The tangled tale of PTC

Why is PTC so expensive? So complicated? So time-consuming? Delving into its past may provide some answers.

As this is being written, it appears the odds are more than even that Congress will be extending the Dec. 31, 2015 deadline for implementing Positive Train Control. On September 30, the House Transportation and Infrastructure Committee introduced H.R. 3651, the Positive Train Control Enforcement and Implementation Act of 2015, which extends the deadline for at least three years (p. 1). The railroad industry breathed a collective sigh of temporary relief, but the question remains: How did it come to an 11th-hour scenario in the first place?

The industry has been spending a tremendous amount of hard-earned capital on a technology they believe will not deliver much more than a marginal improvement to a safety record that is already outstanding, and that has been steadily improving for many years.

Some of the experts who have been involved with PTC are questioning why, in their opinion, it has morphed into an overly complicated, overly expensive and overly time-consuming initiative whose original intent was to deliver not only improved safety, but measurable business benefits. Railway Age has asked several of these skilled and dedicated people to go on the record with their experiences as well as their opinions. Our intent is not to point fingers, or to stir a pot that has been boiling with intensity for quite some time. Rather, we hope to add some useful, constructive dialogue to a highly complex technological undertaking that perhaps was underestimated some seven years ago, when the Rail Safety Improvement Act of 2008 became law.

Agreeing to disagree

Just three short years ago, Railway Age Contributing Editor Ron Lindsey—one of this industry’s more controversial and outspoken individuals—had this to say in our April 2012 issue:

“Regrettably, the technicians that are handling the extensive complexities of delivering an interoperable PTC solution are neither charged with, nor have they been provided with, the necessary management directives and the proper resources to address both the tactical and strategic perspectives. Specifically, the railroads’ technicians have significantly expanded the technical issues of PTC, and therefore the capital investment, beyond what is required, and they have done so without the necessary strategic perspective that could perhaps justify their activities.”

It is not unusual for brilliant minds to butt heads. Over the years, two of them—Lindsey and Steve Ditmeyer, whose experience with PTC encompasses his days at Burlington Northern and then the Federal Railroad Administration—have disagreed on the nuances of PTC. However:

“I agree wholeheartedly with Lindsey’s assessment,” Ditmeyer told Railway Age for this article. He points out that the Class I railroads were implementing a PTC architecture designed by committee, i.e., the Interoperable Train Control (ITC) Committee, without the participation of a system integrator. Had there been one, the system would have worked when the pieces were put together, he believes.

At the National Transportation Safety Board PTC forum in February 2013, NTSB Board Member Mark Rosekind asked UP’s director of PTC, representing the AAR, who the “system integrator” for PTC was.

“The UP rep responded that the railroads were serving as their own system integrators,” Ditmeyer recalls. “Rosekind then asked who was making sure the systems were interoperable. Again, the UP rep responded that the railroads themselves were. After a pause and consulting with others, the UP rep said he believed the AAR had money in its 2014 budget to hire a system integrator person. Rosekind just shook his head and went speechless.”

Ditmeyer doesn’t believe the AAR ever hired that “system integrator person, which in any event would have been only a token gesture,” he says. “System integration is an activity carried out by organizations that have experience in this discipline, not by individuals.”

Further, notes Ditmeyer, “At the June 24, 2015 Senate hearing on PTC, a CSX vice president, testifying for the AAR, talked about the complexity of the PTC implementation process without once mentioning a system integrator.”

Ditmeyer also gave a presentation at the 2013 NTSB PTC Forum in which he said that BN had hired Rockwell International as designer and system integrator for ARES (Advanced Railway Electronics System), a PTC-predecessor initiative with which he was intimately involved from its inception to its shutdown in the 1990s. He notes, “Wabtec, which purchased Rockwell’s Railway Electronics business unit in the late 1990s and which now produces the on-board platform for the I-ETMS PTC system the freight railroads are implementing, told me in 2009, ‘We have a different business model than Rockwell; we are not serving as a system integrator for PTC. Railroads will have to find their own system integrators.’”

“Two of the very few railroads that will have their PTC systems operational by the mandated deadline hired system integrators to help them: Metrolink hired Parsons Corp. and Caltrain hired WSP | Parsons Brinckerhoff,” Ditmeyer points out.

Business benefits—or not?

