January 2017 Railway Age

RailwayAge

January 2017 | www.railwayage.com

Serving the railway industry since 1856

Railroader of the Year

Tom Prendergast

New York’s People-Mover

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RailwayAge

January 2017

visit us at www.railwayage.com Features Railroader of the Year

22

Passenger Railcar Market

46

Passenger Rail Outlook

49

Conrail Human Factors

53

News/Columns From the Editor

2

Update

10

Watching Washington

20

Financial Edge

64

Departments Industry Indicators

4

Industry Outlook

6

Market

8

People

59

100 Years Ago

59

Meetings

59

Products

60

Advertising Index

61

Professional Directory

62

Classified

63

22

46

53

On the Cover Railroader of the Year Tom Prendergast Photo: William C. Vantuono Railway Age Magazine (Print ISSN 0033-8826; Digital ISSN 2161-511X), (USPS 449-130), (Canada Post Cust. #7204564; Agreement #40612608; IMEX PO Box 25542, London, ON N6C 6B2, Canada) is published monthly by Simmons-Boardman Publishing Corp., 55 Broad St., 26th Floor, New York, NY 10004. Tel. (212) 620-7200; FAX (212) 633-1863. Vol. 218, No. 1.

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January 2017 Railway Age 1

From the Editor William C. Vantuono

Editorial and Executive Offices Simmons-Boardman Publishing Corp.

55 Broad Street, 26th Fl. New York, NY 10004 212-620-7200; Fax: 212-633-1863 Website: www.railwayage.com

A man and his milestone

T

om Prendergast, our 54th Railroader of the Year, is retiring from the New York Metropolitan Transportation Authority in a few short months. At this juncture, I can’t imagine anyone who could even begin to fill his shoes. Andrew Cuomo, the Empire State’s definitely-Downstate Governor (he’s from Queens, can’t you tell?), has his work cut out.

New York City’s immense rapid transit system attained a milestone on New Year’s Day 2017. The $4.4 billion first leg of the Second Avenue Subway, linking 63rd Street with 96th Street on the Manhattan’s East Side, opened to the public 88 years after the first bond issue was floated for its construction. The Q Train, which now runs from Coney Island in Brooklyn to 96th Street on the Upper East Side, is relieving stifling congestion on the Lexington Avenue Line (4-5-6 Trains).

Tons of fish may be sold at Fulton Fish Market at Hunt’s Point in the Bronx, but the sardines are tightly packed—not into tin cans, but stainless-steel subway cars— on “The Lex.” It was enjoyable participating in the festivities marking the Second Avenue Subway’s inauguration. It felt good to be a part of history in the making, considering that Railway Age was founded 48 years prior to the Interborough Rapid Transit’s opening in 1904. Governor Cuomo was having a grand time, making grand entrances flanked

by New York State Troopers, receiving hearty cheers from the crowd, and followed, paparazzi-style, by reporters and photographers.

I, however, took great satisfaction in watching Tom Prendergast quietly, humbly enjoying the fruits of his labor, sharing his joy with the thousands of MTA people he leads. Tom, the Second Avenue Subway is your milestone, the capstone on a distinguished career that began more than 40 years ago with the Chicago Transit Authority and took you from the Windy City to Washington D.C. and finally to the

2

Railway Age

January 2017

RailwayAge

Big Apple. Yes, the Governor deserves a lot of credit for securing the billions in funding that built this long-planned, long-delayed project, but it’s you, and all the employees and suppliers and contractors, who will be most-remembered long after the trains are rolling up and down the entire length of the East Side, from 125th Street to The Battery.

“Opening the Second Avenue Subway this weekend was a crowning achievement for the MTA, and I’m proud to have been a part of such a historic moment,” Tom said when he announced his retirement. “It has not only changed the daily commute for hundreds of thousands of customers, it has helped change the face of the MTA—showing the public we can meet the deadlines we set for ourselves. I’m also proud of the work we have done to integrate new technology into all aspects of our system to keep up with the growing needs of our riding public and of the way we recovered and fortified our assets from the devastating damage left behind by Superstorm Sandy. It’s never easy to leave an organization after 25 years of service, but I do so knowing that the MTA will continue to serve the public so well and that our governor will ensure New York continues to have the most robust transportation system in the country.”

I wish to thank Tom Prendergast for his service, not only to our industry, but to Railway Age. In the nearly 25 years that I’ve known him, he has spoken at many of our conferences, in particular our NextGeneration Train Control CBTC/PTC events. Advanced technology has always been on Tom’s agenda. Those of you— suppliers, consultants and users alike—who are involved with CBTC know that success not only requires technical and financial resources, but leadership and vision.

For more on this remarkable railroader, see our story on p. 22.

ARTHUR J. McGINNIS, Jr., President and Chairman JONATHAN CHALON, Publisher jchalon@sbpub.com WILLIAM C. VANTUONO, Editor-in-Chief wvantuono@sbpub.com BEN VIENT, Managing Editor bvient@sbpub.com Contributing Editors: Roy H. Blanchard, Alfred E. Fazio, Bruce E. Kelly, Ron Lindsey, Ryan McWilliams, David Nahass, Jason H. Seidl, David Thomas, John Thompson, Frank N. Wilner Creative Director: Wendy Williams Art Director: Nicole Cassano Graphic Designer: Aleza Leinwand Corporate Production Director: Mary Conyers Digital Ad Operations Associate: Shannell Beckles Production Director: Eduardo Castaner Marketing Director: Erica Hayes Conference Director: Michelle Zolkos Circulation Director: Maureen Cooney Western Offices 20 South Clark Street, Suite 1910, Chicago, IL 60603 312-683-0130; Fax: 312-683-0131 Engineering Editor: Mischa Wanek-Libman mischa@sbpub.com Assistant Editor: Kyra Senese ksenese@sbpub.com International Offices 46 Killigrew Street, Falmouth, Cornwall TR11 3PP, United Kingdom Telephone: 011-44-1326-313945 Fax: 011-44-1326-211576 International Editors: David Briginshaw, db@railjournal.com Keith Barrow, kb@railjournal.com Kevin Smith, ks@railjournal.com Customer Service: 800-895-4389 Reprints: PARS International Corp.

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Congratulations

Thomas F. Prendergast Chairman and CEO New York Metropolitan Transportation Authority

2017 Railroader of the Year

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Industry Indicators SHORT LINE AND REGIONAL TRAFFIC INDEX

TRAFFIC ORIGINATED CARLOADS MAJOR U.S. RAILROADS

FIVE WEEKS ENDING DECEMBER 3, 2016

by Commodity Grain Farm Products ex. Grain Grain Mill Products Food products Chemicals Petroleum & Petroleum Products Coal Primary Forest Products Lumber and Wood Products Pulp and Paper Products Metallic Ores Coke Primary Metal Products Iron and Steel Scrap Motor Vehicles and Parts Crushed Stone, Sand, and Gravel Nonmetallic Minerals Stone, Clay & Glass Products Waste & Nonferrous Scrap All Other Carloads Total U.S. CarLoadS

NOV ’16 128,828 4,669 48,231 31,710 150,332 53,753 453,142 5,788 15,260 27,623 25,506 20,563 39,093 14,382 86,142 110,864 21,099 36,464 18,953 26,606 1,319,008

NOV ’15 108,619 4,280 46,560 31,146 147,503 63,566 462,424 6,957 14,990 28,995 27,787 18,541 40,268 12,560 89,276 108,150 21,842 35,605 16,751 27,782 1,313,602

% CHANGE 18.6% 9.1% 3.6% 1.8% 1.9% -15.4% -2.0% -16.8% 1.8% -4.7% -8.2% 10.9% -2.9% 14.5% -3.5% 2.5% -3.4% 2.4% 13.1% -4.2% 0.4%

401,784

373,775

7.5%

1,720,792

1,687,377

2.0%

CARLOADS

Chemicals Coal Crushed Stone / Sand / Gravel Food & Kindred Products Grain Grain Mill Products Lumber & Wood Products Metallic Ores Metals & Products Motor Vehicles & Equipment Nonmetallic Minerals Petroleum Products Pulp, Paper & Allied Products Stone, Clay & Glass Products Trailers / Containers Waste & Nonferrous Scrap All Other Carloads

COMBINED U.S./CANADA RR INTERMODAL MAJOR U.S. RAILROADS

FIVE WEEKS ENDING DECEMBER 3, 2016

by Commodity TRAILERS CONTAINERS TOTAL UNITS

NOV ’16 120,960 1,198,229 1,319,189

NOV ’15 129,095 1,165,765 1,294,860

% CHANGE -6.3% 2.8% 1.9%

4,845 298,461 303,306

5,803 288,695 294,498

-16.5% 3.4% 3.0%

125,805 1,496,690 1,622,495

134,898 134,898 1,589,358

-6.7% 2.9% 2.1%

CANADIAN RAILROADS TRAILERS CONTAINERS TOTAL UNITS

COMBINED U.S./CANADA RR TRAILERS CONTAINERS TOTAL COMBINED UNITS

Source: Monthly Railroad Traffic, Association of American Railroads

average weekly U.S. Rail Carloads: all commodities (not seasonally adjusted) 340,000 2006 (peak year)

320,000

2015

280,000

NOVEMBER 2015 - 320,572 280,000 290,000 300,000 310,000 320,000 330,000 340,000 350,000 360,000 370,000

2016

240,000

Jan Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

Data are average weekly originations for each month, are not seasonally adjusted, do not include intermodal, and do not include the U.S. operations of CN and CP. Source: AAR

4

Copyright © 2015 All rights reserved.

Railroad employment, Class I linehaul carriers, NOVEMBER 2016 (% change from NOVEMBER 2015)

Transportation (train and engine) 59,822 (-8.70%)

Executives, Officials, and Staff Assistants 9,144 (-4.84%)

Professional and Administrative 13,214 (-7.46%)

Total employees: 151,495 % change from NOV. 2015: -7.76% Maintenance of Equipment and Stores 28,201 (-7.79%)

Maintenanceof-Way and Structures 35,179 (-6.51%)

Source: Surface Transportation Board

260,000

220,000

% CHANGE 8.4% 10.8% -12.7% 5.9% 19.7% -1.8% -2.6% -10.6% 11.8% 16.9% -38.4 17.9% -8.3% 15.7% 30.1% 8.0% 12.0%

NOVEMBER 2016 - 352,463

Transportation (other than train & engine) 5,935 (-10.25%)

2014

300,000

ORIGINATED NOV ’15 41,153 19,456 27,238 10,397 25,373 6,264 8,668 3,235 13,526 7,686 2,418 1,762 17,329 11,538 41,894 8,114 74,521

TOTAL CARLOADS, NOVEMBER 2016 vs. 2015

CANADIAN RAILROADS ALL Commodities

ORIGINATED NOV ’16 44,593 21,554 23,773 11,012 30,383 6,152 8,440 2,893 15,124 8,987 1,489 2,077 15,886 13,354 54,494 8,764 83,488

BY Commodity

Railway Age

January 2017

class I employment dropS ON YEAR, BUT STEADIES ON MONTH Figures released by the STB show Class I total railroad employment dropped 7.76% in November 2016, measured against November 2015.

But total railroad employment stayed nearly even compared to October 2016, declining only 0.27%. On the yearly comparison, Transportation (other than train and engine) dropped the most at 10.25%; followed

by Transportation (train & engine), which dropped 8.70%, followed by Maintenance of Equipment and Stores, which dropped 7.79%.

Industry Outlook STB finalizes rule for Board-initiated investigations

FRA’s Tier III safety standards The FRA has proposed updates for the passenger train safety standards used in the U.S. as the country looks to regional projects to add high-speed trains that can travel up to 220 mph and replace its aging passenger fleet.

The proposed updates represent nearly a decade of work by FRA’s passenger rail division and would establish a new category of passenger equipment, Tier III, for trains traveling up to 220 mph. The FRA says the updates would offer an alternative method for evaluating crashworthiness. The public, railroad industry, railroad labor, manufacturers and other stakeholders will have an opportunity to provide feedback and comment on the proposed rule during the next 60 days.

In addition to measuring a train’s

crashworthiness based on whether it meets current prescriptive strength standards, the FRA says that “the proposed changes would allow a train’s crashworthiness to be evaluated based on it meeting an equivalent level of safety achieved through CEM (crash energy management) technology or other innovative engineering methods.”

Although Tier III trains will be required to have dedicated right-ofway to operate at speeds above 125 mph, the FRA says the new standards “will allow Tier III trains to safely share track with current Tier I and Tier II commuter, intercity, and Amtrak Acela Express trains. Compatibility between equipment types is a key strategy to allow trains to share existing corridors to reach downtown stations.”

TEX Rail awarded $499MM FTA grant The Federal Transit Administration announced on Dec. 15, 2016 a $499.39 million federal full-funding grant agreement (FFGA) with the Fort Worth Transportation Authority (FWTA) to build TEX Rail, a regional/commuter rail line between downtown Fort Worth and the Dallas Fort Worth International (DFW) Airport.

The 26.8-mile line will serve downtown Fort Worth, the City of Grapevine and DFW Airport. The project also will provide connections to other transportation services in the area, including the Dallas Area Rapid Transit (DART) 6

Railway Age

January 2017

light rail system, Amtrak, Trinity Railway Express and the FWTA bus system.

FWTA estimates that TEX Rail will open in 2018. Estimated ridership is 9,000 daily transit trips when it opens, rising to 13,700 by 2035.

With the signing of the FFGA, FTA is committing a total of $499.39 million through its Capital Investment Grant (CIG) Program to the $1.034 billion TEX Rail project. The federal funds will be provided over the course of four years on an annual payment schedule, subject to Congressional approval during the annual appropriations process.

The Surface Transportation Board last month adopted a final rule to establish procedures for Board-initiated investigations concerning railroad issues of national or regional significance pursuant to Section 12 of the Surface Transportation Board Reauthorization Act of 2015 (Reauthorization Act), Pub. L. No. 114-110, 129 Stat.

2228 (2015).

Before passage of the Reauthorization Act, the Board could commence an investigation only in response to a stakeholder’s complaint, rather than upon its own initiative. The final rule also marks the last milestone in the Board’s implementation of the Reauthorization Act. STB says “the Reauthorization Act provides the overarching procedural framework for investigations initiated by the Board. Building on the statutory framework, the STB’s final rule establishes a three-stage process of preliminary fact-finding, Boardinitiated investigation, and formal Board proceeding.”

The Board will apply the “national or regional significance” standard on a case-by-case basis, considering factors such as the impact of the potential violation on national or regional rail traffic, customers or third parties, as well as the geographic scope of the potential violation. The Board’s investigative authority does not apply to disputes over individual rail rates.

“With our new investigative authority, the Board is better equipped to explore and resolve significant railroad issues,” said Chairman Daniel R. Elliott. “These rules ensure appropriate protections for due process, separation of fact-finding versus adjudication, and the timely resolution of investigations. I appreciate the thoughtful comments of our stakeholders throughout the process of this rulemaking, and hope that these rules facilitate investigations of regional or national significance that inspire the public trust.”

Market

Siemens finalizes S70 streetcar deal with Charlotte Siemens has finalized a plan with the Charlotte City Council to build six new S70 streetcars for the Charlotte Area Transit System (CATS), the public transit system operated across Mecklenburg County and four surrounding counties.

