[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[Senate]
[Pages 22683-22685]
[From the U.S. Government Publishing Office, www.gpo.gov]



    REHABILITATION, PRESERVATION, AND IMPROVEMENT OF RAILROAD TRACKS

  Mr. SPECTER. Mr. President, I wish to make one more point before 
yielding the floor, and that is another amendment which I am 
considering offering on the stimulus package. That is an amendment 
which would add $350 million for capital grants to be made by the 
Secretary of Transportation for the rehabilitation, preservation, and 
improvement of railroad tracks, including bridges, roadbed, and related 
track structures to short-line railroads.
  Legislation has been pending in the House of Representatives on this 
subject which has more than 100 sponsors. Legislation is pending in the 
Senate which has 7 sponsors. This would be a tremendous stimulus 
because it would immediately put many people to work on the 
reconstruction of the short-line railroads in the short run, providing 
very extensive jobs, and in the long run, by improving the 
infrastructure which would be enormously helpful to the economy of 
Pennsylvania and similarly to other areas where there are short-line 
railroads.
  At my request, the McFarren Group prepared an extensive analysis of 
proposed railroad costs to be included in the Federal stimulus package. 
Because of the shortage of time, Mr. President, I ask unanimous consent 
that a limited portion of this report be printed: The executive summary 
and the third page of the summary, together with a summary of factors 
in support of this amendment and a copy of the amendment itself.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                           Executive Summary


proposed railroad costs to be included in the federal economic stimulus 
                       package, October 31, 2001

     Background
       At the request of Senator Arlen Specter, the Keystone State 
     Railroad Association conducted a survey of member and non-
     member Pennsylvania railroads to ascertain the degree of 
     infrastructure improvements needed across the Commonwealth's 
     rail system. Respondents were asked to provide information 
     related to project readiness, safety and infrastructure 
     conditions, security and insurance cost estimates, and 
     estimates on the number of jobs that could be created if 
     listed projects were undertaken.
     Summary of Findings
       Pennsylvania railroads responding to this survey indicate 
     more often than 60% of the short line and regional railroad 
     infrastructure is in need of extensive rehabilitation, 
     including more than 170 bridges. Excluding the Bessemer & 
     Lake Erie and Delaware & Hudson railroads, both of which have 
     heavy load infrastructures, the short line and regional 
     railroads are capable of handling the heavier 286,000-pound 
     loads on only 70% of their infrastructure. The funds needed 
     to upgrade these lines and the related bridge infrastructure 
     will exceed many preliminary cost estimates. Many customers 
     are beginning to demand the use of 315,000-pound cars, which 
     will dramatically escalate funding needed for these rail 
     lines even further.
       The cost of most extensive bridge repairs can easily exceed 
     $1 million each for smaller spans. Short line and regional 
     railroads also indicate that more than 300 rail crossings are 
     in need of serious rehabilitation and repair.
       Projects that could be undertaken to address Pennsylvania 
     railroad infrastructure needs total some $280 million. Of 
     these projects, construction could be initiated on 44% of 
     them, totaling more than $120 million, in the next six 
     months.
       While it may be difficult to quantify, a clear correlation 
     undoubtedly exists between derailments and rail 
     infrastructure conditions. Railroads indicated that more than 
     350 derailments occurred during the past twelve months 
     resulting in only nine worker injuries. This is a tremendous 
     testament to the railroad industry's excellent safety record. 
     A majority of the derailments occurred at low speeds in yard 
     and switching operations. It is estimated that more than 
     540,000 carloads of hazardous materials cross Pennsylvania's 
     rail system each year.
       In the aftermath of the tragic events of September 11, 
     business and government are taking a much harder look at ways 
     to improve the security of the nation's transportation 
     system. A group of Class I railroads has already met to 
     discuss a series of security measures. Any efforts undertaken 
     by Class I railroads will also need to be addressed by 
     regional and short line railroad systems. The costs of 
     augmenting manpower at critical points along the system can 
     be extremely prohibitive to many small and medium-sized 
     operations.
       The September 11 disaster has already escalated insurance 
     costs in most sectors. Several railroads have been warned 
     that their risks and their rates will be re-evaluated. Some 
     railroads may not even qualify for any affordable insurance 
     coverage. It is conceivable that railroads receiving funding 
     for infrastructure projects will be forced to spend an 
     equivalent amount in additional security and insurance costs 
     in coming years. An addendum provides an overview of current 
     insurance conditions, as it relates to the railroad industry.
       There is no doubt that investment in the nation's railroad 
     infrastructure is warranted. The American Short Line and 
     Regional Railroad Association (ASLRRA) recently surveyed 
     members nationwide and reported that the nation's short line 
     and regional railroads could invest $1.2 billion in 
     infrastructure upgrades in the next six months if the 
     financial resources were available. KSRRA's findings in 
     Pennsylvania certainly bear this out. The most modest 
     forecasts for the movement of freight by the Federal Highway 
     Administration (FHWA) indicate that increases of up to 70% 
     can be expected in the Northeast over the next ten years. A 
     fraction of this type of growth would severely congest the 
     national transportation network unless investments are made 
     today. Railroads remain the safest and most viable mode for 
     transporting hazardous materials, coal, industrial raw 
     materials and

