements between commuter rail agencies and Amtrak 
vary. One reason for this variation is the negotiation process. 
Although some financial arrangements have grown from the historical 
relationships between Amtrak and commuter rail agencies, most of 
today's arrangements are the product of individual negotiations. 
Through these negotiations, Amtrak and a commuter rail agency reach 
agreement on the terms and conditions--including price--for the 
commuter rail agency's use of Amtrak services and infrastructure. This 
agreement is typically documented in a contract between Amtrak and the 
commuter rail agency. The specific contract terms and conditions vary 
due to a number of factors, such as the comparative bargaining power of 
each party, the specific services and infrastructure used, and the 
extent of competition for the contract.[Footnote 16] 

According to Amtrak officials, another factor that influences the 
specific terms and conditions of some of Amtrak's commuter rail 
contracts is the Interstate Commerce Commission's[Footnote 17] 1983 
ruling known as Ex Parte 417. This ruling governed compensation for 
access to the NEC for some commuter rail agencies, but not necessarily 
others.[Footnote 18] 

² Amtrak officials stated that NEC commuter rail agencies that were 
established prior to the ruling--namely, LIRR, SEPTA, NJT, MBTA, and 
MARC--start from an avoidable cost basis in NEC-access negotiations 
with Amtrak. Avoidable costs refer to only those expenses above what 
Amtrak would pay if the commuter rail did not use Amtrak 
infrastructure. 

² Amtrak officials stated that other commuter rail agencies must 
negotiate NEC-access agreements from a fully allocated cost basis, 
which could include all of Amtrak's costs for running commuter rail 
trains over the NEC (e.g., including avoidable costs, depreciation, and 
overhead). These agencies include PENNDOT, SLE, and VRE.[Footnote 19] 

Commuter rail agencies' financial arrangements with Amtrak also vary in 
relation to the terms of their capital contributions for shared 
infrastructure. Some commuter rail agencies contribute significantly 
more to capital projects that benefit both the commuter rail agency and 
Amtrak than others. For example, NJT has negotiated a $600 million, 10- 
year (1997-2006) joint benefit capital investment program with Amtrak. 
In contrast, SEPTA made over $30 million in capital investments on 
Amtrak-owned portions of the NEC between fiscal years 1995 and 
2005.[Footnote 20] 

The financial arrangements between Amtrak and commuter rail agencies 
also vary in terms of how they are structured. For example, Amtrak may 
have separate contracts for services, infrastructure access, and 
capital investment with one commuter rail agency, while another agency 
might have only one contract that bundles several services and access 
fees together in a fixed price. In addition, a few commuter railroads 
have entered into "quid-pro-quo" exchange arrangements with Amtrak. For 
example, Sound Transit and Amtrak have an exchange arrangement where 
monetary values are not established for maintenance of the two stations 
they share--that is, Amtrak uses the Tukwila Station, which is 
maintained by Sound Transit, and in turn Sound Transit uses the King 
Street Station, which is maintained by Amtrak. No recognition is given 
to this exchange in Amtrak's financial records and reports. Similarly, 
Amtrak grants MBTA commuter service access to 5.7 miles of track that 
Amtrak owns and maintains; in exchange, MBTA grants Amtrak the right to 
run intercity trains over 37 miles of track owned by MBTA. No money is 
exchanged between Amtrak and MBTA for the use of those portions of 
track. 

Financial Arrangements between Amtrak and Commuter Rail Agencies Lack 
Clarity: 

The financial arrangements between Amtrak and commuter rail agencies 
also lack clarity. That is, although such information could help 
decision makers consider potential reforms to Amtrak, it is difficult 
for commuter rail agencies, Amtrak's management, and external 
stakeholders (such as Congress and DOT) to identify the overall amount 
of revenue Amtrak generates and the costs it incurs in providing 
services and infrastructure access to commuter rail agencies. It is 
also difficult to determine whether commuter rail agencies are being 
over-or under-charged for services and infrastructure access. Several 
factors contribute to the lack of clarity, including limitations in 
Amtrak's accounting practices, a lack of transparency in Amtrak's 
financial reports, and the structure of some of the arrangements. 
Specifically: 

² Limitations in Amtrak's accounting practices: Limitations of Amtrak's 
cost-accounting practices produce a lack of clarity in the financial 
relationships between commuter rail agencies and Amtrak--particularly 
with respect to Amtrak's ability to clearly show all of the costs it 
incurs in providing access to infrastructure and various services. 
While Amtrak can support amounts in periodic billing statements to some 
of its commuter rail customers, it cannot identify (and does not 
allocate and bill) the full cost of providing these services or access. 
In prior reports, we noted that Amtrak has insufficient unit cost 
metrics to measure the full costs of its core functions, such as train 
operations or infrastructure maintenance. Amtrak officials acknowledged 
that the methods for assigning its costs are not exact, and some 
commuter rail agencies with whom we spoke expressed dissatisfaction 
with Amtrak's ability to clearly document these costs. For example, 
officials from one commuter rail agency explained that Amtrak relied on 
historical cost data from prior negotiations and regularly adjusted 
these amounts for inflation rather than on clear and transparent actual 
annual costs. As a result, these commuter rail agency officials 
believed that Amtrak significantly overcharges for some items and 
significantly undercharges for others. In October 2005, we recommended 
that Amtrak enhance financial management transparency by lines-of-
business (which include commuter operations) and establish unit cost 
measures, which could help Amtrak increase the accuracy of its cost 
information in providing services and infrastructure access to commuter 
railroads.[Footnote 21] Amtrak received $5 million in its fiscal year 
2006 appropriations to develop and implement a new managerial 
accounting system, which could also help improve its financial 
transparency.[Footnote 22] 

² Lack of clarity in Amtrak's financial reports: Amtrak's financial 
reports do not clearly and transparently present useful information for 
all amounts of revenue generated and all costs incurred for providing 
infrastructure access and services to commuter rail agencies. Amtrak 
has made some progress in showing its revenues and costs in its monthly 
performance reports; however, the total amount of revenue and costs 
from providing infrastructure access and services to commuter rail 
agencies is still unclear. For example, income generated from Amtrak's 
operation of commuter rail service is shown as commuter revenue; 
however, infrastructure access fees from commuter rail agencies are 
included with other railroads' access fees as infrastructure management 
revenue. Similarly, Amtrak's audited consolidated financial statements--
while they properly report all items of revenue, cost, and offsets to 
capital items from commuter rail activities--Amtrak's management does 
not separately disclose all of this activity in one place, which would 
increase its usefulness. The lack of transparency in Amtrak's financial 
reports is due, in part, to limitations in Amtrak's accounting 
practices. Although commuter rail activities are not the focus of 
Amtrak's financial reports, the lack of transparency about the revenues 
and costs incurred as a result of Amtrak's commuter rail activities 
makes it difficult for Amtrak's management and external stakeholders to 
make fully informed decisions about its commuter line- of-business. 

² Structure of financial arrangements: The structure of Amtrak's 
financial arrangements with commuter rail agencies also contributes to 
the lack of clarity. For example, as noted above, some commuter rail 
agencies have a single contract for both infrastructure access and 
services. According to Amtrak officials, while these contracts separate 
charges for infrastructure access and services, commuter rail agencies 
are not able to identify Amtrak's specific costs associated with these 
charges. As a result, several commuter rail agencies stated that this 
makes it difficult to determine the value of the specific services or 
access that they are purchasing from Amtrak. In addition, the "quid- 
pro-quo" arrangements are not recorded as revenues or expenses by 
Amtrak. Because these arrangements are not assigned monetary values, it 
is difficult to quantify the financial value or impact to Amtrak's or 
commuter rail agencies' bottom line. 

Officials from Amtrak acknowledged that there is a lack of clarity in 
the current financial arrangements between Amtrak and commuter rail 
agencies. In particular, officials noted that because of Ex Parte 417 
and the practice of some (but not all) commuter rail agencies 
contributing to capital projects, there is a built-in imbalance in 
access fees and capital contributions paid to Amtrak from commuter 
railroads on the NEC. Amtrak officials said they would welcome a 
uniform capital contribution and access fee policy from the federal 
government. 

New NEC Fee Could Improve Transparency but Poses Potential Challenges: 

As part of Amtrak's fiscal year 2006 appropriation, Congress directed 
the Secretary of Transportation to assess a fee on commuter rail 
agencies using the NEC. According to the statute, the fee will be based 
on annual NEC maintenance and capital costs--net of any current 
contributions from commuter rail agencies--attributable to commuter 
rail use of the infrastructure. The statute directs the Secretary of 
Transportation to calculate the fee based on relative use of the NEC 
(e.g., train mile usage or another factor). The revenue generated from 
this fee would be used to support capital projects on the NEC. As of 
March 2006, FRA was working to develop and implement the fee. 

FRA and FTA officials identified several challenges in implementing 
this new fee. First, FRA officials stated that developing a formula for 
assessing the fee could be complicated; several factors could be used 
as a basis for the fee, including ridership or train miles--both of 
which are already used in other federal funding formulas--or other 
factors. Second, FTA officials noted that most commuter rail agencies 
already have negotiated agreements with Amtrak concerning cost-sharing 
approaches for capital investments, which will complicate the 
development of a separate formula for assessing the fee. Finally, FTA 
officials stated that they will need clarification regarding whether 
the Congress intended this fee as a rescission to federal funding of 
capital projects from FTA to commuter rail agencies, or as a new 
federal funding source to Amtrak. 