The new streetcars will add to the 42 Siemens-built light rail vehicles currently in operation on the Blue Line across the city. The new streetcars will run on the second phase of the CityLYNX Gold Line, replacing the legacy green and yellow trolleys currently in operation. The new phase will add 2.5 miles to the Gold Line, expanding it to 4 miles in length ending at Sunnyside Avenue to the east and Johnson C. Smith University to the west. The Gold Line expansion construction is scheduled to begin January 2017 and is estimated to open in fall 2020.

North America Bombardier has been awarded an eight-year contract by Montréal’s Agence Métropolitaine de Transport (AMT) for the operations and maintenance of the AMT commuter rail fleet on all of its six lines in the greater Montréal area.

Cubic Transportation Systems (CTS) was awarded a $4.8 million contract modification from the Maryland Transit Administration (MTA) to upgrade its Automatic Fare Collection (AFC) system.

Ottawa’s O-Train Confederation Line LRT project attained a major milestone on Dec. 2 as the first of 34 Alstom Citadis Spirit LRVs began testing on the line segment between Blair and Cyrville stations, during a ceremonial launch.

GE Transportation acquired Iders Incorporated, an electronic product 8

Railway Age

January 2017

design and manufacturing company for the rail industry.

Massachusetts Bay Transportation Authority (MBTA) ordered 120 additional Red Line cars from the CRRC MA Corporation.

Siemens first Brightline trainset, comprised of two locomotives and four coaches adorned in Brightline Blue, is now on the property in West Palm Beach, Fla., with a scheduled Jan. 11 public debut.

GE Transportation made the first shipment of its diesel-electric Evolution Series ES43ACi locomotives to Pakistan Railways, from its manufacturing plant in Erie, Pa. The locomotives are expected to arrive in Pakistan in the first quarter of 2017.

Railtech Matweld has finalized its merger and integration with Railtech Boutet. As of Jan. 1, 2017, Railtech Matweld will be officially conducting business as Railtech Boutet.

Worldwide: South Africa’s state-owned freight and logistics giant Transnet has partnered with GE Transportation to create “a digital solution that will seamlessly connect shippers and transport operators, enabling an efficient movement of goods.”

Santiago Metro awarded a joint venture of Arrigoni Engineering & Construction, Chile, and Strukton International a $49 million contract to construct stations on Metro Line 3.

Liverpool City Region Combined Authority placed an order with Stadler for a new fleet of 52 EMUs. Metrowagonmash Russia has completed delivery of 27 class 711 regional DMUs to Serbian Railways (ZS).

Hitachi Rail Europe (HRE) rolled out the first Intercity Express (IEP) train assembled at its plant in Newton Aycliffe, Britain.

OKONITE The Premier Manufacturer of Vital Circuit Signal Cables For nearly 140 years Okonite had been the leader in the design and production of vital circuit signal cables. Signal cables are an essential component of the uncompromising safety, security and integrity of a railroad’s signal system.

Okonite, along with its Okoguard EPR insulation for power cables, was also the first to innovate EPR vital circuit EPR signal cables. With its 50 years of outstanding service record, Okonite's signal cables ensure unmatched characteristics, excellence in quality and reliability and an assurance of railroad security and safety operations.

Over the years others have tried to match Okonite’s trusted reliability, but only Okonite signal cables can meet the most discriminating and essential test requirements — the tests of long-term and trouble-free time and service in railroad cable installations of all types.

Okonite’s dedicated commitment is to re-invest in our business, provide the highest and most advanced facilities, keeping us at the forefront in cable product and manufacturing superiority.

Only Okonite has demonstrated the expertise to provide concurrently the necessary response and capacity to effectively process high levels of cable requirements associated with other important railroad programs such as Positive Train Control.

Only Okonite — Proven Experience, Proven Reliability and Proven Quality and Service.

THE OKONITE COMPANY

Okonite Cables...A higher Standard!

102 Hilltop Road, Ramsey, NJ 07446 201.825.0300 Fax: 201.825.9026 www.okonite.com

Update From KLW, a new breed of repowers

K

noxville Locomotive Works (KLW) has repowered, refurbished, remanufactured, and/or upgraded more than 400 locomotives since its establishment in 1998. The company’s most recent offering is a fleet of nine SE Series switchers constructed with the assistance of Texas Emissions Reduction Program (TERP) funds.

KLW offers its own line of green, single-engine, repowered locomotives, from 1,000 hp four-axle switchers up to 3,200 hp six-axle linehaul locomotives.

In addition, KLW offers locomotive rebuilding and refurbishment services for traditional locomotives.

The project, conducted for Locomotive Solutions of Houston and Baton Rouge, originated from applications submitted under the TERP program, which is administered by a funding department within the TCEQ (Texas Commission on Environmental Quality). TERP is a biennium funding program for obtaining ERIG (Emissions Reduction Incentive Grants). Under the TERP program, Locomotive Solutions was awarded a contract for nine repowered units using KLW’s drive train system, which consists of an MTU Tier 4i engine platform for 1,050 BHP and 1,560 BHP engines. The company says that, effectively, 80% of the cost of the top-deck repower is reimbursed through 10

Railway Age

January 2017

emissions reduction incentive grants.

The nine KLW SE Series switchers, models SE15B and SE10B, are destined for Chevron refineries in the Houston and Beaumont-Port Arthur, Tex., non-attainment areas. The first unit was christened on Friday, Dec. 16.

The KLW SE15B and SE10B are switcher locomotives that are 1,560 BHP and 1,050 BHP respectively.

Utilizing four-axle EMD and GE cores, both models weigh up to 276,000 pounds and are fitted with a Series 2000 MTU diesel engine, ZF gearbox, TMV wheelslip prevention system, and other modern technology.

“These switcher locomotives are some of the lowest emitting units ever created and offer superb fuel savings,” the company says. “The SE15B and SE10B models are also the only switcher locomotives in existence to use a high-speed diesel engine with the low-speed AR10 alternator.”

The MTU engines are made in Aiken, S.C. Currently certified to EPA Tier 4i off-highway standards, the 12V and 16V Series 2000 engines offer estimated emissions reductions of up to 90%, making them “excellent solutions for switching in highly populated areas, which is one reason why they qualify for many government-funded emissionsreduction programs,” the company says.

KLW says that, in addition to ultralow emissions, the SE15B and SE10B reduce fuel consumption by 30-50% compared to similar horsepower locomotives and up to 60% (SE10B) when replacing a higher horsepower locomotive, “thanks to improvements in tractive effort. In many operations, this means savings in the tens of thousands of dollars or more per year.”

The TMV Traction and Engine Control Unit (TECU) controls the traction alternator, engine speed/power, wheelslip, cooling fans, direction control, automatic engine start-stop (AESS), among other functions. KLW says the TECU is about one-fourth the size of a typical Dash-2 module rack “and as a result features much less wiring than older electronic systems.” A touchscreen is also provided so that operating and maintenance crews can monitor the locomotive’s diagnostics, including faults, in real-time.

One of the key features of TMV’s TECU system is wheelslip control. “By monitoring the traction motors and each axle, the TECU can prevent wheelslips from occurring,” the company says.

“This increases the starting tractive effort significantly, up to 40% in certain conditions, compared to older wheelslip control systems. Increasing the starting tractive effort allows the locomotive to do more work than it could before the repower process. Preventing wheelslips and increasing traction also reduces the wear and tear on wheels and on track.

“What sets KLW locomotives apart is our unique approach to locomotive repowers,” the company says. “Each model uses a single MTU high-speed engine with a low-speed AR10 alternator. This is possible with a ZF 2:1 reduction gearbox with the MTU engine. The gearbox converts RPMs from the MTU engine (up to 1,800) down to a lower speed (up to 900), making the MTU engine compatible with the AR10. The gearbox is joined to the AR10 with an AR10 double bearing adapter (patented by KLW) and a Geislinger or Centa coupling.”

Engineering opportunities together.

US$126 million Sale to Genesee & Wyoming Financial Advisor November 2016

US$20 million

US$20 million

Senior Credit Facility

Senior Credit Facility

Sole Lender July 2016

Sole Lender March 2016

Portfolio Company of

US$875 million Senior Secured Notes

US$800 million Senior Credit Facility Joint Lead Arranger, Joint Bookrunner, & Administrative Agent November 2015

Sale to Levine Leichtman Capital Partners Financial Advisor August 2015

US$275 million Senior Notes

Co-Lead Manager April 2014

The tracks are lined with opportunity. Whether you’re seeking capital, considering expansion, or pursuing new business acquisitions, we have the breadth of rail expertise and experience you need to achieve your goals.

Steve Hull Managing Director, Investment Banking 312-461-4164 steve.hull@bmo.com

Robert Dovenberg Managing Director, Mergers & Acquisitions 612-904-5725 bob.dovenberg@bmo.com

William Thomson Director, Corporate Banking 312-461-3879 william.thomson@bmo.com

Banking products and services are provided by BMO Harris Bank N.A. Member FDIC. BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Ireland p.l.c., and Bank of Montreal (China) Co. Ltd and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC) in the U.S., BMO Nesbitt Burns Inc. (Member Canadian Investor Protection Fund) in Canada and Asia and BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in Europe and Australia. “BMO Capital Markets” is a trademark of Bank of Montreal, used under license. “BMO (M-Bar roundel symbol)” is a registered trademark of Bank of Montreal, used under license.® Registered trademark of Bank of Montreal in the United States, Canada and elsewhere.

February 2016 Railway Age 11

Update STB’s Ann Begeman confirmed to second term President Obama on Dec. 7 nominated Ann Begeman to another five-year term on the Surface Transportation Board.

She was approved by voice vote in an Executive Session of the Senate Commerce Committee within hours of Obama’s nomination reaching the Committee, and then quickly confirmed by the full Senate on Dec. 9.

As a long-time former senior legislative aide to Commerce Committee Republicans, and a South Dakota native as is Committee Chairman John Thune (R-S.D.), there was never a doubt that the Committee would move her nomination to the Senate floor once it was received from the White House.

Begeman’s new five-year term will run through Dec. 31, 2020. (Begeman’s term expired Dec. 31, 2015, and she has since been in a holdover year.)

“Since Begeman, now the STB’s lone Republican, was confirmed by the Senate as expected, the STB in 2017 will look precisely as it did in 2016, except that Begeman likely will be named Chairman by President-elect Trump following his inauguration Jan. 20,” observes Frank N. Wilner, Railway Age’s Capitol Hill Contributing Editor and a former White House-appointed chief of staff at the STB. “Until then, Democrat Dan Elliott remains Chairman. Elliott’s term expires Dec. 31, 2018, and Democrat Deb Miller’s on Dec. 31, 2017. By statute, STB members may remain in office for a maximum of 12 months beyond the expiration of their

STORAGE

12

Railway Age

term, or until a successor is nominated and confirmed by the Senate.

“While the Surface Transportation Board Reauthorization Act of 2015 created two new STB seats, President Obama declined to make nominations.

It will be up to Trump to make those nominations, but it is unlikely he will do so until Congress passes a Fiscal Year 2017 budget expected to include an increase in STB funding to cover the cost of two new STB members and their staff. A Fiscal Year 2017 budget has been stalled since mid-2016, with Congress having voted extensions of the Fiscal Year 2016 budget to keep the federal government in operation. The latest extension is to run to April 2017.

“Thus, a budget bump-up for the STB is unlikely before April or May, which likely will delay nomination to the two 2015-created and still vacant seats until then. Given that Elliott and Miller are Democrats, and the statute provides an STB membership majority from the political party controlling the White House, the two new nominations to the five-member STB will be Republicans.

“Issues of railroad importance before the STB in 2017 include captive-shipper petitions for open access, whether to revise the Stand Alone Cost (SAC) test for rate reasonableness, and the formula for determining revenue adequacy. In the past, Begeman has shown significantly more interest in captive-shipper arguments than her Republican predecessors on the STB, and has been a

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perennial critic—as has Miller—of Elliott’s leadership and alleged lack of collegiality and transparency.”

“Begeman’s level of frustration with Elliott is manifest in her record number of progressively penetrating dissents, while Miller increasingly has withheld a necessary second vote until Elliott makes revisions to his draft decisions,” Wilner wrote in his September 2016 Watching Washington column. “The squabbling promotes regulatory delay. A five-year Elliott-led torment to produce a decision on forced competitive access by a second railroad at certain one-railroad served points resulted in Miller holding out for further stakeholder input and a better grasp of the long-term financial impact. Begeman still dissented, irritable that the decision failed to identify which shippers will use the access, how and at what cost, and the impact on rail network fluidity. It will be 2017 or later—with voting by up to three new STB members—before a final decision.”

Congratulations Thomas F. Prendergast - Chairman & CEO, New York Metropolitan Transportation Authority for being honored as 2017 Railroader of the Year See you in Indianapolis!

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Update Elaine Chao Trump’s DOT Secretary choice President-elect Donald Trump has named Elaine Chao as his choice for U.S. Transportation Secretary. Chao is a former Deputy Transportation Secretary and a former Labor Secretary, and wife of Senate Majority Leader Mitch McConnell (R-Ky.) since 1993.

Chao served as Secretary of Labor under President George W. Bush from 2001 through 2009. She also served as Deputy Secretary of Transportation under President George H.W. Bush from 1989 to 1991. In 1986, she became Deputy Administrator of the Maritime Administration. From 1988 to 1989, she served as chairwoman of the Federal Maritime Commission.

After she left the Bush Administration in 2009, Chao remained active in politics. She has been an adviser to her husband. She is a Distinguished Fellow at the conservative Heritage Foundation, whose retired economist Ron Utt is a

member of Trump’s transition team, advising him on transportation. Railway Age Capitol Hill Contributing Editor Frank N. Wilner describes Utt as a person “among whose favorite piñatas was Amtrak public subsidies.”

At DOT, Chao will have a principal role in helping Trump get an infrastructure spending bill passed through Congress and start government-backed projects, a role potentially complicated by her relationship with McConnell, who will also be a critical player in any infrastructure bill negotiations. She wouldn’t be the first DOT Secretary with such a conflict. Elizabeth Dole served as DOT Secretary in the Reagan Administration while married to Sen. Bob Dole, 1985-1987 Majority Leader.

In January 2015, Chao resigned from the board of Bloomberg Philanthropies, which she had joined in 2015, reportedly because of its plans to significantly

increase support for the Sierra Club’s “Beyond Coal” initiative, a campaign to promote renewable energy. Beyond Coal has received at least $80 million from Bloomberg Philant hropies. According to the Capitol Hill newsletter Politico, early in the George W. Bush Administration, an energy task force convened by Vice President Dick Cheney advocated the construction of 200 new U.S. coal plants. The Beyond Coal campaign prevented 170 of the 200 plants from being built.

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Railway Age

January 2017

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Update GAO pricing study addresses contract vs. tariff rates The U.S. General Accountability Office (GAO) has released a study, “Freight Rail Pricing,” which suggests that rail shippers are amenable to longer-term contracts but wary of pricing.

