How CSX Assumed Passenger Responsibilities from Conrail

This paper presents the planning, implementation and follow-up pursuant to

CSXT acquisition of its portion of Conrail. Engineering projects underway and planned

are also described.

Recent history

The past two years have been exciting and challenging for both CSX and Norfolk

Southern. The Conrail transaction presents a significant opportunity for both companies

to grow their respective business.

The public benefits of the Conrail transaction have been widely discussed andchronicled. They include:

• Balanced competition throughout the East• Greater investment in the Eastern rail infrastructure which will benefit freight

customers and commuters• Less highway traffic which clearly has positive safety, environmental and

overall transportation policy implications

There is little doubt that the public benefits will be advantageous to both freightand passenger interests in both the short and long terms.

A chance to review our business practice

The Conrail transaction allowed CSX an opportunity to take a fresh look at allaspects of its business including its relationships with commuter and passengerorganizations.

It was clear from the start that the new network would result in CSX having thelargest interface with passenger and commuter operations either as a landlord or tenant.The company, and in particular Pete Carpenter, had the foresight to reach out to me formy forty-plus years of freight and passenger rail experience.

For the past two years, CSX’s passenger services team has worked tirelessly toenhance relationships with existing and new commuter partners. The approach has beenbased upon the following principles:

• Both freight and passenger operations must be safe• Both must be reliable

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• Public funding is critical• The agency sponsoring passenger operations must have the necessary liability

coverage.

Open Communications is key

By communicating clearly and openly with passenger authorities, CSX has developed

a greater understanding of the key issues and opportunities that exist and the need for a

strong working partnership.

CSX responded to legitimate concerns and set out to write a new chapter that allows

for mutual respect and growth of freight and passenger systems.

The result has been a positive response. Commuter and passenger agencies have

positively responded to the issues that are of critical importance to CSX. As a result,

there exists today a greater appreciation of the economic and operational tradeoffs

necessary for both interests to be successful.

At this point in the paper, let me offer an after-action review of where we are since we

began integrating.

• First couple of days of new operation was very smooth• Amtrak on-time service rate was above average 90-91%• Commuter operations were almost perfect including MBTA Worcester• The evening of June 3 - Lightning strike halted operations for 3 hours

Conclusion: Plan for coverage and support of passenger and commuter operationsduring the startup was perfect. Any troubles that did exist were outside of Conrailacquisition. In the next several weeks congestion developed at certain locations whichwere quickly addressed for resolution.

InfrastructureThere exists a number of ongoing infrastructure projects involving CSX participation.

They include:

Virginia Railway Express (RF&P): There are two distinct facets with regards to

Washington to Richmond service. Congress requested a study related to further upgrade

of the south end of the Northeast Corridor (NEC -New York City) to correspond to faster

BOS segment. The Northeast Corridor Improvement Plan (NECIP) is now a decade old.

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Congress later directed the Federal Railroad Administration (FRA), and then Amtrak, to

extend the study to include Washington to Richmond on CSX.

The final report, supported by engineering consultants, was published in May 1999,

and is consistent with plans to extend the corridor south through North Carolina.

This inter-city passenger rail program anticipates reduced travel times and added

frequencies. There already exist 18 Amtrak trains (Richmond to Washington), 14 VRE

Manassas trains that converge and diverge at Alexandria with 3 Amtrak trains on Norfolk

Southern, and 12 VRE Fredericksburg trains on CSX. That equates to 48 daily passenger

trains crossing the Potomac River. The addition of 30-35 freight trains creates significant

density of some 80 weekday trains.

With regards to the VRE sector between Washington and Fredericksburg, Va., a

number of vital projects have recently been completed, are underway, or in design

including:

• The construction of a third main track in the Crystal City area

• New sets of universal crossovers (45 mph)

• Extension of Amtrak’s Auto Train lead track to avoid blocking main line track

• New multi-track bridge at Quantico, Va.

• Rehabilitation of Neabsco bridge

• Conversion of RF&P cab signals to 100 Hz

All parties including CSX, Norfolk Southern, Amtrak, VRE, VIRGINIA Department

of Rail and Public Transportation and the FRA have generally agreed to an additional

program. Priorities have been established and sources and application of funding is

progressing. CSX’s investment is being put forward as a match to public money where

appropriate.

