tial rail use; provide the affected state does not object and that all state and local taxes on the dormant line are forgiven. Rail lines which have little or no rail activity today but will provide significant future traffic should be land banked by CONRAIL. To assure however that such a decision is agreed to by the state and local areas, the respective governments must agree to forego all applicable taxes on these lines. I. Rail lines which serve areas with substantial coal or other mineral reserves shall be designated in the Final System Plan for conveyance to CONRAIL for preservation of rail right-of-way for future potential use; if deposits are in active production, CONRAIL shall provide service. The Conference has found that increased production of coal is to be a goal of national energy policy. Further, the Congress prescribed in the Regional Rail Reorganization Act that one goal be preservation of railroad trackage in areas in which fossil fuel natural resources are located. At the Silver Spring meeting on March 4 officials of the Federal Energy Administration expressed to the Conference concern about proposed abandonment of coal branch lines as shown in the USRA Preliminary System Plan. The Conference finds that the USRA has failed to develop criteria for evaluating retension of coal branch lines or to formulate a methodology for calculating benefits and losses attributable to such branches. Therefore, the Conference recommends that USRA include active coal branch lines in the Final System Plan and that rail banking be used to hold branch lines to coal reserves for future use. J. Rail lines which, through commitments of states or other responsible parties, will have revenues covering avoidable costs plus return on investment shall be designated in the Final Plan for conveyance to, and operation by CONRAIL. Such commitments include but are not limited to rehabilitation, labor agreements, rate surcharges, additional traffic, relief of taxes, etc. In lieu of either operating subsidy or acquisition and modernization, an agreement can be reached among all interested parties regarding the measures needed to assure revenues covering avoidable costs and return on investment. Branch lines with such agreements which meet all end states specified by USRA for viability should be acquired and operated by CONRAIL. K. Rail lines meeting minimum FRA safety standards which have been operated under subsidy with revenues covering avoidable costs plus return on investment for two years shall be, upon request of the state, conveyed to and operated by CONRAIL. Service on such lines may not be discontinued until two years after date of such conveyance and then only through applicable ICC procedures. Once revenues exceed avoidable costs plus return on investment, a branch line need not be subsidized and should be acquired and operated by CONRAIL. Lines relieved of the subsidy burden will be looked at more favorably by industries planning plant relocations or by industries on the line for plant expansion. These firms do not want to make capital investments along lines with a questionable status. Therefore, once a line pays its way it should be treated as any other viable line and be acquired and operated by the CONRAIL. L. Branch line viability determinations by USRA and subsidy formulas determined by RSPO shall consider as "avoidable costs" only the cost avoidable by abandonment of each branch individually without consideration of the collective impacts of abandoning other branch lines unless it can be clearly shown that additional savings in the short and long term from aggregation of abandonments will in fact accrue to the rail system. Avoidable costs on a single line basis must be used in all calculations. USRA has not done this. As an example, USRA has assumed that crew costs will be saved by any branch line discontinuance. This is an incorrect assumption which overstates the avoidable cost. To credit any crew saving to a branch line discontinuance requires a finding for the particular branch line that the cost would, in fact, be avoided. A crew working regular time hours on a branch line for only a few hours per day or per week as part of its regular assignment is not avoidable. The same reasoning can be used for other unavoidable costs which USRA has charged to branch lines such as locomotive costs. The elimination of one line, although it may save some locomotive-miles or locomotive-hours is highly unlikely to save an amount equivalent to that generated by a complete diesel unit which, as an indivisible piece of equipment, can only be disposed of in toto. M. CONRAIL shall be required to establish a branch line management function to give explicit attention to the operation and marketing of branch line services for branch lines both included in the Final System Plan and operated under subsidy. Cost of this management function is to be borne by the branch lines. The Conference of States finds that a serious cause of branch line unprofitability has been inadequate management. Thus, in the restructured system management attention must be focused on the branch linep roblem. Both branch lines included in the system and operated under subsidy should be organized as "profit centers" with central or regional management attention to efficiently sized groups of branch lines. This will combine the management skills proven to exist in the Region's "short lines"-which have continually exploited marketing opportunities and provide excellent services-with the operating efficiencies and scale economies of Class I operation. The cost of this management should be borne by the branch lines. The final system plan should provide that the subsidized lines and the branch lines inclued in CONRAIL will be properly managed. N. The States recommend that Congress enact legislation to improve the manner in which revenue divisions are adjudicated. Such legislation should (1) fix a one-year time limit for a final Interstate Commerce Commission decision in any division case and (2) impose penalties providing reimbursement with interest for any ICC decision taken to court and sustained. Some major revenue division cases before the ICC have taken several years before a decision is reached. Inequities continue to occur to the carriers during the time the case is adjudicated. The great length of time and costs involved in major revenue division cases