“While rail contracts and tariffs are similar, contracts offer the flexibility to customize rates and terms to a specific shipper, according to stakeholders GAO interviewed,” GAO said. “Both contract and tariff rates are based on market factors, such as competition, according to representatives from the four largest U.S. freight railroads. However, they noted that in developing contract rates, a railroad will also examine factors specific to each shipper and may negotiate discounts in exchange for the shipper committing to provide a specified volume over the contract’s duration.

“According to railroad representatives, the volume commitments negotiated in a contract allow the railroad to more

The Magic of Urethane

efficiently allocate its resources and ensure consistent revenues. Also, selected shippers told GAO that they can more efficiently manage multiple shipping routes under one contract because of the stability in rates over the duration of the contract. In contrast, tariffs may be preferred for smaller shipments.”

Despite the volume discounts contracts can offer, some shippers said that contracts that include rates for multiple origin-to-destination routes can contain high rates on some routes. “This is particularly an issue for shippers that are ‘captive,” GAO said.

Representatives of the “Big 4” Class I’s said they charge “what shippers are willing to pay to cover infrastructure costs for the entire rail network,” GAO said. “However, according to selected shippers GAO interviewed, combining captive and non-captive routes together in one contract can compel shippers to

accept some unreasonable rates. Shippers subject to contract rates they view as unreasonable cannot challenge those rates at the STB because contracts are not subject to STB oversight.”

GAO said it conducted the study because the STB Reauthorization Act of 2015 included a provision for GAO to review rail transportation contract proposals containing multiple originto-destination routes. GAO’s report addresses similarities and differences in shipping freight under a tariff vs. a contract, and the potential benefits to using each; and views of selected stakeholders on the implications of shipping freight under a tariff vs. a contract.

GAO analyzed STB data from 2005 to 2014, reviewed documents provided by and interviewed representatives of the four largest freight railroads, the AAR, STB officials, and representatives of nine shippers.

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January 2017

Update Crew fatigue faulted in UP Hoxie crash

The National Transportation Safety Board (NTSB) named crew member fatigue as the probable cause of a 2014 Union Pacific (UP) Hoxie, Ark., accident that killed two crew members and seriously injured two others.

Two UP trains collided in the early hours of Aug. 14, 2014, while traversing a turnout control point. NTSB’s report on the accident found that the northbound crew had no indication of the impending collision and that the southbound train conductor was likely asleep at the time of the collision. The report also cited a lack of federal regulations governing sleep disorder and fatigue modeling tools as a contributing factor to the accident.

The Federal Railroad Administration (FRA) originally issued a safety advisory in 2004 on the dangers of sleep apnea and included a warning on the health issue again in another safety advisory issued on Dec. 3.

NTSB’s official probable cause declaration reads: “The probable cause of the accident was the failure of the southbound train crewmembers to respond to the signal indications requiring them to slow and stop their train prior to control point Y-229 because they were fatigued and had fallen asleep due to (1) the locomotive engineer’s inadequately treated obstructive sleep apnea, (2) the conductor’s irregular work schedule and (3) the train crew operating in the

early morning hours when they were predisposed to sleep. Contributing to the accident was (1) the lack of a functioning positive train control system; (2) the use of an automatic horn sequencer that, when activated, negated the operation of an electronic alertness device; (3) the Federal Railroad Administration’s failure to promulgate rules regarding sleep disorders; and (4) the absence of federal regulations requiring freight railroads to use fatigue modeling tools for train crew work schedules.”

NTSB’s report makes several recommendations to the FRA and to Class I, intercity and commuter railroads.

NTSB wants FRA to require freight carriers to use fatigue models when developing work schedules, as well as develop and enforce medical standards.

NTSB recommended that all commuter, intercity and Class I railroads, with the exception of UP, review their medical rules to ensure the railroad is informed of an employee’s sleep disorder diagnosis and that periodic evaluations are performed to ensure the condition is being treated and the employee is fit for duty. To UP, NTSB recommended revising the railroad’s medical rules to include sleep disorders on the list of reportable medical conditions. To all Class I railroads, NTSB recommended a revision to scheduling practices for train crews that includes science-based tools.

OmniTRAX reactivates grain silo at Port of Brownsville OmniTRAX, Inc., worked with the Port of Brownsville to help facilitate the lease of a large grain-handling facility to West Plains LLC. The threemillion-bushel-capacity grain elevator is located near the GEOTRAC Industrial Hub being developed by OmniTRAX. Renovations on the previously idle facility by West Plains began in the spring with the first train set to arrive in the first quarter of 2017 on the

OmniTRAX-operated Brownsville & Rio Grande International Railway, LLC via Union Pacific. It will be the first grain delivery to the Port in five years.

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January 2017 Railway Age 19

Watching Washington Frank n. wilner

STB’s Begeman: Head, heart in conflict

N

ews item: Republican Ann Dawn Begeman, 52, was confirmed by the Senate in December to a second term—expiring Dec. 31, 2020—on the five-person Surface Transportation Board (STB). Expect her to be named STB Chairman by President Trump, succeeding Democrat Dan Elliott, who was President Obama’s choice as Chairman. Elliott, whose second term expires Dec. 31, 2018, remains a voting member, as does Democrat Deb Miller, whose first term expires Dec. 31, 2017. By statute, STB members are limited to two terms.

Two vacant seats, created by the 2015 Surface Transportation Board Reauthorization Act, have yet to be filled. The nominees will be Republicans, giving the STB a 3-2 Republican majority.

A pregnant question is whether Begeman, with an eventual Republican majority whose orthodoxy is less government intrusion in private sector affairs, will embark on a more rail-friendly course than did Elliott.

Three cases are progressing toward final decisions under Begeman’s chairmanship. None has a voting deadline, meaning she could hold each in abeyance, pending a majority vote for her position.

One is a shipper request that, at certain points and under certain conditions, a sole-serving railroad be required to carry traffic to an interchange with a competitor (reciprocal switching). In preliminary votes, Begeman expressed skepticism as to the practical effect of so doing.

A second case considers whether to implement a rate cap or other mechanism for limiting rate increases on railroads meeting a “revenue adequacy” means test determining the ability of railroads to attract sufficient capital to assure normalized maintenance and

20

Railway Age

January 2017

facilities renewal.

In a third pending case, and to the displeasure of railroads, Begeman is opponent-in-chief of the STB’s complex, time-consuming and expensive stand-alone-cost test by which captive shippers dispute rate reasonableness. The difficulty is formulating an equitable alternative standard.

During her first term that began in 2011, Begeman was meticulous in parsing Elliott-written decisions, issuing a bevy of dissents—often harsh in tone—to the Elliott-Miller majority.

She becomes most interesting when her heart and head go in different directions.

In personal letters and public comments to congressional leaders, she has expressed frustration that Elliott engages in regulatory overreach.

A fiercely independent thinker, and sphinx-like in collegial settings, Begeman sometimes shunts aside Republican tenets of less government involvement, alternatively expressing empathy with shipper concerns.

A South Dakota farm upbringing exposed her to recurrent prairie populist distrust of railroads.

Indeed, her childhood home of Humboldt, whose population has never exceeded 600, lost its rail service to abandonment a generation ago. That left three local grain elevators less competitive with those enjoying direct rail service in a state

where half the grain and oil seeds move by rail, and 45% of the state’s some 2,000 rail miles are owned and operated by BNSF. Much of Begeman’s work history has been in the employ of two similarly independent thinking U.S. senators—Humboldt native Larry Pressler (R-S.D.), now in private law practice; and Sen. John McCain (R-Ariz.).

Both chaired the Senate Commerce Committee and looked to Begeman for expert counsel on rail policy issues. In 2008, she worked on McCain’s presidential campaign.

Begeman also is professionally close to current Senate Commerce Committee Chairman John Thune (R-S.D.), principal author of the 2015 Surface Transportation Reauthorization Act. During the 1990s— notable for rail mergers and line abandonments that contributed to rural America losing some 70% of its rail competition since the 1970s— Thune was South Dakota’s state rail director, and later a lobbyist for Dakota, Minnesota & Eastern Railroad (now Rapid City, Pierre & Eastern Railroad, a Genesee & Wyoming short line).

Other professional friends of Begeman include Amy Hawkins, a BNSF lobbyist who was an aide to former Sen. Kay Bailey Hutchison (R-Tex.); and Mary Phillips, a former freight railroad policy analyst and McCain aide, now a rail adviser to House Republicans.

The Association of American Railroads reacted to Begeman’s reconfirmation by praising her “appreciation of the importance of empirical data in the decision-making process.” An attorney for captive shippers, asking not to be identified, said she “becomes most interesting when her heart and head go in different directions.”

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Reduced failures, RAILROADER THE YEAR faster response

Tom Prendergast New York’s People-Mover

By WILLIAM C. VANTUONO, Editor-in-Chief 22 Railway Age January 2017

R

ailway Age’s 54th annual Railroader of the Year Award recipient is Thomas F. Prendergast, Chairman and CEO of the New York Metropolitan Transportation Authority, the world’s largest organization of its type. The MTA’s five operations—New York City Transit, Long Island Rail Road, Metro-North Railroad, Bridges and Tunnels, MTA Capital Programs—account for an astounding 25% of all North American public transportation operating and capital expenditures. The agency’s five-year (2015-2019) capital program tops an equally astounding $29 billion—larger than that of some Class I freight railroads.

Since the MTA’s first long-term capital program in 1982, the agency has invested more than $100 billion to make its mass transit network an engine of growth for the region.

A native of Chicago with a Systems Engineering degree from the University of Illinois, Tom Prendergast began his career at the Chicago Transit Authority in 1975. From there, he joined the U.S. Department of Transportation in Washington, D.C., then moved to New York City Transit in 1982 as Assistant Director of System Safety.

In 1984, Prendergast was named Chief of NYCT’s System Safety Department. In 1987, he became Staten Island Rapid Transit General Manager, and in 1989, NYCT’s Chief Electrical Officer. In 1991, he was named Senior Vice President of the NYCT Department of Subways. In 1994, he became President of the Long Island Rail Road.

In mid-2008, Prendergast was appointed CEO of TransLink, the public transportation system in Vancouver, B.C., Canada. It wasn’t long before he returned to the MTA. In November 2009, he was named NYCT President.

Prendergast served as Interim Executive Director of the MTA from January 1, 2013, until the New York State Senate confirmed his appointment by New York Governor Andrew Cuomo as Chairman and CEO on June 20, 2013.

On Jan. 1, 2017, the day the long-awaited Second Avenue Subway opened, Prendergast announced his retirement from the MTA. His successor will have very big shoes to fill.

Tom Prendergast sat down with Railway Age Editor-in-Chief William C. Vantuono in early December 2016 to talk about his 42-year career and his role as leader of the New York Metropolitan Transportation Authority.

William C. Vantuono

RAILWAY AGE: Tell us how you got started.

TOM PRENDERGAST: I’m a native Chicagoan, and

always knew I wanted to be an engineer. I went to the University of Illinois in Chicago. For the longest time in school I thought I was going to be a highway engineer. But in my junior year I realized that most of the interstates were going to get built out, and it probably wasn’t a good place to start my career.

I had a very fortunate experience. Call it serendipity. My advisor came to me and said that the school had a grant from the federal government, and if I wanted to, I could work at the Chicago Transit Authority. I took him up on it. I went to work for one summer in the operations and planning department. I got to work on service planning, and I enjoyed it.

The CTA offered me an opportunity to come back. So as a graduate trainee with an engineering degree, I was able to work in a variety of departments. I actually ran a train. I ran

a bus. I worked as a conductor. I had a fondness for electric trains when I was a boy, and I thought I could have a career in electric trains and service delivery. That’s how I got my start.

RA: And you’re still running electric trains!

PRENDERGAST: Yes. Never in my wildest dreams

did I think I’d come to New York. I was a resident of the Second City and I used to take umbrage about how New York was the best, the brightest. But it is one of the biggest systems in the world. And to be able to come here and work, especially in the subway network, was something I couldn’t say no to.

RA: How did your move from CTA to MTA come about?

PRENDERGAST: It came in two steps. I went to work for

the federal government in a safety position. At that time, the Urban Mass Transportation Administration, now the Federal Transit Administration, was spending a lot of money building new systems in the United States. They wanted to make sure that from a safety and a system assurance standpoint, the investments they were making were being made right.

I had to travel to New York. There was an unsafe-condition investigation on the R46 subway cars. Their trucks, their undercarriages, were cracking. I was part of the investigation, and I got to deal with people up here. Once that investigation was done, there were job opportunities, so I came up here.

When I arrived, things were pretty bad. We had derailments every 27 days. We had car fires. We had graffiti on every inch of the system. I thought, you know, I’m going to give this three years because I’ll have a heck of an experience if I’m going to go somewhere else. But the system saw improvements. David Gunn came in as leader and we started an aggressive rebuilding program. So I’ve spent the majority of my career in New York.

I remember my first day: Jan. 12, 1982.

RA: At that time, the first major long-term capital program was instituted. It resulted in many improvements.

PRENDERGAST: Absolutely. Dick Ravitch was Chairman at the time. He went on a very aggressive selling campaign with his stakeholders in New York. If you remember how bad things were back then—it was the Bad Apple, the Rotten Apple, as some people called it. He made an aggressive and compelling argument that if New York didn’t fix its infrastructure, its transportation system, the businesses that were traditionally here would move elsewhere. There was a groundswell of support after that. And we had our first $8 billion program over five years.

RA: The capital program is worth almost $30 billion.

PRENDERGAST: Yes, $29.5 billion. And the Governor

has been just as supportive with funding the infrastructure needs here. I’ve been in New York the majority of my career. I’ve gone away; I’ve come back. And one of the reasons I not only came back but came running back was the fact that the people who are the ones that control the decisions, whether it be the stakeholders, the elected officials, the leadership of the executive branch of government, the Governor: At the end of the day we get the money we need. You can’t operate a system of this size without the money you need.

January 2017 Railway Age 23

2017 railroader of the year

Tom Prendergast’s capstone achievement in his distinguished career was the opening of the Second Avenue Subway on Jan. 1, 2017.

RA: You’ve always been a proponent of new technology, going back to the beginnings of CBTC on the Canarsie Line.

PRENDERGAST: In the case of signals, my safety background probably drives it. Of my 42 years in the industry, ten years of it was directly involved in safety, whether at the federal level or a local level—the party accountable for making sure that there was a system safety program in place, that we were keeping track of the important need to not only fund the asset but have processes, procedures and controls in place to provide for safe and reliable service.

On Dec. 28, 1990, we had a very unfortunate accident. We had a train at the entrance to a tunnel going from Brooklyn into Manhattan at Clark Street in the IRT and there was a serious cable fire. People worked diligently in the control center. They didn’t want to have any trains trapped in the tube. But it took them so long to identify the location of the trains, and in the peak of the rush hour we have 540 trains on the system. People were subjected to smoke, and we had two fatalities. So the importance of putting in a signal system with automatic train supervision, where we could locate trains on a real-time basis, was extremely important.

Unfortunately what happens is that individual incidents drive 24 Railway Age January 2017

the public resolve to say, “do something to fix it.” That was the commitment to build a control center and have an ATS system in place for the IRT. Not more than eight months later, Aug. 28,1991, we had another unfortunate accident, at 14th Street on the East Side IRT. We had a train operator we were reasonably sure was drunk or on drugs. He entered a crossover at 50 mph. The maximum speed of a crossover is about ten mph. The first truck traversed the crossover, the remaining trucks did not.