It is important to note that there are freight improvement projects along and adjoining

the passenger corridor that directly benefit passenger reliability and overall line capacity.

An example of this is the freight only Virginia Ave. tunnel track that joins with Amtrak’s

First St. tunnel line to Union Station. After clearing the tunnels, some 47 passenger and

30 freight trains will traverse the double track over the Potomac River. At the current 10-

mph speed limit, a freight train consumes 15-20 minutes on a joint passenger segment.

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With track speeds increased to 40 mph, the possibility exists for several additional

commuter/Amtrak trains to be added to the equation.

Line capacity analysts acknowledge that freight-only line improvements as far as four

miles distant from a passenger train junction benefit passenger service.

CSX’s goal is to have all partners involved in improvement programs to agree on the

scope and layout of the respective project, to include, freight/Amtrak and commuter

participants plus state/local and federal funding partners. A key to ensuring success is to

have as much give and take in the process, which when involving knowledgeable people,

usually results in success.

Additionally, there are several important projects in the initial stages involving CSX’s

newly acquired Conrail territory.

• Massachusetts – Fall River/New Bedford:

Early staging of bridge construction along the line - four replacement structures

and one upgrade – which is necessary to facilitate operation of MBTA commuter

trains serving these communities. Conrail had been cooperating in this unique

approach with CSX support. The new CSX is committed to exploring these

service extensions with total flexibility of options as to funding, ownership and

operation as this project extends beyond underlying structures including track

configuration and signal control, etc.

• New York State DOT/Amtrak Empire Service:

The following are the terms of the Conrail acquisition-related settlement

agreement specific to the CSX portion of the route.

- Poughkeepsie to Buffalo Line:

“Provided that the STB approves the Conrail acquisition without

major changes or conditions, CSX will fulfill the commitment in its

merger application to maintain the rail lines between Hoffmans, NY and

Buffalo, NY to FRA Class 5 standards, and to increase the passenger train

speeds between these points to 79 mph, except where specific local

conditions (e.g. curves and crossovers) necessitate lower speeds. CSX

agrees that it will cooperate with Amtrak in efforts to further increase

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speeds on these lines, and on the NYC-owned portions of the lines used by

Amtrak between Poughkeepsie, NY and Hoffmans, provided that the

additional costs associated with such increases in speeds (e.g. the

installation of cab signals where required on infrastructure and in freight

locomotives that is required solely to permit increases in passenger train

speeds) are publicly funded.”

“CSXT encourages focus on improvements east of Hoffmans, the

Junction with the 14 mile single track passenger line from Rensselear with

the heavy traffic, double track TCS main line to Cleveland. Amtrak

Empire trains delay each other on this single track when out of slot making

double tracking top priority.”

“South of Rensselear further speed increases beyond today’s

maximum 110 mph would support the very frequent, heavily patronized

Albany-New York city service.”

“West of Hoffmans to Buffalo CSXT suggests the ultimate step to

a separate high speed track should be the goal since speeds being

considered (90 mph to 125 mph) go beyond those compatible even with

intermodal freight trains (and there are many carload trains too).”

Amtrak and NY State DOT have agreed as follows: Memorandum of

Understanding National Passenger Rail Corporation and New York State Department of

Transportation

“Whereas, the National Passenger Rail Corporation (Amtrak) and the State of

New York, acting through its Department of Transportation (DOT), are jointly committed

to establishing a New York State High Speed rail program and improving the rail,

infrastructure in the Empire Corridor so as to provide reliable high speed passenger

service while simultaneously preserving freight service, and;

Whereas, Amtrak and DOT have jointly developed a program of capital initiatives

to support the achievement of these objectives, and;

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Whereas, the parties have agreed to memorialize their understanding in this

Memorandum of Understanding and to develop formal binding agreements consistent

with this Memorandum of Understanding, now therefore be it Resolved, that Amtrak and

DOT have agreed as follows:

1. DOT will complete the rehabilitation of two RTL III Turboliners with

FRA and NYS funds, and Amtrak will operate the rehabilitated equipment in

its Empire Service.