Commuter rail agencies using Amtrak-owned NEC share many of these 
concerns--especially that the contracts they have negotiated with 
Amtrak already establish their contribution for infrastructure access 
and capital contributions. These agencies also noted to us that their 
state fiscal year 2006 budgets have already been passed and did not 
include any funding for such a fee. As a result, these agencies may 
face difficulties in securing funding to pay the fee if DOT levies the 
charge as directed during the remainder of fiscal year 2006. In 
addition, because commuter rail agencies and Amtrak use the NEC in 
different ways (e.g., Amtrak high-speed intercity trains require more 
costly maintenance-of-way requirements as compared to slower commuter 
trains) and have different levels of use, commuter rail agencies argue 
that there are valid reasons for cost differentials between commuter 
rail agencies and Amtrak. Finally, officials from several commuter rail 
agencies expressed concern that they were not consulted prior to the 
enactment of this fee and believe that Amtrak, the federal government, 
and representatives of the affected states and commuter rail properties 
should cooperatively develop a formula for determining and allocating 
costs and compensation for shared-track operations on the NEC. 
According to FRA officials, FRA is in the process of meeting with 
commuter rail agencies to develop a methodology to calculate and apply 
this fee. 

Abrupt Amtrak Cessation Could Raise Critical Issues for Some Commuter 
Rail Agencies: 

Decisions made by federal policy makers in the debate over Amtrak will 
play a critical role in whether or not Amtrak abruptly ceases to 
provide services and infrastructure to commuter rail agencies. In the 
event that Amtrak abruptly ceases to provide services and 
infrastructure, commuter rail agencies would face two critical 
operational issues that could make it difficult for some to continue 
operations and avoid severe service disruptions. One critical issue 
they would face would be the potential loss of Amtrak skilled labor. 
Another critical issue would be the potential loss of access to Amtrak- 
owned infrastructure. Some commuter rail agencies also described facing 
additional issues, such as the loss of revenue or a strain on capacity. 

Decisions Made by Federal Policy Makers Will Play a Critical Role in 
Whether Amtrak Abruptly Ceases to Provide Infrastructure and Services 
to Commuter Rail Agencies: 

Decisions made by federal policy makers will play a critical role in 
whether or not Amtrak abruptly ceases to provide services and 
infrastructure to commuter rail agencies.[Footnote 23] The most likely 
cause for an abrupt Amtrak cessation is bankruptcy. Amtrak has been on 
the edge of bankruptcy several times. For example, in 2001, Amtrak lost 
over $1.2 billion and had to mortgage a portion of Pennsylvania Station 
in New York City to generate enough cash to meet its expenses. As we 
reported in October 2005, Amtrak's financial troubles have continued 
since that time, with operating losses now totaling over $1 billion per 
year.[Footnote 24] Given Amtrak's precarious financial position, 
federal policy makers' decisions could either usher Amtrak into 
bankruptcy or prevent Amtrak from slipping into bankruptcy. For 
example, if policy makers acted on legislative proposals that end or 
substantially reduce federal funding, an Amtrak bankruptcy or shutdown 
could quickly follow. Specifically, Amtrak officials have stated that 
proposals with zero funding for Amtrak operating or capital costs would 
promptly trigger an Amtrak bankruptcy. In contrast, federal policy 
makers could also act to prevent Amtrak from declaring bankruptcy, as 
was the case in July 2002 when DOT approved an emergency loan because 
the railroad was running out of cash. 

If federal policy makers allow an Amtrak bankruptcy to occur, a trustee 
would be appointed to oversee the bankruptcy proceedings. Under current 
law, the trustee, along with the bankruptcy court, would make decisions 
about Amtrak's future.[Footnote 25] Although it is difficult to predict 
what decisions a bankruptcy court would make, there is no guarantee 
that all of Amtrak services--such as the services it provides to 
commuter rail agencies--would continue. In October 2005, we suggested 
that as a first major step toward implementing and rationalizing the 
provision of intercity passenger rail service, Congress should consider 
establishing a clear national policy for intercity passenger rail 
service that would address, among other things, the interests of the 
diverse set of Amtrak stakeholders and limit unintended consequences to 
these parties.[Footnote 26] Commuter rail agencies are one kind of 
stakeholder, and the effect of an abrupt Amtrak shutdown on commuter 
rail agencies could be one such unintended consequence. 

One Critical Issue Commuter Rail Agencies Would Face Would Be the 
Potential Loss of Skilled Amtrak Labor: 

For those commuter rail agencies that contract with Amtrak to provide 
services, an abrupt Amtrak cessation could result in a shortage of 
qualified labor needed to maintain commuter service and avoid severe 
disruptions or a shutdown of service. Amtrak employees provide a number 
of services to commuter rail agencies that support a wide range of 
commuter rail functions. In addition, these employees have 
institutional knowledge regarding the use and maintenance of the 
equipment and infrastructure needed to provide safe and efficient 
passenger rail service. If Amtrak employees no longer provided these 
services, commuter rail agencies would need to replace Amtrak labor 
with other experienced railroad employees or hire new employees and 
train them. However, the narrowed available pool of qualified rail 
employees due to the recent increase in freight traffic as discussed by 
freight railroad officials, as well as the time required to train new 
employees, could limit the ability of commuter rail agencies to replace 
Amtrak employees in the short term. 

STB staff placed Amtrak employees that provide services to commuter 
rail agencies in the following categories based on the type of service 
they provide to commuter rail agencies: 

² Dedicated-contract employees: these employees are mainly dedicated to 
a single commuter rail service and include conductors, engineers, and 
maintenance of equipment personnel. For example, the Amtrak engineers 
and conductors that operate VRE commuter trains are dedicated to this 
service by contract, although they may occasionally work on Amtrak 
service. 

² Cross-cutting employees: these employees provide services, such as 
maintenance-of-way, signals and communications, or dispatching, for 
more than one passenger rail service. For example, Amtrak and LIRR 
dispatchers working in Pennsylvania Station Central Control facility in 
New York City are jointly managed by Amtrak and LIRR. These dispatchers 
control the movement of Amtrak intercity trains as well as LIRR and NJT 
commuter trains. 

² Overhead employees: these employees take care of functions such as 
payroll and training, and provide support to both Amtrak and the 
various commuter operations. These employees support dedicated, cross- 
cutting, and other overhead functions. It is unclear how many of these 
employees would be needed to support each individual commuter service 
contract. 

According to STB staff, dedicated-contract employees may be easier for 
commuter rail agencies to replace or assume in the short term than 
employees that provide either cross-cutting or overhead functions. For 
instance, dedicated-contract employees are easier to identify because 
they generally work for only one commuter rail service. In addition, 
the costs associated with dedicated-contract employees, such as 
salaries and benefits, are easier to quantify than costs associated 
with employees that support functions for more than one passenger rail 
service. 

If Amtrak abruptly ceased to provide services and infrastructure to 
commuter rail agencies, officials from a few commuter rail agencies 
told us they might be able to replace the Amtrak employees who are 
dedicated to their particular commuter rail service with employees from 
another railroad. For example, SLE, which operates between New London 
and New Haven, Connecticut, may be able to replace Amtrak train and 
engine crews with Metro-North employees that are already familiar with 
SLE's operation in 6 to 12 months. Similarly, according to a senior 
Coaster official, the Coaster service operating between San Diego and 
Oceanside, California, would be able to replace Amtrak maintenance-of- 
way employees more quickly than other employees because either 
Burlington Northern Santa Fe, a Class I freight railroad, or local 
contractors could step in to perform this type of work. 

In most cases, however, commuter rail agencies told us they could not 
quickly replace current Amtrak employees because of workforce 
limitations, such as the availability of a qualified labor pool. For 
example, according to officials from several Class I freight railroads, 
their current workforce is already strained due to a growing demand for 
freight rail transportation and a narrow labor pool of qualified 
applicants. In addition, freight railroad employees could not 
immediately take over services provided by Amtrak employees without 
first obtaining training on commuter rail equipment. According to 
officials from one freight railroad, it would take at least 9 months to 
train someone to safely operate commuter service if existing Amtrak 
train crews were unavailable. Commuter rail agencies also told us they 
do not have the workforce capabilities or expertise to take over the 
services provided by Amtrak (especially overhead, dispatching, or 
maintenance services) in the short term. As a result, some commuter 
rail agencies would have to limit or shut down service in the short 
term unless current Amtrak employees could continue providing these 
services. For example: 

² Caltrain bundles the services required to operate, maintain, and 
dispatch its commuter trains into one contract with Amtrak. According 
to one Caltrain official, if Amtrak no longer provided these services, 
Caltrain would likely go out of business and discontinue its commuter 
operations, because, among other things, Caltrain employees are not 
equipped to assume overhead functions currently provided by Amtrak, 
such as payroll, training, and human resources. Moreover, because of 
the small size of the commuter operation, it would be cost-prohibitive 
for Caltrain to handle these overhead functions compared to Amtrak, 
which can centralize such functions for its national network and all of 
its commuter services. 