We knocked down 33 columns. We killed four people. It was a classic case of, however well the wayside block signal system had served us for so many years, it was clearly apparent that overspeed protection at a much higher level was necessary.

That was the genesis for the need to move from wayside block to communications-based train control, so that we could have continuous overspeed protection for physical speed restrictions entering crossover areas or making sure that you don’t operate into another train in front of you.

That was the start of a very aggressive program to re-signal the entire system with CBTC. We completed the Canarsie Line about ten years ago. We’re on the verge of completing our second line, the Number 7.

RA: Now that Canarsie is in place and the Number 7 line is well under way, are plans moving forward at a faster clip?

There’s Queens Boulevard Phase One and others.

PRENDERGAST: Right. We’ve reached out to other systems in the world. We’ve talked to people in Asia. But one of the differences between Asia and here is that a lot of the

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RA: What does it cost annually to operate the MTA, all things considered—capital aside?

PRENDERGAST: Capital aside, it’s a$15 billion annual budget. That accommodates New York City Transit Subway and Bus; the two largest commuter railroads in the country, Metro-North and LIRR; Bridges and Tunnels; Paratransit.

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2017 railroader of the year

RA:

In terms of your relationship with signaling and train control suppliers and how they are involved with advanced technology, New York really drives things. Would you agree?

PRENDERGAST: I would. Given our size, we can help move the market. When suppliers are responding to requests for proposals on our competitive projects, they have to have the requisite knowledge and competency, but also the capacity to supply. We move two-thirds of the passenger rail traffic in the country. So, there’s a lot of an asset here in terms of size.

There used to be that commercial: “When E.F. Hutton talks, people listen.” To a certain degree, the same can be said for us. But we want to do it in a way where we can be supportive of our sister agencies, so that they can get the benefits of some of the roads we’ve plowed ahead of them. But we do need to step up the pace, because at the rate we’re going, it’ll be well into the 21st century before we get the entire system equipped with CBTC. The corollary to that on the commuter rail side is PTC. The technologies may be different, but the functionality is the same.

RA: In the past few years there have unfortunately been some accidents and safety problems. How are you and the MTA addressing them?

PRENDERGAST: I referenced the bad accident we had at 14th Street on the subway system. What came out of that was drug testing, and the apparent need to install CBTC. More recently, we had a very bad accident at Spuyten Duyvil on Metro-North. It was Dec. 1, 2013, on a 30-mph curve. We had a locomotive engineer that, as a result of the investigation, we’ve determined had sleep apnea, but it wasn’t diagnosed. He proceeded into that curve at 84 mph, well above the tip-over speed. The train derailed. Four people got killed.

It reaffirmed, much the same way 14th Street did on the subway side, that we need to more-aggressively implement PTC. We need to have systems in place that can make up for human error. From a standpoint of what we’re asking our employees to do, they’re trying to balance their personal and professional lives. We’re making sure we have systems like fatigue management in place that can overcome deficiencies.

26 Railway Age January 2017

RA: Are there programs in place now or are they being implemented?

PRENDERGAST: For PTC, we have to comply with the federal requirement of Dec. 31, 2018. We’re doing that on both railroads. We’re trying to step up that pace. It’s challenging. I don’t need to tell that to anybody in this industry because the Class I railroads know it as well. The other issues we’re looking at along with them are in two basic areas.

How do we make sure that we address those issues?

One area is fatigue management. In the case of sleep apnea, it’s a medical condition. It needs to be able to be diagnosed so the person can get treatment. You need to work within the bounds of a collective bargaining agreement. And while there are challenges there, they’re all doable, but you just need to face up to them.

The other issue we’re concerned about is opioid use, not necessarily opioid abuse. I can distinctly remember when I was in my teens or even before then: The amount of medications my parents took was maybe one or two. It’s fairly common now, once people get to their 50s and 60s: We’re trying to treat ailments and extend life; a person may be taking four or five different medications simultaneously. What effect does that have on somebody in terms of their ability to be attentive, their ability to do their job? Those are things we need to explore, because we rely on a certain amount of the activities we do on the human interface, and we have to make sure that we manage that well.

RA: In the past few years, if you look at Metro-North and the NJ Transit accident in Hoboken, and even the Amtrak accident in Philadelphia, which was not sleep apnea but lack of attention, I wouldn’t say it’s an epidemic but it seems to be more common. To what do you possibly attribute that?

PRENDERGAST: It does seem to be more common. I will say this: The level of awareness [is higher] because there’s greater dissemination of information. One could make an argument that it happened at the same frequency in the past, but you didn’t know about it. But let’s not dwell there. Those are three excellent examples. In two of the cases, it was sleep apnea. I’m a firm believer in application of science to

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Asian applications are greenfield, brand new applications.

The two systems we compare ourselves to because they’re more brownfield—in other words, how do you institute this technology on a legacy system?—are London and Paris.

We’ve reached out to them because both have been on a very aggressive program to implement CBTC. At one time we figured we’d do it all at once: car-borne equipment, interlockings, wayside. We’ve moved away from that and went to attacking it in three different pieces.You install the car-borne equipment when you purchase cars.

You install the CBTC equipment along the right-of-way, and you upgrade your interlockings. So we have three different programs, all aimed at the same thing. Ultimately, at the end of the day, we’ll have the most current, state-of-the-art, overspeed collision avoidance protection system: CBTC.

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2017 railroader of the year

determine how you address a problem, whether it’s technical, medical, human factors—whatever. In two of those incidents, it was sleep apnea-related, so it’s diagnosis, treatment and monitoring of it.

In the third case, which was the Amtrak incident, there was no evidence of that; no evidence of interference, like on a cell phone or whatever. But a lot of the activities that our employees in rail have are repetitive. And one could make an argument that at certain times due to a variety of factors, they kind of lose track of where they’re at—no pun intended.

We’ve had cases where we’ve had an incident on the subway side where you’re doing a post-accident investigation and you’re interviewing the train crew or in this case a train operator. And he or she can’t recall how they got from five stations to the station they’re at. They’re reasonably sure they made station stops. They’re reasonably sure everything went fine. But they don’t have a memory of it because of the repetitive nature. So when you’re in environments like that, you need to identify what it is you can do to awaken the person—not literally, because they may not be asleep; they’re just in a dull, non-attentive state—and reinforce the importance of what they do.

I don’t want to go into the details because I’m not sure I know all the details, but I know in the Amtrak incident, you’re going through a number of curves where you have to apply brakes and then you can release and speed up. If it’s a sequential thing and you have four or five and you think you’re through the last one and you’re not, then you could have undesired consequences.

We’ve had similar things happen in our system. We have 8,000 daily train movements on the subway system. So, you know, you can from a system safety standpoint say that a particular incident may be one in a million. That doesn’t change. We just roll the dice a lot here because we have 8,000 trains a day.

RA: You are in I’d say a unique position as Chairman of the MTA. Let’s talk about your relationship with the Legislature, with Governor Cuomo specifically. How you came to the Chairmanship job is a pretty interesting story.

PRENDERGAST: Things were so bad in the ’80s that I said I’ll be here three years and then get out of town because I’ll experience a lot but I don’t want to stay. But with the infusion of money and the development of a Capital Program and progress made, it got to be fun. It got to be exciting. And you get a certain amount of a charge out of knowing that you’re providing a public service for nine million people a day: six million in the subway and up to 500,000 people on the two commuter railroads and 2.5 million people on the buses.

So I stayed and I worked through the safety side. I was able to transfer over to the operations side because there was a keen understanding that you needed to have people with a safety background be part of the organization and change it. So, I ran Staten Island Rapid Transit and the Staten Island Division’s two bus depots. And then I was Chief Electrical Officer, responsible for all power, signals and 28 Railway Age January 2017

communications; operations; maintenance and engineering and Capital Program improvements. And then I became Senior Vice President of Operations for Subways.

So, I worked through the operating side. I remember when Chuck Hoppe left the LIRR and Peter Stangl was the Chairman, and he asked me if I wanted to be President of the LIRR. I said, I think so but I’m not sure. And he said, “Well, what do you mean you’re not sure?” I said, the operating side of the issue, I have no problems with. I’m fairly confident I’ll be able to do it. It’s the political side, because as you become an agency head, a certain amount of your job is in the political realm. And you have to be able to operate in that realm.

And so I said to him, I’m not so sure I could do it. And he was very simple, I’ll never forget. He answered me in like two nanoseconds. He said, “It’s not a matter of whether you can.

It’s a matter of whether you want to.” And the message he was telling me was: If you want to, you will. He said: “I’ve handled the political side. I know you can handle it. The question is: Do you want to handle it?”

When I came back to work with Jay Walder because he wanted somebody to run New York City Transit; I thought it was as far as I was going to go in the industry in terms of height within an organization. He left, and Joe Lhota came in. And ten when Joe Lhota left, I was named Interim Executive Director, and there was an Acting Chairman.

Now I’m in a position that is unique in the industry: Chairman and Chief Executive Officer. When I threw my hat in the ring, I remember having a conversation with Governor Cuomo. The Governor, as he did in the search to find Joe Lhota, wanted to make sure he had somebody that could handle the job. He related to me that certainly, I was competent, but I also can handle the political side of it.

I had a conversation with him, and I’ll never forget one of the questions he asked: “Do you really want this job?” And I said yes, because I’d already talked through it. And he leaned forward and said, “Do you really want this job?” I said yes.

And then he leaned forward again and said, “Do you really, really, really want this job?” And I said yes.

The point he was trying to make is that it’s a challenging job. There’s a lot on your plate here. You’re moving a lot of people. You’re responsible for a lot of assets. People are depending on you. And it’s a difficult environment. So, if you don’t have the fire in your belly and you don’t have the will and the resolve to do it, don’t take it.

That was a very important point. Governor Cuomo wanted to make sure in that transaction before he nominated me that it was clear I understood the importance of the job.

He understood the importance of the job and the importance of the commitment to it. Never in my wildest dreams did I ever think I wanted to be Chairman. I thought I wanted to be an agency head. Chairman is something different. But I’ve never regretted the decision.

RA: You’ve brought in some good people: Ronnie Hakim to run the subways; Pat Nowakowski to run the Long

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“It’s a challenging job. You have a lot on your plate here. You’re moving a lot of people. You’re responsible for a lot of assets.”

30 Railway Age January 2017

difficulty with. But now I understand the importance of it.

RA: So the Governor is fairly hands-on, would you say?

PRENDERGAST: Absolutely. And, you know, I’ve said this

and he’s all-in, in in a number of ways. He’s all in with the Capital Program: $29.5 billion that we got. He’s all-in in terms of asking tough questions. The two go hand in hand.

And I recognize that and the agency has recognized that.

There are a lot of elected officials that at times will say on the public transportation front that they have an arms-length relationship—you know, don’t get too close, don’t get too far, but have an arms-length relationship. Governor Cuomo is all in.

RA: That’s different, isn’t it, than in most cases?

PRENDERGAST: Yes, it is. And while it provides

for challenges, the benefits far outweigh the disadvantages. When Governor Cuomo puts a focus on something, it’s unmistakably clear. One thing transportation agencies do very well, and I’ve yet to see one that doesn’t, when there’s an emergency—a derailment, collision, a flood, snowstorm—there’s this laser focus on what needs to be done. All of a sudden infighting among departments, people disagreeing, disappears because there’s this commonality of restoring service and getting the system up and running.

How you translate that into everyday service is what people have difficulty doing. Governor Cuomo, in the places where he is involved, makes it clear that that focus is crystal clear and that unanimity of purpose is in place.

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Island Rail Road; Joe Giulietti to run Metro-North. You’ve surrounded yourself with some very strong players.

PRENDERGAST: I’ve been fortunate enough to know all those individuals in different ways before I asked them to come here. If you’re in this business long enough, you’ll see the same people, over a period of 30 or 40 years in different places. But I had the benefit of knowing each of them in different ways. Joe worked here before he went to Florida.

I asked him to come back. I knew Pat because he worked at SEPTA and we shared information. I knew Ronnie because we both worked at New York City Transit.

When I entered the business it was more the norm than the exception that the heads of the agencies matriculated up through and became agency head after having a series of titles.

Either they came from the operating side or they came from the administrative side, but they were basically self-grown.

While that still exists to some extent in the industry, what is probably becoming the norm is cross-movement of people.

There are benefits to that because if you see the same thing from a different perspective, you may have a fuller picture of it. And so the benefit I have with everyone of those people is: Two of them worked here, went somewhere else and came back; one of them came here having never spent time here.

That’s good because they will ask the question, why? If you matriculate up in the organization, sometimes you don’t ask that question. Governor Cuomo continually asks me, why? He continually challenges me and the organization to think outside the box and try to change the culture. And it’s something that, you know, at first, I was resistant to—I had

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2017 railroader of the year RA: The MTA went through Superstorm Sandy and recovered quite well.

PRENDERGAST: The storm was Oct. 29, 2012. Joe Lhota was Chairman. He left as Chairman at the end of that year.

He ran for Mayor. I was NYCT President during the event, but I was Interim Executive Director up until June 2013 and then I became Chairman. We lost the Montague Street Tube here on the R Line. We lost the Rockaways. So, I was instrumental in terms of what we did to shut down the system and check it and what we did to actually restore service.

While it was by far the most significant event that this system ever saw, it showed very clearly to everybody that if you’re a public transportation professional, you always know how important your system is. You do it for love of whatever.

It was the only time in my life where everybody who missed the service because it was out basically said, please come back.

We always say the subway system and New York City Transit and the MTA are the lifeblood of New York. That was an effective demonstration of it.

RA: The new South Ferry Terminal?

PRENDERGAST: That was the worst

RA: Since the recovery, what things are being done to harden the system, If something like Sandy God forbid ever happens again?

PRENDERGAST: Well, first we had to replace those assets that saw significant damage. Water and electricity don’t go well together. Salt water with electricity is even worse, because if you have something that’s an electric circuit immersed in water, maybe 50% of the time you can remove all the water; you can dress up the electrical equipment and it can be restored to normal condition. With salt, it’s a little bit different, because when the water goes away, the salt conductive paths remain and it just wreaks havoc on electrical systems.

So we had to replace elements that were damaged. But we replaced them with things that were more resilient.

I’ll give you one example that people will think is a joke but it’s not. If you say to most people a “submarine cable,” they would think a cable in a submarine. But what it really means is a cable that will be immersed in a marine environment, in the water. So we now know that, in the life of our under-river tubes, they will flood. The Canarsie Tube has flooded in my

RA: Let’s talk about the Capital Program and some very big projects that are coming to fruition: East Side Access. The Number 7 Extension recently opened. The Second Avenue Subway, which has been in the works since what, 1950, or before that?

PRENDERGAST: The first bond issued for Second Avenue was in the late ’20s. The Governor has been pretty insistent that we meet the committed deadline of Dec. 31, 2016, which we’re confident we’ll do. So time will tell, but that’s what we’re doing. (Editor’s note:That’s exactly what happened.

