Published: Oct 3, 2005
Easy, cheap rail proves elusive
The optimistic $100 million estimate vanished as the transit agency hit roadblocks
The Triangle Transit Authority assumed rail companies would yield to public transit priorities. But the companies demanded changes that added millions to project costs.

An Amtrak train passes over I-40 near Miami Boulevard in Durham County on its morning Raleigh-to-Charlotte run. TTA wants to erect a bridge alongside this one with two new tracks for commuter trains. Plans also include space for a fourth track that one day might carry high-speed passenger trains

By BRUCE SICELOFF, Staff Writer


Commuter trains could be built cheap! They would be running soon!
Triangle leaders trumpeted rail transit in the early 1990s as a simple bargain that would make smart use of a quiet, state-owned railroad running through the center of the region.
The tracks were positioned perfectly to whisk riders to and from Research Triangle Park, where Interstate 40 rush-hour drivers were often sitting still.
The Triangle Transit Authority said back then that it would cost as little as $100 million to get trains rolling by 2000 from West Durham to North Raleigh through RTP, Cary and downtown Raleigh. But those plans carried a big assumption: that TTA would get free access to the existing tracks, which it could share with the freight trains.
TTA also expected generous concessions from the freight railroads.
Instead, TTA learned it would have to build its own track within the railroad right of way, then that it would have to build two -- at an extra cost of more than $170 million. Inflation, spikes in construction costs and unexpected engineering challenges added millions more.
The railroads did not surrender their interests for the sake of commuter rail. They extracted concessions that added more than $74 million in unexpected expenses, TTA says.
Today, the cost of the Triangle's commuter rail system is estimated at $759 million
And it's a shorter version, with fewer stops, than TTA originally proposed. This past summer, scrambling to trim costs, TTA cut the length of station platforms in half and reduced its trains from two cars to one.
Major increases in costs aren't unusual in transportation projects, highways included. The 29-mile northern section of the Outer Loop in Wake County, for example, was expected in 1994 to cost $443 million. Today, the estimate is $757.5 million -- roughly the same as the rail system.
But highways don't get the same scrutiny as rail projects. Under new, stricter federal guidelines, the price tag threatens to prevent the rail project from winning more than $400 million needed from the Federal Transit Administration.
Was TTA foolishly optimistic in its early plans? Will costs soar even more? Did the railroads skunk the rail agency during years of negotiations?
"As more information has become available through time, those early numbers look exceedingly naive," said David D. King, deputy state transportation secretary.
"The freight rail lines pretty much have TTA over a barrel and can demand about anything they want and get away with it," said Edison H. Johnson Jr., director of the Capital Area Metropolitan Planning Organization. "When you're spending other people's money, you don't really care what it costs."
 
Idealistic agenda
The railroads were supposed to be the key to making the project quick and cheap.
In the early 1990s, Triangle city and county leaders decided that rail transit would help them take control of the suburban sprawl that was causing traffic congestion. Along with providing expanded travel options for thousands of commuters every day, local governments could direct some of the region's growth to dense, efficient developments along transit corridors.
They looked to a little-used rail corridor owned by N.C. Railroad, a private company then owned mostly by the state. Passing within yards of the Triangle's worst traffic jams, the track carried fewer than a dozen freight and Amtrak trains each day.
The Triangle Transit Authority was chartered by the legislature in 1989 to improve public transportation in Wake, Durham and Orange counties. Its first studies of transit and land-use options emphasized the railroad corridor's strategic value.
The favored option was called regional rail -- self-propelled diesel cars that travel on standard tracks. Regional rail could be launched quickly and with minimal construction cost in the N.C. Railroad corridor, the TTA concluded.
A 1994 TTA report raised the possibility that commuter trains would share the existing rails with Amtrak and freight trains, saving the cost of building a separate track. State and local leaders were pushing for a low-cost solution, and Jim Ritchey, TTA's first general manager, talked up the most optimistic scenario.
"I can remember Jim Ritchey saying ... , 'You know, I think if we can bring this thing in under $100 million, I can sell it to the legislature,' " Johnson said. "I thought, 'No way.' "
Ritchey, now deputy director of the Georgia Regional Transportation Authority, declined to be interviewed for this report.
Reality sets in
Johnson was right about the $100 million figure. The price would rise quickly.
In 1997, TTA concluded that it would have to build its own track, adding more than $100 million. It would be difficult to coordinate scheduled commuter service with irregular freight schedules. And, on a track controlled by freight railroad dispatchers, commuter service delays were inevitable and expansion would be restricted.
In a preliminary engineering study in 1998, TTA estimated capital costs at $250 million for commuter service on a new 35-mile line from Duke University Medical Center in Durham to Spring Forest Road in North Raleigh.
In 1998 -- four years after pinning its hopes on easy use of the rail corridor -- TTA solicited its first formal comment from N.C. Railroad, Norfolk Southern Railway, CSX Transportation and the state DOT Rail Division.
Instead of winning easy agreement, TTA leaders learned that their assumptions were in error: There would be no quick, cheap solution with the railroads.

