Reducing the Costs of Passenger Rail

WASHINGTON, D.C., June 5, 2013 – With passenger rail funding expiring in less than four months, Congress is poised to scrutinize core features of the multi-year reauthorization—and for good cause. A new report from the Competitive Enterprise Institute finds that outdated regulations are needlessly inflating passenger train costs.

Under the guise of promoting safety, federal regulations currently require passenger rail operators to spend far more than necessary to procure modern world-class rolling stock. The Federal Railroad Administration’s strict crash safety standards cannot be met by passenger trains commonly used in Europe unless the trains add weight and bulk, which significantly increases both manufacturing and operating costs for Amtrak and transit agencies.

“The Federal Railroad Administration has imposed a heavy burden on American passenger railroads,” writes David Edmondson, the author of CEI’s report. “By mandating crashworthiness requirements fundamentally opposed to crashworthiness standards that have proven effective in Europe for years, the FRA has raised a large trade barrier between the EU and the United States passenger railway markets. The argument that these rules are necessary to ensure passenger safety has been shown by the FRA itself to be invalid.”

The Federal Transit Administration estimated in 2010 it would cost $77.7 billion to bring U.S. transit systems up to a state of good repair under the current regulatory regime. The maintenance backlog for Amtrak in the Northeast Corridor, where nearly all of Amtrak-owned infrastructure is located, was estimated in 2010 to be an additional $6 billion.

“Although CEI is opposed to federal public transit subsidies and new-build rail transit projects, we are stuck with legacy systems that will need to be reconstructed in the coming years,” said Marc Scribner, Fellow in Land-use and Transportation Studies at CEI. “The level of deferred maintenance across the United States is obscene thanks to decades of government mismanagement, but there is no good reason to add to these costs by retaining outdated and discredited safety regulations. If Europe and Asia can buy off the shelf and adopt modern safety technology that lowers costs, the U.S. should be able to do so as well. Congress needs to push back against bureaucratic inertia and examine commonsense reforms that can save money for both passenger rail operators and taxpayers.”

>> Read the CEI OnPoint: “Reducing Passenger Train Procurement Costs: The FRA’s Outmoded Safety Regulations Should Be Repealed