See p. 2.) The other thing he’s asked us to do, and it’s somewhere between ask and tell is: In order to change the culture, you need to set the bar high. So, you need to be in a position so where you make a commitment and you meet that commitment.

Second Avenue will be a tremendous benefit to the City of

lifetime, in my career here, three times.

So, it’s not a matter of if, it’s a matter of when and how often. When you install equipment, do it with the understanding that either you have better design elements to keep them dry, or if they do get wet, they can dry out.

So, we’re doing a number of those things. There are vent gratings in Lower Manhattan that we know in a Category 2 or 3 storm event are going to flood. Before Sandy, we had very rude and crude ways of putting plywood and sandbags down to protect those openings. We’ve now spent money to put in mechanical systems where somebody can go flip a lever and close off those vent gratings. The vent gratings have to be open when we run normal service for ventilation. But you definitely want them closed when there’s a storm event.

So, we’ve spent billions of dollars of restoring and hardening the system. example. It’s still not back for service. Thank God we didn’t totally close out the old South Ferry because we’re still using that system. But we know there will be another storm event. It’s not a matter of if, it’s a matter of when.

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New York and to the system. What it’s going to enable us to do is off-load a lot of the capacity problems we have on the Lexington Avenue Line, because the Lexington Avenue Line (4-5-6 Trains) is as far east as you go.

You’ve got residential densities in the form of 80,000 to 100,000 people per square mile. And what people have to do is walk from wherever their house is, between the East River and Lexington Avenue, over to Lexington Avenue. The Lexington Avenue Line is the most heavily traveled line in the country—500,000 people a day. That’s more than I think Washington and Chicago combined on a daily basis.

So when we open up the stations at 63rd, 72nd, 86th and 96th for Phase 1—Phase 2 will go north of that point—you’re going to see a lot of people not having to trundle over to the Lexington Avenue Line. So, it’ll be a better commute for them. And it’ll open up capacity on the Lexington Avenue Line. I think the stations will be pretty striking because they won’t be the typical IND design, which was our latest design for cut-and-cover, track level, mezzanine, a lot of columns, whatever. These are very open, spacious stations. You’ll like them.

RA: There’s a lot of tunneling involved with the Second Avenue Subway, over and under other lines and systems.

PRENDERGAST: Yes. There were some elements of it built that they tied into. But, you know, a lot of people don’t realize it because people that come to Manhattan now see a very flat terrain. The original Manhattan was not flat.You had hills and valleys.You had rock strata. And when they filled it in to make it flat, you had a lot of fill that wasn’t rock. So where you tunnel here, you can actually tunnel through rock as well as tunnel through soil, and there were challenges.

There was a point in time where in the construction of the tunnel they had to freeze the soil, so that the boring machine could continue with work. And that’s kind of like we reported on it at the committee meetings, but people kind of forget about it. Those are the challenges you have when you build a subway tunnel.

RA:

How does it feel to have the first phase of Second Avenue

completed during your tenure? What does that do for you personally, for your sense of accomplishment?

PRENDERGAST: Many people have asked me that. The best way for me to answer is that I had many mentors in my career and people who preceded me who I admired and learned from. One common element all of them had was that they took the job they inherited and left what they had in a better condition than how they inherited it. I’ve ascribed to that theory.

I’ve also understood that the development of some projects takes years. And it may take years beyond the tenure of one individual. In some cases, I’ve gotten credit for projects that somebody else started. In other cases, somebody has gotten credit for projects that I started. I started CBTC for Canarsie, but it entered service when I was away in Vancouver.

There’s a plaque with my name on it with Governor Mario Cuomo and Peter Stangl at Penn Station, and I had been LIRR President only three or four months when the project got completed. But Chuck Hoppe, my predecessor, really deserved the credit. So when you asked the question about Second Avenue, I’m proud to have been Chairman when we open and make full on a promise made in the early part of the 20th century. But the credit goes to all the people that were involved in that project. I can say that not just for projects. I can say that for the system.

What happened in Superstorm Sandy and what we were able to do to protect this system and bring it back as fast as we did was the result of labor, management, hourly employees, supervisors, managers—everybody working together.

They get the credit.

RA: Blue sky: Say money is no object. What would you like to see in terms of connectivity, you know, things like connecting Grand Central with Penn? There are a lot of projects that have been talked about over the years. What do you think this region needs?

PRENDERGAST: First and foremost, it needs CBTC throughout the entire system. One may say that’s not an expansion, but it is because you can increase capacity. The way to increase more trains per hour is with CBTC.

Mitch Levine and the J-Track team would like to extend their sincerest CONGRATULATIONS to Thomas F. Prendergast on his career achivements as well as the honor of being named Railroader of the year in the Railway Age’s 2017 January addition.

14-45 117th Street • College Point, NY 11356 Telephone: 718-554-2760 • http://www.jtrackny.com/

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If you assume that’s a given and we can do it as fast as possible, now we get into the issue: How do we expand the system? Continuation of Phase 2 of the Second Avenue Subway up to 125th Street, with stations at 106th, 116th and 125th Street. Have it bend west and touch with MetroNorth. Penn Access for Metro-North. When East Side Access starts to bring LIRR trains into Grand Central Terminal, we’re going to free up tunnel slots.

There are people on the New Haven Line and on the other lines of Metro-North that want to go to Penn Station, more so now than ever before. Why? Hudson Yards, the biggest residential-commercial development in the world, in terms of the amount of money that’s being spent there.

At some point in time regionally, if you take a look at the New York RPA (Regional Plan Association), they’re very good at being long-term visionaries. They’re not constrained like we are, in terms of that we even have to constrain our thoughts. Like through-running service between New Jersey and New York. Right now, we do it in a very ad-hoc way for the Giants football specials. For example, the New Haven Line trains that go through Penn Station to the New Jersey Meadowlands and MetLife Stadium.

If you want to increase the capacity of Penn Station, which is the most heavily used train station in the country, you do it through through-running, because you’re not having to turn trains in the station. Right now, that limits capacity. Gateway is a step in doing that. Purchase of compatible equipment for New Jersey Transit, Metro-North and the LIRR for throughrunning service is another. Those are some examples.

There are others. There has always been the long-running need of a train to a plane. There’s been a long-running need for extensions to the system, like a one-seat direct ride from West of Hudson.You prioritize those and make a point of taking bite-size chunks out of them and build them. After 30 or 40 years, you can say, wow, the system is a lot different.

RA: The MTA has established a place for itself on the world stage. As we speak, the UITP is having a forum here. There seems to be more synergy now between the North American systems and Europe—a lot more globally.

PRENDERGAST: There is. We do interface with a number of systems here in North America. Toronto and New York City are pretty much comparable. But when you talk about assets, that’s where we can make some comparisons Class I’s are different than us. They’re profit-centered. They’re moving freight. They’re doing different things. But when it comes to whole-life asset management, there’s similarity.

The two systems that are closest to the challenges we have on the subway or rail transit side are London and Paris. They have some of the same things, in the way they approach not only whole-life asset management but also how they expand the system and how they introduce new technology. I ran Vancouver TransLink, which was at one time the largest automated system in the world. It was automated from day one. It was a greenfield. RATP Line 1 in Paris was automated from day one, so it was brand-new construction.

Those are the types of challenges we have, and they’re not only the technical. How do you deal with labor? It’s not all right to just say, you have no job tomorrow because we decided to automate. What do I provide for you as a career opportunity, even though it’s no longer a train operator?

RA: What about the MTA’s relationship with APTA? I know it’s a sensitive subject.

PRENDERGAST: It’s pretty well-known. We took a position and talked about it in the sense that, in the long-term we belong in being part of APTA. We’ve committed that to APTA, and I want to say that. We need to stand together on a Congressional level. We need to stand together when we’re seeking partners at the federal level in terms of the needs we have.

The degree to which we can be aligned with APTA and be

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part of APTA is in our interest. There was a point in time, over a long period of time, where we felt that we were becoming more dissimilar to what APTA was. And we took a position that for a period of time we were going to leave APTA. And that’s where we’re at right now.

But we have an ongoing dialogue with APTA. They want us to come back. We want to come back. But right now, you know, we’ve got other issues we’re focused on. I think they accepted our reasons for concern very well. There’s a dialogue going on in terms of how our concerns can be addressed so that we come back in. That process is ongoing and we’re committed to that process. I’m confident we’ll return. But right now, we’re focused on other things.

RA: So you see APTA taking steps to make changes that need to be made?

PRENDERGAST: Absolutely.

RA: What else is important to you?

PRENDERGAST: We look to Class I’s

from the standpoint of infrastructure and whole-life asset management because the size of their assets is comparable, if not larger. Our assets—our physical structures, our track, our systems, our stations—are valued at a trillion dollars—a trillion dollars!

You know, you talk to a child and you say, what’s the biggest

number? And the child says a gazillion. There is no such number. But I was born and raised in Illinois, and Senator Dirksen used to say, a billion here, a billion there. Sooner or later you’re talking real money. That’s not a billion anymore.

It’s a trillion.

You’ve probably heard me say this, because I was selling the Capital Program. It takes about 12 days to go one million seconds. It takes about 2,000 years to go a billion seconds. It takes 22,000 years to go a trillion seconds. That shows you the size of our assets. So before you enhance the customer experience, you have to take care of what you have. That’s a heavy responsibility. We have to maintain this asset.

Class I’s have to maintain their assets. They won’t be profitable if they don’t. The first level is to make sure it’s safe and reliable. I won’t tell you that it’s easy, but that’s the first step. But how do you get the most extensive life out of each asset? When I started in this business, a railcar lasted about 30 or 35 years. We’re now able to have railcars in terms of structure last 50 years. We’re using Corten steel. We’re doing much better with things in terms of the manufacturing process, taking care of the cars, stainless steel construction.

We’re getting 45 to 50 years out of a car.

So, if the cost of a car is $2.5-$3 million and you can get more years of life out of it, that’s money you free up for investment in other parts of the asset or expansion, if you

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2017 railroader of the year

want to do expansion. The ability is for us to have whole-life asset management systems in place with a manager of the asset, and I’m not talking about a budget manager. I’m not talking about the service delivery manager.

Somewhere in New York City Transit there is an individual responsible for maintenance of the track asset. I want that individual to have all the information he or she needs to be able to say, instead of replacing track on this curve at 30 years, I can replace it at 32 safely, not affecting service, but saving the investment in that asset for something else. We have to get our whole-life asset management systems to that level. We’ve had discussions with Class I’s that are further down the road than we are on that and much better at it because they have to do it. And that’s where I’m aggressively looking to share as much information as possible. The destiny of this organization for the next hundred years will be dependent on our ability to get that right.

RA: Amtrak

is now under new management. How would you describe your relationship with Amtrak? Has it changed?

PRENDERGAST: It has. We have a symbiotic relationship with Amtrak. And NJ Transit is operating in there as well.

Our long-standing relationship with Amtrak is excellent. It’s not without its challenges and fits and starts. I had a very good relationship with Joe Boardman, and with Tony Coscia, their

Chairman. Whether it’s Gateway, whether it’s East Side Access, whether it’s improvements to Moynihan Station, we have to find ways to live better together. What does that mean? How do we get all that work done? How do we get all those projects completed with all those competing resources in a way where NJ Transit is not affected on a day-to-day basis? Where Amtrak, the Long Island Rail Road and Metro-North are not affected? In the case of Metro-North, Amtrak operates over its tracks to get into New York. In the case of the LIRR, we operate over Amtrak to get into New York. We’ve met with Wick Moorman. It was a very good first meeting. He’s committed to making sure that we have periodic meetings and alignment of priorities and resources. And so it’s off to a very good start. It was good under Joe Boardman, too. Both organizations understand the importance of having a very healthy relationship. There’s no acrimony.

RA: We’re bringing you back to Chicago on March 14 to the Union League Club.

PRENDERGAST: My last winter in Chicago was 1978-79.

It was the winter when Jane Byrne got elected Mayor. I worked at the Chicago Transit Authority and I can remember it distinctly. We had a warm spell in January. On a Thursday, the temperature was in the 50s, and, you know, you think the winter’s over. It’s not over. On Friday, the snow started

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2017 railroader of the year

falling, and the temperature was in the high 20s. By Monday morning, after 30 inches of snow, it was eight below zero. It was a lesson learned. We ran trains until they dropped, and they dropped. We had a fleet of 1,100 cars. We had a service requirement of 900. We did not have forced-air ventilation on the traction motors. We had self-cooled motors. We had a lot expressway median operation. What do you do on an expressway? You salt it. What happened when the cars rode on it? They kicked up that salt. That all got ingested in the traction motors. When they dried, we had flashovers. Inside of ten days, out of 1,100 cars in the fleet and 900 cars to protect service, we had 300 available cars.

I don’t miss winters in Chicago. But it made an indelible mark on my brain: Sometimes it’s better to say, I can’t take you today. I have a storm. Go home. Stay warm. When the storm comes, we’re going to protect the fleet and protect the assets.

We’ll clean it up and we’ll get back faster. I don’t miss the winters but I miss Chicago.

People are creatures of the environment they’re born and raised and live in, and because I started here when the place was falling down, a state of good repair was so important to me. Like Peter Stangl, said, you have to get beyond state-ofgood-repair. You have to have an improved level and quality of service. The next step was expansion. Back in the ’70s, we were spending money on expansion, but not on maintenance.

40 Railway Age January 2017

I’ve been part of budget review processes in a very complicated environment. You’re serving four or five masters, and each one of them has a different set of priorities. But if you’re doing the right things and you convince people that you’re doing the right things, you just keep going.

Each MTA agency had a culture of “we do it the best, the heck with you”—Long Island Rail Road vs. Metro-North.

Over-riding third rail is better than under-riding third rail.

No, under-riding is better than over-riding. On and on and on. What you have to do in an organization like ours is a little bit of head-knocking, because you can’t afford five asset management systems. We have catenary. We have underrunning and over-running third rail. We need to develop a spec that would enable inter-running across all three railroads—Metro-North, LIRR and NJ Transit. It is a challenge.

But it’s like anything else: If you don’t put it out there and say do it, people will find ways why they can’t do it.

A great movie and a great teaching moment is Apollo 13.

They’re not filtering out carbon dioxide and they don’t have compatible filter systems [in the Command Module and Lunar Module]. They put everybody in a room and and say, this is all we have. If we don’t come up with a system to filter this, the astronauts die. So it’s like Apollo 13. You have to create a construct that says, you don’t walk out of the room until you have a solution. RA

2017 railroader of the year

Railway age Railroader of the Year Award The Railroader of the Year Award was started by

1973: James B. Germany, Southern Pacific

Modern Railroads magazine in 1964 as the “Man of the

Transportation Co.

Year” award. Railway Age acquired Modern Railroads in

1974: L. Stanley Crane, Southern Railway System

1991 and has presented the award annually since then.

1975: Frank E. Barnett, Union Pacific Railroad 1976: Dr. William J. Harris, Jr., Association of

Recipients under Modern Railroads

American Railroads

1964: D. W. Brosnan, Southern Railway System

1977: Edward G. Jordan, Conrail

1965: Stuart T. Saunders, Pennsylvania Railroad Co.