One of the more controversial arguments involving PTC has been whether it can, on top of safety improvements, deliver business benefits.

“Before the enactment of the RSIA and the PTC mandate, and even for six months after, UP was touting PTC’s business benefits,” says Ditmeyer. “During a Dec. 17, 2008 UP PTC webinar—after the Chatsworth, Calif., accident—UP said PTC can ‘improve safety, velocity and fuel conservation.’”

Ditmeyer points out that the FRA’s economic analysis of PTC in its final PTC regulation only covered safety benefits. “FRA never said that there would be no business benefits, only that they were contentious and so they omitted them,” he notes. “But that does not mean that no business benefits exist for PTC. It should be intuitively obvious to the most casual observer that the continuous, real-time information that PTC produces could generate significant train operating efficiencies if PTC systems were properly implemented.”

So where is the disconnect? Observes Ditmeyer: “The Class I CEOs made a big mistake when they all assigned the responsibility for PTC implementation to their signaling departments. Signal engineers were fearful that PTC would mean the demise of their signal systems. When they were given the responsibility for implementing PTC, they changed the architecture so that PTC would be tied to all intermediate wayside signals, meaning that more than 20,000 data radios would need to be installed. And then they also decided that they needed to replace all their old wayside signals with new ones to which they could connect the PTC system. These decisions more than doubled the cost of PTC from what FRA had estimated.

“Tying PTC to intermediate wayside signals also had an adverse effect on business benefits. It meant that existing fixed blocks, and the relay logic that controlled the signals, would remain in place. Thus, moving block, and the possibility of closer train spacing, would not be possible. That in turn meant that business benefits such as improved running times, improved reliability, increased track capacity and improved asset utilization would not be obtainable. Had the railroads implemented PTC in such a way as to obtain those benefits, their customers would receive better, more reliable service.

“I don’t think the CEOs did this purposely. I think it happened more because they did not bother to learn about PTC technology, which even the AAR had been looking into for more than 20 years at the time. And they did not lean on their people to keep costs low and to maximize the benefits. This is a leadership mistake.

“UP’s late chairman Jim Young had the right to argue for the repeal of the PTC mandate, but by using (in a Sept. 9, 2011 Bloomberg News article) such incendiary language as calling PTC ‘a terrible waste of money’ and saying that ‘the President should junk the idea’ where his employees could read it, he compromised the principles of strategic leadership by removing all motivation from them to figure out ways to get some business benefits from PTC.”

To reiterate Contributing Editor Frank Wilner’s Watching Washington column in our August 2015 issue: “Railroads once advocated an early version of PTC, known as Advanced Train Control System (ATCS); and BN, prior to its merger with the Santa Fe, was field testing ARES. Although railroads envisioned significant business benefits from ATCS and ARES—BN calculated the benefit-cost ratio of ARES as a positive 3-to-1 by including extensive business benefits—the projects were scrapped as railroads instead pursued a chain of mergers. Railroads say the cost of the more-complex PTC exceeds safety benefits by 11-fold. A changed architecture, requiring replacement of wayside signals and retention of fixed-block train spacing—rather than the less expensive moving-block technology used by ARES—eradicated business benefits for PTC. Compounding the technological hurdles fueling delay is the $14 billion price tag—an unfunded federal mandate occurring as the Surface Transportation Board, encouraged by many in Congress, entertains shipper petitions to place new caps on railroad freight rates.”

“When PTC research began anew after the merger era, railroads indicated support only for its safety aspects,” Wilner points out. “Steve Ditmeyer is the one who first identified the error of turning PTC over to the signal departments, which used the mandate to spend on signals and discard the less expensive but equally efficient and safe ARES architecture that did not include wayside signals and included significant business benefits.”

“How can we get this done?”

We asked retired FRA Deputy Associate Administrator for Safety Standards and Program Development Grady Cothen, now a consultant, to weigh in. At the FRA, Cothen, like Ditmeyer at the BN, was intimately involved with PTC, albeit in a position of having to enforce a government mandate.