² While MBTA no longer contracts with Amtrak for operations and 
maintenance of equipment services, Amtrak personnel still provide some 
services, including maintenance-of-way, signal maintenance, and 
dispatching for some of its trains. In particular, Amtrak employees 
dispatch MBTA trains at the joint Centralized Electrification and 
Traffic Control (or CETC) center in Boston's South Station. The 
technical skills required to dispatch trains take time to develop and 
could not be replaced in a short time period. An official from the 
Massachusetts Bay Commuter Railroad Company (MBCR), the contract 
operator of the MBTA commuter service, stated that if Amtrak no longer 
provided dispatching services for MBTA trains, it would need to hire 18 
dispatchers--and hiring and training these dispatchers would take about 
15 months if it could not hire the existing, qualified Amtrak 
employees. Until these dispatchers were trained and in place, MBTA's 
service would be limited. 

Other commuter rail agencies on the NEC that rely on Amtrak's skilled 
workforce would also face issues in the event of an abrupt Amtrak 
cessation. For example, NJT relies on Amtrak employees to dispatch some 
of its trains out of the CETC center in Philadelphia's 30th Street 
Station. SEPTA also relies on Amtrak dispatchers to provide overhead 
electric power and dispatch both power and some of its trains out of 
this CETC center. According to NJT and SEPTA officials, these employees 
could not be replaced in the short term because of the training and 
expertise required to provide these services. 

Potential Loss of Access to Amtrak Infrastructure Is Another Critical 
Issue Commuter Rail Agencies Would Face: 

To avoid disruptions or shutdowns, commuter rail agencies would need to 
be able to continue accessing Amtrak-owned infrastructure if Amtrak 
abruptly shut down. Commuter rail agencies on the NEC, in particular, 
could face severe service disruptions without the ability to access 
Amtrak-owned track and stations along the NEC. For example: 

² Officials from LIRR stated that without access to Pennsylvania 
Station, which is the LIRR's major access point to downtown New York 
City, about 87.4 percent of LIRR's daily passengers would have to be 
taken to temporary west-end terminals and transferred to various subway 
stations in order to complete their trips into Manhattan. 

² NJT officials estimated that over 77 percent of its daily passengers 
would be affected each day if it could no longer operate its trains 
over the NEC. According to these officials, there are not enough 
suitable alternative transportation options to accommodate these 
passengers because of capacity limitations on area highways and lack of 
additional bus equipment. 

² According to a SEPTA official, almost all of its passengers would be 
affected without access to Amtrak-owned right-of-way and traction 
power, which is provided through the CETC Center in Philadelphia's 30th 
Street Station. This is because almost all SEPTA passengers begin or 
end their commute in the city center, where all of SEPTA's routes are 
connected through a central tunnel that has traction power provided by 
Amtrak. If access to Amtrak-owned infrastructure and power is 
unavailable, limited bus service to SEPTA heavy rail and light rail 
lines might be available to some passengers. 

As discussed previously, Amtrak also owns and controls infrastructure 
outside the NEC, including stations and maintenance yards that are used 
by commuter rail agencies. These commuter rail agencies would also need 
continued access to these facilities in order to limit service 
disruptions if Amtrak abruptly ceased service. For example, over half 
of Metra's commuter rail lines could not complete their trips without 
access to Chicago Union Station. In Seattle, Sound Transit officials 
stated that they would have to obtain access to another maintenance 
facility, which would likely cause severe service disruptions, or 
discontinue service if access to Amtrak's Holgate maintenance yard was 
unavailable due to an abrupt Amtrak cessation. 

Commuter Rail Agencies Also Described Other Issues They Would Face with 
Abrupt Amtrak Cessation: 

While access to labor and infrastructure present critical issues for 
commuter rail agencies that rely on Amtrak, a number of other issues 
could also face commuter rail agencies in the event of an abrupt Amtrak 
cessation. These include loss of revenue and a strain on capacity. 

² Loss of revenue: some commuter rail agencies could lose revenue 
received from access fees paid by Amtrak to operate its trains over 
tracks owned by the commuter authority. For example, the Coaster 
service in California receives $1.9 million a year from Amtrak to 
operate over infrastructure owned by Coaster. According to one Coaster 
official, without this revenue, service reductions or fare increases 
would likely result. 

² Strain on capacity: some commuter rail agencies could also face a 
strain on capacity as a result of an abrupt Amtrak cessation. For 
example, some commuter rail services may have to accommodate passengers 
from Amtrak's intercity service or take over portions of Amtrak's 
intercity service. However, commuter rail agencies may not have 
adequate resources or the capacity to accommodate additional intercity 
passengers. For example, both Metro-North and Metrolink expect they 
would have to add equipment to their service in order to accommodate 
Amtrak intercity passengers. However, according to a Metrolink 
official, it is uncertain how quickly it could procure additional 
equipment to meet increased demand in the short term. In addition, some 
commuter rail agencies have cross-ticketing programs with Amtrak that 
allow one or both parties to increase capacity on their lines without 
having to add cars or trains to their service. For example, both 
Coaster and Metrolink have initiated "rail-to-rail" ticketing programs 
with Amtrak that allow commuters who hold monthly passes to ride Amtrak 
trains within the commuter rail's service territory. This effectively 
increases the number of trains that Coaster passengers can use each day 
from 22 to 44. An Amtrak cessation, therefore, would significantly 
reduce these commuter rail agencies' capacity. 

Some Options Are Available to Commuter Rail Agencies in the Event of an 
Abrupt Amtrak Cessation, but Service Disruptions and Financial 
Difficulties Would Be Likely: 

Most commuter rail agencies that rely on Amtrak services and Amtrak- 
owned infrastructure have identified short-and long-term options to 
mitigate service disruptions in the event that Amtrak abruptly ceases 
operations. However, those options are largely dependent on the ability 
to retain Amtrak employees and access to Amtrak's infrastructure, 
particularly in the short term. Federal agencies could provide short- 
term options to mitigate potential impacts on commuter rail agencies in 
the event of an abrupt Amtrak cessation. However, service disruptions 
are likely and the cost of funding such options is unknown. Private 
transportation companies could take over commuter rail services 
provided by Amtrak; however, labor and liability issues, among others, 
would need to be addressed. 

Most Commuter Rail Agencies Have Identified Contingencies for an Amtrak 
Cessation that are Largely Dependent on Access to Amtrak Employees and 
Infrastructure: 

Contingencies identified by commuter rail agencies to respond to an 
abrupt Amtrak cessation vary depending on the reliance of that agency 
on Amtrak for services and access to infrastructure. Commuter rail 
agencies that have little to no reliance on Amtrak would be able to 
continue operating commuter service with little or no service 
disruption if Amtrak abruptly ceased to provide services and 
infrastructure. Nevertheless, some of these agencies have identified 
some options to mitigate the potential non-service impacts, such as the 
potential strain on capacity as a result of an Amtrak cessation. For 
example, Metro-North would add train cars to its current service in 
order to accommodate passengers from Amtrak's intercity service. 

Commuter rail agencies with limited to heavy reliance on Amtrak, 
however, could face minor to severe service disruptions depending on 
their ability to retain Amtrak employees and use Amtrak infrastructure-
-which is particularly critical for commuter rail agencies on the NEC. 
Commuter rail agencies identified short-term contingencies ranging from 
assuming portions of the service to curtailing or shutting down service 
if Amtrak abruptly ceases to provide services and access to 
infrastructure to them. 

² Assume portions of service: In some cases, commuter rail agencies may 
be able to assume management of some of the services provided by 
Amtrak. For example, MBTA has the option to add dispatching and 
infrastructure maintenance functions to its contract with MBCR. These 
functions are currently provided by Amtrak on those portions of the NEC 
that MBTA operates commuter service. However, MBTA stated it would 
prefer to hire the current Amtrak personnel or would need the current 
workers to continue to provide these services until other workers were 
hired and trained--a process that could take more than 1 year. 

² Find alternate service provider: A few commuter rail agencies would 
make arrangements for an alternate provider to take over services 
provided by Amtrak. For example, a commuter rail agency official told 
us that they would either conduct an emergency procurement to replace 
the current contract with Amtrak or would go directly to another 
operator and ask them to fill in. However, this process would likely be 
very expensive because there would not be sufficient time to 
competitively procure the contract. It would also require the 
willingness of Amtrak employees currently dedicated to that commuter 
rail agency's service to hire on with the new contractor. 

² Curtail or shut down service: Several commuter rail agencies, 
particularly on the NEC, stated they would either have to curtail 
portions of their service or shut down service entirely, particularly 
if access to Amtrak employees and infrastructure were unavailable. For 
example, MARC officials told us if MARC could no longer access 
Washington Union Station, they would run only the trains that operate 
over CSX Transportation (CSX) infrastructure to stations outside of 
Washington, D.C., and passengers would need to transfer to subway or 
bus lines to complete their trips into Washington, D.C. Other commuter 
rail agencies told us they would likely shut down service if Amtrak 
abruptly ceased to provide services and infrastructure. For example, a 
Caltrain official stated that it would likely end all of its commuter 
rail service because it does not have the workforce capabilities to 
take over all of the services provided by Amtrak. 