1978: Robert M. Brown, Union Pacific Railroad

1966: Stuart T. Saunders, Pennsylvania Railroad Co.

1979: Theodore C. Lutz, Washington Metropolitan

1967: Louis W. Menk, Northern Pacific Railway

Area Transit Authority

1968: William B. Johnson, Illinois Central Railroad

1980: John G. German, Missouri Pacific Railroad Co.

1969: John W. Barriger, Missouri-Kansas-

1981: Lawrence Cena, Atchison, Topeka & Santa

Texas Railroad 1970: John S. Reed, Atchison, Topeka & Santa Fe Railway 1971: Jervis Langdon, Jr., Penn Central Transportation Co. 1972: Charles Luna, United Transportation Union

Fe Railway 1982: A. Paul Funkhouser, Family Lines Rail System 1983: L. Stanley Crane, Conrail 1984: Hays T. Watkins, CSX Corp.

1985: John L. Cann, Canadian National 1986: Raymond C. Burton, Jr., Trailer Train Co.

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2017 railroader of the year

Ra’s Railroader of the Year Award (continued) 1987: Willis B. Kyle, Kyle Railways 1988: Darius W. Gaskins, Jr., Burlington Northern 1989: W. Graham Claytor, Jr., Amtrak 1990: Arnold B. McKinnon, Norfolk Southern Corp.

1991: Mike Walsh, Union Pacific Railroad Recipients under Railway Age

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42 Railway Age January 2017

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PRESENTED BY RAILWAY AGE AND RT&S

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• The Streetcar Boom • Analysis of Expedited Service • Signaling and Train Control Options • Shared-Use with Freight Rail • North American New-Build/ Expansion Project Updates • Carbuilder Roundtable Discussion • Environmental Permitting

Anthony Fazio Manager of Track Design SEPTA

RAILROAD TUNNEL LIFE CYCLE COST ANALYSIS Avinash Prasad, P.E. Maintenance-of-Way Civil Engineer, MTA New York City Transit

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RAIL TRANSIT FINANCE FORUM TOPICS • What You Need to Know about the Federal Transit Administration Process • Public-Private Partnerships: The New Paradigm • RRIF Loans, Bond Issues, Special Taxes and Voter Referendums • Balancing Federal, State and Local Requirements • When Design-Build-Operate-Maintain is a Good Approach • Sale-Leasebacks and Other Forms

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19

Passenger railCar Market at a glance These new and rebuilt cars were delivered in 2016 Purchaser

# of cars

Type

Builder

Amtrak

1 Intercity

CAF

Brightline (Florida)

4

Intercity

Siemens

Buffalo (NFTA)

2

Rebuilt Light Rail

Hitachi Rail USA

Charlotte (CATS)

16

Light Rail

Siemens

3

Streetcar

GOMACO

Chicago (Metra)

10

EMU Bilevel Commuter

Nippon Sharyo

Cincinnati

5 Streetcars

Detroit

3 Streetcar Brookville

CAF

Honolulu (HART)

4

Rapid Transit

Hitachi

Houston (MTA)

76

Light Rail

CAF/Siemns

Kansas City

2

Los Angeles (LACMTA)

50

Streetcar

CAF

Light Rail

Montreal (Societe de Transport)

108

New York (New York City Transit)

132

R-188 Rapid Transit

Kawasaki

Philadelphia (PATCO)

18

Rebuilt Rapid Transit

Alstom

Seattle (DOT)

15

Streetcars

Inekon

San Francisco (BART)

10

Commuter (EMU)

Bombardier

8

Commuter (DMU)

Toronto (Metrolinx/GO Transit)

54

Bilevel Commuter

Bombardier

Toronto (TTC)

54

Rapid Transit

Bombardier

16

Light Rail

Bombardier

Vancouver (Translink)

28

Rapid Transit

Bombardier

Virginia Railway Express

7

Bilevel Commuter

Nippon Sharyo

Washington D.C. (WMATA)

80

7000 Series Rapid Transit

Kawasaki

Orders likely to develop in 2017

Rapid Transit

Kinkisharyo International LLC Alstom/Bombardier

Stadler

New-car deliveries by mode, 11-year tracking

Purchaser

# of cars

Type

Charlotte (CATS)

6

Light Rail/Streetcar

2006 358 250 130 738

El Paso

6

Vintage Trolley

2007 139 402 121 662

Kansas City

2

Streetcar

2008 227 272 97 596

Los Angeles (LACMTA)

64

Rapid Transit

Maryland Transit Metro

90

Rapid Transit

Year Regional/Intercity Rapid Transit LRT/Streetcar

Total

2009 187

752

202

1,141

2010 199

782

148

1,129

Montreal (AMT)

24

Bilevel Commuter

2011 235 113 149 497

New York/New Jersey (PATH)

50

Rapid Transit

2012 343 243 59 645

175

Rebuilt Rapid Transit

88

EMU M-9 Commuter

New York (Metro-North)

80-130

EMU M-9 Commuter

New York (NYC Transit)

285

R211 Rapid Transit

Philadelphia (SEPTA)

45

Bilevel Commuter

Phoenix (Valley Metro)

11

Light Rail

6

Streetcar

San Bernadino (SANBAG)

3

Light Rail

Seattle (DOT)

10

Streetcar

Toronto (Metrolinx/GO Transit/UPX)

76

Bilevel Commuter

Vancouver (Translink)

28

Rapid Transit

New York (LIRR)

46

Railway Age

January 2017

2013 531

337

166

1,034

2014 251 484 116 851 2015 251 462 258 971 2016 94 424 188 706 Total 2,815 4,521 1,634 8,970

2017 passenger rail outlook Work progresses on this undelivered backlog (as of Jan. 1) Purchaser

# of cars

Type

The five-year (2018-2022) outlook Builder

Amtrak

59 Intercity

Austin (Capital Metro)

4

Diesel Light Rail

CAF Stadler

Boston (MBTA)

120

Rapid Transit

CRRC

Brightline (Florida)

16

Intercity

Siemens

Buffalo (NFTA)

13

Rebuilt Light Rail

Hitachi

Calgary (Calgary Transit)

63

Light Rail

California (Caltrain)

96

EMU Commuter

Calif./Illinois et al

175

HrSR Intercity

Sumitomo/ Nippon Sharyo

Charlotte (CATS)

2

Light Rail

Siemens

400

Rapid Transit

CRRC Sifang America JV

Chicago (CTA) Denver

29

Detroit

3 Streetcar

Light Rail

Type

1050 Intercity

Boston (MBTA)

14

Brightline (Florida) Calgary

Rapid Transit

15-50

Intercity

60

Light Rail

70-86

HSR Intercity

California (Caltrain)

96

EMU Commuter

Siemens

California (Caltrans)

30-60

Bilevel Intercity

Stadler

Chicago (CTA)

446

Rapid Transit 7000 Series

40-60

Rebuilt Commuter

Siemens Brookville

32

DMU Commuter

Stadler

Honolulu (HART)

76

Rapid Transit

Hitachi

Los Angeles (Metro)

185

Light Rail

Kinkisharyo International LLC

Maryland Transit

52

Rebuilt Light Rail

Alstom

Miami-Dade

136

Rapid Transit

Hitachi

5 Streetcar

# of cars

Amtrak

California (CHSRA)

Fort Worth (TEX Rail)

Milwaukee

Purchaser

Brookville

Chicago (Metra)

160

Denver (RTD)

10

Multilevel EMUs Light Rail

El Paso

6-7

Vintage Trolley

Fort Worth (TEX Rail)

8

DMU Commuter

Kansas City

12

Streetcar Rapid Transit

Los Angeles (LACMTA)

218

Milwaukee

0-3

Streetcar

Minneapolis/St. Paul (Metro Transit)

0-22

Light Rail

Montreal (AMT) Newark (NJ Transit)

6-60

Bi-level Commuter

113-484

Multilevel Commuter

76

EMU M-9 Commuter

MontrĂŠal (Societe de Transport)

360

Rapid Transit

Alstom/Bombardier

New York (Metro-North)

0-34

EMU M-9 Commuter

New York (LIRR)

92

EMU M-9 Commuter

Kawasaki

New York (Metro-North)

150-400

Bilevel Commuter

Kawasaki

New York (NYC Transit)

1870-2110

Rapid Transit

New York (Metro-North) New York (NYC Transit) Oklahoma City (Embark)

60 290

EMU M-8 Commuter R-179 Rapid Transit

Bombardier

6

Streetcar

Brookville

Ontario (Metrolinx) E-C

182

Light Rail

Bombardier

Ontario (Metrolinx) K-W

14

Light Rail

Bombardier

Ottawa

34

Light Rail

Alstom

Philadelphia (PATCO)

102

Rebuilt Rapid Transit

Alstom

San Diego (MTS)

45

Light Rail

Siemens

San Francisco (BART)

765

Commuter (EMU)

Bombardier

San Francisco (MUNI)

210

Light Rail

Siemens

Seattle (Sound Transit)

Sonoma-Marin (SMART)

9

Bilevel Commuter

Bombardier

122

Light Rail

Siemens

4

DMU Commuter

Sumitomo/Nippon Sharyo

New York (LIRR)

New York/New Jersey (PATH)

North Carolina (Triangle Transit)

0-72

Rapid Transit

175-350

Rebuilt Rapid Transit

TBD

Light Rail

Oklahoma City (Embark)

1

Streetcar

Orlando (SunRail)

2

Bilevel Commuter

Philadelphia (SEPTA)

45

Bilevel Commuter

Phoenix (Valley Metro)

TBD

Light Rail

San Bernadino (SANBAG)

1-2

Light Rail

San Francisco (BART)

306

Commuter (EMU)

Seattle (DOT)

4-8

Streetcar

5

Streetcar

South Florida RTA Toronto (TTC)

126

Rapid Transit

60

Streetcar

Toronto (TTC)

54

Rapid Transit

Bombardier

Vancouver (TransLink)

174

Light Rail

Bombardier

Virginia Railway Express

Toronto (Metrolinx/GO Transit)

21

Bilevel Commuter

Bombardier

Vancouver

28

Rapid Transit

Bombardier

Virginia Railway Express

14

Bilevel Commuter

Nippon Sharyo

Washington, D.C. (WMATA)

590

7000 Series Rapid Transit

Kawasaki

Waterloo, Ont.

14

Light Rail

Bombardier

56-72 52

Rapid Transit Bilevel Commuter

January 2017 Railway Age 47

CONGRATULATIONS to Thomas F. Prendergast Chairman and Chief Executive Officer of the New York Metropolitan Tranportation Authority for being named Railway Age’s Railroader of the Year

Built in New York, by New Yorkers

www.bombardier.com

Slow results for the FAST Act? After years of delays and extensions, a multi-year surface transport bill passed in 2016. Is it delivering on the advertised?

William C. Vantuono

2

016 saw the first year of the Fixing America’s Surface Transportation (FAST) Act, signed on Dec. 4, 2015 by President Barack Obama. The FAST Act authorizes $305 billion in funding for federal surface transportation programs for fiscal year (FY) 2016 through FY 2020 and provides funding to improve highways, bridges and transit systems.

The FAST Act provided hope in transportation sectors; however, Congress failed to pass the FY 2017 appropriations bill, which has put a hold on the FAST Act’s potential.

Rail provisions in the FAST Act would improve rail infrastructure and safety by “consolidating rail grant programs, cutting red tape and dedicating resources for best use. It also establishes a federal-state partnership to bring passenger rail assets into a state of good repair. Additionally, the bill will accelerate the delivery of rail projects by significantly reforming environmental and historic preservation review processes, and applying existing exemptions already used for highways to make critical rail investments go further.”

Major suppliers watch with interest: Alstom Transport, Bombardier Transit Corp., Brookville Equipment (pictured above), CAF USA, Kawasaki Railcar USA, Kinkisharyo, Siemens, and a new entry into the North American market, China’s CNR Changchun, are busy filling equipment orders for several public transportation agencies across the U.S., Canada and Mexico.

Major agencies like the New York MTA, BART, WMATA, MBTA and the Toronto Transit Commission account for a good chunk of the market, according to information complied for Railway Age’s annual “Passenger Railcar Market At A Glance” chart. The chart glances at deliveries in 2016, as well as orders for 2017 and beyond.

The largest orders in 2017 are expected to be with Los Angeles City MTA, Maryland Transit Metro, New York/New Jersey PATH, New York Long Island Railroad, New York Metro-North, NYC MTA and Toronto’s Go Transit.

The five-year outlook features several systems planning to order hundreds of cars: Amtrak, Chicago CTA, Los Angeles January 2017 Railway Age 49

2017 passenger outlook

City MTA, New Jersey Transit, New York Metro North, NYC MTA, New York/New Jersey PATH, and San Francisco BART. In August 2016, Amtrak announced it will be investing nearly $2.5 billion in new trainsets and infrastructure upgrades for the next generation of Acela Express. New trainsets are expected to be operational beginning in 2021. The company is also going to make significant station improvements at Washington, D.C. Union Station and create the Moynihan Station in New York City, along with other major station investments and developments in Philadelphia, Boston and Chicago.

Railway Age asked John D. Porcari, President of U.S. Advisory Services at WSP | Parsons Brinckerhoff, to comment on the FAST Act one year in, how it has developed and what this means for the rail community. Porcari directs the firm’s strategic consulting services across all market sectors

including transportation, infrastructure, industrial & energy, and environment.

Prior to joining WSP | Parsons Brinckerhoff, Porcari was Deputy USDOT Secretary. Porcari also twice served as secretary of the Maryland Department of Transportation, from 2007 to 2009 and from 1999 to 2003.

He provided the following responses: Q. What is the status of allocations for FAST Act funding?

A. Passage of the FAST Act, which for the first time included authorization of passenger rail programs along with highway and transit programs, was an important milestone for the rail industry. The FAST Act authorized more money for passenger rail, including Amtrak, and transit programs.

However, Congress’ failure to pass a FY 2017 appropriations bill has put a hold on that funding. The FAST Act also created three new discretionary passenger rail grant programs focused

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January 2017

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on safety and state of good repair.

However, these programs are not funded for FY 2017 under the shortterm continuing resolution.

Q. What is your view on the implementation of the FAST Act so far, and what has it meant to the rail transit community in terms of new-starts and upgrades, expansions to networks, etc.?

A. Creation of the Build America Bureau under the FAST Act has greatly streamlined project development and funding, with a one-stop source for credit opportunities and grants available through the USDOT. At WSP | Parsons Brinckerhoff, we expect the Bureau to expedite the delivery of transportation infrastructure funded through public-private partnerships or traditional public resources.

We’ve already seen its effectiveness in advancing projects such as [Amtrak’s] Gateway Program.

Q. How has the FAST Act benefitted passenger rail in the past year, and how do you see it benefitting in 2017 and the near future?

A. Funding for positive train control (PTC) has been critical in helping commuter rail systems meet their obligations to comply with federal safety requirements for passenger rail.

