Intercity Passenger Rail: Amtrak's Management of Northeast	 
Corridor Improvements Demonstrates Need for Applying Best	 
Practices (27-FEB-04, GAO-04-94).				 
                                                                 
In the 1990s, the National Railroad Passenger Corporation	 
(Amtrak) undertook the Northeast High-Speed Rail Improvement	 
Project to make infrastructure improvements that would enable	 
Amtrak to meet a statutory goal of providing 3-hour intercity	 
passenger rail service between Boston and New York City. Amtrak  
shared responsibility for implementing the project with commuter 
rail authorities and state governments, and the Federal Railroad 
Administration (FRA) developed a master plan for the project and 
provided federal funds to Amtrak. GAO reviewed (1) the status of 
the project, (2) Amtrak's management of the project, (3) FRA's	 
oversight of the project, and (4) best practices for managing	 
future large-scale rail infrastructure projects.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-94						        
    ACCNO:   A09359						        
  TITLE:     Intercity Passenger Rail: Amtrak's Management of	      
Northeast Corridor Improvements Demonstrates Need for Applying	 
Best Practices							 
     DATE:   02/27/2004 
  SUBJECT:   Best practices					 
	     Best practices reviews				 
	     General management reviews 			 
	     Interagency relations				 
	     Performance measures				 
	     Program management 				 
	     Railroad industry					 
	     Railroad regulation				 
	     Railroad transportation operations 		 
	     Strategic planning 				 
	     Amtrak Northeast Corridor Improvement		 
	     Project						 
                                                                 

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GAO-04-94

United States General Accounting Office

GAO

Report to the Chairman, Committee on

               Commerce, Science, and Transportation, U.S. Senate

February 2004

INTERCITY PASSENGER RAIL

  Amtrak's Management of Northeast Corridor Improvements Demonstrates Need for
                            Applying Best Practices

                                       a

GAO-04-94

Highlights of GAO-04-94, a report to the Chairman, Committee on Commerce,
Science, and Transportation, U.S. Senate

In the 1990s, the National Railroad Passenger Corporation (Amtrak)
undertook the Northeast High-Speed Rail Improvement Project to make
infrastructure improvements that would enable Amtrak to meet a statutory
goal of providing 3-hour intercity passenger rail service between Boston
and New York City. Amtrak shared responsibility for implementing the
project with commuter rail authorities and state governments, and the
Federal Railroad Administration (FRA) developed a master plan for the
project and provided federal funds to Amtrak. GAO reviewed (1) the status
of the project, (2) Amtrak's management of the project, (3) FRA's
oversight of the project, and (4) best practices for managing future
large-scale rail infrastructure projects.

GAO recommends that Amtrak apply best practices for managing large-scale
infrastructure projects to future major intercity passenger rail projects
and that FRA require these best practices and develop guidance for how to
do this. GAO also recommends that FRA seek legislative authority to
oversee such projects in the future. Amtrak did not comment directly on
GAO's specific recommendations but said it was incorporating many of the
best practices discussed in the report as part of its management
restructuring. Amtrak also raised some issues concerning GAO's report
findings. FRA agreed with our recommendations.

www.gao.gov/cgi-bin/getrpt?GAO-04-94.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact JayEtta Z. Hecker at (202)
512-2834 or [email protected].

February 2004

INTERCITY PASSENGER RAIL

Amtrak's Management of Northeast Corridor Improvements Demonstrates Need for
Applying Best Practices

Amtrak has not yet met the 3-hour trip-time goal established by the 1992
Amtrak Authorization and Development Act although electrified service
between Boston and New York City was initiated in January 2000 and Amtrak
began limited high-speed rail service in December 2000. Currently, this
trip is scheduled to take 3 hours 24 minutes. Furthermore, 51 of 72 work
elements that FRA identified in its 1994 master plan as necessary to
reduce trip times (e.g., electrify tracks and acquire high-speed trains),
enhance capacity (e.g., construct sidings), rebuild or extend the life of
physical assets (e.g., replace bridges), or make other improvements are
incomplete or their status is unknown. Fifteen of these work elements are
on non-Amtrak owned sections of track and are important for achieving and
maintaining 3hour service as rail traffic increases over time. Through
March 2003, Amtrak and others had spent about $3.2 billion on the project.

Neither Amtrak nor FRA exercised effective management or oversight of the
Northeast High-Speed Rail Improvement Project. Amtrak's management was not
comprehensive, and it was focused primarily on the short term. Amtrak
focused on managing the electrification and acquisition of new high-speed
trains, and did not sufficiently address major infrastructure improvements
needed to attain the trip-time goal. In addition, Amtrak did not fully
integrate the interests of stakeholders (commuter rail authorities and
state governments) into the project, even though work that involved them
was critical to achieving 3-hour service. FRA served as a conduit for
federal appropriations to the project but did not have the resources or
the authority to oversee Amtrak's management of the project.

Best practices-including comprehensive planning, risk assessment and
mitigation, comprehensive financial management, accountability and
oversight, and incorporation of diverse stakeholders' interests-provide a
framework for effectively managing future large-scale intercity passenger
rail infrastructure projects. These best practices have proved effective
in managing large-scale infrastructure projects and could assist in
managing future projects like the Northeast High-Speed Rail Improvement
Project.

Best Practices for Managing Large-Scale Infrastructure Projects

Contents

  Letter 1

Results in Brief 3
Background 6
Northeast High-Speed Rail Improvement Project Has Not Achieved

Trip-Time Goal 11
Amtrak Did Not Exercise Effective Management of the Northeast
High-Speed Rail Improvement Project 26
FRA's Oversight of the Northeast High-Speed Rail Improvement
Project Was Limited 31
Best Practices Framework Would Support Effective Management of

Large-Scale Intercity Passenger Rail Infrastructure Projects 37
Conclusions 47
Recommendations for Executive Action 48
Agency Comments and Our Evaluation 50

Appendixes

Appendix I:
Appendix II:

Appendix III:

Appendix IV: Appendix V:

Appendix VI:

Scope and Methodology 55

Northeast Corridor High-Speed Rail Improvement Project
Work Elements, by Category and Status as of March 2003 58

Methodology Used to Develop a Framework of Best Practices
for Managing Intercity Passenger Rail Infrastructure
Projects 61
Definition and Classification of Best Practices 61
Literature Reviewed and Organizations Contacted to Identify Best

Practices 63
Limitations 64

Brief History of the Northeast Corridor and Northeast
High-Speed Rail Improvement Projects 65

Selected Sources of Best Practices for Managing Large-Scale
Infrastructure Projects 70
GAO Products 70
Non-GAO Products 70

Comments from the National Railroad Passenger
Corporation 71

Tables Table 1: FRA's Estimated Cost of the Project, by Major Category 14

                                    Contents

Table 2:	Amounts Spent by Amtrak on the Northeast High-Speed Rail
Improvement Project, by Category of Spending, as of March 2003 21

Table 3: Best Practices, by Framework Category 61

Figures	Figure 1: Figure 2:

Figure 3:

Figure 4:

Figure 5:

Figure 6:

Figure 7:

Ownership of the Northeast Corridor 8
Status of Work Elements Listed in FRA's 1994 Master
Plan, by Milestones, as of March 2003 16
Geographic Location of Remaining Work Elements and
Major Beneficiaries, as of March 2003 19
Growth in Estimated Cost of Route Electrification, May
1992 to March 2003 22
Best Practices Framework for Managing Large-Scale
Infrastructure Projects 39
Critical Path Method Graphical Representation of Project
Schedule 42
NECIP Appropriations, Fiscal Years 1976 to 1998 67

Abbreviations

4R Act Railroad Revitalization and Regulatory Reform Act
Amtrak National Railroad Passenger Corporation
BART Bay Area Rapid Transit
CDOT Connecticut Department of Transportation
DOT Department of Transportation
FHWA Federal Highway Administration
FRA Federal Railroad Administration
FTA Federal Transit Administration
MBTA Massachusetts Bay Transportation Authority
MTA Metropolitan Transportation Authority
NECIP Northeast Corridor Improvement Project
OMB Office of Management and Budget
PMO project management oversight

This is a work of the U.S. government and is not subject to copyright
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separately.

A

United States General Accounting Office Washington, D.C. 20548

February 27, 2004

The Honorable John McCain Chairman, Committee on Commerce, Science, and
Transportation United States Senate

Dear Mr. Chairman:

Intercity passenger rail service is a critical component of the
transportation system in the densely populated Northeast Corridor, which
is generally defined as the area between Boston and Washington, D.C. The
Northeast Corridor is the busiest passenger rail line in the country-some
200 million intercity and commuter rail passengers use this line, or some
portion of it, each year. Although the National Railroad Passenger
Corporation (Amtrak) is the primary owner of the Northeast Corridor
between Washington, D.C., and New York City, track ownership between
Boston and New York City is divided among Amtrak, commuter rail agencies,
and state governments. Amtrak acquired its portion of the Northeast
Corridor in 1976. Recognizing the importance of the Northeast Corridor and
the need to make critical infrastructure improvements to the rail line,
Congress established the Northeast Corridor Improvement Project in 1976.
This project, which consisted of infrastructure improvements designed to
enable high-speed rail service between Boston and Washington, D.C., was
one of the largest rail infrastructure projects undertaken in recent times
and represented the single largest federal investment in intercity
passenger rail service in the last century.

In the 1990s, the focus of the Northeast Corridor Improvement Project was
on infrastructure improvements between Boston and New York City. In
particular, in 1992 the Amtrak Authorization and Development Act directed
the Secretary of Transportation to develop a master plan for a program of
improvements that would permit regularly scheduled, safe, and dependable
rail passenger service between Boston and New York City in 3 hours or
less. In 1994, the Federal Railroad Administration (FRA) issued such a
plan. The plan contained three milestones-initiating electrified train
service between Boston and New York City, initiating 3-hour train service,
and completing infrastructure improvements designed to enhance track
capacity and extend the useful life of existing assets (called
"recapitalization")-and identified 72 work elements that would be needed
to complete the project. FRA estimated that the first milestone could be
completed by mid-1997, the second by 1999, and the third by the end of

2009. FRA also estimated that about $3.1 billion (1993 dollars)1 would be
needed to enable 3-hour service between Boston and New York City and
complete capacity enhancement and recapitalization work to maintain this
schedule. Improvements to achieve the 3-hour service included electrifying
the route between New Haven, Connecticut, and Boston;2 upgrading and
improving tracks, signals, and other infrastructure; and acquiring 26
highspeed passenger trains. Amtrak was responsible for managing these
efforts, which collectively became known as the Northeast High-Speed Rail
Improvement Project, and shared responsibility for implementing the
project with several other entities, including commuter and freight
railroads and state governments, which we refer to in this report as
"stakeholders."

This report responds to your request that we examine Amtrak's management
of the Northeast High-Speed Rail Improvement Project. In particular, the
report discusses (1) the status of the project, (2) Amtrak's management of
the project, (3) FRA's oversight of the project, and (4) the use of best
practices as a framework for managing future large-scale intercity
passenger rail infrastructure projects. Best practices in the context of
capital projects are defined as those "practices that have been
successfully implemented by organizations recognized for their outstanding
capital decision-making practices."3

To determine the status of the Northeast High-Speed Rail Improvement
Project, we reviewed applicable laws related to both it and the Northeast
Corridor Improvement Project and reviewed documents on its cost, schedule,
and status. To address Amtrak's management of the project, we reviewed
documents related to the project's organization and management and
interviewed Amtrak, FRA, and other officials about the project's
management. To address FRA's oversight of the project, we reviewed laws
related to FRA's legislative authorities, discussed FRA's oversight of the
project with FRA officials, and reviewed documents related to the Federal
Transit Administration's (FTA) project management oversight program.
Finally, to address the use of best practices as a framework for managing

1In this report, all financial amounts are in nominal dollars unless
otherwise noted.

2In 1994, this section of the Northeast Corridor was not electrified, and
Amtrak had to switch from electric to diesel locomotives at New Haven.

3U.S. General Accounting Office, Executive Guide: Leading Practices in
Capital Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December 1998).

future large-scale intercity passenger rail projects, we conducted a
literature search to identify best practices related to infrastructure
management and discussed infrastructure management best practices with
Amtrak, FRA, and other officials. We then synthesized this information
into the framework presented. Appendix I discusses our overall scope and
methodology, appendix II discusses our methodology for identifying best
practices related to infrastructure project management, and appendix V
lists GAO and other products associated with project management best
practices.4

Results in Brief	Amtrak has not yet met the statutory goal of 3-hour rail
service between Boston and New York City, although it has reduced the
scheduled trip time from about 4 hours to 3 hours 24 minutes. To achieve
this reduction, it completed the first milestone in FRA's 1994 master
plan-initiate electrified train service between Boston and New York
City-in January 2000, and it acquired enough high-speed trains to begin
limited high-speed rail service in December 2000. However, it initiated
these activities about 3 years later than planned. In addition, according
to the latest available data (March 2003), only 5 of the 17 work elements
needed to complete the second milestone of FRA's 1994 master plan-initiate
3-hour service-are complete. Progress toward achieving the third
milestone-completing infrastructure improvements designed to enhance track
capacity and extend the useful life of existing assets-has also been
slower than planned. In total, as of March 2003, Amtrak, commuter rail
authorities, and other stakeholders had completed 21 of the project's 72
work elements-51 of the work elements were incomplete or their status was
unknown.

4In November 2001, one of the contractors manufacturing the Acela Express
trains (Bombardier) filed suit against Amtrak in the United States
District Court for the District of Columbia seeking damages for, among
other things, Amtrak's alleged interference with the manufacture of the
equipment. In November 2002, Amtrak filed a countersuit against the
manufacturers alleging, among other things, breach of contract. As of
February 2004, these suits were still pending. In addition, Amtrak
officials indicated that the Department of Justice and the U.S. Attorney's
Office were conducting investigations related to the contract for
electrification work done under the Northeast High-Speed Rail Improvement
Project. As of February 2004, these investigations were also still
pending. Nothing in this report is intended to have any impact on the
outcome of these suits or investigations, and this work was not performed
in relation to either the suits or the investigations. As discussed
further in appendix I, this report does not analyze detailed information
regarding either the highspeed trains or electrification procurements.
However, we do not believe that such scope restraints negatively affected
our ability to review and evaluate information on the overall management
of the Northeast High-Speed Rail Improvement Project and draw conclusions
about how Amtrak managed the project.