prevents many cases being initiated and thereby perpetuates inequitable divisions. The imposition of interest penalties will also provide incentive by the involved parties for a quick settlement. NEW ENGLAND REGIONAL COMMISSION RESOLUTION NUMBER 123 A Resolution of the New England Regional Commission Concerning the Need for a National Rail Transportation Policy. Whereas, the New England Regional Commission has taken an active interest, in the railroad industry of New England; and Whereas, the analysis of the Preliminary System Plan of the United States Railways Association fails to make proper provision for the rehabilitation of the New England Rail System; and Whereas, present national policy fails to meet the very urgent needs of the rail industry for capital for maintenance of the fixed plant; and Whereas, the public supports all other transportation modes through subsidies to construction and maintenance of fixed facilities including highways, airports and shipping ports and channels; now therefore be it Resolved by the New England Regional Commission that the Commission calls upon Congress, the Department of Transportation and the United States Railway Association to adopt legislation to provide public support to all modes of transportation; and be it further Resolved, That the Commission endorses the concept of public ownership and maintenance of the fixed facilities of the railroads in order to provide an equitable base of public support to all transportation modes; and be it further Resolved, That the Commission will develop specific legislative proposals to accomplish this aim, which proposals shall include the following elements: 1. Public acquisition of rail rights-of-way and other fixed facilities. 2. Public maintenance of the rights-of-way and rehabilitation of presently deteriorated facilities. 3. Leases to operating carriers to provide service over present routes with user charges. 4. Establishment of a trust fund to finance rehabilitation and ongoing maintenance. 5. An energy tax credit for use of fuel efficient modes. 6. A program to increase productivity of rail labor. 7. Reform of the process of regulation of the transportation industry to increase flexibility in competition and service; and; be it further Resolved, That the Commission directs staff to prepare draft legislation and such supportive documents as may be required for presentation to national authorities. Adoption certified by the Commission. The Department of Transportation privately proposed early this year legislation that would have authorized an $800 million program to improve highspeed rail passenger service between Washington and Boston that could have returned $2 billion in profits to a government corporation, DOT documents showed today. The proposal which was seen as a major source of energy savings, especially of scarce petroleum resources-was just as quietly allowed to die by the White House Office of Management and Budget. As a result, DOT's report on the project was never even made public. A copy of the report and proposed legislation, obtained by The Star-News, shows DOT wanted to create a Rail Passenger Service Improvement Corp., whose sole job would be to upgrade the Washington-Boston corridor to the point that trains could operate at 150 miles per hour. The fastest present trains, Metroliners between Washington and New York are limited to 115 miles an hour because of track conditions and reliability. The corporation would have authority to borrow from private sources, backed by the government's guarantee to repay the money-up to $800 million. Of this, $577 million would be used for improvements to track ($139 million), bridges, signaling and the like, and $120 million for new cars. Another $100 million would be available to pay interest until the operation begins making money. The upgrading was to have been completed by 1976, in time for the nation's bicentennial celebration of million and the cash surplus would be $149.7 million. The report figures the total cash surplus would be nearly $2.1 billion by the end of 2005. Precisely how much of the cash surplus would be turned into profit is an open question, and this would depend on how much the corporation would pay to lease the Washington-Boston rail line. The corporation would be limited to leasing the line-owned by the bankrupt Penn Central-for no longer than 36 years. The DOT report estimates the cost of the lease at anywhere from $10 million to $32 million a year-but this would still leave the operation with a substantial profit. The DOT report was heavily in favor of improving railroad service as the best way of providing adequate transportation to meet the growing needs of the dense populated Northeast. It rejected substantial improvements to air travel, pointing out that new airports will be needed and problems associated with such facilities include substantial amounts of land and increasing noise pollution. It rejected the option of widening the heavily traveled New Jersey Turnpike or developing an alternate highway route because this would "create conflicts in land-use and disruptions in economic and social patterns." But it pointed out that "the rail passenger system in the corridor is presently under-utilized as opposed to the air and highway modes. With modest investments the rail system can provide a significant source of relief for projected congestion on the other modes." CONFERENCE OF STATES ON REGIONAL RAIL REORGANIZATION RESOLUTION ON PASSENGER SERVICE ESSENTIALITY OF PASSENGER SERVICE The Northeast Railroads serve 150,000,000 passengers per year (half a million per day) largely in areas where the volume of rail travel exceeds highway capacity and where air travel exceeds highway capacity and where air travel is neither practical nor economical. The Regional Rail Reorganization Act requires that the Northeast Corridor recommendations of the USDOT of September, 1971 be implemented promptly. This requires electrification of the link between New Haven and Boston, upgrading of track, and more reliable rolling stock. Passenger service involves three separate and distinct types of service. The greatest volume is short haul and commuter traffic, not presently encompassed by the Amtrak operation and covered by the support from the Urban Mass Transportation Administration. This is a potential growth area, with great value for traffic, economic, energy