The plan depended on generous accommodations from three railroads. To keep its costs low, TTA wanted Norfolk Southern and CSX to relocate miles of their tracks and to be flexible in determining how many feet must separate freight and commuter tracks.
TTA counted on getting a sweetheart deal from N.C. Railroad -- cheap access to the railroad right of way, and maybe even a share of the railroad's main revenue source, the rent Norfolk Southern paid to use its tracks.
But N.C. Railroad was hobbled in the mid-1990s by internal conflict between the private citizens who owned 25 percent of its stock and the state of North Carolina, which owned the rest. And Scott Saylor, then the railroad's lawyer, was embroiled in difficult negotiations for a new lease with Norfolk Southern.
"At that point, Norfolk Southern didn't want anything to do with commuter rail anywhere on their line, period," recalled Christie S. Cameron of Raleigh, a former TTA trustee, who serves as clerk of the N.C. Supreme Court. Cameron left the TTA board in 1999 to join the N.C. Railroad board of directors.
"I remember Scott Saylor saying, 'This is not the time to come to me with this,' because of the delicacy of the [Norfolk Southern] negotiations."
Cameron and other TTA leaders simply had to wait until N.C. Railroad resolved its internal issues and worked out terms with the freight carrier. Meanwhile, they were buoyed by the optimism of their manager, Ritchey.
The state spent $71 million to buy out N.C. Railroad's private stockholders in 1998. In a new lease with Norfolk Southern, the state-owned railroad stipulated that the freight carrier should work out terms with TTA to make transit service possible.
But Norfolk Southern won assurances that TTA would not be allowed to constrain freight operations or restrict its opportunity for growth. In these talks and all negotiations, the railroads held the upper hand with TTA, because they could kill the project by refusing to share the railroad corridor.
"I don't know how anybody could have foreseen it," said Tommy Harrelson of Raleigh, who was the TTA trustees chairman in 1999 and 2000 and served as state transportation secretary under former Gov. Jim Martin. "You don't know, until you get into it, whether the railroads are going to cooperate with you in a way that helps you or not. In this case, it just didn't happen."
Bill Schafer, now Norfolk Southern's corporate affairs director, was involved in talks with TTA for several years.
"We're trying to preserve our options in the future that we have today," Schafer said in an interview. "It's only good business to make sure we have enough room there to accommodate any type of rail service that would benefit Norfolk Southern."
Jeff Boothe, a Washington, D.C., lawyer who lobbies for urban transit agencies, says freight railroads have added unfair burdens to transit projects. The added costs make it more difficult for TTA and other agencies to meet the federal government's new cost-effectiveness standards.
"It could have a very definite impact on whether folks meet their numbers or not," Boothe said. "The freights are using their leverage. They see the transit authority and the federal government as deep pockets, as free money to invest."
Haggling continues
In some cases, TTA was asking for significant concessions from competing businesses. CSX and Norfolk Southern balked at relocating several miles of their tracks. The two companies declined to share an eight-mile track between Cary and Raleigh -- and to give the other track to TTA.
TTA got nowhere with its proposal to build its tracks within 15 feet of the existing freight line.
Schafer told TTA in 1998 that Norfolk Southern favored a separation of 25 feet but would consider exceptions "where this is impractical" in tight spots, such as a narrow space beneath the Pullen Road bridge in Raleigh.
But, by 2001, the railroads ruled there would be no exceptions to the 25-foot rule. They made it a 26-foot rule in 2002.
The railroads acknowledge that there are other places in the country where transit and freight trains operate in closer quarters. But for safety reasons, they say they would be less likely today to accept anything less than a 26-foot separation.
Even with the greater separation, the railroads insisted that TTA make its trains heavy enough to meet federal standards for surviving a crash with a freight locomotive. TTA says its costs were increased by about $18 million for heavier rail cars and $15 million for stronger tracks and bridges to bear the added weight.
In other cases, the railroads pressed their advantage. In Durham, where General Electric once made steam turbines at its plant on South Miami Boulevard and shipped them by train, the GE rail spur has been freight-free for 21 years. Weeds and rust are overtaking the tracks.