According to FRA and commuter rail officials, several of the work elements
that are incomplete or for which their status is unknown (such as
realignment of curves) are important to achieving the 3-hour goal. As of
March 2003, Amtrak, commuter railroads, and other stakeholders had spent
about $3.2 billion on the project. How much more work will be done is
uncertain. Several Amtrak officials said they consider the project
complete, even though the trip-time goal has not been met and many
capacity enhancement and recapitalization work elements are incomplete or
their status is unknown. Work is continuing, or is planned, for some of
the master plan's work elements, but there does not appear to be an effort
to complete the project or meet the trip-time goal.

Amtrak could have exercised more effective management of the Northeast
High-Speed Rail Improvement Project had its management of the project been
more comprehensive and had it focused greater attention on critical
infrastructure issues needed to attain the 3-hour trip-time goal. Although
FRA's 1994 master plan laid out the blueprint for the Northeast High-Speed
Rail Improvement Project, Amtrak did not adopt this plan and did not
prepare a comprehensive management plan of its own. Instead, Amtrak
generally focused on managing individual project components, particularly
the electrification and acquisition of high-speed trains. Although Amtrak
senior management obtained a substantial amount of information about these
two aspects of the Northeast High-Speed Rail Improvement Project, it did
not consistently use this information effectively to minimize the impact
of problems on the overall project. Amtrak also relied on annual
appropriations to plan work rather than on a more comprehensive financial
plan that considered long-term funding needs. Finally, although Amtrak
worked closely with stakeholders-commuter railroads and state
governments-to coordinate some project work, it did not fully integrate
their interests into project goals. The participation of stakeholders was,
and continues to be, essential for completing work critical for meeting
the 3-hour trip-time goal.

FRA provided little oversight of the Northeast High-Speed Rail Improvement
Project. Although FRA-the primary federal agency supporting the
project-was the conduit of millions of federal dollars to the project, FRA
management adopted the position that it had only limited authority to
oversee the project. FRA was legally responsible for and carried out other
activities related to the project, such as conducting environmental
assessments and developing safety regulations to accommodate high-speed
rail service. FRA officials said they did not take an active role in
overseeing the project because (1) the agency did not have

the resources or the legislative authority to change Amtrak's project
management, (2) Congress did not specifically authorize FRA to oversee the
project, and (3) FRA did not have a formal mechanism to perform oversight.
We agree with FRA's view that it had only limited authority to oversee the
project. For fiscal year 2003, Congress increased FRA's responsibility to
provide oversight of and accountability for federal funds used for
intercity passenger rail service, but this responsibility extended only to
fiscal year 2003 funds.

Project management best practices can provide a framework for effectively
managing future large-scale intercity passenger rail projects. Through our
analyses of management approaches across a broad spectrum of national
activities, we have identified key components of a best practices
framework for project management. These components include (1) conducting
comprehensive project planning, (2) assessing risks and identifying
mitigation measures, (3) comprehensively managing project finances, (4)
establishing accountability for and oversight of projects, and (5)
incorporating stakeholders' interests in planning and implementing
projects. Comprehensive planning helps manage and control projects'
implementation. Assessing risks and identifying mitigation measures assist
in meeting projects' goals by recognizing and responding to problems
earlier. Comprehensively managing project finances is important for
estimating and controlling projects' costs. Establishing accountability
for and oversight of projects better ensures the prudent use of resources,
including federal resources. Incorporating diverse stakeholders' interests
helps facilitate projects' successful implementation by ensuring there is
a clear understanding of roles, responsibilities, and potential concerns.

We make recommendations to Amtrak to adopt elements of the best practices
framework when planning and implementing future large-scale infrastructure
projects, like the Northeast High-Speed Rail Improvement Project. This
includes developing project management and finance plans. We also make
recommendations to the Secretary of Transportation to direct FRA to
require managers of federally funded large-scale intercity passenger rail
infrastructure projects to adopt elements of the best practices framework,
including preparing project management and finance plans and conducting
risk assessments, as part of their receipt of federal funds for such
projects, and that FRA provide guidance on how to do this. Finally, we
recommend that FRA seek legislation authorizing it to establish a program
to oversee such federally funded large-scale intercity passenger rail
infrastructure projects in the future.

We provided a draft of this report to Amtrak and the Department of
Transportation for their review and comment. The president of Amtrak
observed that our report raised many of the issues that he has had to
address since he took office and that on a regular basis he has had to
deal with many of the consequences of decisions made during the life of
the Northeast High-Speed Rail Improvement Project. Although Amtrak said it
was unable to comment because of matters under litigation, it believes our
findings and conclusions were incomplete because we did not consider how
the actions of contractors might have influenced Amtrak's management of
the project. Amtrak also believes we placed too great a reliance on FRA's
master plan to measure their project management. We recognize that
contractor actions can influence project implementation and management.
However, our findings are directed to Amtrak's overall management of the
Northeast High-Speed Rail Improvement Project, including the preparation
and use of comprehensive project management plans, rather than the actions
of contractors or the planning and implementation of specific project
components (e.g., high-speed train acquisition). Although Amtrak agreed
that FRA's statutorily required master plan constituted a blueprint for
the project, we found that Amtrak did not use this plan to manage the
project or create its own comprehensive management plan to oversee the
program of improvements needed to bring 3-hour passenger rail service
between Boston and New York City. Amtrak did not directly comment on our
specific recommendations but instead said it was incorporating many of the
best practices discussed in our report as part of its management
restructuring. FRA responded for the Department of Transportation and
agreed with our recommendations. FRA said that their proposed Passenger
Rail Investment Reform Act would create an oversight program similar to
what we are recommending. We continue to believe that the recommendations
in this report are valid.

Background	The Rail Passenger Service Act of 1970 created Amtrak to
provide intercity passenger rail service because existing railroads found
such service to be unprofitable. Amtrak operates a 22,000-mile network,
primarily over freight railroad tracks, providing service to 46 states and
the District of Columbia. Amtrak owns about 650 miles of track, primarily
on the Northeast Corridor between Boston and Washington, D.C. In fiscal
year 2002, Amtrak served 23.4 million passengers, or about 64,000
passengers per day. According to Amtrak, about two-thirds of its ridership
is wholly or partially on the Northeast Corridor.

Amtrak acquired the Northeast Corridor in 1976 from the Consolidated Rail
Corporation as part of the disposition of the Penn Central Transportation
Company's assets. At the time, the Penn Central Transportation Company and
certain other Northeastern railroads were in bankruptcy. As required by
the Regional Rail Reorganization Act of 1973, the purpose of this
acquisition was to facilitate improved high-speed passenger rail service.
However, Amtrak is neither the exclusive owner nor the exclusive user of
the Northeast Corridor. Although Amtrak is the owner and operator of the
Northeast Corridor between New York City and Washington, D.C. (called the
"south-end"), other organizations, including the Massachusetts Bay
Transportation Authority (MBTA), the Connecticut Department of
Transportation (CDOT), and the Metropolitan Transportation Authority of
New York (MTA), own significant portions of the Northeast Corridor between
Boston and New York City (called the "north-end"). (See fig. 1.) Both
Amtrak and commuter rail trains operate on these segments of track: MBTA
provides commuter rail service between Boston and Providence, Rhode
Island; Shore Line East provides commuter rail service between New London
and New Haven, Connecticut; and Metro-North Railroad provides commuter
rail service between New Haven and New Rochelle, New York. In fiscal year
2002, Amtrak accounted for 10 percent of the number of intercity and
commuter rail trains operated on the north-end of the Northeast Corridor,
and commuter railroads accounted for 90 percent.5 Six freight railroads
also operate on the Northeast Corridor and, in fiscal year 2001, these
freight railroads operated 38 trains per day on the Northeast Corridor. In
contrast, in the same year Amtrak and commuter railroads operated
approximately 470 trains per day on just the north-end of the Northeast
Corridor.

5Number of trains is measured as the train volume at the point of maximum
line utilization. Although Amtrak does not operate as many trains as
commuter rail operators, it accounts for a larger percentage of
train-miles. A train-mile is a train traveling 1 mile. In fiscal year
2002, Amtrak accounted for about 60 percent of train-miles on the
north-end of the Northeast Corridor, compared with about 40 percent for
commuter rail operators.

Figure 1: Ownership of the Northeast Corridor

Source: GAO.

The Railroad Revitalization and Regulatory Reform Act of 1976 (4R Act)
formally established the Northeast Corridor Improvement Project. Among
other things, the 4R Act authorized Amtrak to make improvements to the
right-of-way between Boston and Washington, D.C., needed to enable
highspeed rail service, and it established certain goals for the project.
In particular, within 5 years of the 4R Act's enactment, the project was
to achieve regularly scheduled and dependable intercity passenger rail
service between Boston and New York City in 3 hours 40 minutes, and
between

New York City and Washington, D.C., in 2 hours 40 minutes. The ultimate
goal was to achieve service between Boston and New York City in 3 hours,
and between New York City and Washington, D.C., in 2 hours 30 minutes. The
act directed the Secretary of Transportation to determine the
practicability of meeting these latter goals and authorized $1.75 billion
to accomplish them as well as make certain other improvements on routes
related to the Northeast Corridor (such as Harrisburg, Pennsylvania, and
Springfield, Massachusetts). The act did not specify a time by which these
latter goals were to be met, but did require a status report within two
years after the 4R Act was enacted. Under the act, FRA was the project
manager. Amtrak was a subcontractor primarily responsible for track and
signal work.

The Passenger Railroad Rebuilding Act of 1980 (P.L. 96-254) called for
transferring responsibility for the Northeast Corridor Improvement Project
from FRA to Amtrak by October 1985.6 FRA officials told us that at the
time of this transfer, they generally considered the project to be
complete in that additional funding for remaining major work elements was
not envisioned. Although the project had achieved significant improvements
to the entire Northeast Corridor, its principal focus had been on the
south-end of the corridor because of the significant deterioration of the
infrastructure on this segment of the line. An Amtrak official told us
that the emphasis had been largely on addressing infrastructure
maintenance and repair issues, not on enhancing the Northeast Corridor to
accommodate high-speed rail service. Consequently, although the project
met the 2-hour-40-minute triptime goal on the south-end of the Northeast
Corridor between New York City and Washington, D.C., it did not meet
either the 3-hour-40-minute or the 3-hour trip-time goals on the north-end
of the Northeast Corridor between Boston and New York City. FRA attributed
the failure to meet the trip-time goals for the north-end to a lack of
funding, which prevented electrifying the line north of New Haven and
making other improvements to track and structures. During the 1980s,
funding for the project was reduced several times, and these reductions
limited the scope of the project and led to the elimination of the
north-end electrification work.

In 1992, the Amtrak Authorization and Development Act (P.L. 102-533)
required the Secretary of Transportation to develop a master plan for a
new project, the goal of which was to provide intercity passenger rail
service

6In September 1985, FRA entered into a grant agreement that transferred
responsibility for the Northeast Corridor Improvement Project to Amtrak as
of October 1, 1985.

between Boston and New York City in 3 hours or less. The act authorized a
total of $470 million for fiscal years 1993 and 1994 to plan this effort
and make capital investments. Amtrak established the Northeast High-Speed
Rail Improvement Project in response to this act. In July 1994, FRA issued
a master plan for the project that called for a series of improvements
designed to meet the act's 3-hour trip-time goal and permit initiation of
3hour service by 1999.7 FRA estimated a cost of about $3.1 billion (in
1993 dollars)8 for the project, of which about $1.9 billion (1993 dollars)
would be required to achieve 3-hour rail service. The project was to be
complete by the end of 2009. (See app. III for more information on the
history of the Northeast Corridor Improvement Project and the Northeast
High-Speed Rail Improvement Project.)

Since its inception in 1970, Amtrak has struggled to earn revenues and
operate efficiently. These struggles have continued in recent years,
leading to proposals for restructuring the provision of intercity
passenger rail service. These proposals range from keeping Amtrak intact
and providing increased funding to improve its equipment and
infrastructure, to breaking Amtrak up and introducing competing rail
service. The creation of a separate infrastructure company has also been
proposed as a means to maintain and rehabilitate the Northeast Corridor
and other infrastructure for providing intercity passenger rail service.
Finally, a proposal has been made to delegate much of the responsibility
for intercity passenger rail service to states and have states (acting
through interstate compacts) provide a larger share of the funding and
make decisions about intercity passenger rail service. As of September
2003, these proposals were pending before Congress. One or more of these
proposals may influence how largescale intercity passenger rail
infrastructure projects are managed in the future.

The federal government is also likely to be involved in future large-scale
intercity passenger rail infrastructure projects as high-speed rail
corridors are developed around the country. As of January 2002, there were
10 federally designated high-speed rail corridors nationwide. We reported
in March 2001 that 34 states were participating in the development of
highspeed rail corridors and that those states had invested more than $1
billion

7U.S. Department of Transportation, Federal Railroad Administration, The
Northeast Corridor Transportation Plan, New York City to Boston (July
1994). For purposes of this report, this plan is referred to as the "FRA
master plan."

8This is about $3.6 billion in 2002 dollars.

to improve local rail lines for that purpose.9 Federally designated
corridors may be eligible for federal funds. The total cost to develop
high-speed rail corridors is unknown. However, in April 2003, we reported
that preliminary estimates of the cost to develop these corridors could be
between $50 billion and $70 billion over the next 20 years.10

Northeast High-Speed Rail Improvement Project Has Not Achieved Trip-Time
Goal

Amtrak has not met the goal of 3-hour rail service between Boston and New
York City, although it has reduced the scheduled trip time from about 4
hours in 1994 to 3 hours 24 minutes in 2003. To do this, it completed the
first milestone in FRA's 1994 master plan-initiate electrified train
service between Boston and New York City-in January 2000, and it acquired
enough high-speed trains to begin limited high-speed rail service in
December 2000. However, it initiated these activities later than planned,
and, according to the latest available data (from March 2003), nearly
threequarters of the work elements (12 of 17 work elements) needed to
complete the second milestone-initiate 3-hour service-are incomplete or
their status is unknown.11 Progress toward completing the third and final
milestone-completing infrastructure improvements designed to enhance track
capacity and extend the life of existing track assets-has also been slower
than planned. In total, as of March 2003, Amtrak, commuter rail
authorities, and other stakeholders had completed 21 of the project's 72
work elements-51 were either incomplete or their status was unknown. Of
these 51 work elements, according to FRA and commuter rail officials,
several (such as realignment of curves) are important to achieving the
3hour goal. As of March 2003, Amtrak, commuter railroads, and other

9U.S. General Accounting Office, Intercity Passenger Rail: Assessing the
Benefits of Increased Federal Funding for Amtrak and High-Speed Passenger
Rail Systems, GAO-01480T (Washington, D.C.: March 2001).