The Federal Railroad Administration has solicited PTC applications prior to the FY 2017 Congressional appropriations. Congress must approve the 2017 appropriation as well as future annual appropriations at authorized levels in order to give state and local rail agencies the resources they need to ensure passenger safety. RA

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U.S.A. CAN 300.01 - 400.00 27.17 73.75 400.01 - 500.00 31.35 86.05 500.01 - 600.00 35.75 98.12 600.01 - 700.00 40.15 112.90 700.01 & up (Appropriate charges applied)

To order, call

1-800-228-9670 or visit www.transalert.com The Railway Educational Bureau 1809 Capitol Ave., Omaha NE, 68102 (800) 228-9670 I (402) 346-4300 www.RailwayEducationalBureau.com

Rail news delivered to you at high speed RAIL GROUP NEWS brings you a daily round-up of news stories from Railway Age, RT&S, and IRJ. This email newsletter offers North American and global news and analysis of the freight and passenger markets.

From developments in rail technology, operations, and strategic planning to legislative issues and engineering news, we’ve got you covered.

From Railway Age, RT&S and IRJ www.railwayage.com/rgn

RAIL GROUP NEWS

ROUND-U

RAIL

Conrail bridges the experience cliff

Incorporating the past, present and future to develop human capital.

By josh Davidson, Contributing Writer, and Steve McGinnis, Communications Coordinator, Conrail, for Railway Age

F

ormed in 1976 to consolidate seven bankrupt eastern railroads, Conrail’s greatest challenge was to pare a vastly oversized workforce and asset base. Since that time, it transformed through the discharge of passenger service to Amtrak and metropolitan commuter agencies along with many other consolidation and resizing efforts.

Conrail’s evolution has been dramatic, from government-born behemoth to a wholly owned terminal and switching agent, operating in three of the nation’s busy rail hubs providing a consistent competitive environment for CSX and Norfolk Southern Corp. since 1999.

Conrail now stands at the edge of an “experience cliff.” By the end of this decade more than 3,000 years of experience will exit into well-deserved retirement—leaving a corps of mid-career talented managers who must overcome this significant loss of experience.

Its current success comes from a high degree of management expertise approaching retirement age. In 2010, Conrail President and Chief Operating Officer Ronald L. Batory, along with his immediate leadership team recognized the looming management STORIES shortfall. Expertise developed over three millennia would UND-UP of NEWS FROM: need to be replaced in a decade’s time.

Additional challenges AILWAY AGE, RT&S and IRJ

simultaneous to effective succession planning were the ongoing necessities of implementing new technology such as remotecontrol switching, satellite assist tracking via GPS, and PTC development along with the never ending attention to a safe work environment and enhanced service delivery processes to fulfill changing demands of the customer base– all in the midst of an economic downturn not seen in decades. The new generation of managers would need to grasp the age-old demands of running a railroad and learn to apply new technological skills, some of which didn’t yet exist in the industry.

Even if it was possible to replace the retiring bodies by recruiting experienced managers from other railroads or related industries, it would be risking the unique Conrail culture of serving two masters equally that had developed so effectively since 1999. The answer was to create a synergistic, strategic program to recast Conrail’s management ethic to value learning ability and specialized training with the respect traditionally granted to years of experience, and create a culture of strategic teamwork where individual expertise is considered “common property” to be shared and nurtured across departments. Batory and his team also recognized that good fundamental management practice was based on January 2017 Railway Age 53

CONRAIL HUMAN CAPITAL Recruiting for Management Potential

Supervisor-Car Department Operations Brian Taylor

real “on-the-rails” experience, ensuring that decision-making remained grounded upon the realities of the rail industry work place. The strategy comprised four core tactics: • A focus on recruitment and hiring practices from craft employees with post-secondary education, specialized training or military service.

• Engage and expose new-hire trainees to seasoned management.

• Develop multiple, complementary layers of expertise among the emerging trainees.

• Weave a collaborative learning culture where newly promoted managers incorporate colleagues’ expertise.

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January 2017

Finding employees at any level who can successfully adapt to the rigors of working 24/7 is a challenge. To also gauge their potential for leadership and their likelihood to remain with the company requires imposing higher standards for all candidates. A high school education is sufficient to succeed in craft positions on most railroads, but Conrail continually seeks candidates with some post-secondary education. Many “new generation” Conrail managers didn’t initially see their own management potential when they entered their craft role.

Work Force Planning Manager Lisa Jones (p. 57) entered the company as a Conductor, and never considered a management role until she came to “envision herself as a capable leader through the support and interaction with co-workers.”

Conrail also seeks candidates who already have pertinent experience, education or both. The U.S. Armed Forces is a source of disciplined individuals accustomed to large-scale logistics operations.

Prior to joining Conrail, Steve Hart (p. 56) was in the United States Army and served two combat tours in Iraq. He was hired as a Train Dispatcher and completed his Bachelor’s degree while working in that position. Steve was promoted to Management Trainee in the Transportation Department and after a one year training and evaluation period was promoted to Supervisor-Car Department Operations. He currently holds

CONRAIL HUMAN CAPITAL

the position of Assistant Manager-Risk and was recognized by Railway Age as a runner-up in the inaugural “Fast Trackers, 10 Under 40” contest last year.

An active college internship program is also a primary channel for new employees with various levels of exposure and experience. Scott Gruenburg (opposite, right) started as an intern while attending Fairfield University. He was hired as a full time employee after graduating and trained as a Conductor prior to entering Locomotive Engineer training. His education, training and experience provide the potential to assume leadership roles in the future.

Whether a new hire enters Conrail with a degree completed, unfinished, or only an aspiration, they are given every opportunity to further their education. Training and education through Norfolk Southern Corp. Railroad University, CSX Transportation REDI, Railway Educational Bureau, and other industry-specific training institutions is strongly supported for all employees. Tuition reimbursement policies aid employees who aspire to enhance their skills and/or obtain a pertinent college degree.

For those managers who display significant leadership qualities, Conrail selectively enrolls its cadre of candidates into the Michigan State University Railway Management Program or University of Denver Master of Science in Transportation Management.

Locomotive Engineer Scott Gruenburg

Engaging New Hires

Throughout the year, the senior Conrail leadership team holds a series of “Listening to the Future” sessions with first-year employees. These personalized group meetings are meant to honor the completion of the toughest year of their career— the first. In a relaxed and open environment Conrail honors the “first year rookies’” accomplishments and listens closely to their impressions and ideas evolving from their first year of experiences. Close contact also assures new hires that they are important to the success of their employer, but just as importantly, it helps their newly associated employer to be aware of what the first year experience is like today for a new hire.

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January 2017 Railway Age 55

CONRAIL HUMAN CAPITAL

Assistant ManagerRisk Steve Hart

Developing Expertise

As a complement to the general recruiting process, awarding internships to enrolled college students who display interest in the rail industry views the human resources prospecting effort through the other end of the scope. Conrail interns are typically intent on entering the rail industry, and gaining experience is the essence of their role. But the internship channel presents a different challenge to Conrail’s sometimes imperative that a manager possess some mastery of a craft. Assistant

56

Railway Age

January 2017

Terminal Engineer Adam Baginski (p. 53) had anticipated a railroad career since high school. He interned with Conrail throughout his college years at McGill University, graduating with every intent of putting his civil engineering degree to work. “The surprise was that I came up through the operating crafts,” says Baginski, who was hired as a Conductor and then promoted to Locomotive Engineer,Yard Master and Train Dispatcher. “The lessons I learned in the crafts gave me an advantage as a leader respectful of work performed by others.”

Railway_HalfVert_1.2017.ai

1

12/30/16

11:38 AM

CONRAIL HUMAN CAPITAL

Workforce Planning Manager Lisa Jones

Mobile Flash-Butt Welding

New operations and maintenance craft employees complete Conrail’s in-house training program. Individuals who display exceptional qualities, quickly grasp the training material and readily apply it without exception are identified for advancement opportunities. Preparation for a management role presents a whole new level of commitment between the individual and the company to equip the prospect with the technical knowledge and communication skills they will need to progress and succeed.

In his eight-year rise from Car Inspector to Supervisor of Car Department Operations, Brian Taylor (p. 54) has attended numerous technical training and management educational forums at Conrail to favor his undergraduate degree from The University of Delaware.

C

M

Y

CM

Unmanned Geometry Measurement Systems

MY

CY

CMY

K

Integrated Management

Every management development module makes sense on its own. But it is by their strategic combination that they will, in relatively short order, gel into an energized and empowered management culture that can replace millennia of experience with versatility, expertise, and teamwork on an accelerated basis.

Facing an epochal transition, Conrail must depend on a strong teamwork culture maturing through collaborative work association. Vice President and Chief Engineer Tim Tierney, and Vice President, Chief Administrative Officer and Treasurer Anthony Carlini have initiated a far-reaching team-building strategy to task the new generation with developing modern solutions to perennial railroad challenges. Five teams of managers were composed of various disciplines within the company, and assigned to tackle a classic challenge that will continually arise in evolving forms throughout their railroading careers.

Six years ago, Conrail faced a future for which it had to prepare. It was imperative to replace 3,000 years of experience in ten years’ time. The objective was to build an integrated system of professional diversity upon a solid bed of traditional railroad experience through a “greenhouse” strategy incorporating the past, present and future of railroading. At this juncture, it stands as a proven transformation of the railroads’ human capital development process. RA

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Visit hollandco.com Call 708-672-2300 January 2017 Railway Age 57

We’re current, are you? FRA Regulations FRA News:

Mechanical Department Regulations A combined reprint of the Federal Regulations that apply specifically to the Mechanical Department. Spiral bound.

Part Title 210 Railroad Noise Emission Compliance Regulations 215 Freight Car Safety Standards 216 Emergency Order Procedures: Railroad Track, Locomotive and Equipment 217 Railroad Operating Rules 218 Railroad Operating Practices - Blue Flag Rule 221 Rear End Marking Device-passenger, commuter/freight trains 223 Safety Glazing Standards 225 Railroad Accidents/Incidents Updated 12-7-16.

229 Locomotive Safety Standards 231 Safety Appliance Standards 232 Brake System Safety Standards

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FRA Part #

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Update effective

8-1-16 7-20-09 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16

BKHORN 222 8-1-16 BKRFRS 224 8-1-16 BKHS BKLSS BKSLI BKSAS BKBRIDGE BKLER

228 229 230 231 237 240

8-1-16 8-1-16 8-1-16 8-1-16 8-1-16 8-1-16

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RR Communications Rear End Marking Device, Passenger, Commuter & Freight Trains Use of Locomotive Horns Reflectorization of Rail Freight Rolling Stock Hours of Service Locomotive Safety Standards Steam Locomotive Inspection RR Safety Appliance Standards Bridge Safety Standards Qualification and Certification of Locomotive Conductor Certification

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49 CFR Part 225, Update to Email Address for the Electronic Submission via the Internet of Certain Accident/Incident Reports: This final rule updates FRA's accident/incident reporting regulations to provide the current electronic mail address railroads must use to electronically submit to FRA certain accident/incident report forms.

DATES: Effective: December 7, 2016.

Part 213: Track Safety Standards, Subparts A-F 49 Part 213, Subparts A-F. Classes of Track 1 through 5: Applies to track required to support passenger and freight equipment at lower speed ranges. Includes Defect Codes and Appendices A, B, and C to Part 213. Softcover. Spiral bound. 120 pages.

Updated 8-1-16.

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49 CFR 233, 234, 235, and 236. Requirements for signal system reporting; maintenance standards; grade crossing signal system safety. Includes material modification of a signal system or relief from requirements plus instructions, standards, and rules governing the installation, inspection, maintenance, and repair of signal and train control systems. Spiral-bound. Softcover, 225 pages. Updated 8-1-16.

BKSTC Regs Governing RR Signal & Train Control Sys.

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Part 214: Railroad Workplace Safety The FRA's Railroad Workplace Safety standards address roadway workers and their work environments. Subparts A-General, B-Bridge Worker Safety Standards, C-Roadway Worker Protection, D-On-Track Roadway Maintenance, and Defect Codes for Part 214. Spiral bound.

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Compliance Manuals BKINFRA

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Add Shipping & Handling if your merchandise subtotal is: U.S.A. CAN U.S.A. CAN $4.50 $8.75 25.01 - 50.00 10.78 16.80 7.92 12.65 50.01 - 75.00 11.99 21.20

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*Prices subject to change. Revision dates subject to change in accordance with laws published by the FRA. 1/17

People

John E. Giles

CM&Q

Ryan Ratledge

CM&Q

Meetings High profile: Two senior executives at Central Maine & Quebec Railway—John E. Giles and Ryan Ratledge—assumed new responsibilities on Jan. 1, 2017. After partnering with Fortress Investment Group in 2014 and leading the transformation of the former Montreal, Maine & Atlantic Railway into the CM&Q, President and CEO John E. Giles will assume the duties of Executive Chairman. Chief Operating Officer Ryan Ratledge will succeed Giles as President and CEO. Giles will continue to lead initiatives supporting CM&Q’s strategic positioning for growth and investment, including longterm planning, market positioning and acquisitions. Ratledge, a 22-year railroad veteran, began his career on BNSF, rising quickly through the operating ranks before joining RailAmerica in 2007. While at RailAmerica, he held a variety of positions that included General Manager of the Puget Sound & Pacific Railroad, GM of the Indiana & Ohio Railway, and Vice PresidentMidwest Region. Ratledge joined CM&Q in 2014, “where he and his team have dedicated themselves to retaining and developing existing and new business, while partnering with connecting carriers to optimize routes and improve pricing and service for CM&Q customers,” the railroad said.

Ricardo Rail has appointed Brian Ruddy to the new role of Business Development Manager, U.S. The Michigan State University Railway Management Certificate Program (RMCP) appointed Dr. Andreas Hoffrichter as Burkhardt Professor in Railway Management and Executive Director of Railway Management Programs.

Rio Grande Pacific Corp. (RGPC) promoted Anthony Pacetti to Director of Customer Service, Fort Worth, Tex. The Bureau International des Containers (BIC) appointed Douglas Owen as Secretary General.

Three former transportation industry officials and government affairs professionals have joined forces to form Cardinal Infrastructure: former Federal Transit Administration (FTA) Acting Administrator Sherry E. Little, former FTA Chief Counsel Severn E. S. Miller and long-time transportation advocate Anja Graves.

WSP | Parsons Brinckerhoff named Michael Harris-Gifford a Senior Principal Technical Specialist with responsibility for

managing and developing systems design for railroad and rail transit projects. The company also appointed Michael S. Venter an Assistant Vice President and Senior Engineering Manager.

The board of directors of Texas Central Partners, LLC (Texas Central) named Carlos F. Aguilar as CEO. Former CEO Tim Keith becomes President.

Canadian Pacific Railway Limited appointed Jane L. Peverett to its Board of Directors.

100 YEARS AGO in

January 19, 1917 Coal Famine at Chicago The shortage of coal in Chicago is now so widely felt that Mayor Thompson has called a conference of coal dealers and railroad officers to meet at once and discuss ways to relieve the shortage. Some schools and other public institutions have been forced to close for lack of fuel (adding urgency) for expediting the delivery of coal cars now within the Chicago switching district.

January 11-12, 2017 Midwest Association of Rail Shippers (MARS) Winter Meeting, Hilton Chicago/Oak Brook Hills Resort, Oak Brook, IL Contact : (630) 513-6700 www.mwrailshippers.com.