TTA had marked the idle spur for removal to make way for its own tracks, but Norfolk Southern and N.C. Railroad wouldn't abandon the possibility that they might get another customer at the location.
After seven years of negotiations, TTA agreed to improve the unused spur with automated signals and 2,000 feet of shiny rails, even though they might never be used. The improvements will cost taxpayers $2.6 million.
"GE could change the function of that facility in a heartbeat," said Schafer of Norfolk Southern. "And if they did, it might be a function that would require the use of rail. We've got that option today. We don't want to eliminate that option."
More demands
Much of TTA's sharpest criticism came from the state DOT Rail Division. While former Gov. Jim Hunt had helped build political support for the TTA project, he and his Department of Transportation were more committed to faster long-distance train service.
DOT engineers insisted on expensive changes in TTA plans to protect a path for proposed high-speed trains between Charlotte and Washington, D.C.
Ritchey and Harrelson protested that DOT's demands would sink the project.
Today, more than four years after Hunt left the governor's mansion, the DOT Rail Division is still working to meet his goal of reducing rail travel time between Raleigh and Charlotte to two hours. It's a laudable idea, Harrelson says, but it has added time and expense to the TTA project.
"You can't criticize somebody for doing what they view as their mission," Harrelson said. "But at some point, somebody has got to step in and set the priorities."
Other requirements added more money. In 2000, TTA agreed with state and federal officials who recommended that it build two tracks, not one; other systems, such as Baltimore's, had experienced schedule problems with a single track and had to spend more money to add a second track later. Cost of the second track for TTA: about $70 million.
Railroads bear down
In 2002, TTA agreed to pay N.C. Railroad $15 million for permission to build twin tracks and run trains between Durham and Raleigh.
"It is not an inexpensive undertaking to build a double-track rail line in an urban area," said Saylor, now the railroad's president. "We saved them probably a couple hundred million dollars by leasing to them the right of way in our corridor for that purpose. ...
"Imagine what it would cost to build an 80- or 100-foot-wide swath through the Triangle today. It probably wouldn't be possible along that alignment."
For its proposed future rail line from downtown Raleigh to Spring Forest Road in North Raleigh, TTA bought 52 acres from CSX. TTA's independent appraisers valued the land at $9 million, and TTA set aside $16 million in its budget. But in 2003, it paid $24.5 million.
TTA has one major agreement left to work out: a construction and operation pact with Norfolk Southern. TTA officials began telling federal regulators in 2003 that they were close to signing the deal. This year they stopped making predictions about when they would come to terms.
The last issue separating TTA and Norfolk Southern involves staffing necessary to ensure safety and minimize disruption of freight traffic while TTA builds its tracks and passenger stations.
Federal railroad worker protection rules give key responsibilities to construction safety officers called flaggers. They operate at trackside with work crews and control all train movements through the work zone.
"It's important for our employees for somebody to be out here who knows the condition of the tracks and knows how to coordinate the trains," said James E. Alston of Apex, a veteran flagger for CSX.
TTA had argued that its construction would require the use of only a few flaggers. But to get Norfolk Southern's signature on construction and operating agreements, TTA agreed to use as many as 20 flaggers at one time during the busiest periods of construction.
John D. Claflin, TTA general manager, said it's a higher standard than he has seen elsewhere. TTA estimates it will pay the railroads $6.2 million to hire and train flaggers.
It's hard to tell, in some cases, whether previous TTA leaders should have recognized that their early cost estimates were too low, Claflin says.
"Whether they should have been estimated that way or not, I think the idea was that we had partners that would work with us and try to maintain our costs to the lowest extent possible," Claflin said. "And that has not always been the case.
"But you know, it's their railroad."
Staff writer Bruce Siceloff can be reached at 829-4527 or bruce.siceloff@newsobserver.com.
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