10U.S. General Accounting Office, Intercity Passenger Rail: Issues for
Consideration in Developing an Intercity Passenger Rail Policy,
GAO-03-712T (Washington, D.C.: April 2003).

11Status unknown means that either Amtrak did not know the status of the
work element or we were unable to obtain information about a work
element's status from Amtrak or commuter railroads. It should be
recognized that not all work elements might be of equal importance, scale,
or complexity. For example, completing electrification of the line between
New Haven and Boston (which is considered 1 work element) is significantly
more important to achieving project goals and more complex than something
like eliminating a railroad-highway grade crossing (which is also
considered to be 1 work element). Also, as discussed later in this report,
not all of the work elements were located on Amtrak-owned track.

stakeholders had spent about $3.2 billion on the project. How much more
work will be done is uncertain. Several Amtrak officials said that they
consider the project complete, even though the 3-hour trip-time goal has
not been met and many work elements are incomplete. Work is continuing, or
is planned, for some of the master plan's work elements, but there does
not appear to be an effort to complete the project or meet the trip-time
goal.

FRA's Master Plan Identified Milestones and Work Elements and Estimated
Costs for the Northeast High-Speed Rail Improvement Project

FRA's 1994 master plan for the Northeast High-Speed Rail Improvement
Project divided the project into three milestones and identified dates for
their completion. These milestones were as follows:

o 	Initiate electrified service. This milestone consisted of 16 work
elements12 and required the completion of such things as the installation
of an electrification system between Boston and New Haven-the line between
New Haven and New York City was already electrified-and the realignment of
curves on the Boston to New Haven segment of track. According to the
master plan, the installation of the electrification system was expected
to take the most time, and its completion would control the achievement of
the first milestone. FRA estimated this milestone could be completed by
mid-1997.

o 	Initiate 3-hour train service. This milestone consisted of 17 work
elements and required the completion of such things as the partial
delivery of high-speed trains (at least eight trains were expected to be
delivered to meet this milestone) and the realignment of curves between
New Haven and New Rochelle. FRA anticipated the initiation of limited
3-hour service between Boston and New York City in 1999, followed by full
3-hour service using all 26 high-speed trains in 2001.

o 	Complete capacity enhancement and recapitalization work elements
necessary to maintain 3-hour service. This milestone consisted of 43 work
elements and included the completion of several capacity enhancement and
recapitalization projects, such as construction of

12The total number of work elements for all three milestones is 76, rather
than 72, because FRA counted 4 work elements twice-curve realignments,
constructing high-level platforms, reconfiguring existing interlockings
(places where trains can be switched from one track to another track), and
constructing passing sidings-since they could help achieve more than one
milestone.

passing sidings and the replacement of movable bridges-that is, bridges
that can be lifted or pivoted to accommodate maritime traffic. This
milestone was to be completed by the end of 2009 to accommodate projected
intercity, commuter, and freight traffic levels in 2010.

To accomplish the project's three milestones, FRA's 1994 master plan also
laid out the work elements in four categories. (See app. II for a list of
all the work elements.) The categories were

o 	trip time reduction-20 work elements were designed to reduce trip times
through such efforts as electrifying the line from Boston to New Haven and
acquiring high-speed trains;

o 	capacity enhancement-18 work elements were designed to enhance capacity
by, for example, reconfiguring interlockings to accommodate traffic
growth;

o 	recapitalization-15 work elements were designed to rebuild or extend
the useful life of the infrastructure by, for example, replacing
bridges;13 and

o 	other-19 work elements, labeled as "other," including fiber optic
communications lines and pedestrian bridges, were designed to provide more
general benefits to rail passengers and others.

Under the master plan, Amtrak, commuter railroads, and state departments
of transportation shared responsibility for implementing the work
elements. According to FRA's analysis, some of these elements exclusively
or primarily benefited Amtrak's intercity passenger rail service, while
other elements primarily benefited commuter and freight rail service.

The 1994 master plan recognized that completing the work elements would be
expensive. FRA estimated that the work elements designed to reduce trip
times, enhance capacity, and perform recapitalization work would cost
about $3.1 billion (in 1993 dollars). This worked out to about $1.3
billion for trip-time reductions, about $600 million for capacity
enhancements, and

13These items were also to restore track and other infrastructure to a
"state of good repair." A state of good repair is the outcome expected
from the capital investment needed to restore Amtrak's right-of-way
(track, signals, and auxiliary structures) to a condition that requires
only routine maintenance.

about $1.2 billion for recapitalization. FRA did not include a cost
estimate for the 19 other work elements.14 (See table 1.) Of the $3.1
billion cost estimate, FRA estimated that about $1.9 billion (about 60
percent) would be required to enable 3-hour service between Boston and New
York City. The 1994 master plan also did not assign funding responsibility
to particular organizations, but it did indicate that about 40 percent of
the project's estimated costs would cover work that would provide
significant benefit to commuter railroads. The plan recognized that
funding would come from a variety of sources, including direct
appropriations to FRA, appropriations authorized under the Intermodal
Surface Transportation Efficiency Act of 1991, and state and local
governments. The plan further recognized that allocating funding
responsibility and identifying funding sources would involve negotiations
between relevant parties.

Table 1: FRA's Estimated Cost of the Project, by Major Category

                              Dollars in millions

                    Work element  Number of work elements     Estimated costa 
             Trip-time reduction                         20          $1,255.1 
            Capacity enhancement                         18             606.4 
                Recapitalization                         15           1,230.4 
                           Other                         19                 b 
                           Total                         72          $3,091.9 

Source: GAO analysis of FRA data.

aIn 1993 dollars.

bNot available.

Amtrak generally agreed with FRA's 1994 master plan in their written
comments provided to FRA. However, in commenting on the plan, Amtrak did
not agree with certain cost estimates or with all of the plan's work
elements that FRA identified as essential to achieve the 3-hour trip-time
goal. For example, Amtrak did not agree that FRA should have included some
capacity enhancement and recapitalization work elements (such as the
installation of concrete ties in commuter rail territory) in its estimate
of the cost to complete the project. However, Amtrak recognized that both
the

14FRA indicated that the cost estimates were based on information provided
by government agencies and the railroads themselves. For those work
elements for which cost estimates were not directly available, FRA
contractors developed conceptual estimates.

capacity enhancement and recapitalization work elements were ultimately
essential to reliably and cost effectively support projected increases in
rail service over the following 20 years. Furthermore, Amtrak said that to
achieve a reliable 3-hour schedule it was not depending on improvements to
the non-Amtrak-owned sections of track (such as those owned by commuter
rail authorities) that FRA had identified as essential to achieve the
3-hour trip-time goal. Finally, Amtrak stated its expectation that
improvements such as capacity enhancements would be funded by the state or
local agency or organization primarily benefiting from the improvement,
even if that agency or organization did not own the track.

In subsequent discussions with Amtrak officials, they said that, while
Amtrak had commented on FRA's master plan during its development and
acknowledged its issuance, Amtrak did not adopt the plan or manage its
high-speed rail projects in accordance with it. According to Amtrak, the
master plan was never intended by Amtrak, Congress, or FRA to be used as a
"blueprint" or planning directive for the high-speed work and that the
document, once released, was virtually obsolete. This contradicts
information that was provided during our work. At that time, both Amtrak
and FRA officials agreed that the 1994 master plan was a blueprint for the
Northeast High-Speed Rail Improvement Project. A former Amtrak project
director had told us that FRA's plan could be considered a baseline for
the overall project.

 Northeast High-Speed Rail Improvement Project Has Not Achieved 3-Hour Goal and
                              Is Far from Complete

Amtrak believed it could achieve a reliable 3-hour trip time by the summer
of 1999-about 2 years earlier than FRA had projected in the master plan.
Despite its belief that it could meet this goal by 1999, Amtrak has not
yet done so, and progress on the project has been slower than FRA
initially estimated. (See fig. 2.) As of March 2003, a total of 51 of the
project's 72 work elements were not complete or their status was unknown.
Most of these were in the third milestone. Although 49 of the project's 72
work elements were supposed to have been completed before 2003, as of
March 2003, less than 40 percent (19 of the 49 work elements) had actually
been completed by that date. In addition, 2 other work elements that were

scheduled for completion after 2003 were actually completed by March
2003.15

Figure 2: Status of Work Elements Listed in FRA's 1994 Master Plan, by
Milestones, as of March 2003

Number of work elements

50

45

40

35

30

25

20

15

10

5

0 Initiate electrified Initiate 3-hour service Complete 2010 service in
1997 between Boston and requirements New York City in 1999 in 2009

Milestones

Complete as of March 2003

Incomplete or status unknown

Source: GAO analysis of Amtrak and commuter railroad data.

Note: The total number of completed work elements shown in figure 2 is 22,
rather than 21, because 1 of the work elements that help to achieve two
milestones (curve realignments) is partially complete (the portion needed
to initiate electrified service) and partially incomplete (the portion
needed to initiate 3-hour service).

15Of the 21 work elements completed by March 2003, all, or part of, 5 work
elements were completed early-that is, ahead of their scheduled completion
date. This included 1 work element (replace/upgrade overhead bridges in
Rhode Island) that was completed in 1999- about 10 years ahead of its
scheduled completion date in 2009. It also included 1 work element-the
track program (installation of concrete ties, track resurfacing, and
ballast cleaning)-that was completed about 3 years ahead of its scheduled
completion date. An Amtrak official told us that much of the track and
infrastructure work was accelerated once delays in electrification began
to occur.

According to the master plan, Amtrak was scheduled to complete the first
milestone-initiate electrified service-by mid-1997, but it did not
initiate such service between Boston and New York City until January 2000,
and the electrification was not substantially completed until July
200016-about 3 years later than expected. The electrification was delayed,
in part, because Amtrak changed contractors in 1995 after the first
electrification contractor went out of business and the contract was
terminated. Amtrak then had to hire a new contractor to complete the work
and lost about 2 years in work time. As of March 2003, 4 of the work
elements for this milestone were still incomplete, including the line
electrification work element, for which final acceptance is still
pending.17

Amtrak has yet to attain the second milestone-initiate 3-hour service.
Amtrak did begin limited Acela Express high-speed train service in
December 2000, but this service is scheduled to take 3 hours 24 minutes
from Boston to New York, not 3 hours. The 3-hour goal has not been met, in
part, because work elements on the 56-mile segment of track between New
Haven and New Rochelle that is operated by Metro-North Railroad have not
been completed. Amtrak did not believe work on this line segment was
necessary to achieve 3-hour service. However, both FRA and commuter rail
officials told us that work on this track segment is essential for
achieving the 3-hour goal. Among the work elements that have not been
completed is the reconfiguration of the New Rochelle ("Shell")
interlocking. Originally this was to include the construction of a
"flyover" (elevated track), called the Shell Flyover. According to Amtrak
officials, at-grade improvements are now planned rather than a flyover
because of high costs. Work at New Rochelle is critical because of the
severe train congestion in this area- Connecticut Department of
Transportation officials said more than 200 commuter trains a day go
through the Shell interlocking. As of March 2003, about three-quarters of
the work elements (12 of 17 work elements) needed to reach this milestone
were incomplete or their status was unknown. According to Amtrak, work on
some elements under this milestone is actively under way. For example, the
Stamford center island platforms were completed in the summer of 2003, and
final curve modifications were

16"Substantially complete" means that most of the construction work
related to electrifying the line, such as installing foundations, erecting
poles, and constructing electric substations and related facilities, had
been completed. However, it does not mean that all the work was done or
that there are no unresolved disputes concerning the work.

17For purposes of this report, we consider electrification incomplete
since final acceptance of the system was still pending as of March 2003.
It was still pending as of February 2004.

under design. Amtrak said that this, in conjunction with completion of the
Connecticut Department of Transportation's catenary18 program would, among
other things, allow it to travel 90 miles per hour between New Haven and
New Rochelle and generate about 7 minutes of trip-time savings.

Finally, progress toward the third milestone-complete capacity enhancement
and recapitalization work-has been slower than planned, and nearly 90
percent of the work elements for this milestone (38 of 43 work elements)
were incomplete or their status was unknown as of March 2003. Of the 38
work elements that were incomplete or their status was unknown, 2 were
related to trip-time reduction (a noise and vibration study and
construction of a transfer facility at Kingston, Rhode Island), 12 were
categorized as capacity enhancement (including construction of passing
sidings), 10 were recapitalization (including bridge replacements), and 14
were categorized as other (including construction of layover facilities
and commuter parking).

As of March 2003, 15 of the 51 work elements (about 30 percent) that had
not been completed or whose status was unknown were on track not owned by
Amtrak. (See fig. 3.) Of these 15 work elements, Amtrak was expected to be
the major beneficiary of 9. Some of these work elements, including certain
curve realignments and track clearances, are critical for achieving the
3-hour trip time. For example, Amtrak is not currently able to use a key
feature of the new high-speed trains-a mechanism that allows the trains to
"tilt" and, therefore, take curves at a higher speed-in part, because
track centers are too close on the segment of track between New Haven and
New Rochelle. The Connecticut Department of Transportation and the
Metropolitan Transportation Authority of New York own this track.
According to an Amtrak official, the tilt mechanism on the high-speed
trains is turned off between New Haven and New Rochelle. FRA's 1994 master
plan identified track curvature as the most severe constraint on trip
time, and both FRA and commuter rail officials told us that curves on the
north-end of the Northeast Corridor are a severe constraint on the
achievement of faster trip times.

18The overhead wire that delivers the electricity to the locomotive for
traction, or movement.

Figure 3: Geographic Location of Remaining Work Elements and Major
Beneficiaries, as of March 2003

Boston

Providence MBTA

Number of incomplete

work elements (4)

- 3 - 1

New London

                             Work element with ...

                     Commuter or freight major beneficiary

             Both Amtrak and commuter, or freight major beneficiary

                            Amtrak major beneficiary

Source: GAO analysis of Amtrak, commuter, and freight railroad data.

Note: The above does not include 18 work elements that were not
geographically specific-that is, they applied to all or a portion of the
track between Boston and New York City (e.g., electrification and
acquisition of high-speed trains), or involved studies or actions not tied
to specific geographic locations.

Through March 2003, a total of about $3.2 billion (2003 dollars) had been
spent on the Northeast High-Speed Rail Improvement Project-or just less

than 90 percent of the $3.6 billion (2002 dollars)19 project cost
estimated in FRA's 1994 master plan. Amtrak has spent about $2.6 billion20
and three commuter railroads, two freight railroads, and two state
governments have spent about $625 million.21 Most of Amtrak's spending was
for the acquisition of high-speed trains and related maintenance
facilities (about $1.1 billion),22 electrification of the route (about
$717 million), and track and infrastructure projects ($652 million). (See
table 2). Of the amounts spent by commuter and freight railroads and the
state governments, the most-about $141 million-was spent by the
Connecticut Department of Transportation to replace a bridge. The
Connecticut Department of Transportation also plans to spend an additional
$250 million to replace catenary between the New York/Connecticut state
line and New Haven.