Commuter rail agencies also identified long-term contingencies in the 
event of an Amtrak cessation. Commuter rail agencies that use Amtrak 
for services would issue request-for-proposals (RFP) to hire new 
contractors to replace Amtrak. However, several commuter rail officials 
told us that the procurement process takes an average of 18 months from 
the time the RFP is issued to the time the new contractor can begin 
providing service. These contractors would also need to hire a 
qualified workforce, which may or may not include Amtrak employees, and 
would require access to Amtrak-owned infrastructure in order to provide 
services to commuter rail agencies. 

Federal Agencies Could Provide Short-Term Options for Commuter Rail 
Agencies, but Service Disruptions Are Likely and Costs Are Unknown: 

STB has the statutory authority to direct a rail carrier to provide 
services, previously provided by Amtrak, to commuter rail agencies in 
the event of an abrupt Amtrak cessation of services. According to the 
statute, in order for STB to issue a directed-service order (1) a 
commuter rail agency must be adversely affected by an Amtrak shutdown 
and (2) funding must have been appropriated for directed service. The 
statute also establishes parameters for the use of directed service. 
For example, a single directed-service order cannot last more than 270 
days (about 9 months). In addition, in a directed-service scenario, STB 
must require the use of the employees who would have normally performed 
the work, to the extent practicable. Such employees could be former 
Amtrak employees or employees from another railroad,[Footnote 27] 
including commuter or freight railroads. The statute also gives STB the 
authority to direct a service provider to take over the provision of 
infrastructure functions related to operations, such as traction power, 
dispatching, and maintenance. Therefore, according to STB staff, STB 
could direct service over the NEC so that current commuter rail 
agencies could continue to operate on the NEC for a limited period of 
time. However, STB's authority to direct service for commuter rail 
agencies has never been used, and a number of uncertainties about 
directed service--such as the time required to implement a directed 
service order and the costs of such efforts--exist. Consequently, FRA 
officials believed that service disruptions under a directed-service 
scenario would be unavoidable and could be either brief or extended, 
depending on the particular situation of the commuter rail agency. 

Companies that could be directed to provide the services now performed 
by Amtrak for commuter rail agencies include freight railroads, the 
commuter rail agencies themselves, and possibly other entities. For 
example, Metra in Chicago might be directed to take over the operation, 
maintenance, and dispatching for Chicago Union Station--a 
responsibility Metra officials stated they would be able to do. STB 
staff did note that even though STB has the authority to direct 
entities to serve as a directed service provider, it would have to 
weigh their willingness to perform this task. For example, although STB 
can direct a freight railroad to provide train crews to operate 
commuter rail service, freight railroad officials with whom we spoke 
have consistently expressed a lack of interest in being directed- 
service providers. STB staff did note, however, that the freight 
railroads operating in the Northeast do have an interest in Amtrak's 
continued operations. For example, Norfolk Southern (NS) relies on 
Amtrak dispatching and infrastructure to provide freight service over 
some of the NEC to several major mid-Atlantic markets. According to a 
Norfolk Southern official, the NEC is the only practical route NS 
freight trains can use to reach Baltimore, Wilmington, and the Delmarva 
Peninsula,[Footnote 28] which are all major rail markets. STB staff 
recognize that directing an unwilling entity to provide service is an 
undesirable situation that could result in service delays, and STB 
staff stated that they would prefer to avoid this type of scenario. 

STB staff and FRA officials believe that directed service would be 
highly problematic and should be avoided if at all possible.[Footnote 
29] FRA officials stated that the current directed service 
implementation plan contains some questionable assumptions, 
particularly the assumptions about labor and the cost of directed 
commuter service. For example, implementation plans assume that Amtrak 
employees (especially on the NEC) would be willing to continue 
performing their same duties for the directed-service provider. 
However, according to FRA and FTA officials as well as STB staff, 
former Amtrak employees would have no legal obligation to accept an 
employment offer from the directed-service provider. The labor unions 
we spoke with stated that they believed that in a directed-service 
scenario, Amtrak employees would be much more likely to accept jobs 
with employers that participate in the railroad retirement-system, such 
as freight railroads. These jobs would be more secure and would allow 
employees to remain in the railroad retirement-system.[Footnote 30] Not 
all commuter rail agencies participate in the railroad retirement- 
system, which would make jobs with those commuter rail agencies less 
desirable to employees currently covered by the retirement system. 
According to FRA officials, the biggest concern and unknown in a 
directed service scenario is whether former Amtrak employees will agree 
to work for the new provider. 

In addition, FRA officials stated that the estimates of the costs of 
providing directed service are unreliable and not based on a robust set 
of assumptions. In fiscal years 2004 - 2006, Congress directed the 
Secretary of Transportation to withhold $60 million from Amtrak's 
federal grant to use if STB issued a directed-service order.[Footnote 
31] According to STB staff and FRA officials, the $60 million figure is 
a rough estimate of the cost of providing directed service that FRA 
developed based on Amtrak's overall cash burn rate per month. However, 
because of the assumptions used to calculate the estimate, officials 
from FRA and STB staff questioned the reliability of the estimate and 
the length of time this level of funding could cover. For example, FRA 
officials suggested that $60 million could cover no more than 2 months-
-and likely far less--of directed commuter rail service. These 
officials stated that this estimate assumed only minimal services for 
the 2-month period. For instance, according to FRA officials, this 
level of funding would not allow for any significant mechanical work on 
any piece of commuter rolling stock, which would force any equipment 
requiring such servicing to be parked until additional funding was made 
available. Taking equipment that needs maintenance out of service is 
not sustainable for more than a few months. In addition, STB staff and 
FRA officials stated that the estimate reflects only the operational 
costs associated with providing directed service, and therefore, did 
not include funding for capital maintenance or for the backlog of 
capital improvements on the NEC. It also does not account for the 
access fees commuter rail agencies would presumably continue paying to 
the residual Amtrak (or new infrastructure owner) for the use of its 
infrastructure. STB staff and FRA officials stated that long-term 
directed-service scenarios (i.e., when directed service lasts longer 
than 1 or 2 months) would require additional funds for train 
operations, equipment maintenance, and capital funding for critical 
infrastructure. Some commuter rail agencies noted that directed service 
would probably be needed for more than a few months due to the time 
required to transition to a new service provider. 

Although the accuracy of the $60 million estimate for 2 months of 
directed service is questionable, it was used to calculate the costs of 
providing directed service for 12 months in the administration's fiscal 
year 2006 budget proposal. Specifically, the administration's fiscal 
year budget proposed that no capital or operating funds be provided to 
Amtrak, and that $360 million be set aside for directed service for 
commuter and freight rail. According to FRA officials, the $360 million 
was based on FRA's 2-month estimate and multiplied out to cover an 
entire year. However, as the original estimate was not based on robust 
assumptions, officials do not think that $360 million would be able to 
cover 1 year of directed commuter rail service in the event of an 
Amtrak shutdown, much less commuter and freight rail services. 

Private Transportation Companies Could Provide Options for Commuter 
Rail Agencies, but Challenges Exist: 

In addition to Amtrak, freight railroads and other private 
transportation companies currently provide services, including train 
operations, equipment maintenance, infrastructure maintenance, and 
dispatching, to commuter rail agencies. Freight railroads typically 
provide some level of services to commuter rail agencies in cases where 
the commuter service operates in part (or entirely) over infrastructure 
owned and maintained by the freight railroad. For example, Burlington 
Northern Sante Fe provides access to--and maintenance of--its 
infrastructure for Metrolink, Sounder, and Metra. In addition, private 
transportation companies, including Bombardier, Connex, and Herzog, 
provide services to seven commuter rail agencies. These companies 
provide a range of services, including operations, equipment 
maintenance, infrastructure maintenance, and dispatching. 

While some freight railroads currently provide services to commuter 
rail agencies, most are not actively pursuing additional commuter rail 
contracts and would be hesitant to take over services provided by 
Amtrak if it abruptly ceased to provide services and infrastructure. 
Freight railroad officials told us they have limited resources to 
dedicate to commuter rail service because the freight industry 
continues to grow and expand. The growth of freight traffic also 
presents a greater opportunity for freight railroads to make a profit 
and limits the capacity freight railroads have to add commuter trains 
on their infrastructure. In addition, most of the freight railroad 
officials with whom we spoke told us liability is an issue in providing 
commuter rail service. 

Private transportation providers, on the other hand, expressed interest 
in expanding their role in the commuter rail market and in taking over 
services provided by Amtrak if Amtrak was to abruptly cease providing 
services and infrastructure access to commuter rail agencies. However, 
officials from some private transportation companies told us that they 
would need sufficient time to ensure a smooth transition, noting it 
would take months to work out all the operational and administrative 
details, such as complying with FRA safety regulations--particularly if 
the new operator was unable to hire Amtrak employees. For example, in 
taking over Metrolink's service from Amtrak in July 2005, Connex had to 
take responsibility for all regulatory requirements pertaining to the 
operation of the railroad, including, among other things, setting up a 
drug and alcohol testing regime, obtaining engineer certification, and 
setting up operating rules. According to Metrolink officials, it took 
Connex about 4 months to satisfy these regulatory requirements from the 
time the contract was awarded. 