and pollution relief. Amtrak operates two types of service. One type is the high speed corridor service for distances under 250 miles where rail service is often preferable to other modes. The other type is long distance travel for those who prefer it in the interest of safety, energy conservation, and all-weather reliability. Either of these types of service can be required by states under the 403b section of the National Railroad Passenger Act. NEW AMTRAK SERVICE The Regional Rail Reorganization Act provides for USRA recommendations for additional passenger services now not existing. USRA has recommended new or improved service in 16 corridors outside the Northeast Corridor but did not address the need for such passenger service where one end point consists of an area of less than one million in population. The ridership potential in certain areas under one million population is good but has been neglected. These include: Boston-Worcester-Springfield-Hartford. Boston-Lawrence-Portland. Boston-Manchester-Concord. Newark (for New York)-Allentown-Reading. COMMUTER SERVICE The USRA has been unresponsive to its passenger service responsibilities under the RRRA with the result that numerous issues have arisen which require clarification. USRA has failed to provide clear guidelines for the continuation of passenger operations by ConRail or other carriers. USRA must acknowledge that all passenger service provided pursuant to contract at the time of enactment of the RRRA must be continued by ConRail where a portion of that service is over property transferred to ConRail, notwithstanding the fact that some of the service operates over properties not transferred. Furthermore, USRA must acknowledge that ConRail as well as the debtors' estates is obligated to operate passenger service when offered a rail service continuation subsidy under section 304 of the RRRA regardless of whether the service is operated over properties transferred to ConRail. It should be made clear that the cost sharing provisions of section 402 of the RRRA are applicable to passenger service and the RSPO standards should be corrected to conform. USRA, in the Preliminary System Plan, has proposed abandonment of trackage now providing commuter or intercity passenger service without providing for any realistic way of continuing such essential service. Examples are Parkesburg to Lancaster, Pa., Royalton to Conewago in Pennsylvania; Lansdale to Doylestown, Philadelphia, Chestnut Hill to Wayne Junction, Philadelphia, Kalamazoo to Dowagiac, Michigan, and others. These proposals must be elim inated from the Final Systems Plan if the goal of supporting passenger service mandated in the Rail Reorganization Act is to be observed. JOINT TRACK USAGE Most of the States in the Conference support the operation and/or management control of passenger and freight service in the Northeast Corridor by a public Northeast Corridor Authority that would also own the trackage, unless a CONFAC solution is enacted. The corridor is defined by the Conference as extending from Boston to Washington, D.C. with logical extensions to the west. Outside the Northeast Corridor, intercity passenger service would be provided by Amtrack on trackage owned by the appropriate freight carrier under existing agreements that require the carrier to preserve trackage in physical condition existing as of May 1, 1971 at its expense and provides reimbursement on an avoidable cost basis. Outside the Northeast Corridor, commuter passenger service would be provided by the appropriate freight carrier over its own trackage (unless a CONFAC ownership is enacted) operating under contract with a commuting authority, providing reimbursement on an avoidable cost basis. The Conference opposes the diversion to ConRail of any portion of the $500 million of loan guarantees legislatively earmarked for non ConRail improvements. CONFERENCE OF STATES ON REGIONAL RAIL REORGANIZATION RESOLUTION ON MAINLINE STRUCTURE AND FINANCING RAILROAD ESSENTIALITY The nation's railroads perform almost 40% of the freight movement for $15 billion per year. In contrast, other carriers require $50 billion plus subsidies to move the other 60%. It is essential that rail efficiency be preserved and enhanced, so that the cost of living is restrained, energy is conserved, and highway problems are relieved. If railroad work were transferred to the other other modes by failure to solve this railroad problem, the cost of movement would increase about $6 billion per year more than currently, fuel consumption for freight would be doubled, air pollution problems would be exacerbated and highway safety would suffer. A NATIONAL RAIL PROBLEM DESERVES A NATIONAL SOLUTION If the rail system, as mandated by Congress and proposed in the Preliminary System Plan, is implemented some expect little more than a governmentfunded holding action keeping the rail lines in the northeast and midwest alive as the underlying problem migrates across the country to the west and south. Already, the Rock Island has gone bankrupt. The Milwaukee, Chicago Northwestern, Burlington Northern, and M-K-T (Katy) lines all have their financial problems. Nowhere is the rate of return on investment high enough to cover the cost of new long-term debt. The problem is not one confined to the northeast; it has merely manifested itself earlier in that region than elsewhere. Even a massive infusion of government cash does not solve the underlying problems of the rail industry throughout the nation. Rather, it simply masks the symptoms where they are most obvious. The inescapable fact is that we require our rail system to carry the burden of a high capital investment in fixed plant while we subsidize nearly all of the corresponding facilities of other modes. Simply stated, we are now faced with the reality that revitalized, or even continued, rail service is not possible without an extensive national commitment to the rail mode. We now know that the rail mode must be placed on parity with other modes if it is to compete. The railroads cannot continue to be the only mode that pays the full cost of its right-of-way. This situation is not the fault of the participants in the rail planning process. Their efforts have been more diligent. Nor does fault lie in the Regional Rail Reorganization Act of 1973. The Act was a bold and imaginitive attempt to solve an extremely complex problem. |