19$3.1 billion in 1993 dollars.

20This figure does not include about $100 million in disputed costs
between Amtrak and the electrification contractor.

21This represents information from Long Island Rail Road, Metro-North
Railroad, the Massachusetts Bay Transportation Authority, CSX
Transportation Inc., Providence and Worchester Railroad, Connecticut
Department of Transportation, and the Rhode Island Department of
Transportation.

22Of the $1.1 billion total for acquisition of trains, locomotives, and
maintenance facilities, $753 million was financed. The $1.1 billion
includes amounts spent for 15 high horsepower locomotives for
non-high-speed train operations on electrified lines, and about $5.7
million for the Advanced Civil Speed Enforcement System.

Table 2: Amounts Spent by Amtrak on the Northeast High-Speed Rail
Improvement Project, by Category of Spending, as of March 2003

                               Dollars in milions

                         Spending category Amount spent

Acquisition of trains, locomotives, and maintenance
facilities $1,127.2

                             Electrification 716.7

                         Track and infrastructure 652.1

           Environmental impact statement mitigation activities 94.7

                            Product development 33.8

                                 Total $2,624.5

Source: GAO analysis of Amtrak data.

Note: The spending in this table is shown in the categories Amtrak used to
track project spending. Although requested, Amtrak was unable to reconcile
its categories of spending to the work elements and three milestones
contained in FRA's master plan.

While Amtrak did not track costs of improvements relative to the original
projections, it is clear that the cost of some work elements was higher
than expected. For example, the estimated cost of electrification
increased from about $300 million in 1992 to about $727 million in 2003.
(See fig. 4.) As of March 2003, Amtrak had spent about $717 million.
According to Amtrak's data, much of the cost increase (more than $200
million) was attributable to unexpected and unplanned items. Amtrak
incurred approximately $120 million in unplanned costs because, according
to an Amtrak official, the contractor frequently revised the geographic
location of the electrification work, and each revision triggered the need
for safety protection work, called "flag protection," that was provided by
workers standing along the track and at highway-railroad grade crossings
holding flags. Under collective bargaining agreements, Amtrak was required
to advertise this work for 7 to 10 days so that its unionized employees
could express their interest in doing the work. The extra time required
for Amtrak to comply with this requirement delayed the electrification
work and increased Amtrak's costs.

Figure 4: Growth in Estimated Cost of Route Electrification, May 1992 to
March 2003

Dollars in millions

800

700

600

500

400

300

200

100

0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 May
Dec. Nov. Oct. Apr. Mar. 1992 1995a 1997 1999b 2000 2003

Original contract Contract 2 Contract 2 modifications Additional Amtrak
costs related to electrification

Source: GAO analysis of Amtrak data.

aThe original contract was terminated in late 1995. Amtrak spent $16
million on this original contract. In subsequent bars the $16 million is
included in contract 2 amounts.

bContract 2 was scheduled for completion in October 1999.

Similarly, the cost of acquiring trains, locomotives, and maintenance
facilities also increased, from an original estimate of about $186 million
for 26 trains in FRA's 1994 master plan to about $800 million for 20
trains plus three maintenance facilities in 1996.23 Through March 2003,
Amtrak had spent about $1.1 billion for these items. Amtrak attributed
much of the cost

23In June 1992, Amtrak had estimated a cost of about $450 million for
high-speed trains.

increase to, among other things, the addition of the three maintenance
facilities, various modifications to the trains, and a
higher-than-expected bid to manufacture the trains. Amtrak also said that
an additional $100 million was incurred to add a second power car to each
train (an extra 20 power cars) to comply with new FRA passenger car safety
standards. An Amtrak official said it was difficult to estimate the cost
of trains, since the acquisition went from a relatively simple procurement
of train equipment to a complex high-speed rail program that included the
acquisition of equipment capable of traveling at speeds of up to 150 miles
per hour. The acquisition cost of both the trains and maintenance
facilities was financed, and debt service on this financing began in
fiscal year 2002 and will continue through fiscal year 2023 for the
high-speed trains and through fiscal year 2042 for the maintenance
facilities unless an early buyout offer is exercised. Amtrak expects the
interest on this financing to total about $426 million.24

Amtrak stated that FRA's involvement with the Northeast High-Speed Rail
Improvement Project also affected project cost and schedule. (See below
for a discussion of FRA's role in this project.) For example, according to
Amtrak, the environmental impact statement that FRA developed for the
project was over a year late and imposed significant and costly mitigation
measures. Also, FRA's new track standards required development of the
technologically challenging and expensive Advanced Civil Speed Enforcement
System-a system for automatic train control on the entire Northeast
Corridor. Because all trains that operate on the Northeast Corridor would
be required to use this system, Amtrak agreed to fund the equipment
upgrades for various railroads that use the Northeast Corridor, including
commuter railroads.25 Finally, FRA's passenger car safety standards
required the 20 additional power cars discussed above as well as an
expensive crash-energy absorption system on the trains. FRA officials told
us that Amtrak was intimately involved with development of the track and
passenger car standards and that, in some instances, the standards were
specifically developed to accommodate the Northeast High-Speed Rail
Improvement Project. In general, FRA officials said there was no extra
cost for Amtrak to comply with FRA's new safety regulations. However,

24This is interest on the permanent financing only. It does not include
interest paid on interim loans used during construction of the equipment
or facilities.

25According to an Amtrak official, phase I of this system was scheduled
for completion in summer 2003 with phase II (to permit remote enforcement
of speed restrictions) scheduled to be completed in 2005.

they acknowledged the additional cost to develop the Advanced Civil Speed
Enforcement System but said Amtrak could not operate high-speed trains
without this system.

Some Consider Project Complete Even Though Work Is Not Finished

Several Amtrak officials told us that they consider the Northeast
High-Speed Rail Improvement Project complete, even though Amtrak has not
achieved the 3-hour goal and the work is not finished. As of March 2003,
41 of the work elements identified in FRA's master plan were incomplete,
and on an additional 10 work elements there was no information or their
status was unknown. It is not clear how many work elements will be
completed or whether Amtrak is committed to achieving the 3-hour goal. A
former director of the Northeast High-Speed Rail Improvement Project told
us that Amtrak hopes to reduce the trip time to 3 hours 10 minutes in the
future if funding is available. But the former director doubted there was
much of a market for 3-hour service between Boston and New York City.26 In
the past, however, Amtrak had stated that it was relying on meeting the
3-hour goal to help it attract the ridership and revenue needed to attain
operational self-sufficiency, as called for in the Amtrak Reform and
Accountability Act of 1997.27 As recently as 2000, the Chairman of
Amtrak's Board of Directors testified before Congress that Amtrak would
achieve the 3-hour trip-time goal between Boston and New York City.

Although several Amtrak officials told us they consider the project
complete, work is continuing, or is planned, for some of the master plan's
work elements. For example, Amtrak's most recent 5-year capital plan
(covering fiscal years 2004 through 2008), issued in April 2003, includes
12 of the 51 work elements in FRA's master plan that, as of March 2003,
were incomplete or whose status was unknown. These work elements consist
primarily of replacing bridges, reconfiguring interlockings, and
completing fire and life safety improvements in and around Pennsylvania
Station in New York. Amtrak's 5-year capital plan also contains $52
million through

26Amtrak officials stated to us that they believe such a trip time is
"achievable" with completion of the Metro-North improvements and
completion of the Advanced Civil Speed Enforcement System.

27The Amtrak Reform and Accountability Act of 1997 prohibited Amtrak from
using federal funds for operating expenses after 2002. The prohibition
against using federal funds for operating expenses does not apply when
Congress specifically appropriates funds for Amtrak to cover operating
expenses in a particular year, as Congress did for fiscal year 2003 (see
the Consolidated Appropriations Resolution, 2003) and 2004.

fiscal year 2008 for the at-grade improvements at the Shell interlocking.
In total, Amtrak's capital plan budgets about $380 million for the work
elements associated with the Northeast High-Speed Rail Improvement
Project. However, there does not appear to be an effort to complete the
project or meet the trip-time goal, and Amtrak did not characterize its
recent capital plan as encompassing the completion of the Northeast
High-Speed Rail Improvement Project. Rather, the plan was characterized as
aiming to stabilize the railroad by returning its plant and equipment to a
state of good repair, controlling operating deficits, and restoring
liquidity.

Commuter rail agencies and state governments along the north-end of the
Northeast Corridor also plan to continue some of the work associated with
the Northeast High-Speed Rail Improvement Project. Commuter rail agencies
and state governments we contacted said they planned to continue work on
at least 20 of the work elements contained in the 1994 master plan. For
example, one commuter rail authority (Metro-North Railroad) plans to
finish improving stations, rehabilitating movable bridges, and upgrading
power, communications and signal systems. Two state governments
(Connecticut and Rhode Island) said they plan to replace bridges and
catenary on the New Haven rail line, as well as construct passing sidings
and improve clearances for freight railroad operations. Commuter rail and
state officials estimated that these work elements could cost hundreds of
millions of dollars. Officials with the Connecticut Department of
Transportation, for example, said their state plans to spend more than
$800 million between 2003 and 2010 on at least 9 work elements associated
with the Northeast High-Speed Rail Improvement Project, including bridge
and catenary replacements and station relocations.

Even though Amtrak has not reached the project's 3-hour goal and many
important work elements remain to be completed, Amtrak officials maintain
that they achieved noteworthy successes, particularly in light of the
challenges they faced. Noting that Amtrak does not own major portions of
the Northeast Corridor, that freight and commuter rail operations
continued throughout the life of the project, and that funding was
provided annually in varying amounts, Amtrak officials consider the
electrification of the Northeast Corridor a significant success. According
to one Amtrak official, the entire project represents a success, because
the Northeast Corridor now enables freight trains to operate at 30 miles
per hour while intercity passenger trains travel up to 150 miles per hour.
The official said that some states outside the Northeast Corridor that are
considering upgrading their rail lines to accommodate both freight traffic
and highspeed passenger trains have sought assistance from Amtrak.

Amtrak Did Not Exercise Effective Management of the Northeast High-Speed
Rail Improvement Project

Amtrak could have exercised more effective management of the Northeast
High-Speed Rail Improvement Project had its management of the project been
more comprehensive and had it focused greater attention on critical
infrastructure issues needed to attain the 3-hour trip-time goal. Although
FRA's master plan laid out the blueprint for the Northeast High-Speed Rail
Improvement Project, Amtrak did not adopt this plan and did not prepare a
comprehensive management plan of its own. Instead, Amtrak generally
focused on managing individual project components, particularly the
electrification and acquisition of high-speed trains. Although Amtrak
senior management obtained a substantial amount of information about these
two aspects of the Northeast High-Speed Rail Improvement Project, it did
not consistently use this information effectively to minimize the impact
of problems on the overall project. Amtrak also relied on annual
appropriations to plan work rather than on a more comprehensive financial
plan that considered long-term funding needs. Finally, although Amtrak
worked closely with stakeholders-commuter railroads and state
governments-to coordinate some project work, it did not fully integrate
their interests into project goals. The participation of stakeholders was,
and continues to be, essential for completing work critical for meeting
the 3-hour trip-time goal.

Amtrak's Project Management Was Focused on Selected Components, Not
Attainment of Project Goals

Amtrak's management of the Northeast High-Speed Rail Improvement Project
contributed to its inability to achieve project goals. Project management
was not comprehensive but rather was focused on selected components, not
project goals. As discussed earlier, FRA's 1994 master plan laid out the
work elements needed to complete the project, estimated their costs, and
identified those elements that would benefit Amtrak or others. However,
Amtrak did not adopt this plan or manage to it. Instead, Amtrak focused on
managing selected components of the project-primarily the work associated
with electrifying the line between Boston and New Haven and acquisition of
the high-speed trains. This occurred even though there were critical
infrastructure improvements that were required in order to achieve the
3-hour trip time between Boston and New York City. Amtrak did not ignore
infrastructure improvements, but as the project evolved, and costs
increased and schedules slipped, the emphasis shifted to completing those
infrastructure improvements required to begin electrified service between
Boston and New York City, not those needed to achieve the 3-hour trip-time
goal. As of February 2004, some infrastructure improvements (such as
reconfiguring the Shell interlocking) that are critical to achieving the
3-hour trip time had not been completed.

Amtrak received a substantial amount of information about selected
components of the project. Amtrak's senior management and the Board of
Directors received periodic information about the project, including
monthly progress reports about the project. Amtrak also received monthly
progress reports from the consortium manufacturing the high-speed trains.
Amtrak used integrated program schedules that were updated monthly to
visually depict start and end dates for various project tasks. Such
information allowed Amtrak management to track work status and to identify
actual or potential problems. For example, an October 1996 monthly
progress report on the high-speed trains noted that progress in this
component was "significantly less" than had been planned, and by December
1996 the progress report noted that the high-speed train acquisition
program was no longer likely to finish on time, even with planned late
finish dates.

Amtrak did not use the information it received to effectively manage
problems that arose. While Amtrak attempted to take action to address
various problems that developed, those actions did not prevent significant
delays in completing either the electrification or high-speed train work.
For example, in 1997 Amtrak proposed hiring a second contractor to help
install electric pole foundations when installation rates decreased to an
unacceptable level, and, in 1998, Amtrak made acceleration payments to
help finish the electrification work. Despite these efforts, the line
between Boston and New Haven was not fully energized until July 2000-about
a year later than planned.28 Amtrak attempted to use recovery plans-plans
designed to identify specific actions to be taken to get a project "back
on track"-to address problems. But Amtrak did not assemble any
programlevel (projectwide) recovery plan for the project as a whole. A
former project director said a program-level recovery plan was not used
because the components of the Northeast High-Speed Rail Improvement
Project were not mutually dependent on each other.