In addition to addressing these issues, private transportation 
companies would need time to secure a workforce to provide the 
services. The private transportation companies do not have a pool of 
available and qualified rail employees to take over commuter rail 
services. Rather, these companies would need to hire, and possibly 
train, employees. Officials from the private transportation companies 
told us that the quickest and easiest option would be to hire the 
Amtrak employees currently providing the commuter rail services. Hiring 
these employees would provide the private transportation company a 
qualified workforce that is knowledgeable about the specific service, 
and therefore help ensure a smooth transition, according to officials 
from these private transportation companies. However, there is no 
guarantee that the Amtrak employees would want to switch to the private 
transportation company providing the commuter service. For example, in 
taking over MBTA's services from Amtrak, MBCR entered into labor 
agreements with 14 separate unions representing 1,600 Amtrak employees 
within 6 months of winning the contract.[Footnote 32] According to 
union representatives, MBCR was successful in hiring Amtrak employees 
because it was willing to "come to the table" and negotiate a fair 
contract that continued to participate in the railroad retirement- 
system and offered higher wages to employees than what they received 
working for Amtrak. As a result, MBCR was able to reach an agreement 
with all Amtrak employees in 3 months. In contrast, Bombardier was 
unable to hire sufficient Amtrak employees when it took over Amtrak's 
maintenance-of-equipment contract with Metrolink. According to union 
representatives, this situation can be expected as experienced railroad 
labor seeks to remain in the railroad retirement-system and retain 
other labor protections--conditions that Bombardier did not offer. As a 
result, Bombardier had to hire new maintenance staff with very little 
railroad experience and train them on Metrolink's procedures and 
equipment. According to Metrolink officials, this contributed to a 
"turbulent" and lengthy transition. 

The labor union representatives with whom we spoke told us that many 
senior Amtrak employees would be hesitant to accept a job offer from a 
private transportation company that did not have Amtrak's experience 
and understanding of the railroad business. In accepting an offer with 
another company, Amtrak employees may not only lose their employee 
benefits and collective bargaining agreements, but also could lose 
their seniority. That is, these employees would not likely transition 
to a new service provider and expect to maintain the same level of 
seniority they had with Amtrak. As a result, despite Amtrak's long-term 
financial uncertainty, Amtrak employees are cautious about taking on 
the risk of working for a private transportation company. 

In addition to securing a workforce, officials from private 
transportation companies with whom we spoke identified several other 
challenges, such as the regulatory process, in competing for or 
assuming commuter rail services. The most frequently cited challenge 
was liability. According to private transportation company officials, 
they carefully review liability and insurance language in evaluating 
whether or not they will bid on a particular commuter rail contract; 
although, according to an official from one private transportation 
company, liability and insurance language has never prevented it from 
submitting a bid for a commuter rail contract. These factors are 
particularly important when negotiating with a commuter rail agency 
that operates its service over infrastructure owned by freight 
railroads. According to an official from one private transportation 
company, freight railroads require public entities, including commuter 
rail agencies, to carry upwards of $200 million for liability insurance 
to operate over their track and also include expensive indemnification 
language in commuter contracts. Therefore, some commuter rail agencies 
are now using shared-liability contracts for services, in which the 
operator and commuter rail agency share exposure to liability risk. For 
example, in taking over the train operations contract from Amtrak, one 
commuter rail agency required its private operator to assume some of 
the liability if it was found to have shown willful misconduct in 
causing an accident. Specifically, if that operator is found 
responsible for an incident causing over $500,000 in damages, the 
operator is responsible for contributing $500,000 toward the damages up 
to two times a year. 

Some Commuter Rail Agencies Are Moving away from Amtrak to Provide 
Services, but Others Like Having Amtrak as an Option: 

Seven commuter rail agencies currently contract with private 
transportation companies to provide services, such as operations and 
equipment maintenance. Of these seven commuter rail agencies, two 
agencies had contracted with Amtrak for services in the past, but in 
one case, moved away from Amtrak because of dissatisfaction with the 
service Amtrak was providing and its unresponsiveness in meeting the 
needs of the commuter rail agency. In the other case, Amtrak withdrew 
from the commuter rail agency's most recent procurement process and did 
not submit a proposal in response to the agency's RFP to continue 
providing services. 

Other commuter rail agencies have also expressed interest in moving 
away from contracting with Amtrak for services, including commuter rail 
agencies on the NEC. These agencies cited a number of reasons, 
including Amtrak's unstable federal funding and long-term planning 
challenges, in their decisions to reduce their reliance on Amtrak-- 
either by conducting more of their services in-house, or by contracting 
with a private transportation company. For example, one commuter rail 
agency constructed its own maintenance facilities so it would not have 
to rely entirely on Amtrak to service its equipment at Amtrak 
facilities. In addition, another commuter rail agency recently 
conducted a procurement process and recommended that a private 
transportation company be awarded the contract to provide the services 
previously provided by Amtrak. According to officials from the American 
Public Transportation Association, Amtrak's threatened service shutdown 
in 2002 over the level of federal funding for Amtrak may also have 
caused some commuter rail agencies to contemplate other service 
providers more seriously. 

Although some commuter rail agencies have moved away from contracting 
with Amtrak for services, officials from a few commuter rail agencies 
stated that they would like Amtrak to continue providing services to 
commuter rail agencies. According to these officials, Amtrak has a 
history of providing services to commuter rail agencies and its 
employees are knowledgeable about the commuter rail business. In 
addition, commuter rail agencies would like to have a number of firms 
or companies to choose from when competitively procuring service 
contracts. Two commuter rail agency officials mentioned that having 
more competition provides commuter rail agencies more flexibility in 
choosing a service provider, and can reduce costs. 

Conclusions: 

Given the dependence of most commuter rail agencies on Amtrak for 
services and infrastructure, an abrupt Amtrak cessation would likely 
result in major disruptions or shutdowns of commuter rail services 
throughout the country. This could strain regional transportation 
systems, as hundreds of thousands of regular commuter rail passengers 
would be forced to seek alternative forms of transportation. Although 
commuter rail agencies have some contingency plans and the STB has the 
authority to direct commuter rail service, an abrupt Amtrak cessation 
would create a worst-case scenario for many commuter rail agencies, 
especially those that use Amtrak-owned infrastructure in the densely 
populated NEC. 

Certainly, commuter rail issues should not drive or derail policy- 
makers' efforts to reform Amtrak. However, given the importance of 
commuter rail services to many regions and the negative impact an 
abrupt Amtrak exit would create, it seems appropriate that these issues 
are included as federal policy makers consider the debate over Amtrak. 
In our October 2005 report on Amtrak's management,[Footnote 33] we 
suggested that Congress consider establishing a nationwide policy for 
intercity passenger rail that would address, among other things, the 
interests of the diverse set of Amtrak stakeholders and limit 
unintended consequences to these parties. Given the complex 
relationships between commuter rail agencies and Amtrak, commuter rail 
agencies are one such stakeholder, and the effect of an abrupt Amtrak 
shutdown on commuter rail agencies would be an unintended consequence 
of some Amtrak reform proposals. Any such negative impact on commuter 
rail agencies should be taken into account when developing any national 
policy for intercity passenger rail. 

Our work indicates that two critical issues for commuter rail agencies 
that would need to be addressed in the event of an abrupt Amtrak 
shutdown are (1) the potential loss of Amtrak's skilled labor force and 
(2) access to Amtrak-owned infrastructure. Without access to key 
infrastructure, such as the NEC, and a skilled labor force to crew 
trains and maintain the right-of-way, among other things, commuter rail 
service disruptions throughout the nation are inevitable. A related 
issue is the time that commuter rail agencies need to transition from 
Amtrak to other operators in the event of an Amtrak shutdown. According 
to some commuter rail agencies and private transportation operators, a 
transition between qualified operators takes months, not weeks. To 
date, the various Amtrak reform proposals do not comprehensively 
address these issues. As deliberations about Amtrak move forward, such 
issues should be considered and addressed so that disruptions to 
commuter rail service can be minimized. 

To fully understand the relationship between commuter rail agencies and 
Amtrak, it will also be important to obtain better information on the 
costs Amtrak incurs--and the revenue it earns--in providing services 
and infrastructure access to commuter rail agencies. Although Amtrak 
has made some progress in improving its accounting systems and 
practices, its current practices do not allow for full transparency. In 
particular, Amtrak's financial reports do not clearly show the revenues 
earned and costs incurred for providing services and infrastructure 
access to commuter rail agencies. Moreover, Amtrak lacks a methodology 
to adequately allocate shared costs to different commuter rail users. 
Consequently, it is difficult to determine what Amtrak's true costs are 
in providing services and infrastructure to commuter rail agencies, and 
whether commuter rail agencies are paying their "fair share." 
Furthermore, the lack of this type of information clouds the 
negotiation process between commuter rail agencies and Amtrak--that is, 
commuter rail agencies do not necessarily know if they are being over- 
or undercharged for services. Likewise, Amtrak management cannot make 
fully informed decisions about competing for commuter rail contracts. 