[[Page 22684]]

     large quantities of goods. It is clear that an investment in 
     an improved rail infrastructure is an investment in the 
     country's economic future.
       The funding of railroad infrastructure projects also 
     creates powerful economic stimuli as more than 650 new 
     construction and maintenance jobs could be directly created 
     if the attached projects were funded. This does not include 
     the hundreds of additional jobs that would need to be added 
     by railroad tie manufacturers, steel rail manufacturers, the 
     stone industry and other additional suppliers. Typically, a 
     multiplier of four is applied to measure the overall economic 
     impact. These infrastructure projects would also be of 
     tremendous benefit to the nation's steel industry since new 
     rail would be purchased from domestic steel sources, as 
     required in most government funded projects. Pennsylvania 
     railroads responding to this survey have painted a compelling 
     picture for investment in rail infrastructure.
       Attached is a detailed listing of projects that 
     Pennsylvania railroads are prepared to undertake, as well as 
     an addendum pertaining to railroad security.

                           *   *   *   *   *

       Any economic stimulus package should include expenditures 
     that will initiate further economic activity and that will 
     produce a long-term economic benefit. Any such stimulus must 
     be timely and result in meaningful product development rather 
     than merely being an additional burden on future government 
     spending patterns.
       Many transportation authorities have continually pointed to 
     the dramatic need to invest in our major transportation 
     infrastructure. These improvements in most cases are already 
     part of the strategic transportation plan. The projects, 
     which we have analyzed and produced for your consideration, 
     have already been engineered and prioritized by the 
     respective railroad companies. These projects can be 
     initiated with very short notice and the economic stimulus 
     will be immediate. The additional employment will be needed 
     immediately.
       From a national security perspective, railroads are one of 
     the best ways to produce a more secure system for 
     transporting dangerous or hazardous products. By further 
     improving the infrastructure, the overall railroad operating 
     system can become even safer and more difficult to disrupt by 
     any terrorist group. These needed changes and the additional 
     security measures will add substantial costs to industry 
     operations but the changes and improvements are long lasting 
     and a fraction of the cost incurred in other areas.
       Transportation is the centerpiece of industrial production 
     and energy generation. Railroads transport more than 60% of 
     coal used by generating facilities and some 70% of motor 
     vehicles from the factory to a regional distribution 
     facility. Some 30,000 miles of the railroad network is part 
     of the strategic national defense corridor system. The 
     regional and short line railroads are the feeders and 
     supporting players in this overall transportation network. 
     The network is only as strong as its weakest link. Therefore, 
     the $280 million of projects for Pennsylvania short line and 
     regional railroads is an absolute priority in any national 
     economic stimulus package.
                                  ____


        Facts in Support of Proposed Specter-Santorum Amendment


                             general points

       The amendment would provide $350 million in track 
     rehabilitation funds for short line railroads. It would be 
     distributed based on the criteria established in S. 1220, 
     pending legislation that would authorize this expenditure. 
     This legislation was moving quickly through the process prior 
     to September 11th. It was passed unanimously by the House T&I 
     Committee and awaiting floor action. It has strong bipartisan 
     support in the Senate including sponsorship by the Chairman 
     and Ranking Member of the Senate authorizing subcommittee of 
     jurisdiction. It is supported by the Class I railroads and by 
     rail labor.
       There are over 500 Class II and III railroads that together 
     operate approximately 50,000 miles of track, or just under 
     one third of America's railroad route mileage, and employing 
     approximately 25,000 people.
       The short line industry keeps the less populated areas of 
     the country connected to the national railroad main line 
     network. It does so over track that was very marginal in the 
     Class I system because it never generated enough traffic to 
     justify sufficient investment. With a lower cost structure 
     and more flexible service, short line companies that 
     purchased the track have been able to keep these lines going. 
     However, the revenue is still not high enough to make up for 
     past years of neglect.
       Today, two factors have combined to bring this situation to 
     a head. First, the advent of the heavier 286,000-pound cars 
     that are becoming the standard of the Class I industry 
     require substantially higher investment in the track. Second, 
     as the Class I's put a greater premium on speed and precisely 
     scheduled operations, the short line railroads must meet 
     these higher standards or be cut off from the national 
     system.
       Transportation is at the heart of industrial production and 
     energy generation. Railroads transport more than 60% of coal 
     used by generating facilities and are a major mover of 
     automobiles, industrial chemicals and mining products. The 
     short line and regional railroads are the feeders and 
     supporting players in this transportation network and the 
     network is only as strong as its weakest link.