Not assembling comprehensive project management or program-level recovery
plans made it difficult for Amtrak's senior management and Board of
Directors to effectively manage the project and assign accountability for
project results. A comprehensive project management plan similar to FRA's
1994 master plan could have allowed senior management and the Board of
Directors to clearly understand the status of the project at any given
point

28As of fall 2003, the electrification work had still not been completed
and Amtrak had not accepted the final system.

and how problems in one project component could be affecting other project
components. Such a plan could also have facilitated understanding how
difficulties in one or more project components could affect the ultimate
success of the entire project and achievement of project goals. For
example, as noted earlier, FRA's 1994 master plan identified the planned
improvements to Metro-North Railroad's New Rochelle interlocking (the
"Shell interlocking") as critical for achieving 3-hour service.
Metro-North officials said that Amtrak did not work collaboratively with
them on improving the Shell interlocking but instead imposed its own
solution for improving the interlocking. In the late 1990s, cost increases
to the proposed flyover led Amtrak to scale back its design to an at-grade
improvement. Based on the documents we reviewed, it was not clear that
Amtrak's Board of Directors had an understanding of the effect of not
completing either the Shell interlocking or other critical infrastructure
improvements. Moreover, the lack of program-level recovery plans made it
difficult to identify specific actions being taken to correct problems,
who was responsible for these actions, when they would be completed, and
expected outcomes. Such information was critical for maintaining
accountability for the project and the conditions affecting the project's
outcomes. Again, project documents we reviewed did not indicate that
Amtrak's Board of Directors had a comprehensive understanding of project
recovery efforts and expected outcomes.

Financial Management of the Project Was Also Not Comprehensive and Was
Largely Focused on the Short Term

Amtrak's financial management of the project was also not comprehensive,
and it also focused primarily on the short term. Amtrak's plans for
financial management were similar to its project management plans, in that
they addressed only individual work elements. In addition, these plans,
which Amtrak called "spend plans," were based largely on annual
appropriations and focused on spending for a single fiscal year. Although
the spend plans contained many of the elements of a financial plan-such as
the total cost of each major work element in current-year dollars, a
cumulative estimate of expected spending on each of these elements through
the end of the current fiscal year, and the cumulative spending on each
element to date- they were not comprehensive and only allowed Amtrak to
identify shortterm funding shortfalls for individual work components and
not longerterm funding needs and potential shortfalls for the entire
project. The spend plans also did not track the three milestones and 72
work elements laid out in the FRA master plan or incorporate funding needs
and spending by non-Amtrak stakeholders, both of which would have allowed
a more comprehensive financial management of the entire project and
potentially linked spending to a "useful segment." OMB defines a "useful
segment" as a

component that either (1) provides information allowing an organization to
plan the capital project, develop the design, and assess benefits, costs,
and risks before proceeding to full acquisition, or (2) results in a
useful asset for which the benefits exceed the costs even if no further
funding is appropriated.

Not having a stable, long-term source of funding for the project
contributed to the effects of Amtrak's short-term approach to financial
management. To fund its portion of the project, Amtrak relied on annual
appropriations, and the amount of appropriations was not certain from year
to year. Although direct appropriations for the project from 1992 through
1998 (when direct appropriations ended) averaged just under $200 million
per year, they ranged from $250 million in 1998 to $115 million in 1996.
According to FRA's master plan, about $265 million per year (in 1993
dollars) would be needed from all parties from 1995 through 2001 to
achieve 3-hour service. Both Amtrak and FRA officials told us that
dependence on annual appropriations hurt the project, and one Amtrak
official said this type of funding cycle constrained capital planning and
financing for the project and focused on the short rather than long term.

Amtrak Worked With Stakeholders on Numerous Project Work Elements, but Did
Not Fully Integrate Stakeholders' Interests into the Project

Amtrak worked with numerous stakeholders on certain work elements, but did
not fully integrate their interests into the project. Not fully
integrating stakeholders' interests-particularly, non-Amtrak track owners
and users, such as commuter and freight railroads-into the Northeast
High-Speed Rail Improvement Project hindered Amtrak's achievement of the
project's goals, particularly along sections of the north-end of the
Northeast Corridor that Amtrak does not own. In its 1994 master plan, FRA
emphasized that it was critical for Amtrak to involve other stakeholders
in planning, designing, and financing the project to ensure its completion
and to achieve the 3-hour trip time between Boston and New York City. The
1994 master plan also emphasized the importance of completing
stakeholder-related work, including capacity enhancement, in order to
ensure the future reliability of high-speed service in light of expected
intercity and commuter rail traffic growth. According to Amtrak, one
premise of the project laid out in the FRA master plan was that
improvements made to benefit Amtrak were not to adversely affect other
track users-that is, other track users were to be "held harmless" for
these improvements. Amtrak officials said this premise significantly
increased the importance of involving stakeholders. To help ensure that
federal, state, and local concerns would be addressed, Amtrak established
a project office in Old Saybrook, Connecticut.

Amtrak communicated with other Northeast Corridor track owners and users,
holding regularly scheduled meetings and entering into work agreements
with them. Amtrak worked with commuter rail and state officials to
accommodate work that was required to begin electrified service between
Boston and New York City. For example, Amtrak worked closely with MBTA on
several work elements, including refurbishment of Canton Viaduct and
construction of new platforms at the Route 128 passenger rail station, to
make sure electrified service could begin. Some officials we spoke with
complimented Amtrak's handling of stakeholder involvement.

Yet other commuter rail and state officials believed that Amtrak did not
fully integrate their interests into the project's goals. For example,
some track users alleged that after Amtrak obtained their agreement to
proceed with the Northeast High-Speed Rail Improvement Project, it managed
the project with little regard for their interests. In their view, Amtrak
did the work required to accommodate high-speed trains and reduce trip
times, but it did little to focus on capacity enhancement or other work
needed to accommodate expected growth in commuter and freight rail traffic
in future years-a key aspect of FRA's master plan for achieving and
maintaining faster trip times. An official with the state of Rhode Island,
for example, told us that Amtrak's management of corridor improvements
"bogged down" its efforts to complete their Freight Rail Improvement
Project-a program to facilitate and grow freight railroad traffic in Rhode
Island. Regarding the latter, Amtrak observed that this project was
significantly behind in its development and that it paid to do preliminary
design work related to the project in order to facilitate placement of
catenary poles for the electrification work. Officials from Metro-North
Railroad also told us that Amtrak's agenda has generally been to take care
of its own needs and spend money on its tracks, and commuter railroads
could take care of their own needs. In their opinion, better cooperation
and collaboration would have made the work go faster and more smoothly.

Completing the Northeast High-Speed Rail Improvement Project- particularly
the goal of 3-hour service between Boston and New York City-will continue
to require collaboration between Amtrak and other stakeholders. Most of
the work elements critical for achieving the trip-time goal that are not
yet completed are on sections of track that Amtrak does not own,
particularly on the 56-mile section of track owned by the Metropolitan
Transportation Authority of New York and the Connecticut Department of
Transportation. According to Metro-North officials, hundreds of millions
of dollars in additional funds will be needed to

address infrastructure issues between New Haven and New Rochelle to
achieve 3-hour service between Boston and New York City. They estimated
that at least four bridges (costing $130 million to $150 million each)
would require replacement and most of the 60 curves between New Haven and
New York City would require modification. This might not only be
prohibitively expensive but also potentially require property acquisition,
which, because the track is in an urban setting, could be difficult due to
existing development and involve significant condemnation issues. A
Metro-North Railroad official estimated that gaining 1 minute or so in
triptime savings could cost $200 million or more.

FRA's Oversight of the Northeast High-Speed Rail Improvement Project Was
Limited

Although providing millions of federal dollars to the Northeast High-Speed
Rail Improvement Project, FRA-the primary federal agency involved with the
project-provided little oversight of the project, generally because its
management adopted the position that it lacked legislative authority to do
so. Instead, FRA saw itself only as a conduit for funds from the federal
government to Amtrak-a role entailing far less oversight than the Federal
Transit Administration's role as the manager of a project management
oversight program for the recipients of federal grants for major mass
transit projects. FRA was also legally responsible for preparing
environmental assessments for the project and developing track and
passenger railcar safety standards, and it carried out these
responsibilities. FRA officials said the agency provided little oversight
because (1) it did not have the resources or the authority to change
Amtrak's project management, (2) Congress did not grant FRA specific
legislative authority to conduct such oversight, and (3) FRA did not have
a formal mechanism (such as a project management oversight process) for
providing oversight. We agree with FRA's view that it had limited
authority to oversee the Northeast High-Speed Rail Improvement Project.
For fiscal year 2003, Congress increased FRA's responsibility to provide
oversight of and accountability for federal funds used for intercity
passenger rail service, but this responsibility extends only to fiscal
year 2003 funds.

FRA Adopted Position That In general, FRA adopted the position that it
lacked specific authority to
It Had Limited Authority to oversee the Northeast High-Speed Rail
Improvement Project. According to
Oversee the Project the agency, its primary responsibility is to enforce
federal law as it relates

to railroad safety. To protect railroad employees and the public, FRA
carries out this responsibility by developing and administering safety
statutes, regulations, and programs; conducting research on railroad
safety

and national transportation policy; and inspecting railroad track,
equipment, signals, and railroad operating practices. It also plays a role
in enforcing regulations applicable to the transportation of hazardous
materials by rail. According to FRA officials, the agency did not have
specific legislative authority to oversee the Northeast High-Speed Rail
Improvement Project. Consequently, it did not have any particular
authority to direct Amtrak's management of the project by, for example,
requiring Amtrak to prepare project management or finance plans.

FRA officials told us they saw themselves as responsible primarily for
making federal funding available for the project. While FRA, as grantor
for the government, is responsible for ensuring that grant funds are used
for their intended purposes, FRA officials said they did not believe they
were responsible for exercising any specific management oversight of
continuing work on the Northeast Corridor improvements or for ensuring the
success of high-speed rail after Amtrak assumed the responsibility for
managing the Northeast Corridor Improvement Project in 1985. In their
view, both of these responsibilities lay with Amtrak. Accordingly, FRA
officials provided little guidance for planning or for assessing and
mitigating risks to major capital rail projects after 1985-a position they
believed was consistent with congressional direction that limited FRA's
oversight of grants to Amtrak before fiscal year 2003.

Under the 1985 grant agreement that transferred the Northeast Corridor
Improvement Project to Amtrak, FRA retained responsibility to formally
accept completed work and to audit the expenditure of funds to ensure that
monies provided by the federal government were spent for their intended
purposes. Amtrak was required to periodically provide reports concerning
work status, budget, and accounting matters. Between 1986 and 1998, the
grant agreement was amended 21 times. Some of these amendments added work
covered by the Northeast High-Speed Rail Improvement Project, such as the
electrification work. In 1992, FRA and Amtrak amended the agreement to
allow FRA to provide support to and coordination of the project. According
to FRA, this included getting the environmental assessment started,
preparing the 1994 Master Plan, and helping coordinate project activities
among Amtrak, commuter railroads, and others. However, under the agreement
Amtrak retained full authority to decide issues pertaining to property it
owned and operated.

Given these circumstances, we agree with FRA's view that it was not
authorized to exercise direct oversight of the project. Over time,
Congress removed responsibility for the management and execution of

improvements to the Northeast Corridor from FRA and gave it to Amtrak. As
part of the Passenger Railroad Rebuilding Act of 1980, Congress directed
the Secretary of Transportation to enter into an agreement with Amtrak to
reallocate authority and responsibility for track improvements connected
with the Northeast Corridor Improvement Project and to transfer
responsibility for the project to Amtrak by October 1, 1985. This transfer
made Amtrak responsible for implementing project goals Congress had
previously mandated, and thus relieved FRA of its responsibilities in this
regard. Congress later imposed additional duties on the Secretary of
Transportation in relation to Northeast Corridor improvements. For
example, the 1992 Amtrak Authorization and Development Act directed the
Secretary of Transportation to prepare a program master plan for Northeast
Corridor improvements in consultation with Amtrak and commuter and freight
railroads. Congress continued to reaffirm Amtrak's central role in
managing these improvements and high-speed rail work. Prior to 2003, there
was no clear indication that Congress intended for FRA to reassume
responsibility for conduct of the Northeast High-Speed Rail Improvement
Project. Rather, according to FRA, Congress intended for the agency to
principally act as a conduit of project funds appropriated for Amtrak's
use. Therefore, we believe there is a basis in law for FRA acting
primarily as a conduit of project funds and not to conduct oversight.

FRA's limited oversight role contrasts with the stronger oversight role
that Congress assigned to the Federal Transit Administration (FTA) in
1987, when it directed FTA to establish a project management oversight
program29 to better safeguard the federal investment in transit projects
funded through the agency's fixed guideway grants program (called the "New
Starts" program).30 Under the project management oversight program,
contractors serve as an extension of FTA's technical staff to assess the
project management and technical capacity of New Starts grantees and their
capability to successfully implement major capital projects. In addition,
contractors monitor projects to make sure they are on time, within budget,
and in accordance with their plans and specifications. In 1998, FTA
expanded its oversight efforts to include an assessment of

29The Surface Transportation and Uniform Relocation Assistance Act of 1987
authorized FTA's project management oversight program. This program is
codified at 49 U.S.C. S:5327 and implemented through regulations codified
at 49 C.F.R. part 633.

30New Starts is an FTA program for starting fixed guideway projects to
fund up to 80 percent of the cost of transit system projects that use
separate and exclusive rights-of-way, as well as for extensions of
existing systems.

grantees' financial capacity and the financial impact of major projects on
existing transit systems. These reviews, conducted by independent
accounting firms, assess a grantee's financial health and are performed
before FTA commits funds for construction. The program is financed by a
set-aside of funds available under various FTA programs.31 FRA does not
have a project management oversight program similar to FTA's.

FRA Focused on Environmental and Safety Activities, Not Oversight

While FRA had little clear oversight responsibility for the project, it
was involved with other activities, such as assessing the environmental
impact of electrifying the line between Boston and New Haven and
developing safety regulations for the high-speed rail service planned for
the Northeast High-Speed Rail Improvement Project.32 Federal laws and
requirements dictated FRA's involvement with these activities:

o 	Consistent with the National Environmental Policy Act of 1969 and the
Council of Environmental Quality's requirements, FRA's Procedures for
Considering Environmental Impacts requires that either an environmental
assessment or an environmental impact statement be prepared for all major
FRA actions that could have a significant effect on the quality of the
human environment. According to an FRA official, FRA prepared an
environmental impact statement for the Northeast High-Speed Rail
Improvement Project's electrification work because the project was
considered to be a "major action" that could have significant impact on
the environment.

o 	FRA, as the federal agency responsible for railroad safety, was also
required to develop safety standards to facilitate the high-speed rail
service planned under the Northeast High-Speed Rail Improvement Project.
The Rail Safety Enforcement and Review Act of 199233 required FRA to
review and revise its track safety standards. As part of this review, in
July 1997 FRA issued a Notice of Proposed Rulemaking to

31FTA's project management oversight program is financed from 0.75 percent
of funds available under 49 U.S.C. S:5309, and 0.5 percent of funds
available under 49 U.S.C. S:5307 and S:5311. In fiscal year 2002, FTA
received about $29 million to conduct its project management oversight
program.