As Amtrak's precarious financial position raises the possibility of an 
Amtrak cessation of service, it is prudent that commuter rail agencies 
and the responsible federal agencies plan for such an event. These 
plans are in place in many commuter rail agencies and include a range 
of options--from shutting down service to taking over control of key 
infrastructure by the commuter rail agency. STB and FRA's ability to 
order and fund directed service for commuter rail agencies is a 
limited, short-term option. However, directed service is not a panacea-
-rather there is agreement that service disruptions would occur in a 
directed-commuter-service scenario. Moreover, the cost of providing 
directed service is unknown. Current estimates of providing this 
service--including the $60 million estimate for 2 months of directed 
service, or the $360 million estimate for an entire year of service-- 
are, at best, rough estimates of how much such service would cost. 
Without accurate cost estimates, federal policy makers cannot make 
fully informed decisions about directed service. 

Recommendations: 

In order to provide more information to federal policy makers involved 
in the debate over Amtrak, we recommend that the Secretary of 
Transportation direct FRA, in consultation with STB and commuter rail 
agencies, to further refine cost estimates of commuter rail directed- 
service scenarios. 

To ensure that Amtrak provides useful information to both its internal 
and external stakeholders, including commuter rail agencies that 
contract with Amtrak, we recommend that the president of Amtrak improve 
its accounting practices, as well as its financial reports, to clearly 
show all revenues earned and all costs incurred when providing services 
and infrastructure access to commuter rail agencies. This information 
could increase the clarity of Amtrak's costs for providing services and 
access to infrastructure to Amtrak management, commuter rail agencies, 
and Congress. It would also allow for a more informed debate about how 
commuter rail agencies interact with Amtrak and compensate it for 
access to critical infrastructure and services. 

Agency Comments: 

We provided DOT officials a copy of our draft report for their review 
and comment. On April 6, 2006, we met with DOT officials, including 
DOT's Audit Liaison, FRA's Assistant Chief Counsel, and an FTA 
Economist; as well as STB staff, including the Associate Director for 
the Office of Economics, Environmental Analysis, and Administration, to 
obtain their comments on our draft. These officials and staff 
represented the views of their respective agencies. Overall, they 
generally agreed with the draft report's findings and the intention of 
the recommendation. DOT officials indicated that the draft report 
provides useful information about the implications of directed service 
for commuter railroads. Further, they indicated that the draft report 
does a good job of explaining how Amtrak's internal costing and 
contracting systems do not adequately or accurately identify the costs 
incurred and the revenues received for specific lines-of-business, such 
as those provided for commuter railroads. DOT officials recognized that 
these Amtrak accounting systems were not designed with this intent in 
mind. As a result, DOT officials stated that until Amtrak accounting 
and contracting systems provide better documentation and greater 
clarity with respect to individual lines of business, further 
refinements of cost estimates associated with various commuter rail 
directed-service scenarios will continue to prove problematic. 
According to FRA officials, in light of the data limitations, 
attempting further refinements in the cost scenarios associated with 
the unlikely event of an Amtrak shutdown does not represent the best 
possible use of the limited staff resources. FRA officials indicated 
their preference is to continue focusing their resources on priorities 
related to maintaining and improving Amtrak operations. FRA and FTA 
officials and STB staff also provided technical clarifications to the 
draft report, which we incorporated as appropriate. 

We recognize that FRA, like other federal agencies, has resource 
constraints and must focus those resources on certain priorities. 
However, given previous and current debate over the future of Amtrak, 
we believe providing policy makers with accurate information as to the 
implications of directed service--including the costs of such services-
-is a worthwhile investment of agency resources and deserves some level 
of attention. Moreover, although the limitations in Amtrak's accounting 
systems that we detail in the report would prevent the development of a 
precise cost estimate of directed service, we believe that refinements 
could be made using existing information from Amtrak and commuter rail 
agencies. Further, as FRA works with Amtrak to improve its accounting 
systems--and thus improve its cost data--it could further refine the 
directed service cost estimates. DOT officials acknowledged that the 
current estimates--which are based on a limited set of assumptions--are 
inaccurate, and most likely significantly underestimate the true costs 
of directed service. Therefore, any refinements would be a step in the 
right direction in providing better information to policy makers. 

We also provided Amtrak officials a copy of the draft report for their 
review and comment. Amtrak generally agreed with the report's findings, 
conclusions, and recommendations. Amtrak provided technical 
clarifications to the draft report, which we incorporated as 
appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to congressional committees with responsibilities for commuter rail 
issues; the Secretary of Transportation; the Acting President of 
Amtrak; the Administrators of FRA and FTA; the Chairman of STB; and the 
Director, Office of Management and Budget. We also will make copies 
available to others upon request. In addition, this report will be 
available at no charge on GAO's Web site at http://www.gao.gov. 

If you or your staff have any questions on matters discussed in this 
report, please contact me on (202) 512-2834 or at heckerj@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. Key contributors 
to this report can be found in appendix III. 

Sincerely, 

Signed by: 

JayEtta Z. Hecker: 
Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

To address our objectives, we contacted officials from all existing 
(and two proposed) commuter rail agencies, the four largest Class I 
railroads, and private transportation companies that currently operate 
commuter rail service in the U.S. To identify the universe of existing 
and proposed commuter rail systems, we used information published by 
and provided to us by the American Public Transportation Association 
(APTA). We reviewed this information with APTA in order to identify 
transit agencies that are currently providing commuter rail services 
and proposed commuter rail agencies that were the closest to becoming 
operational. APTA categorized proposed commuter rail agencies as either 
"immediate," "midway," or "later"; those in the immediate category were 
considered closest to becoming operational. Using these sources we 
identified 18 existing commuter rail agencies and 2 proposed commuter 
rail agencies. While APTA considered 8 proposed commuter rail agencies 
as immediate, we selected the 2 proposed commuter rail agencies APTA 
officials indicated were likely to begin operations during the course 
of our review. To identify the four largest Class I railroads, we 
reviewed the February 2005 Surface Transportation Board (STB) Report of 
Railroad Employment and information provided by the Association of 
American Railroads (AAR). AAR also provided contact information for 
each Class I railroad. To identify private transportation providers, we 
interviewed officials from APTA, the National Railroad Passenger 
Corporation (Amtrak), freight railroads, and commuter rail agencies to 
ask about companies that currently operate commuter trains or provide 
other services. We subsequently interviewed officials at all of the 
private transportation companies identified by these officials. Table 4 
lists the names and locations of the commuter rail agencies, freight 
railroads, and private transportation providers we contacted. 

Table 4: Names and Locations of Commuter Rail Agencies, State 
Departments of Transportation, Class I Freight Railroads, and Private 
Non-Railroad Companies Interviewed: 

Existing commuter rail agencies; 
 
Name: Altamont Commuter Express; 
Location: Stockton, CA. 

Name: Connecticut Department of Transportation (Shore Line East line); 
Location: New Haven, CT. 

Name: Maryland Transit Administration (MARC); 
Location: Baltimore, MD. 

Name: Massachusetts Bay Transportation Authority (MBTA); 
Location: Boston, MA. 

Name: MTA Long Island Rail Road; 
Location: New York, NY. 

Name: MTA Metro-North; 
Location: New York, NY. 

Name: New Jersey Transit Corporation; 
Location: Newark, NJ. 

Name: Northeast Illinois Regional Commuter Railroad Corporation 
(Metra); 
Location: Chicago, IL. 

Name: North County Transit District (Coaster); 
Location: Oceanside, CA. 

Name: Northern Indiana Commuter Transportation District; 
Location: Chesterton, IN. 

Name: Peninsula Corridor Joint Powers Board (Caltrain); 
Location: San Francisco, CA. 

Name: Pennsylvania Department of Transportation (PennDOT); 
Location: Harrisburg, PA. 

Name: Southeastern Pennsylvania Transportation Authority (SEPTA); 
Location: Philadelphia, PA. 

Name: Southern California Regional Rail Authority (Metrolink); 
Location: Los Angeles, CA. 

Name: Sound Transit, Central Puget Sound Regional Transportation 
Authority; 
Location: Seattle, WA. 

Name: Tri-County Commuter Rail Authority; 
Location: Pompano Beach, FL. 

Name: Trinity Rail Express; 
Location: Dallas, TX. 

Name: Virginia Railway Express; 
Location: Alexandria, VA. 

Proposed commuter rail agencies; 

Name: Nashville Regional Transportation Authority; 
Location: Nashville, TN. 

Name: New Mexico Rail Runner; 
Location: Albuquerque, NM. 

State Department of Transportation; 
 
Name: Delaware Department of Transportation (DELDOT)[A]; 
Location: Wilmington, DE. 

Class I railroads; 

Name: BNSF Railway; 
Location: Fort Worth, TX. 

Name: CSX Transportation; 
Location: Jacksonville, FL. 

Name: Norfolk Southern; 
Location: Norfolk, VA. 

Name: Union Pacific Railroad Company; 
Location: Omaha, NE. 

Private transportation providers; 

Name: Massachusetts Bay Commuter Railroad; 
Location: Boston, MA. 

Name: Bombardier, Inc; 
Location: Montreal, Quebec, Canada. 

Name: Connex North America; 
Location: Silver Spring, MD. 

Name: Herzog Transit Services; 
Location: St. Joseph, MO. 

Name: Washington Group International; 
Location: Boise, ID. 

Source: GAO. 

Note: The commuter rail agencies that we visited are listed in italics. 