January 24-27, 2017 2017 APTA Business Member Board of Governors’ Annual Business Meeting Opal Sands Resort 430 South Gulfview Boulevard Clearwater, FL 33767 Contact: Ann-Marie Glanville (202) 496-4836 aglanville@apta.com.

April 18-20, 2017 Railway Age/RT&S Light Rail Conference: Planning, Engineering, Operations, followed by Rail Transit Finance. Grand Hyatt Denver, Colorado. Information: http://www.railwayage.com. conferences@sbpub.com.

June 7-8, 2017 Railway Age Third Annual Rail Insights Conference Union League Club of Chicago Information: http://www.railwayage.com. conferences@sbpub.com.

Oct. 19-20, 2017 Railway Age/Parsons International Conference on Next-Generation Train Control Courtyard Philadelphia Downtown Information: http://www.railwayage.com. conferences@sbpub.com.

January 2017 Railway Age 59

Products AAR-compliant, Rugged Train Control System Provides Safe Operation MEN Micro’s MA50C is a modular system for safe train control that complies with AAR (Association of American Railroads) standards. The new controller unit features a mechanical design that meets AAR S-590, as well as an AAR S-9401-compliant enclosure that houses a safe CPU, realtime Ethernet card, power supply and shelf controller.

MEN Micro says “the rugged MA50C is the first member of a robust family of AAR-compliant train control units built on the same components and functionality as the existing MEN TCS (train control system) family. All platforms are open and application-ready for easy integration of user applications.”

An MCU (modular concept unit) design hosts a single tower of up to six standard 3U CompactPCI boards. User-specific functions, such as safe digital I/O, MVB (multifunction vehicle bus) and serial I/O are accommodated by incorporating different boards into the system’s slots. Front interfaces include four M12 connectors for Ethernet, four MIL-C connectors for I/O requirements, a ground connector, status LEDs and an optional front display to show system status and diagnostics.

MEN Micro says “the freely configurable and modular MA50C can be used for all kinds of critical train control functions such as automatic train operation (ATO) and automatic train protection (ATP). The unit is ideal for almost any safety-critical railway application, from single train functions up to the main control system, with functional safety levels from SIL 1 to SIL 4, depending on specific requirements. The MA50C’s high degree of flexibility makes railroad computerization fast and cost-effective.”

The MA50C also meets AREMA 11.5.1: Class I, Class J specifications and features an operating temperature of -40°C to +85°C for qualified components, designed for use in regions with extreme environmental conditions or for applications that require an AAR approved form factor.

Contact: https://www.menmicro.com/products/ma50c/

60

Railway Age

January 2017

Robust 6,000W Power Converters Designed for Critical Railway Applications Schaefer Inc. has introduced the C/B5600 Series of 6,000 Watt DC/DC converter, AC/DC power supply and battery charging products.

The C/B5600 Series offers a lineup with more than 150 standard models, with requests for modifications also available. Five standard DC input voltage options span a range from 80-800VDC. AC input models offer 1-Phase or 3-Phase as well as battery charging models. Single output voltages encompass a range from 5-400VDC. All outputs are adjustable and fully regulated to 0.2% or better (load) and 0.1% (line).

Schaefer says its “robust design with industrial grade components provides a highly efficient, space-saving solution for even the most extreme environments in industries such as transportation and railway controls and communications equipment (onboard and trackside), sub-station applications for DC Switches, CBTC, and emergency lighting.”

The C/B5600 Series DC/DC and AC/DC models have remote sense capability and features comprehensive protection circuitry and efficiencies of up to 95%, a –20C to +75C operating temperature range, with –40C to +75C as an option.

The units are packaged in a space-saving 6U or 9U rack module or a wall-mount module. Options include parallel/ redundant operation, further mechanical ruggedization, inhibit, Power-OK / DC-OK alarms, system reset signaling, and programming/monitoring functions.

Contact: Tel: 508/435-6400 Fax: 508/435-6401 Email: sales@schaeferpower.com

Ad Index Company

Phone # 847-623-8800

Fax

URL/Email address

847-623-6139

Page #

e-rail@aldonco.com 16

Aldon Company Inc Amsted Rail Group 312-922-4516 312-922-4597 kskibinski@amstedrail.com 35 Association of American Railroads 202-639-2100 AAR.org 32 25 Bentley Systems International BMO Capital Marketing 312-461-3879 william.thomsn@bmo.com 11 Bombardier Transportation 215-441-1864 215-639-3724 Maryanne.roberts@us.transport.bombardier.com 48 816-241-4888 816-241-3710 bboehm@cte-equipment.com 36 CTE Danella Rental Systems, Inc. 610-828-6200 610-828-2260 pbarents@danella.com 5 770-944-1930 770-944-9136 fbrown142@aol.com 56 Dixie Precast 41 Encore Rail Systems, Inc. 866-712-7622 303-922-6178 www.encorers.com FreightCar America Parts 877-739-2006 814-533-5010 www.freightcar.parts 19 312-928-0850 312-928-0890 tbaun@freightcar.net C2 FreightCar America Georgetown Rail Equipment Co. 512-869-1542 ext. 5292 512-863-0405 bachman@georgetownrail.com 3 Greenbrier Companies The 800-343-7188 503-684-7553 gbrx.info@gbrx.com 15 816-233-9002 816-233-7757 tfrancis@hrsi.com 18 Herzog Railroad Services, Inc. Holland Co. 708-367-2987 708-672-0119 ptenhoven@hollandco.com 57 718-554-2760 contactus@jtrackny.com 34 J-Track LLC NRCMA 202-715-2920 202-318-0867 info@nrcma.org 31 618-241-9270 618-242-8519 sales@nre.com C4 NRE Okonite Co. 201-825-0300 201-825-3524 info@okonite.com 9 Penn Northeastern Railroad 215-855-7110 212-855-7033 info@pnrailroad.com 12 Plasser American Corp.

757-543-3526 757-494-7186 plasseramerican@plausa.com 17 Progress Rail Services 256-505-6402 256-505-6051 info@progressrail.com 33 RJ Corman Railroad Group 800-611-7245 859-885-7804 www.rjcorman 41 Railquip Inc 770-458-4157 770-458-5365 sales@railquip.com 54 402-346-4300 402-346-1783 bbrundige@sb-reb.com 51,58 Railway Educational Bureau, The Railway Interchange info@railwayinterchange.org 13 RailWorks 866-905-7245 952-469-1926 jrhansen@railworks.com 38-39 RCE 866-472-4510 630-355-7173 dennishanke@rcequip.com 42 Road & Rail Services 502-365-5198 14 Siemens-Rail Automation 412-944-6533 amanda.weir@siemens.com 29 Star Headlight & Lantern 585-226-9500 ext.137 585-226-2029 chrisjacobs@star1889.com 55 STV Inc 212-777-4400 212-529-5237 info@stvinc.com 50 Thales Transport & Security Inc 412-366-8814 412-366-8817 transportation@us.thalesgroup.com 40 Western-Cullen Hayes 773-254-9600 773-254-1110 co@wch.com 56 Wi-Tronix 888-948-7664 630-679-9954 cjasmin@wi-tronix.com 43 WSP/Parson Brinckeroff

212-613-8841

menchesj@pbworld.com

27

The Advertisers Index is an editorial feature maintained for the convenience of readers. It is not part of the advertiser contract and Railway Age assumes no responsibility for the correctness.

Advertising Sales MAIN OFFICE Jonathan Chalon, Publisher 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com AL, KY, Jon Chalon 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7224 Fax: (212) 633-1863 jchalon@sbpub.com CT, DE, DC, FL, GA, ME, MD, MA, NH, NJ, NY, NC, OH, PA, RI, SC, VT, VA, WV, Canada – Quebec and East, Ontario Jerome Marullo 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7260 Fax: (212) 633-1863 jmarullo@sbpub.com

AR, AK, AZ, CA, CO, IA, ID, IL, In, KS, LA, MI, MN, MO, MS, MT, NE, NM, ND, NV, OK, OR, SD, TN, TX, UT, WA, WI, WY, Canada – AB, BC, MB, SK Heather Disabato 20 South Clark Street, Suite 1910 Chicago, IL 60603 (312) 683-5026 Fax: (312) 683-0131 hdisabato@sbpub.com The Netherlands, Britain, France, Belgium, Portugal, Switzerland, North Germany, Middle East, South America, Africa (not South), Far East (Excluding Korea /China/India), All Others, Tenders Louise Cooper International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185 lc@railjournal.co.uk

Scandinavia, Spain, Southern Germany, Austria, Korea, China, India, Australia, New Zealand, South Africa, Russia, Eastern Europe Baltic States, Recruitment Advertising Julie Richardson International Area Sales Manager The Priory, Syresham Gardens Haywards Heath, RH16 3LB United Kingdom +44-1444-416368 Fax: +44-(0)-1444-458185 jr@railjournal.co.uk Italy, Italian-speaking Switzerland Dr. Fabio Potesta Media Point & Communications SRL Corte Lambruschini Corso Buenos Aires 8 V Piano, Genoa, Italy 16129 +39-10-570-4948 Fax: +39-10-553-0088 info@mediapointsrl.it

Japan Katsuhiro Ishii Ace Media Service, Inc. 12-6 4-Chome, Nishiiko, Adachi-Ku Tokyo 121-0824 Japan +81-3-5691-3335 Fax: +81-3-5691-3336 amkatsu@dream.com CLASSIFIED, PROFESSIONAL & EMPLOYMENT Jeanine Acquart 55 Broad St., 26th Floor New York, NY 10004 (212) 620-7211 Fax: (212) 633-1325 jacquart@sbpub.com

January 2017 Railway Age 61

equipment Sale/Leasing

Available For Lease ◆ Pressure Differential (PD) Covered Hopper Cars – 5,125 & 5,230 cu. ft., 286K GRL, operate at 14.7 psi. ◆ Pressure Differential (PD) Covered Hopper Cars – 3,915 cu. ft. capacity, operate at 14.7 psi. ◆ Mill Gondolas – 65’ 6” inside length with 5’ sides and 52’ 6” inside length with 4’ 6” sides.

For additional information and pricing, please contact John Goodwin phone (605) 582-8318 e-mail jgoodwin@mwrail.com www.carmathinc.com

Available for Lease 3000 cu ft Covered Hopper Cars 4650 cu ft Covered Hopper Cars 3600 cu ft Open Top Hopper Cars 4480 cu ft Aluminum Rotary Open Top Gons 65 ft, 100-ton log spine cars equipped with six (6) log bunks Contact: Tom Monroe: 415-616-3472 Email: tmonroe@atel.com

Av a i l a b l e f o r S a l e 6 x A E M - 7 A C • • •

6 x AEM-7AC Electric L o comotives for sale Fully Operational and Ser vice Ready Av a i l a b l e f o r I m m e d i a t e I n s p e c t i o n / D e l i v e r y

For additional information and pricing, p l e a s e c o n t a c t : Ya s u h i r o K a z a m a mail : nycmm@dg.mitsui.com, phone : 212-878-4327 Mitsui & C o. (USA), Inc., NY

Marketplace SaleS

contact: Jeanine acquart ph: 212/620-7211 • Fax: 212/633-1165 email: jacquart@sbpub.com

62 Railway Age January 2017

All MAjor Credit CArds ACCepted

PROFESSIONAL DIRECTORY

RECRUITMENT

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Financial edge DAVID NAHASS

Can policy and appointees save King Coal?

I

ndustry watchers and railcar owners have been on a deathwatch for coal for some time. Over the past three years, as we headed into the hydraulic fracking boom, the energy markets saw a huge decrease in the price of natural gas, while coal railcar loadings, the baseload commodity that has carried railcar loadings, well, for as long as there have been railcar loadings, began to decrease precipitously.

The message: Coal is a dying commodity; its death has been heralded across the rail industry.

Low-priced natural gas has made coal uncompetitive to transport and burn.

From December 1997 to December 2016, the average spot price for natural gas was $4.06 per million BTUs (MMbtu). However, in the most recent two years, 2014-2016, that same MMBtu averaged $2.56.

To remain competitive as a source of energy in the U.S., coal needs a natural gas price of $3.25 per MMBtu or greater.

Natural gas pricing is only part of the decline of coal. In addition to price reductions, the Obama Administration tightened NOx, SOx and mercury emissions standards from coal-fired generating facilities. As a result of tightening EPA regs, cheap natural gas and renewable energy tax incentives, coal went from supremacy in 2008, where it was producing 48.9% of domestic energy, to subordination in 2016, where it is on pace to produce 30%.

That is a smaller percentage than natural gas.

In the rail economy, the impact is huge: In 2008, U.S. railroads moved just under 900 million tons of coal.

In 2015, that number was just less than 700 million tons, and total coal carloads are scheduled to be off another 20% for 2016.

As industry watchers are aware,

64

Railway Age

January 2017

decreased coal traffic has a significant impact—fewer loads, fewer railcars, faster velocity, etc. As coal continues its decline, the word on the street is: “Coal is dead, never to return.”

Wait just one minute! On the heels of campaign promises to return coal to prominence as a domestic energy source, President-Elect Trump nominated Rick Perry, former Texas Governor, as Secretary of Energy, and Scott Pruitt, Oklahoma Attorney General, to head the EPA. Pruitt is a part of a group of attorney generals, utilities

“The investment required to convert a plant from gas back to coal is ridiculous and therefore very unlikely.” and other parties favoring coal use (including the AAR) that are currently suing the EPA to overturn the “Clean Power Plan” enacted in 2015. Perry comes with a legacy of promoting the beginnings of the fracking boom that originated in, among other places, the energy hotbed of West Texas.

Adding Perry and Pruitt to the Presidential Cabinet may have a significant impact on the future of coal movements by rail.

So the world of coal has gained a few allies. But the question for the rail economy is: Has too much market share been given up to natural gas to return coal to its prominence in U.S. energy consumption and in rail transportation? I consulted with rail industry analyst Eric Starks, President of

FTR Associates, for his read on the coal picture. Eric will be speaking at the 2017 Rail Equipment Finance Conference (www.railequipmentfinance.com).

I asked Eric if he thought that the new appointees for Energy and EPA offer hope for an increase in coal loadings. While they will be coal-friendly and positive for coal growth, Eric feels that, “Going forward, competition with natural gas will keep fuel selection as a market event rather than a regulatory event.”

I asked Eric if decommissioned coal plants would be recommissioned if coal prices were favorable for energy production. He responded, “The investment required to convert a plant from gas back to coal is ridiculous and therefore very unlikely.” (The return on investment is probably not there.)

Finally, I asked Eric if coal loadings would increase, based upon and in anticipation of change in current EPA regs. He responded, “The global market is saturated and coal prices are depressed; it is difficult to see a large uptick in loadings.”

I asked for the upside to the current market. Eric said, “Changes in policy may stop the bleeding, and that may be a comfort to some.” He indicated that hopeful parties are injecting optimism into a potential window of opportunity, but that other than specific pockets of demand attached to fluctuating stockpile levels, the market for coal and coal traffic is likely to remain steady.

Eric Starks offers a clear perspective on an important issue affecting the rail economy. All invested parties will continue to hope for better times ahead. Here’s to significant improvement in 2017!

Got questions? Set them free at dnahass@railfin.com.

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