32According to Amtrak, FRA had some involvement with the acquisition of
the high-speed trains. This included numerous meetings between Amtrak and
FRA officials and FRA participation in planning, requirements testing, and
design work.

33As amended by the Federal Railroad Safety Authorization Act of 1994.

amend its track safety standards to include new standards for track to be
used by high-speed trains. The revised standards, made final in 1998,
included three additional classes of track that would permit passenger
rail trains to travel up to 200 miles per hour.34 FRA officials said the
standards for high-speed rail service were developed at Amtrak's request
to accommodate train speeds of up to 150 miles per hour envisioned under
the Northeast High-Speed Rail Improvement Project.

o 	In addition, the Federal Railroad Safety Authorization Act of 1994
required FRA to develop safety standards for passenger equipment,
including passenger rail cars. Such standards did not previously exist.
FRA issued an Advance Notice of Proposed Rulemaking establishing safety
standards for passenger rail cars in 1996, a Notice of Proposed Rulemaking
in 1997, and a Final Rule in 1999. According to FRA, these standards
reflected the agency's desire to ensure safety in the context of an ever
more complex passenger railroad operating environment (including higher
train speeds). These standards accommodate highspeed rail service.

Apart from these activities, FRA's direct involvement with the Northeast
High-Speed Rail Improvement Project was limited, reflecting a decrease,
FRA officials said, in the resources that FRA devoted to the project after
the management of the Northeast Corridor Improvement Project was
transferred from FRA to Amtrak in 1985. At that time, about 50 to 60
individuals who had been detailed to FRA to work on the Northeast Corridor
Improvement Project returned to the Federal Highway Administration
(FHWA),35 and FRA closed its project office and reduced the number of FRA
full-time employees working on the project from between 8 and 10 to less
than 1. FRA officials said the latter individual was primarily responsible
for monitoring the completion of outstanding work on the Northeast
Corridor Improvement Project, ensuring compliance with the final
environmental record of decision, and serving as an ombudsman between FRA
and Amtrak. In addition, this individual helped coordinate

34Federal regulations currently have nine classes of railroad track (Class
1 through Class 9) that permit passenger trains to operate at speeds of
between 15 miles per hour (Class 1) and 200 miles per hour (Class 9).
Track standards were prepared for speeds up to 200 miles per hour to
accommodate the development of high-speed rail systems around the country.

35According to an FRA official, FHWA employees were detailed to work on
Northeast Corridor Improvement Project activities because they had both
engineering and infrastructure management expertise and because they would
be needed only temporarily (up to 5 years), since the project was expected
to be short term.

the project with local agencies as well as commuter and freight railroads.
Although FRA tracked federal spending on the Northeast High-Speed Rail
Improvement Project and checked on project progress, agency officials said
FRA's authority to change how Amtrak managed this project was limited. FRA
could raise matters of concern at meetings of Amtrak's Board of Directors,
they said, but the agency was one of seven votes and had no unilateral
authority to change Amtrak's decisions. Finally, FRA officials said,
Congress did not specify a desire for them to be proactive in overseeing
the project. Rather, in the officials' view, FRA was to serve largely as a
conduit of federal funds to Amtrak and little else.

Amtrak's management of the Northeast High-Speed Rail Improvement Project
was also subject to limited oversight from the Inspector General for
Amtrak and the U.S. Department of Transportation's (DOT) Inspector
Generals. Although Amtrak's Inspector General devoted 8 to 10 staff and
created two groups to review the project's activities, much of this work
was specific to contract matters rather than program management issues.
Amtrak's Inspector General told us that ongoing claims disputes, criminal
investigations, and litigation over the Acela Express trains have
precluded his office from conducting broader audits of the Northeast
High-Speed Rail Improvement Project's program management. In addition, he
said that because the project is not yet considered complete, it would not
currently be appropriate to conduct a programmatic review of the project.
Amtrak's Inspector General also told us there are certain lessons learned
from the Northeast High-Speed Rail Improvement Project that he has
recently reinforced with Amtrak's Chief Engineer. Similarly, DOT Inspector
General officials said they had not conducted much oversight of the
project either. The Amtrak Reform and Accountability Act of 1997 required
the DOT Inspector General to annually assess the financial requirements of
Amtrak. As a result, the office produced several reports on this issue.
However, only one report issued by the DOT Inspector General directly
addressed the Northeast High-Speed Rail Improvement Project. This report
discussed the progress of the electrification work.36

In Amtrak's fiscal year 2003 appropriations legislation, Congress adopted
measures to increase the Secretary of Transportation's responsibility for
providing oversight of and accountability for the federal funds used for
intercity passenger rail service. Among other things, these measures

36U.S. Department of Transportation, Office of Inspector General, Amtrak's
High-Speed Rail Electrification Project (December 1999).

require that Amtrak transmit a business plan to the Secretary of
Transportation and Congress, supplemented by monthly reports describing
work completed, changes to the business plan, and reasons for the changes.
The business plan was to describe the work to be funded using federal
funds. Furthermore, on or after March 1, 2003, Amtrak was only permitted
to use fiscal year 2003 and 2004 federal capital expense and improvement
grant funds for purposes included in its business plans.37 Finally, Amtrak
was required to agree to certain terms and conditions that would, among
other things, improve its financial controls and accounting transparency
and seek operating cost reductions. Although these measures acted to
impact DOT's role with respect to the expenditure of federal funds
provided to Amtrak, the measures apply only to expenditures financed with
fiscal year 2003 and 2004 funds and are not necessarily directed to the
oversight of any particular infrastructure project that might be financed
with funds provided prior to fiscal year 2003. FRA officials also said
that the appropriations act did not provide any additional resources
analogous to that given to FTA (such as a takedown from various program
funds) to conduct oversight.

Best Practices Framework Would Support Effective Management of Large-Scale
Intercity Passenger Rail Infrastructure Projects

Through our work on the Northeast High-Speed Rail Improvement Project and
our analyses of reports and guidance published by our office, the Office
of Management and Budget (OMB), FTA, and FHWA,38 we have identified key
components of a best practices framework for effectively managing large
infrastructure projects, including future intercity passenger rail
projects. These best practices offer guidance for project managers and
decision makers and include the following:

o 	Conduct comprehensive planning. Effective planning can include
developing a preconstruction planning process, using the resulting
preconstruction plans to implement a project, and evaluating the project's
success by comparing the actual results with those planned.39

37Additional restrictions were placed on grants to cover operating losses.

38See app. III for a discussion of the methodology we used to compile this
framework and app. V for a list of best practices sources.

39Planning is linked to an organization's strategic goals, which are based
on a needs assessment that identifies the need for a project.

o 	Assess risks and identify mitigation measures. Early identification and
assessment of risks to a project allow for prompt intervention.

o 	Comprehensively manage the project's finances. Tools for financial
management can include project financial plans that provide for accurately
estimating and effectively controlling costs.

o 	Establish accountability and oversight for prudent use of resources.
Assigning responsibility for a project and tying its performance to pay
and personnel decisions can help ensure accountability for the project's
results. Independent assessments of the project's plans and implementation
can provide oversight to help protect the federal investment.

o 	Incorporate the interests of diverse stakeholders. Coordination and
communication with stakeholders, including states, communities, and others
are important in identifying problems, reaching agreement on solutions,
and avoiding delays.

This framework applies to projects across their preconstruction,
construction, and postconstruction phases (see fig. 5).

Figure 5: Best Practices Framework for Managing Large-Scale Infrastructure
Projects

Mitigate project impacts to Coordinate and communicate stakeholders with
stakeholders through

postconstruction Coordinate and communicate with stakeholders through
implementation

Source: GAO analysis of best practices literature.

aPreconstruction refers to the planning, preliminary engineering, design,
and other work that precedes construction. Construction refers to the work
involved in building a project. Postconstruction refers to evaluation of a
project's results.

bNot applicable-postconstruction elements of risk assessment and financial
management may be captured under project lessons learned or other
categories.

                          EFFECTIVE PROJECT MANAGEMENT
          Project Phasea Preconstruction Implementation -Construction
                                Postconstruction
                                                                  Evaluate    
                         Conduct        Use project plans for     project,    
Comprehensive     preconstruction    implementation Update    comparing    
planning              planning           project plans        results to   
                                                                  planned     
                                                                  outcomes    
                     Identify project   Recognize problems and                
Risk assessment  risks and develop     promptly intervene        N/Ab
                        mitigation      Develop recovery plans 
                        strategies           if necessary      
                    Review and refine                                         
Comprehensive      cost estimates    Control project costs  
financial        Develop financial   to stay within planned      N/Ab
management       plans Account for          budgets         
                      inflation and                            
                   stability of funding                        
                                                                Tie project   
                          Assign        Track project progress performance to 
                    responsibility for       and monitor          pay and     
                     project results.    implementation. Tie     personnel    
Accountability  Conduct independent  project performance to   decisions    
    and oversight  assessment of plans    pay and personnel       Conduct     
                        and other         decisions Conduct     independent   
                     preconstruction    independent assessment assessment of  
                        documents         of implementation       project     
                                                                  results     
                      Coordinate and    
     Stakeholder     communicate with   
     involvement   stakeholders through 
                     project planning   

Conduct Comprehensive Project Planning

Comprehensive planning serves as a foundation for effectively managing
large-scale infrastructure projects, both for agencies or organizations
that manage multiple capital projects and for individual projects. Such
planning helps manage and control one or more projects' implementation,
costs, schedules, scope of work, and achievement of goals. As we reported
in 1998, a long-term capital plan documents the specific projects an
organization intends to pursue and the resources it expects to use over
the long term and establishes priorities for implementation.40 Officials
from four Class I railroads we contacted prepare and develop multiyear
capital plans that establish organizational priorities and assist in
developing current and future budgets for the successful completion of
capital projects.41 Plans for individual projects can take years to
complete. For instance, preconstruction planning for the Alameda Corridor
Project lasted more than a decade.42 However, the time spent on planning
can help organizations and agencies avoid costs and delays later.
Officials from the Alameda Corridor Project credited that project's
comprehensive, long-term planning process for helping them complete the
20-mile corridor within budget and on schedule.

An important tool for comprehensive planning is the project management
plan, which typically uses performance baselines for goals, costs,
schedules, major milestones, and risks to manage and control a project's
implementation. Developing a project management plan focuses
organizations, including those managing large-scale intercity passenger
rail projects, on implementation issues early in the life of a project.
These plans are not intended to be rigid, but rather, flexible and
dynamic. During implementation, the plans are updated and otherwise
revised to reflect changes in the project, such as changes in its cost,
schedule, or scope of work. After a project has been implemented, its
success can be measured by comparing its actual cost, schedule, and other
outcomes with those that

40See GAO/AIMD-99-32.

41The four Class I railroads we contacted were the Burlington Northern and
Santa Fe Railway Co., Norfolk Southern Corporation, CSX Transportation
Inc., and Union Pacific Railroad Company. In 2001, these were the four
largest Class I railroads. For 2001, Class I railroads were those
railroads that earned at least $266.7 million per year in revenue.

42Called the Alameda Corridor because of the street it parallels, the
project created a 20mile, $2.4 billion railroad express line connecting
the ports of Los Angeles and Long Beach to the transcontinental rail
network near downtown Los Angeles. The project eliminated approximately
200 street-level railroad crossings, thereby alleviating congestion and
improving mobility for cargo.

were planned. The recently introduced Passenger Rail Investment Reform Act
(S. 1501) would similarly require organizations managing and receiving
funds for intercity passenger rail capital projects to submit a project
management plan for the Secretary of Transportation's approval.

To help ensure effective uses of federal funds, FTA requires grantees
agreeing to federal fixed guideway project funds to develop project
management plans as a condition of receiving federal financial assistance.
These plans typically include budgets, implementation schedules,
procedures for controlling documents and keeping records, reporting
requirements, and cost and schedule controls.43 When project management
plans are not developed or used, projects can encounter problems, such as
cost overruns and schedule delays. As we reported in March 2000, the Bay
Area Rapid Transit (BART) expansion project to San Francisco International
Airport experienced costs that were $300 million more than estimated.
According to FTA, this was in part due to management not fully committing
to the project management plan.44 More specifically, managers did not
update the plan or submit monthly budget and schedule updates. As a
result, FTA said, cost and schedule trends were difficult to anticipate,
and overruns were hard to manage effectively.

Assess Risks and Identify Mitigation Measures

Risk assessments allow project managers to identify and manage risks
related to a project's costs, schedules, and other aspects and to develop
mitigation measures that can increase the number of projects meeting
established goals. Best practices suggest that managing organizations
identify the risks to a project and their potential impact and then
develop mitigation strategies. As we reported in 1998, early recognition
of problems allows for prompt intervention, which increases the likelihood
that corrective action will get the project back on track before there is
significant deviation from its goals.45 Assessing and mitigating risks
reduces the probability of later encountering problems that can cause cost

43U.S. Department of Transportation, Federal Transit Administration, EG&G
Dynatrend Inc., Project and Construction Management Guidelines, 1996
Update (Wellesley, Mass.: June 1996).

44U.S. General Accounting Office, Mass Transit: Review of the Bay Area
Rapid Transit District's Airport Extension Finance Plan, GAO/RCED-00-95R
(Washington, D.C.: Mar. 31, 2000).

45See GAO/AIMD-99-32.

increases and schedule delays. Potential risks to projects include cost
increases, funding reductions, schedule delays, and environmental,
political, and legal issues.

There are various techniques for performing risk assessments. Some of the
Class I freight railroads we contacted (1) include a risk management group
in planning a project to assess its risks, (2) conduct rigorous financial
analyses, or (3) monitor monthly status reports to identify risks. FHWA
and FTA suggest using what is called a critical path method to boost a
project's efficiency and predictability, thereby potentially reducing its
risks. This method relies on computer technology to identify the most
efficient sequence of events to complete the project over the shortest
time. The computer technology identifies each task to be completed and
calculates a set schedule (see fig. 6). Managers can then visualize the
impact of potential delays on the project's schedules and costs.

Figure 6: Critical Path Method Graphical Representation of Project
Schedule Number of months

Sources: GAO and Nova Development (clip art).