[A] In addition to its regular commuter rail service, SEPTA also 
provides a "turnkey," or contracted commuter rail service, for the 
Delaware Department of Transportation (DELDOT) between Newark/ 
Wilmington, DE and Philadelphia, PA. Information on SEPTA's use of 
Amtrak services and infrastructure for the Delaware service are 
included in SEPTA's data. Therefore, we did not consider DELDOT as a 
separate commuter rail agency. 

[End of table] 

We conducted site visits to seven existing commuter rail agencies and 
one proposed commuter rail agency. We selected these agencies based on 
their dependence on Amtrak for services and access to infrastructure, 
as well as their location. Specifically, based on interviews with each 
commuter rail agency, we divided each commuter rail agency's 
relationship into several categories based on their reliance on 
Amtrak's infrastructure and services, and their current or past 
relationship with Amtrak. These categories included: the extent to 
which commuter rail agencies rely on Amtrak for infrastructure and 
services, whether the commuter rail agency operates on the Northeast 
Corridor (NEC), whether the commuter rail agency no longer contracts 
with Amtrak for services, and whether a newer commuter rail agency 
chose not to contract with Amtrak. Some commuter rail agencies were 
placed into multiple categories. Using this categorization, we selected 
commuter rail agencies that represent a range of reliance on Amtrak and 
are geographically disperse. During the site visits, we interviewed 
senior level management and toured operation, dispatching, and 
maintenance facilities. In addition to the site visits, we conducted 
semi-structured interviews with officials from all 18 existing commuter 
rail agencies and 2 proposed commuter rail agencies. We analyzed the 
information we collected from the site visits and semi-structured 
interviews to identify shared concerns across the commuter rail 
agencies we interviewed. 

In addition, to obtain information on the options commuter rail 
agencies will have if Amtrak abruptly ceased to provide services and 
infrastructure access, we conducted semi-structured interviews with all 
of the existing commuter rail agencies and asked them to identify short-
and long-term contingencies if Amtrak abruptly ceases to provide 
services and infrastructure to commuter rail agencies. We also 
interviewed representatives from the American Short Line and Regional 
Railroad Association (ASLRRA) to get an understanding of non-Class I 
railroads' interest in providing services to commuter rail agencies. We 
analyzed the information we collected from the semi-structured 
interviews to determine private transportation companies' and freight 
railroads' interest in entering the commuter rail market, as well as 
barriers to doing so. 

We also conducted informational interviews with the Federal Railroad 
Administration, STB, the Federal Transit Administration, and Amtrak; 
and with representatives from industry and government associations, 
including AAR, APTA, ASLRRA, the Coalition of Northeastern Governors 
and the National Railroad Construction and Maintenance Association. We 
also interviewed representatives from 10 of Amtrak's 15 total labor 
unions. (See table 5.) In addition, we interviewed a representative 
from the Law Office of Jenner and Block to get background information 
on railroad bankruptcy law. 

Table 5: List of Labor Unions: 

Name: Brotherhood of Locomotive Engineers and Trainmen. 

Name: Transport Workers Union of America. 

Name: United Transportation Union. 

Name: Transportation Workers Union. 

Name: Sheet Metal Workers International Association. 

Name: American Train Dispatchers Association. 

Name: International Brotherhood of Electrical Workers. 

Name: Brotherhood of Maintenance of Way Employees. 

Name: Transportation Communications International Union. 

Name: Brotherhood of Railroad Signalmen. 

Source: GAO. 

[End of table] 

Finally, we reviewed statutes, government reports on Amtrak, recent 
Amtrak reform proposals from the 109TH Congress, and our past reports. 
Additionally, we reviewed Amtrak, STB, FRA, and APTA documents and 
statistics, as well as contracts and requests for proposals for 
services and access to infrastructure between several commuter 
railroads and Amtrak (or other operators). 

To ensure the reliability of the information presented in this report, 
we corroborated information provided from commuter rail agency 
officials and Amtrak officials about aspects of their contractual 
relationship with other sources. For example, we compared information 
we obtained from commuter rail agencies about the extent to which they 
rely on Amtrak for access to infrastructure and services against 
information obtained from Amtrak, as well as statistics compiled by STB 
staff and FRA. Based on our assessment, we concluded that the 
information provided from commuter rail agency officials and Amtrak 
officials about aspects of their contractual relationship was 
sufficiently reliable for the purposes of this report. 

A limitation of our review is that we only focused on the impact of an 
abrupt Amtrak cessation on commuter rail operations. For example, if 
policy makers acted on legislative proposals that end or substantially 
reduce federal funding, an Amtrak bankruptcy or shutdown could quickly 
follow. Multiple bills to reform intercity passenger rail have been 
proposed in recent years--and these bills, if enacted, could result in 
outcomes other than an Amtrak cessation. However, we did not examine 
how these other outcomes or scenarios would impact commuter rail 
operations. 

[End of section] 

Appendix II: Commuter Rail Agency Use of Amtrak Services and 
Infrastructure: 

Table 6: Commuter Rail Agency Use of Amtrak Services and 
Infrastructure: 

Existing commuter rail agencies; 

Altamont Commuter Express (ACE); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 7%; 
Dispatching: 7%; 
Amtrak-owned or Amtrak-managed stations and platforms: Minimal; 
Other services: Minimal; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Connecticut Department of Transportation's Shore Line East and New 
Haven Lines (SLE); 
Train operations: 100%; 
Maintenance of equipment: 100%; 
Maintenance-of-way: 100%; 
Dispatching: 100%; 
Amtrak-owned or Amtrak-managed stations and platforms: Significant; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

Maryland Transit Administration (MARC); 
Train operations: 50%; 
Maintenance of equipment: 83%; 
Maintenance-of-way: 50%; 
Dispatching: 50%; 
Amtrak-owned or Amtrak-managed stations and platforms: Critical point; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

Massachusetts Bay Transportation Authority (MBTA); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 7%; 
Dispatching: N/A[A]; 
Amtrak-owned or Amtrak-managed stations and platforms: Minimal; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

MTA Long Island Rail Road (LIRR); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 3%; 
Dispatching: 50%; 
Amtrak- owned or Amtrak-managed stations and platforms: Critical point; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

MTA Metro-North Rail Road; 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

New Jersey Transit Corporation (NJT); 
Train operations: 0%; 
Maintenance of equipment: 19%; 
Maintenance-of-way: 27%; 
Dispatching: 55%; 
Amtrak-owned or Amtrak-managed stations and platforms: Critical point; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

North County Transit District (Coaster)[B]; 
Train operations: 100%; 
Maintenance of equipment: 100%; 
Maintenance-of-way: 100%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Northeastern Illinois Commuter Railroad Corporation (Metra); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 2.3%; 
Dispatching: 0.5%; 
Amtrak-owned or Amtrak-managed stations and platforms: Critical point; 
Other services: Minimal; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Northern Indiana Commuter Transportation District (NICTD); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak- owned NEC?: No. 

Peninsula Corridor Joint Powers Board (Caltrain); 
Train operations: 100%; 
Maintenance of equipment: 100%; 
Maintenance-of-way: 65%; 
Dispatching: 100%; 
Amtrak-owned or Amtrak-managed stations and platforms: Significant; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Pennsylvania Department of Transportation (PENNDOT); 
Train operations: 100%; 
Maintenance of equipment: 100%; 
Maintenance-of-way: 100%; 
Dispatching: 100%; 
Amtrak-owned or Amtrak-managed stations and platforms: Significant; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

Sound Transit, Central Puget Sound Regional Transportation Authority 
(Sounder); 
Train operations: 0%; 
Maintenance of equipment: 100%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak- managed stations and platforms: Minimal; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Southeastern Pennsylvania Transportation Authority (SEPTA)[C]; 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 39%; 
Dispatching: 54%; 
Amtrak-owned or Amtrak-managed stations and platforms: Minimal; 
Other services: Significant; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

Southern California Regional Rail Authority (Metrolink); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 5%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak- owned NEC?: No. 

Trinity Railway Express (TRE); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Tri-County Commuter Rail Authority (Tri-Rail); 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Virginia Railway Express (VRE); 
Train operations: 100%; 
Maintenance of equipment: 66%; 
Maintenance-of-way: 1%; 
Dispatching: 2%; 
Amtrak- owned or Amtrak-managed stations and platforms: Critical point; 
Other services: Minimal; 
Does this commuter operate over Amtrak-owned NEC?: Yes. 

Proposed commuter rail agencies; 

New Mexico Rail Runner Express; 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Nashville Music City Star; 
Train operations: 0%; 
Maintenance of equipment: 0%; 
Maintenance-of-way: 0%; 
Dispatching: 0%; 
Amtrak-owned or Amtrak-managed stations and platforms: None; 
Other services: None; 
Does this commuter operate over Amtrak-owned NEC?: No. 

Source: GAO analysis of commuter rail agency responses. 

[A] With the exception of one route dispatched entirely by Amtrak, all 
of MBTA's routes are dispatched by more than one company. Because of 
this, MBTA officials stated that it is not possible to represent the 
percent of trains dispatched by each of its dispatching service 
providers. MBTA officials indicated that Amtrak provides dispatching 
for MBTA's 34 Attelboro line trains, and the initial dispatching for 
about two-thirds of all other MBTA trains before transferring them to 
another provider. 