          points related to the stimulus package and security

       Money spent on railroad capital programs can be spent 
     immediately. Replacing rails and ties and rebuilding 
     equipment is an on-going process for railroads. The 
     engineering and planning were done long ago. Unlike highways, 
     railroads control their rights-of-way and the timing of their 
     traffic. To double or triple the number of rails and ties 
     installed requires virtually no lead-time. The short lines 
     national association surveyed its entire membership following 
     September 11th and found that the short line industry could 
     spend over $400 million on infrastructure improvements in the 
     next three months and over $1.2 billion in the next six 
     months. Over 6,000 workers would be directly employed for the 
     three month period and nearly 9,500 workers would be directly 
     employed for the six-month period. These jobs would be in 
     addition to the railroad's in-house work forces and would not 
     include additional workers in the tie and rail supply 
     industry.
       A large portion of this investment involves the purchase of 
     rail and in testimony before the Senate Commerce Committee on 
     November 1 the short line association president indicated 
     that the short lines have agreed they will purchase only US 
     made rail with this money.
       One of the recommendations being made by security experts 
     in the wake of September 11th is that we find ways to 
     transport hazardous materials around heavily populated areas. 
     The nation's short line railroads offer a ready-made 
     transportation network that bypasses our nation's most 
     heavily populated areas. Today, 20 percent of all short line 
     customers ship hazardous materials.
       Keeping America's light density railroad lines connected to 
     the national railroad system is important under any 
     circumstances. Today it is even more important. The events of 
     September 11th have caused major disruptions in all our 
     transportation systems. As we sit here today, the federal 
     government is determining how to best inspect truck cargo and 
     is surveying all of America's railroads to determine the 
     location of critical infrastructure assets such as bridges 
     and tunnels and how and where we move hazardous materials 
     near large population centers. Today, America's entire 
     transportation infrastructure is under duress and we should 
     be concerned that America's entire transportation 
     infrastructure is up to the task.
       September 11th has already escalated insurance costs in 
     many sectors. Several railroads have been warned that their 
     risks and their rates will be re-evaluated. Some railroads 
     may not even qualify for affordable insurance coverage. As 
     small railroads are hit with higher and higher insurance 
     costs, they will have less and less to invest in needed 
     rehabilitation.


                     points related to pennsylvania

       Sixty percent of Pennsylvania's short line and regional 
     railroad infrastructure is in need of extensive 
     rehabilitation, including more than 170 bridges. Over 300 
     rail crossings require significant rehabilitation. Excluding 
     the Bessemer & Lake Erie and Delaware & Hudson railroads, 
     both of which have heavy load infrastructures, almost one 
     third of Pennsylvania's short lines and regionals cannot 
     effectively handle the heavier 286,000-pound cars that are 
     becoming the new standard in the industry.
       A recent survey of the state's short lines indicate that 
     infrastructure needs total some $280 million, and over 40% of 
     those projects could be initiated in the immediate future.
       More than 540,000 carloads of hazardous materials cross 
     Pennsylvania's rail system each year.
       The most modest forecasts for the movement of freight by 
     the Federal Highway Administration indicate that increases of 
     up to 70% can be expected in the Northeast over the next ten 
     years. This growth will severely congest the national 
     transportation network unless investments are made today. 
     Railroads remain the safest and most viable mode for 
     transporting hazardous materials, coal, industrial raw 
     materials and bulk commodities. Investment in rail 
     infrastructure is an investment in the country's economic 
     future.
                                  ____



                            amendment no.--

    (Purpose: To provide additional funding for capital grants for 
rehabilitation, preservation, or improvement of railroad track of class 
                      II and class III railroads)

       At the appropriate place, insert the following:
       Sec.   . There is appropriated to the Department of 
     Transportation for the Federal Railroad Administration for 
     fiscal year 2002, out of any funds in the Treasury not 
     otherwise appropriated, $350,000,000 for capital grants to be 
     made by the Secretary of Transportation for rehabilitation, 
     preservation, or improvement of railroad track (including 
     roadbed, bridges, and related track structures) of class II 
     and class III railroads. Funds appropriated by the preceding 
     sentence shall remain available until expended.


[[Page 22685]]


  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. We are recessing at 2 p.m. Has the Senator completed his 
statement?
  Mr. SPECTER. I have. I thank the Chair and yield the floor.
  Mr. REID. Mr. President, I ask unanimous consent that at 4 p.m. 
Senator Byrd be recognized to speak in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________