Operational Issues for Rail Projects APTA Legal Affairs Seminar 2008

1. Operational Issues for Rail ProjectsAPTA Legal Affairs Seminar 2008 Janie Sheng K&L Gates LLP janie.sheng@klgates.com (202) 778-9855

2. Shared Use • What type of share? • Shared Corridor • Shared Track

3. (cont’d) • Shared Corridor: • no major freight vs. passenger capacity issues • lower insurance cost • don’t have to use FRA-compliant equipment

4. (cont’d) • Shared Track • Must use FRA-compliant equipment • i.e. vehicles that meet FRA safety and crashworthiness requirements for use on the general railroad system. See 49 CFR 238. • Otherwise, secure a waiver from FRA requirements for use of non-compliant vehicles.

5. (cont’d) • FRA essentially requires temporal separation as part of the operation plan in Shared Track situations.

6. Rail Line Capacity • Besides price, the most important issue for freight railroads is capacity on the line. • Capacity constraints are worse in dense urban freight corridors.

7. (cont’d) • Tension between how many passenger trains public agency wants to run vs. how many trains freight railroads need to run. • Commission a capacity analysis. • Freight railroads will want to preserve the right to run additional freight.

8. (cont’d) • Public agencies need to make sure freight railroads don’t have the right for future expansion and use up passenger rail capacity.

9. Operations and Maintenance • Will you be purchasing the railroad right-of-way? • If NOT, then • Freight railroads may want to drive your passenger trains. • On-time performance issues. • Freight railroads may want to perform maintenance of way. • Public agency can still perform maintenance on passenger equipment.

10. (cont’d) • If purchasing railroad right-of-way and track • More likely that public agency will be able to drive own trains and maintain own property.

11. Liability and Insurance • “But for” liability protection. • Freight railroads want public agencies to indemnify them against any and all claims • Arising from grant of access, or • Provision of passenger rail service • Regardless of negligence • That would not have arisen but for the existence of the passenger rail service.

12. (cont’d) • Public agencies should expect “but for” liability even if purchasing right-of-way.

13. (cont’d) • How do public agencies manage the risk? • Insurance • Usually self-insurance + policies • Huge cost item for public agencies

14. (cont’d) • Amtrak Reform and Accountability Act • Federal statute limits rail passenger liability to $200 million per occurrence. • Clearly applies to Amtrak • Appears to apply to commuter rail • Unclear whether it applies to third party claims

15. (cont’d) • The industry has talked about establishing a Captive Insurance Pool with other passenger rail providers for lower premiums.

16. The End.