Strategies for mitigating risks include developing recovery plans that may
be integrated into the project management plan. Efforts to assess and
mitigate risks can take place from the beginning to the end of a project.
FHWA officials stated that no matter how much analysis is done before
construction begins, unknowns can always threaten a project's estimated
costs, schedules, and goals. When risks start to affect a project's
progress, developing a recovery plan can help the managing organization
reevaluate the project and outline changes to its scope, cost, schedule or
other elements that will mitigate the negative effects of the risks. In
the context of transit projects, FTA officials said recovery plans are not
developed very

often because FTA's project management oversight process acts as a first
line of defense to identify and address potential problems. However, when
recovery plans are developed, they are intended to demonstrate a managing
organization's ability to complete a project, protect federal funding, and
still achieve the project's goals in the form of transit benefits to the
community. Recovery plans help get a project "back on track" by
considering potential changes to its management, engineering, funding
sources, and other elements.

Comprehensively Manage Project Finances

Comprehensive financial management through accurately estimating and
controlling costs helps to ensure efficient uses of funds. Estimating and
controlling costs is important because the costs of large-scale
infrastructure projects can increase significantly. Best practices suggest
that managing organizations review and refine cost estimates as projects
move closer to implementation to improve accuracy. A project financial
plan, which shows a project's estimated funding needs, funding sources,
and funding responsibilities, is one tool for estimating and controlling
costs. These plans enable project managers to compare actual costs with
planned expenditures, identify deviations, and take actions to address
potential problems.

Because of the large federal investment in major infrastructure projects
and the need to ensure sufficient funding to complete them, a financial
plan may be required for a project to receive federal financial
assistance. For example, since 1998, the Transportation Equity Act for the
21st Century has required recipients of federal assistance under Title 23,
United States Code, to submit annual financial plans to DOT for projects
estimated to cost $1 billion or more.46 FHWA has developed guidance that
requests that state financial plans include a total cost estimate for each
project, annual updates and adjustments for inflation, estimates of future
cost increases, a schedule for completing the project, a description of
construction financing sources and revenues, a cash flow analysis, and a
discussion of any other factors affecting the project's cost. According to
FHWA's guidance, annual updates to these financial plans can also
integrate changes in cost estimates that may arise as a project enters
construction and its plans and designs are more complete. In July 2003,
the DOT

46U.S. General Accounting Office, Federal-Aid Highways: Cost and Oversight
of Major Highway and Bridge Projects-Issues and Options, GAO-03-764T
(Washington, D.C.: May 8, 2003).

Inspector General testified before Congress that, in his opinion,
financial plans should be prepared for projects costing $100 million or
more.47 S. 1501 would require a detailed financial analysis to accompany
grant requests for federal funds, plus a business plan describing capital
and operating work to be funded, cost estimates, and a schedule for
completion. Monthly supplemental reports to the business plans would also
be required.

Accounting for the effects of inflation in a financial plan, as FHWA's
guidance directs, can increase the accuracy of a multiyear project's cost
estimate. Best practices suggest that cost estimates for multiyear
projects account for inflation to avoid deviations between actual and
estimated costs as years pass and the value of currency changes. The
Boston Central Artery/Tunnel project,48 for example, which started in
1985, was originally expected to cost $2.6 billion, but as of May 2003,
FHWA estimated that it would cost $14.6 billion-about $12 billion more
than originally estimated. According to one FHWA official, about half of
this cost increase can be attributed to inflation. Although inflation has
generally decreased since the 1980s, it can still have a significant
impact on a project's costs, as illustrated by the Central Artery/Tunnel
project.

A financial plan can also help control a project's costs after
construction has begun by estimating the amount of funding needed to
complete the project and the availability of that funding. This
information helps an organization and its contractors to assess the impact
of changes that can cause a project's schedules to slip and costs to rise.
Particularly during the first years of a project's development and
construction, the funding received can be considerably less than the
funding requested, especially when the funding is incremental-that is, the
practice of providing budget authority for only a portion of a capital
acquisition or part of a usable asset. As we have reported, incremental
funding without the certainty of future

47U.S. Department of Transportation, Controlling Costs and Improving the
Effectiveness of Federal Highway Administration and Federal Transit
Administration Programs, CC2003-148 (Washington, D.C.: July 22, 2003).

48The Central Artery/Tunnel project, an Interstate Highway System project
in Boston is building or reconstructing about 7.5 miles of urban
highways-about half of them underground. The project includes (1)
extending Interstate 90 east, mostly in tunnels, through South Boston,
under Boston Harbor (through the Ted Williams Tunnel), and to East Boston
and Logan International Airport; (2) replacing the Central Artery-an
elevated portion of Interstate 93 through downtown Boston-with an
underground roadway; and (3) replacing the I-93 bridge over the Charles
River.

funding can result in poor planning, higher costs, delays, and even a
project's termination.49 We have advocated full funding of capital
projects-that is, providing budget authority for the full costs of a
capital acquisition or project at the time decisions are made to provide
financial resources-as a way to increase the recognition of implied
commitments embodied in budgetary decisions. Because a financial plan can
demonstrate the need for funding at particular times and the impact of
funding delays on the project's costs and schedule, it can help an
organization and its contractors stay within cost estimates and keep their
project on schedule as well as determine full funding needs.

While incremental funding can create uncertainty and hamper planning,
funding a project in meaningful phases can help to control costs. As we
reported in 1998, best practices suggest breaking up a project's capital
planning and budgeting cycle into phases before, during, and-in some
cases-after construction.50 Funding is provided for one of these phases at
a time, and future funding is generally tied to achieving milestones.
Under this approach, the initial design work can proceed far enough for
higherquality, more reliable cost estimates to be available for decision
makers to consider before deciding whether to complete the design and
construct the project-and before a substantial federal investment has been
made. OMB and a 2000 DOT task force have also recommended establishing
separate funding categories for preconstruction activities before making a
commitment to full construction.51 Some large-scale infrastructure
projects are already funded in phases. For example, projects funded by
FTA's fixed guideway program ("New Starts") are funded through federal
grant agreements after preconstruction work has given decision makers a
sense of a project's costs, benefits, and financial viability.52

49See GAO/AIMD-99-32.

50See GAO/AIMD-99-32.

51Report of the ONE DOT Task Force on Oversight of Large Transportation
Infrastructure Projects (December 2000).

52FTA terms these agreements "full funding grant agreements," where
funding is committed subject to annual appropriations.

Establish Accountability and Oversight for Prudent Use of Federal
Resources

Best practices suggest that organizations be held accountable for adhering
to planned budgets and schedules, achieving goals, and other project
outcomes in order to ensure the prudent use of federal resources. By
monitoring a project's performance against cost, schedule, and technical
performance goals, as well as establishing incentives to meet those goals,
organizations can increase the likelihood of the project's successful
completion. Organizations can also hold project managers and other
personnel accountable for the project's results. Some of the Class I
freight railroads we contacted use internal sign-offs to assign
responsibility for decisions about a project. They also often tie pay and
personnel decisions to results. Under these decisions, project managers
are held directly responsible for the project's success or failure.
Large-scale infrastructure projects can also face external factors during
implementation, such as reductions in funding from federal, state, or
local jurisdictions, that might affect accountability decisions. In such
circumstances, external factors can be recognized and accountability can
be maintained by developing a system that only holds project managers
responsible for their particular actions.

Independent oversight of a project is a best practice designed to promote
the prudent use of federal resources. Independent assessments help protect
the federal investment in a project by reviewing the implementation of its
plans, monitoring its construction, and reporting problems. One method of
providing independent oversight is to use an approach similar to FTA's
project management oversight (PMO) program. As we reported in September
2000, this program has yielded benefits, including improved project
controls and cost savings.53 For example, for one project in the San
Francisco area, a PMO contractor's recommendation led the grantee to
appoint a coordinator and prepare a comprehensive project management plan
that has improved the implementation of three interrelated projects. We
also reported that the PMO program has been instrumental in providing FTA
with a better understanding of issues surrounding complex construction
projects and a better awareness of potential problems that could lead to
cost increases and schedule delays.54 For example, PMO contractors
assigned to three projects identified significant cost increases and
schedule delays early in construction and helped FTA and the grantees

53U.S. General Accounting Office, Mass Transit: Project Management
Oversight Benefits and Future Funding Requirements, GAO/RCED-00-221 (Sept.
15, 2000).

54See GAO/RCED-00-221.

develop strategies to address these issues. In addition, financial
assessments, also a part of FTA's PMO program, have helped ease FTA's
concerns about grantees not having the capacity to complete new projects
without adversely affecting their existing transit systems.

Incorporate the Interests of Diverse Stakeholders

Incorporating the interests of diverse stakeholders (including commuter
and freight railroads and the public) into a project can increase its
chances of success. This is especially important during the planning
stages, when considering stakeholders' interests can help project managers
identify needs and problems and develop action plans to address them. Best
practices suggest frequent communication and involvement through such
means as meetings and correspondence. These approaches allow stakeholders
like local governments and others to convey their concerns and problems
and work with project managers to address them.

Involving stakeholders in large-scale infrastructure projects, such as the
Alameda Corridor Project, has shown positive results. This project
developed community-based programs that provided business outreach, job
training and development, and a conservation corps for community
beautification. An official with this project said that managers
frequently involved local jurisdictions along the route, and, in her
opinion, their involvement helped achieve local buy-in and avoided delays
through agreements that set the parameters of state and local reviews. For
some highway and bridge projects, FHWA has included stakeholders by using
neighborhood liaisons, community advisory councils, and public workshops.

Conclusions	Although federal investments in the Northeast High-Speed Rail
Improvement Project have yielded infrastructure improvements and faster
trip times, Amtrak did not act to comprehensively plan or manage the
project. The trip-time goal has not been achieved, and work related to
capacity enhancement and recapitalization is yet to be completed-much of
which is on track Amtrak does not own and is critical if Amtrak is still
planning to achieve a 3-hour trip time. Amtrak's management approach and
poor integration of stakeholder interests into the project contributed to
the project not meeting its goals. For example, Amtrak did not develop
project management or finance plans that could have been used to better
control costs and schedule delays. Amtrak also could have done a better
job of

integrating stakeholder interests into the project, which could have
facilitated completion of work elements on track not owned by Amtrak.

The lack of federal oversight also hindered the project's successful
implementation. As experience has shown with other federally financed
infrastructure programs, including large transit projects, increased
federal oversight has the potential not only to facilitate a project's
management but also to facilitate early intervention to correct problems
once they develop. Oversight is critical for protecting federal
investments in capital projects. The Northeast High-Speed Rail Improvement
Project's performance has demonstrated that future large-scale intercity
passenger rail infrastructure projects, including any future projects to
recapitalize the Northeast Corridor, will require better management and
oversight. In our view, these projects would benefit from a project
management framework that is rooted in best practices, including
comprehensive planning and financial management, risk assessment and
mitigation, clear accountability and oversight, and incorporation of
diverse stakeholders' interests.

Recommendations for Executive Action

To ensure that any future federally funded major intercity passenger rail
infrastructure projects that might be undertaken by Amtrak are implemented
as efficiently and effectively as possible, we recommend that the
President of Amtrak work with Amtrak's Board of Directors to do the
following:

1.	Adopt policies and procedures for managing infrastructure projects that
are based on best practices for managing large-scale infrastructure
projects, and require adherence to such policies and procedures before
approving or initiating significant changes to such projects. These
policies and procedures should address the following:

o 	Preparation of comprehensive project management plans that are updated
as needed.

o 	Preparation of comprehensive project financial plans that are updated
at least annually.

o 	Requirements for assessing a project's risks and the methodologies for
performing such assessments. The assessments should be comprehensive and
include those risks that can be reasonably foreseen before construction
begins. When warranted, a risk assessment should be prepared before a
project is approved and updated as conditions

indicate, and it should include measures to mitigate the potential
identified risks. The risk assessment should clearly indicate the
potential effects of the different types of risks that could be
encountered, and especially how those risks could affect a project's costs
and schedules.

o 	Preparation of program-level recovery plans. The policies and
procedures should establish the conditions under which these plans would
be prepared and the elements they would include.

o 	Mechanisms to ensure accountability for a project's success. Such
mechanisms should clearly indicate the individuals responsible for
implementing the project, the expectations for their performance and the
ways their performance will be measured, and the potential consequences
for failing to meet expectations.

2.	Adopt policies and procedures to help ensure that appropriate
stakeholders, especially those external to Amtrak, are included in project
planning, decision making, implementation, and, where appropriate,
mechanisms to indicate stakeholders' agreement with or approval of project
management and financial plans.

To better ensure the future oversight of federally financed, large-scale
intercity passenger rail infrastructure projects, we recommend that the
Secretary of Transportation seek legislation authorizing it to establish a
project management oversight-like program to oversee these types of
projects in the future. The legislation should do the following:

1.	Specify the Federal Railroad Administration's responsibilities for the
oversight of federal expenditures on major intercity passenger rail
infrastructure projects and permit as necessary, to oversee such projects,
the establishment and implementation of a project management
oversight-like program at the Federal Railroad Administration similar to
that authorized by the Surface Transportation and Uniform Relocation Act
of 1987.

2.	Require the Federal Railroad Administrator to develop regulations for
administering the project management oversight-like program and to specify
the requirements for complying with such a program.

3.	Establish a funding mechanism to finance the program established by the
Federal Railroad Administration. Among the mechanisms available

is direct appropriation or a statutorily limited set-aside of funds
appropriated for designated Federal Railroad Administration programs.

To ensure that federally funded major intercity passenger rail
infrastructure projects are implemented as effectively as possible and to
better ensure the protection of federal investments in such projects, we
recommend that the Secretary of Transportation, subsequent to a
clarification of the oversight authority of the Federal Railroad
Administration, direct the Federal Railroad Administrator to do the
following:

1.	Require managers of major intercity passenger rail infrastructure
projects to adopt elements of the best practices framework, including the
development of project management plans and financial plans and the
assessment of risks to such things as the projects' costs, schedules, and
implementation and completion. The risk assessment should identify
measures, as appropriate, to mitigate the risks.

2.	Require managers of major intercity passenger rail infrastructure
projects to monitor the projects' implementation and, where appropriate,
to develop project-level recovery plans once problems arise that threaten
the projects' costs, schedules, or implementation or completion. Each plan
should identify, at a minimum, the actions to be taken, the individuals or
organizations responsible for the actions, the expected outcomes, and an
implementation time frame.

3.	Develop guidance, based on best practices, and make it available to
states, railroads, and others to assist in managing large-scale intercity
passenger rail infrastructure projects. The guidance could cover the
preparation of such things as project management and finance plans, risk
assessments, and recovery plans that address issues that threaten
projects' costs, schedules, or implementation or completion.

