The Policy Update North America

An in-brief look at current rail policy in North America.

United States

The Federal Railroad Administration (FRA) has issued a Notice of Funding Opportunity (NOFO) for the Consolidated Rail Infrastructure and Safety Improvements (CRISI) program. The current August funding for capital rail projects is for 244 million USD. These funds are there to increase rail transportation safety, efficiency and reliability. Projects eligible for this funding are those that address congestion challenges, highway-rail grade crossings, upgrades to short-line railroad infrastructure, the relocation of railway lines, improvements to intercity passenger rail capital assets, and the deployment of railroad safety technology. Positive Train Control is one of the projects that has received CRISI funding in recent years.

Washington DC
US Capitol

Canada, Vancouver

In January 2019 the Canadian Transportation Agency opened an investigation into whether BNSF, CN and CP breached their level of obligations in the Vancouver, BC, area between October 2018 and January 2019. It has found that neither BNSF nor Canadian Pacific breached their level of obligations, but that Canadian National did. It did so by announcing and imposing embargoes on wood pulp shipments without making reasonable efforts to deal with the challenges of the matter first. The Canadian Transportation Agency has ordered CN to produce an annual plan in August (for three years) for its traffic in the Vancouver area with a view towards avoiding and minimising embargoes.

Canada, Ottawa

The City of Ottawa applied to the Canada Transportation Agency to construct an extension to the Trillium Line. To assess the application, the Agency examined whether the City had sufficiently consulted with the Indigenous population who might be affected by the extension, whether the extension would cause significant negative environmental effects, and whether the planned route of the extension to the Trillium line is reasonable. Following an investigation, the Agency has found that the Trillium Line extension does not breach Aboriginal rights, that sufficient consultation has taken place. Furthermore, the extension is not likely to cause significant adverse environmental outcomes and it is reasonable. Consequently the Transportation Agency approves the Trillium Line extension.

Canada, Montréal

The City of Montréal filed an application with the Canadian Transportation Agency against Canadian Pacific Railway Company to obtain authorisation to construct five level crossings for pedestrians and cyclists and to apportion the construction and maintenance costs. The Canadian Transportation Agency ruled in June 2019 that two of the crossings would not be suitable at-grade, and would therefore have to be grade-separated. The City of Montréal will bear the full construction and maintenance costs for these. Further, the City of Montréal will be allowed to construct the other three crossings at grade, but will again be fully responsible for the construction and maintenance costs.

United States

The Federal Railroad Administration has made 272 million USD in funding available for ten rail projects in ten states. These funds will be allocated through the FRA’s State of Good Repair Program (SOGR Program). It is intended to rehabilitate and repair railway infrastructure in the US. The two biggest recipients were North Carolina, with a grant approval of up to almost 77 million USD for the acquisition of 13 new passenger coaches for the Piedmont service and an expansion of the Charlotte Locomotive and Railcar Maintenance Facility. The new coaches would replace rolling stock from the 1950s and 60s.

Massachusetts was awarded a maximum of just over 41 million USD for the replacement and upgrading of signals, switches, track, power systems and related infrastructure at ‘Tower 1’, an important rail network junction at the Boston South Station terminal.

United States, California

Following the threat, issued in February 2019, that the Trump Administration would cancel a 929 million USD grant for California’s high-speed rail project, it made good on that blow in May. A further threat, that it would try and grab back 2.5 billion USD in funding already paid out, was reiterated. Governor Newsom has vowed to fight the decision in court, calling the action “illegal and a direct assault on California”.

Pacheco Pass California
Pacheco Pass Rendering

United States, Canada

The relationship between shippers and Class 1 railroad operators is not an entirely happy one. In May the Surface Transportation Board (STB) held a hearing on fines and charges levied against shippers, which shippers thought were punitive and arbitrary. Of the seven Class 1 railroads in the US and Canada, Kansas City Southern was considered by shippers to have the fairest practices. An example problem is bunching. If a shipper orders a certain number of cars from a railroad, they might not arrive when the shipper wants but several hours earlier or later. If the shipper doesn’t have time to process them there and then, the shipper is charged a demurrage fee, even though the railroad didn’t deliver on time. Other factors, such as the weather, also contribute to bunching due to no fault of the shipper. Such a negative relationship between shippers and railroads is not helpful in trying to encourage a modal shift to rail for freight.

United States

The American Short Line and Regional Railroad Association (ASLRRA) issued a statement in response to the US Senate Finance Committee report examining various tax credits. The ASLRRA said that the short line railroads depended on the 45G (short line) tax credit in order to maximise investment.

Chuck Baker, ASLRRA President, said:

“The residual benefits of dollars spent on railroad infrastructure include employment and growth in the railroad supplier community and the regional economies as more businesses locate because of rail options.”

There are more than 600 short line railroads in the US.

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