2. DOT will rehabilitate an additional four RTL III Turboliners, through

its existing contract with Super Steel, on terms and conditions acceptable to

DOT, Amtrak and Super Steel. The cost of the rehabilitation of the additional

four Turboliners will be shred equally between DOT and Amtrak. Amtrak will

operate the rehabilitated equipment in its Empire Service.

3. DOT will upgrade one additional RTL III Turboliner (currently known

as the RTL II) through its existing contract with Super Steel, on terms and

conditions acceptable to DOT, Amtrak and Super Steel. The cost of the

upgrade of the additional Turboliner will be shred equally between DOT and

Amtrak. Amtrak will operate the rehabilitated equipment in its Empire

Service.

4. As part of the program agreement between Amtrak and DOT relating

to the rehabilitated and upgrade trainsets identified in paragraphs one (1)

through three (3) above and the Turboliner project, Amtrak will permit

(subject to FRA approval) the release of FRA’s lien and the transfer of title of

such equipment to DOT. DOT will agree not to sell, lease, encumber or

otherwise permit a third party to use the Turboliners without the written

consent of Amtrak.

5. DOT, at its expense, will use its best efforts to acquire ownership of

the Empire Corridor from Poughkeepsie to Hoggmans and grant Amtrak

dispatch control over such trackage for so long as Amtrak operates passenger

rail service in the Empire Corridor.

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6. Subject to funding authority and appropriate agreements between

Amtrak and the freight railroads, DOT and Amtrak will jointly develop and

jointly fund a capital program for infrastructure and facility improvements to

enable high speed passenger rail service to operate reliably north, west and

south of Albany, as well as strengthen the economic base of areas served by

Amtrak’s Empire Service. Such capital program, at a minimum, will include

the Livingston Avenue and other bridge improvements and tie replacements to

restore existing infrastructure to a state of good repair south Albany;

incremental improvements to track and curve realignments west of Albany;

planning, design and construction of a second track and signal system between

Albany and Schenectady; track improvements between Schenectady and

Saratoga; and, improvements to the Rensselaer maintenance shop. Such

capital program shall be in the total amount of up to $140 million, in

appropriate annual installments, to be shared equally by the parties, over five

years, from the date of this agreement.”

Agreed this 24th day of September, 1998

CSX looks forward to continuing to work closely with Amtrak, which as an

experienced railroad, should be the lead organization charged with implementation of the

Empire Corridor project.

Other New York Issues

Metro North, another commuter operation, has begun a MIS on extending its

commuter service north of Poughkeepsie to either Rhinecliff or Tivoli on CSX-owned

right-of-way. This is made even more complex given Amtrak’s frequent higher speed

Empire trains, CSX’s overnight freight trains, and now, Canadian Pacific freight as well.

CSX continues to be an active participant in the process.

There is yet another MIS/EIS potentially involving Metro North, this one led by New

Jersey Transit (NJT). The study includes, among other facets, restoration of rail

commuter service on the West Shore line (now called the River line) initially as far as

West Nyack, NY. North of the New York border, which is a very heavily traveled right-

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of-way, service sensitive double stack intermodal container traffic continues to be

severely constrained.

• New Jersey

There are several light rail projects underway in New Jersey that involve CSX. The

first of several stages of the design build Hudson-Bergen project, which is now under

construction, is expected to move beyond the planning stage onto CSX right-of-way at

North Bergen, near the Weehawken Tunnel.

As part of the West Shore MIS, the alternative to add light rail along CSX’s

Northern Branch is being explored. Light rail and freight railroads are not compatible on

the same right-of-way as explained in a June 1999 joint policy statement issued by the

Federal Railroad Administration (FRA) and the Federal Transit Administration (FTA).

Several related issues surrounding the analysis include:

Commuter Rail – In addition to the West Shore commuter rail restoration

mentioned in the New York section, NJT is studying restoration of commuter rail service

on the West Trenton line (former Reading). CSX is actively engaged in this study which

importantly addresses both freight and passenger line capacity. Fortunately, sufficient

right-of-way (a former four-track line) exists on this now single-track segment.