[B] Coaster's contract with Amtrak expires on June 30, 2006. Amtrak was 
not selected to continue the service beyond this point. 

[C] In addition to its regular commuter rail service, SEPTA also 
provides a "turnkey," or contracted commuter rail service, for the 
Delaware Department of Transportation between Newark/Wilmington, DE and 
Philadelphia, PA. Information on SEPTA's use of Amtrak services and 
infrastructure for the Delaware service are included in SEPTA's data. 

Table Definitions: 

"Other services" includes police/security, ticketing, and traction 
power. 

The following definitions refer to the station and platform category 
and other services . 

None = No reliance on Amtrak for access to--or management of--stations 
and platforms. No reliance on Amtrak for "other services." 

Minimal = Amtrak provides access to--or management of--less than 25 
percent of the stations and platforms used by the commuter rail agency. 
Amtrak provides less than half of one "other service." 

Significant = Amtrak provides access to--or management of--more than 25 
percent of the stations and platforms used by the commuter rail agency. 
Amtrak provides more than half of one or more of the "other services," 
or provides less than half of one or more "other services"--but the 
service allows the commuter rail agency to access a critical point for 
its operations (e.g., a critical station). 

Critical point = Although the commuter rail agency may rely on Amtrak 
for access to--or management of--less than 25 percent of the stations 
and platforms it uses, one of these Amtrak-owned stations is critical 
to the service (e.g., a majority of riders enter or exit the commuter 
service at this point, or the station is a terminus for several of the 
agency's lines). 

[End of table] 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

JayEtta Z. Hecker, Director, (202) 512-2834, heckerj@gao.gov: 

Acknowledgments: 

In addition to those named above, Jay Cherlow, Nikki Clowers, Greg 
Hanna, Joah Iannotta, Bert Japikse, Nancy Lueke, Sara Ann Moessbauer, 
Josh Ormond, Robert Owens, Eileen Tumalad, and Alwynne Wilbur made key 
contributions to this report. 

(544111): 

FOOTNOTES 

[1] Class I railroads are the largest railroads, as defined by 
operating revenue, and account for the majority of U.S. rail freight 
activity. There are three classes of railroads. The Surface 
Transportation Board (STB) designates the class of railroad and in 2004 
defined Class I railroads as railroads with operating revenues of $289 
million or more. 

[2] Rights-of-way include the fixed infrastructure required for train 
operations, including tracks and signals. 

[3] In addition, in fiscal year 2001, an average of 38 freight trains 
used the NEC each day. 

[4] The Federal Railroad Administration (FRA) exercises jurisdiction 
over all areas of railroad safety under title 49 U.S.C., chapter 201. 

[5] STB has this authority under section 11123 of title 49 U.S.C. STB's 
predecessor, the Interstate Commerce Commission, also had this 
authority. 

[6] "Final Report: Directed Service for Amtrak-Dependent Carriers," 
prepared by The Woodside Consulting Group, Inc., for the FRA (Palo 
Alto, CA: Oct., 2005), 2. 

[7] Congress directed the Secretary of Transportation to withhold $60 
million for directed commuter and freight service from Amtrak's fiscal 
year 2004, 2005, and 2006 appropriations. 

[8] GAO, Amtrak Management: Systemic Problems Require Actions to 
Improve Efficiency, Effectiveness, and Accountability, GAO-06-145 
(Washington, D.C.: Oct. 2005), 6. 

[9] Amtrak's fiscal year 2006 appropriation was $1.3 billion. 

[10] The nine commuter rail agencies in the Northeast are the Long 
Island Rail Road, the Maryland Transit Administration's MARC Commuter 
Service, the Massachusetts Bay Transportation Authority, Metro-North 
Railroad, New Jersey Transit (NJT), the Pennsylvania Department of 
Transportation's Keystone Service from Harrisburg to Philadelphia, the 
Southeastern Pennsylvania Transportation Authority (SEPTA), the 
Connecticut Department of Transportation's Shore Line East service, and 
the Virginia Rail Express. Metro-North, which operates in New York and 
Connecticut, is the only commuter rail agency in the Northeast that 
does not use any Amtrak-owned track or infrastructure. 

[11] The Pennsylvania Department of Transportation service uses Amtrak- 
owned infrastructure from Harrisburg, PA, to Philadelphia that connects 
with the NEC. 

[12] Amtrak also provides traction power for one SEPTA-owned line in 
its entirety (other than those lines that are on the NEC) and for 
certain other NJT lines. 

[13] Based on passenger counts, LIRR and NJT account for 92.6 percent 
of arriving passengers, while Amtrak accounts for 7.4 percent. 

[14] This number will be reduced to two in 2006, as Amtrak was not 
selected to be the service provider for San Diego's Coaster service. 

[15] The remainder of the services (e.g., train operations, equipment 
maintenance, and the rest of the dispatching) are provided by SEPTA 
employees. 

[16] Commuter rail contracts can either be a product of a competitive 
or non-competitive process. In a competitive process, a commuter rail 
agency requests proposals for a certain set of services and several 
companies submit offers to provide that service. The companies may be 
given feedback and an opportunity to refine their offers. One or more 
companies are ultimately selected for a contract. Where Amtrak owns the 
infrastructure necessary for commuter service, commuter rail agencies 
have entered into non-competitive contracts with Amtrak--for example, 
to access the Amtrak-owned NEC, Chicago Union Station, or Holgate 
Maintenance Yard in Seattle. A non-competitive contract is one in which 
the cost is developed through negotiations with a single provider such 
as Amtrak. 

[17] STB is the successor to the Interstate Commerce Commission (ICC). 

[18] According to STB staff, no commuter rail agency has petitioned the 
Board to apply the ICC ruling. Nevertheless, it serves as an option 
should Amtrak and those commuter rail agencies subject to the ruling 
fail to reach agreement as to the terms and conditions of access. 
Moreover, a senior Amtrak official stated that commuter rail agencies 
covered by the ICC ruling use it as the basis for access negotiations. 

[19] SEPTA provides commuter rail service for the Delaware Department 
of Transportation between Newark/Wilmington, DE, and Philadelphia, PA. 
This service was initiated after Amtrak's inception, and therefore, 
Delaware's Department of Transportation also negotiates a price for 
accessing the NEC. 

[20] SEPTA and Amtrak are finalizing an agreement to invest $380 
million on portions of the Amtrak-owned Keystone Corridor over 11 
years. 

[21] GAO-06-145. 

[22] According to FRA officials, they are currently working with Amtrak 
to develop a plan for revamping its accounting system. 

[23] Our report focuses on the impact of an abrupt Amtrak cessation on 
commuter rail operations. For example, if policy makers acted on 
legislative proposals that end or substantially reduce federal funding, 
an Amtrak bankruptcy or shutdown could quickly follow. Multiple bills 
to reform intercity passenger rail service have been proposed in recent 
years--and these bills, if enacted, could result in outcomes other than 
an Amtrak cessation. However, we did not examine how these other 
outcomes or scenarios would impact commuter rail operations. 

[24] GAO-06-145. 

[25] For more information on issues involved in an Amtrak liquidation, 
see GAO, Intercity Passenger Rail: Potential Financial Issues in the 
Event That Amtrak Undergoes Liquidation, GAO-02-871 (Washington, D.C.: 
Sept. 20, 2002). 

[26] GAO-06-145. 

[27] According to the statute, "[for purposes of the section with 
regard to directed service,] the National Railroad Passenger 
Corporation and any entity providing commuter rail passenger 
transportation shall be considered rail carriers subject to the Board's 
jurisdiction." 49 U.S.C. § 11123(e). 

[28] The Delmarva Peninsula refers to the peninsula between the 
Chesapeake Bay and the Atlantic Ocean made up of territory from the 
states of Delaware, Maryland, and Virginia. 

[29] STB staff have been working with FRA officials to identify 
possible implementation plans, but STB staff said that there has been 
no need for a meeting of the working group tasked with this activity 
since Amtrak's fiscal year 2006 appropriation was passed, which 
provided Amtrak nearly $1.3 billion. The Secretary of Transportation 
holds an additional $40 million that may be released to Amtrak for 
efficiency incentive grants. This appropriation made Amtrak's financial 
situation potentially less dire and significantly reduced the chance 
that Amtrak would be in a bankruptcy situation in fiscal year 2006. 

[30] The railroad retirement-system provides retirement and disability 
benefits to the nation's retired railroad workers and their survivors, 
including those of Amtrak. If employees leave a company that 
participates in the railroad retirement-system, they may face reduced 
retirement benefits. Employees moving from one participant company to 
another (e.g., from Amtrak to a freight railroad) would retain their 
full benefits. For more information on the railroad retirement-system, 
see GAO, Intercity Passenger Rail: Potential Financial Issues in the 
Event That Amtrak Undergoes Liquidation, GAO-02-871 (Washington, D.C.: 
Sept. 20, 2002). 

[31] In fiscal years 2004 and 2005, this money was released to Amtrak 
in the fourth quarter when it was clear that Amtrak would not run out 
of money and enter into bankruptcy before the end of the fiscal year. 

[32] As part of its request for proposal process, MBTA required all 
bidders to offer comparable positions to the existing workforce, 
including key terms of the current contract, such as wages and 
benefits. 

[33] GAO-06-145. 

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