“We all have an obligation to be forward-looking about this,” he says. “The real issue now is, how can we get this done? We may gripe and point fingers—mostly to blow off steam, like a safety valve—but at some point this has to be put in a positive frame of reference. I am concerned, as I have told others, that the justification recently given to me by a railroad vice president for finishing PTC was that ‘we have invested so much already.’ Granted, this was a governmental affairs guy, but surely he understands the concept of sunk costs. There needs to be positive reasons to do this—safety, corporate image, business benefits, and even a contribution to maintaining a balanced transportation system—that can be recognized and affirmed. This kind of leadership has been missing, except arguably on BNSF. Yet since the mandate, even Matt Rose and his people have been constrained with respect to what they could say publicly.”

“I have tried to ‘out’ the smart people on the railroads who know full well (or should) that there are lots of good things that will come with PTC—even the overlay approach chosen by the ITC railroads,” says Cothen. “It’s interesting that nobody has tried to argue with me. The answer has been silence, which tells me I’m probably not too far off. The passenger railroad principals who wanted out of the mandate have departed their posts or have gotten religion following Metro-North’s Spuyten Duyvil and Amtrak’s Frankford Curve accidents. They will do PTC because they know it has to be done.”

Cothen believes that freight railroad leadership “needs to change its tune, add some talent to the projects, and treat PTC as a building block for the future. Absent leadership, it’s going to be a long road to actually turning PTC on. The implementation problems will be unnecessarily disruptive, and many of the potential benefits will be squandered.”

Union influence?

There are some who believe that the railroad unions wielded considerable influence when the PTC legislation was drafted. That, according to Cothen, is only partially correct:

“The Senate Commerce Committee produced the final language,” he says. “The California senators were a major influence, but the committee of jurisdiction had the final say. I believe AAR influence was prominent. In my experience, union influence was not as substantial as one would expect. By 2008, the United Transportation Union knew already that BNSF wanted to use PTC to move to one-person crews—BNSF had proposed it in a Product Safety Plan filing, later withdrawn. The Brotherhood of Railway Signalmen was concerned over potential removal of signal systems.”

“I have no doubt that the BRS, along with the UTU and Brotherhood of Locomotive Engineers and Trainmen, influenced [the late Rep. Jim] Oberstar in the drafting of the RSIA,” adds Steve Ditmeyer. “Both the RSIA and the subsequent FRA PTC regulations, however, set performance requirements, not design or configuration standards. Consequently, neither the RSIA nor the FRA’s PTC regulations required railroads to replace their old signals with new ones or to tie their PTC systems to each of the new signals with wayside interface units and data radios. Those decisions and requirements were made in the ITC Committee meetings, which were closed to union members. And all attendees were required to sign non-disclosure agreements. When a railroad submitted its PTCIP (PTC Implementation Plan, required by FRA), and said it intended to replace its old signals and to tie its PTC system to the new signals with wayside interface units and data radios, and if FRA accepted the PTCIP as meeting its safety standards, then the railroad was obliged to follow its PTCIP.”

“I don’t discount BRS input, given that the UTU and the BLET had their hands on the throttle with Oberstar through the whole legislative process,” adds Frank Wilner. “Labor took no back seats during Oberstar’s reign. BRS, understandably out of self-interest, monitors these events carefully. One could argue they would have access to new technology jobs, but, in context, you saw how UTU deep-sixed the BNSF offer for job security, higher pay and access to new jobs were UTU to accept engineer-only on PTC-equipped lines. For sure, at meetings involving planning for PTC architecture, labor relations would have played an important role in addressing perceptions and likely actions by labor re: scope agreements with BRS. Moreover, UTU and BLET have always stressed the ‘overlay’ nature of PTC to bolster the arguments for retention of two-person crews. Two engineers is BLET’s fervent, but not admitted, hope.”

“I don’t assume, at all, that lobbyists understand the concept of sunk costs,” says Wilner. “Nor do I recognize anyone bold enough among rail lobbyists today who would say Job No. 1 is to change the statute and allow railroads to find and invest in the most efficient, productive and cost-effective of technologies. My suspicion is that back in 2008 and before, railroads wrongly assumed that a public-private partnership would subsidize much of PTC, so they did not put up a fight against rail labor and bought into an overlay architecture. Certainly it was in the interests of the BRS to perpetuate, expand and renew wayside signals. Not to be overlooked are the short horizons of many CEOs. Decisions in 2008 that had a December 2015 deadline may have been assimilated as, ‘Well, I’ll be retired by then.’ Public choice theory is a powerful explanation of self-serving, short-sighted, path-of-least-resistance behavior.”