A complication is that SEPTA now operates electrified service into West Trenton

and an interface between it and NJT similar to that at the Northeast Corridor-Trenton

station is foreseen.

• SEPTA

SEPTA’s R-3 and R-8 Rail commuter routes operate in co-mingled fashion with

CSX’s new north/south route. Studies are underway, including some preliminary

engineering analysis, in an effort to completely separate freight and passenger.

There are a few pinch points, which is to be expected, which are being addressed

by engineering staff from both rail operations. The lines are electrified which adds to the

challenge. The initial assessment indicates that the separation project appears to be viable.

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Returning to Pre-Conrail CSXT:

• Maryland

MARC – In mid-1997, final negotiations were concluded with MARC to initiate

service from Frederick, MD, via Point of Rocks and the Metropolitan Subdivision (the

“Met”) to Washington, DC.

A net of four new trains will be added to the Brunswick schedule. This will be the

first time since I joined CSX’s predecessor Baltimore and Ohio that regular passenger

service has operated on the Old Main Line (approximately seven miles). The Frederick

Branch will be acquired and upgraded by MARC, and improvements such as additional

crossovers and reduced curvature on the Wye at Point of Rocks are included. The author

is concerned about the single-track segment from Point of Rocks to Frederick Junction,

but project costs dictated a less than ideal solution, hopefully workable for three rush hour

trains each way.

Penn Line Connection – MARC’s Camden Station is located at Camden Yard,

near the new PSINet football stadium. Unfortunately, CSX-owned Riverside shop, which

services MARC equipment, lies on the opposite side of CSX’s vital north/south freight

main from Camden station.

To resolve this conflict, agreement was reached on the use of Amtrak’s NEC

MARC service (Penn Line), which is located on the stadium side, allowing for a

connection with CSX, running parallel - and not crossing over - to access the Camden

station area. The project, which is still in planning/design stage, would include a

replacement shop for Riverside, and also assume some maintenance activity now

performed by Amtrak at Union Station and by CSX at Brunswick.

• New High Speed Rail Corridors

It appears that almost monthly, new high-speed rail corridors are designated. One

such hub is located around AREMA’s 1999 conference site in Chicago. Florida’s

initiative has failed, yet again. There is a proposed Gulf Coast high- speed rail corridor

that has the gained the interest of Senate Majority Leader Trent Lott.

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North Carolina has joined with Virginia to extend the emerging NEC extension

south to Raleigh, N.C., (and beyond) using CSX’s former “S” Line, the old Seaboard

railroad.

Ohio continues to express interest in the Cleveland – Columbus – Cincinnati

corridor proposal, where no Amtrak service exists. Indiana has joined this effort, seeking

to service from the latter city through Indianapolis to Chicago.

Needless to say the planners and consultant community are busily engaged. CSX

continues to struggle to keep up with all this activity, unrelated to its basic, vital freight

business.

A new chapter has begun

Hopefully what CSX has accomplished during the last two years has allowed it to

begin writing this new chapter in our relations with our passenger partners.

The company is clearly on a course that is mutually advantageous, but there are

concerns - concerns that could undermine its ability to honor the very commitments it has

made.

Reregulation

The possibility of reregulation looms on the horizon. Passenger and commuter

interests should be concerned. A strong freight rail system goes hand-in-hand with a

strong passenger system so long as both entities share the same right-of-way.

Broad public policy implications

I would suggest that to one degree or another, freight and passenger interests are

operating in a zero-sum game environment. There are always inherent tradeoffs when

operating on someone else’s right-of-way.

The ultimate solution for attaining a passenger rail system second to none lies in a

quantum leap from where we are today. To achieve this, a concerted effort seeking public

policy changes, which would provide public funding for dedicated passenger lines, is

essential.

The extent to which these partnerships evolve and grow will be directly related to

the degree to which we collectively make that quantum leap. Only a public policy that

acknowledges and addresses those limitations will suffice.

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Only then will the U.S. have a first-class passenger rail system. And, whether one

views the issue from an environmental, economic or safety perspective, there is a

tremendous amount of merit in pursuing a first-rate public policy goal on freight and

passenger rail operations.

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