Agency Comments and Our Evaluation

We provided a draft of this report to Amtrak and the Department of
Transportation for their review and comment. Amtrak provided its comments
in a letter from its President and Chief Executive Officer (see app. VI).
In general, the President of Amtrak said that our report raised many of
the issues that he has had to address since he took office and that on a
regular basis he has had to deal with many of the consequences of
decisions made during the life of the project. He further said that after
he arrived he restructured Amtrak's management and budget processes

because he believed that Amtrak had lost focus in a number of critical
areas, including management of capital projects. In addition, he observed
that as part of the management restructuring, project accountability, and
budget-based financial reporting changes he has made since arriving at
Amtrak in May 2002, Amtrak has incorporated many of the best practices
discussed in our report. Amtrak did not comment on our specific
recommendations directly but instead said they had incorporated many of
the best practices as part of their management restructuring. FRA
responded for the Department of Transportation and agreed with our
recommendations and said that the Passenger Rail Investment Reform Act (S.
1501) incorporates many of our recommendations.

Amtrak stated that it was not in a position to provide specific comments
on our findings or conclusions because of allegations related to ongoing
litigation associated with the electrification and high-speed train
acquisition activities of the Northeast High-Speed Rail Improvement
Project. Although Amtrak said it was unable to comment on our report
because of matters under litigation, it believes our findings and
conclusions are incomplete because we did not consider how the actions of
contractors might have negatively affected Amtrak's project management.
For example, Amtrak believes the outcome of the Justice Department
investigation of the electrification contractor would impact an assessment
of its project management. In addition, Amtrak believes our reliance on
FRA's master plan to establish the criteria for costs and schedules in
measuring their management of the Northeast High-Speed Rail Improvement
Project was misplaced. We recognize that contractor actions can influence
the implementation and management of capital projects. However, our work
focused on Amtrak's overall management of the project and the extent that
Amtrak prepared and used comprehensive project management and financial
plans in implementing the project, not the actions of contractors or the
planning and implementation of specific project components (e.g.,
high-speed train acquisition). As our report notes, Amtrak did not have
comprehensive project management or financial plans for the project- plans
that could have been used to better control costs and schedule delays. We
also disagree that our use of FRA's master plan to evaluate Amtrak's
management of the project was misplaced. The Amtrak Authorization and
Development Act of 1992 required this plan. It represented a comprehensive
program of improvements that would permit regularly scheduled, safe, and
dependable rail passenger service between Boston and New York City in 3
hours. Although Amtrak agreed that this plan constituted a blueprint for
the project, we found that Amtrak did not use this plan to manage the
project or create its own comprehensive

project management plan. We do not believe that Congress meant for FRA's
plan to be ignored and not used in scoping and managing the project,
particularly in the absence of an Amtrak prepared plan.

Amtrak commented that it felt our conclusion about not fully integrating
stakeholder interests was undeserved criticism. Amtrak said that it held
countless meetings with stakeholders with often competing interests and
entered into numerous agreements with them that specified their respective
obligations and rights regarding work that was and was not contained in
FRA's master plan. While we recognize the work that Amtrak did with
various stakeholders, including state departments of transportation and
commuter railroads, we continue to believe that Amtrak did not fully
integrate stakeholder interests into project goals. The FRA master plan
highlighted the criticality of stakeholder involvement in achieving the
3-hour trip-time goal. Amtrak's not achieving that goal is due, in part,
to its inability to fully incorporate stakeholder interests into the
project. Doing so could have identified stakeholder responsible work, the
priority of such work, and required stakeholder financial contributions.
Moreover, our report also states that some of the incomplete work elements
on the Northeast High-Speed Rail Improvement Project as of March 2003 that
were critical to achieving the 3-hour trip-time goal were on stakeholder
owned property. This included infrastructure improvements such as curve
realignments and at-grade improvements at the Shell interlocking.
Preparation and use of a comprehensive project management plan would have
not only helped identify these projects but also ensured they were
prioritized so that project goals could be met.

Amtrak also commented that our report failed to adequately account for a
change in the trip-time goal for the Northeast High-Speed Rail Improvement
Project and the effects this change might have had on Amtrak's management
of the project. Amtrak said that as early as 1995 it was assumed that the
3-hour trip time could only be achieved using a nonstop high-speed train
from Boston to New York. Regularly scheduled service with intermediate
stops was planned for 3 hours and 10 minutes. Amtrak also questioned
whether the cost effectiveness of making the infrastructure improvements
necessary to achieve a 3-hour trip time would currently be financially
justified by the net ridership increase resulting from such a trip-time
reduction. This contradicts information we obtained during our review. As
the report notes, following enactment of the Amtrak Reform and
Accountability Act of 1997, which prohibited Amtrak from using federal
funds for operating expenses after 2002, Amtrak stated that it was relying
on meeting the 3-hour trip-time goal to help it attract the

ridership and revenue to attain this goal. As recently as 2000, the
Chairman of Amtrak's Board of Directors testified before Congress that
Amtrak would achieve the 3-hour trip-time goal between Boston and New York
City. Such statements indicate that, rather than abandoning the 3-hour
triptime goal, Amtrak continued to publicly represent until at least 2000
that it would attain this goal-a goal established by the 1992 Amtrak
Authorization and Development Act. Finally, our work focused on Amtrak's
management of the Northeast High-Speed Rail Improvement Project in
achieving the 3-hour trip-time goal. It was beyond the scope of this work
to determine whether a 3-hour trip time should or should not have been the
project goal or if further improvements would be financially justified in
achieving this goal.

Finally, Amtrak commented that there was a need for dependable funding of
capital projects. Amtrak's President observed that the Northeast
High-Speed Rail Improvement Project suffered, especially in the early
years, from a lack of certain and dependable federal funding and that the
amount of financial support from year-to-year was inconsistent. In his
opinion, the success of any future projects will require stable federal
financial support and, without this, effective project planning and
financial accountability would be extremely difficult. We agree that
dependable financial support is important to the success of any capital
project. However, as our report notes, comprehensive financial management
is an equally important component in successfully planning and
implementing capital projects. In particular, preparation and use of
financial plans are important tools for estimating and controlling project
costs. Financial plans are also important in demonstrating the need for
funding at particular times and the impact of funding delays on project
costs and schedules. We found that Amtrak had no comprehensive financial
plan for the Northeast High-Speed Rail Improvement Project, and that
Amtrak focused on the short-term, not longterm, funding needs of the
project. Preparation and use of a comprehensive financial plan would not
only have facilitated the effective use of the financial resources
provided but also have potentially demonstrated the need for additional
resources where warranted.

The Department of Transportation's FRA said that it was in agreement with
our recommendations. FRA noted that the Passenger Rail Investment Reform
Act (S. 1501) would incorporate all of our recommendations by creating a
program based on the Federal Transit Administration model for oversight.
According to FRA, the structure of the capital program in S. 1501 was
closely modeled after the Federal Transit Administration's Transit New
Starts program. It will have the same sort of eligibility criteria,
require the

same planning and analysis by applicants (including the development of
project management plans with regular updates), and will include the same
safety, procurement, management, and compliance reviews and audits as the
Department undertakes with recipients of Federal Transit Administration
funding. In addition, FRA said that S. 1501 proposes the same mechanism to
fund the oversight of capital projects as used by the Federal Transit
Administration, specifically authorizing the Secretary of Transportation
to retain a portion of the grant to fund the Department's oversight
activities.

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 7 days from the
date
of this letter. At that time, we will send copies of the report to
congressional committees with responsibilities for intercity passenger
rail
issues; the President of Amtrak; the Secretary of Transportation; the
Administrator, Federal Railroad Administration; and the Director, Office
of
Management and Budget. We will also make copies available to others
upon request. In addition, the report will be available at no charge on
the
GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me
at (202) 512-2834 or [email protected]. Key contributors to this report
included Matthew Cail, Elizabeth Eisenstadt, Bert Japikse, Richard
Jorgenson, Nancy Lueke, Steve Martin, and E. Jerry Seigler.

Sincerely yours,

JayEtta Z. Hecker
Director, Physical Infrastructure Issues

Appendix I

Scope and Methodology

To address the status of the Northeast High-Speed Rail Improvement
Project, we reviewed documents related to the project's costs and
schedules. These documents, obtained from Amtrak, the Federal Railroad
Administration (FRA), and others, included spending plans, progress
reports, and correspondence between Amtrak and FRA on the status of the
project and related issues. With the assistance of Amtrak, commuter rail
agencies, the Connecticut and Rhode Island Departments of Transportation,
CSX Transportation Inc., and the Providence and Worchester Railroad, we
also determined the status of the Northeast High-Speed Rail Improvement
Project's work elements as of March 2003. These work elements appeared in
FRA's July 1994 master plan for the project. The information we compiled
included, for each work element, the completion status, the actual or
expected completion date, and the location of the work to be completed.
Additionally, with the assistance of Amtrak, commuter rail agencies, the
Connecticut and Rhode Island Departments of Transportation, and the
freight railroads using the Northeast Corridor between Boston and New York
City, we determined the amount of federal, state, and local funds spent on
the Northeast High-Speed Rail Improvement Project through March 2003. To
assess the reliability of the financial information obtained from Amtrak,
commuter railroads, and others, we compared the financial data with
original cost estimates and, to the extent feasible and appropriate, with
contract documents. We found no obvious errors of completion or accuracy.
In addition, we had extensive discussions with Amtrak and commuter
railroad officials about project finances and our use of the financial
data. Since the information was primarily used to illustrate the magnitude
of changes in project and project component costs, we believe the data
were sufficiently reliable for use in this report.

To address Amtrak's management of the Northeast High-Speed Rail
Improvement Project, we reviewed applicable law related to this project
and to the Northeast Corridor Improvement Project, as well as the
legislative history of certain changes to the high-speed rail project. We
also reviewed documents showing how the project was organized and managed,
including project management schedules, information on the electrification
and train acquisition contracts, and quarterly status reports. We also
reviewed memorandums, letters, and other information about cost and
schedule issues, including an Amtrak-acquired assessment of cost and
schedule issues related to its acquisition of the high-speed trains.
Finally, we discussed the project's management and implementation with
Amtrak, FRA, commuter rail agencies, and other officials. We did not
evaluate how, if at all, alternative structures for providing intercity
passenger rail could

Appendix I
Scope and Methodology

affect the potential management of future large-scale infrastructure
projects.

To address the federal government's oversight of the Northeast High-Speed
Rail Improvement Project, we reviewed FRA's legislative and regulatory
authority in relation to railroads, and to Amtrak in particular. We also
reviewed the October 1985 grant agreement between FRA and Amtrak (and its
subsequent amendments) to identify oversight and reporting requirements
related to the Northeast Corridor Improvement Project and to the Northeast
High-Speed Rail Improvement Project. Finally, we reviewed information
about FTA's project management oversight program, including the applicable
law establishing the program and how it is funded. We also reviewed
previous GAO reports discussing the program, its implementation, and the
benefits attributable to it. We discussed with Amtrak, FRA, and Inspector
General officials from the U.S. Department of Transportation the oversight
of the Northeast High-Speed Rail Improvement Project and how this
oversight was conducted. Our discussions with FRA officials covered their
role in the Northeast High-Speed Rail Improvement Project, their legal
authority to oversee the project, how they exercised the oversight of the
project, how oversight of the project changed after Amtrak assumed
responsibility for improvements on the Northeast Corridor in October 1985,
and FRA's current authority and ability to oversee major passenger rail
infrastructure projects.

To address the use of best practices as a framework for the management of
large-scale passenger rail infrastructure projects, we conducted a
literature search to identify best practices related to infrastructure
management. The literature included previous GAO reports and guidelines on
best practices related to the acquisition and management of capital
assets. It also included publications from the Office of Management and
Budget (OMB), the Federal Highway Administration (FHWA), and the Federal
Transit Administration (FTA) addressing best practices and infrastructure
project management issues. From this literature search, we compiled a list
of best practices related to the management of large-scale infrastructure
projects. We also discussed infrastructure management best practices with
Amtrak, FRA, FHWA, FTA, and commuter rail officials. The Amtrak officials
included managers and others associated with the Northeast High-Speed Rail
Improvement Project. Finally, we discussed infrastructure management best
practices with officials from four Class I freight railroads and the
Alameda Corridor project in Los Angeles. We then synthesized this
information into the best practices framework presented in this report.

Appendix I
Scope and Methodology

We do not believe that our review of Amtrak's overall project management
was materially or negatively affected by ongoing investigations and
litigation. In November 2001, one of the contractors manufacturing the
Acela Express trains (Bombardier) filed suit against Amtrak in the United
States District Court for the District of Columbia seeking damages for,
among other things, Amtrak's alleged interference with the manufacture of
the equipment. In November 2002, Amtrak filed a countersuit against the
manufacturers alleging, among other things, breach of contract. As of
February 2004, these suits were still pending. In addition, Amtrak
officials indicated that the Department of Justice and the U.S. Attorney's
Office were conducting investigations related to the contract for
electrification work done under the Northeast High-Speed Rail Improvement
Project. As of February 2004, these investigations were also still
pending. Nothing in this report is intended to have any impact on the
outcome of these suits or investigations, and this work was not performed
in relation to either the suits or the investigations.

Subsequent to completion of our audit work, and in response to Amtrak's
October 2003 comments made on a draft of our report that, because of its
concerns about the litigation, it had withheld critical documents during
our work, Amtrak made available to us additional material related to their
management of the Northeast High-Speed Rail Improvement Project. This
included, among other things, monthly progress reports and quality manuals
that were used for the electrification work and high-speed train
acquisition, selected minutes from Amtrak Board of Directors meetings, and
project schedules that were used to track the progress of various project
components. We reviewed this material at both Amtrak's High-Speed Trainset
office in Philadelphia and at Amtrak's headquarters in Washington, D.C. We
also interviewed a former manager of the Northeast High-Speed Rail
Improvement Project who had not previously been available to us. We
discussed with this individual Amtrak's management of the project. We used
this additional information to further assess Amtrak's management of the
Northeast High-Speed Rail Improvement Project, the effectiveness of this
management, and the extent to which Amtrak involved stakeholders in
project management.

We conducted our work from November 2002 through February 2004 in
accordance with generally accepted government auditing standards.

Appendix II

Northeast Corridor High-Speed Rail Improvement Project Work Elements, by
Category and Status as of March 2003

         Category                      Work element                 Status    
    Trip-time reduction               Realign curves               Incomplete 
(Work elements either Reconfigure Shell interlocking Stamford,  Incomplete 
contributing directly  Conn. station center island platforms    Incomplete 
            to                                                    
lowering trip time or  Reconfigure New Haven, Conn., terminal     Complete 
     permitting higher    area Reconfigure Old Saybrook, Conn.,    Incomplete 
         speeds.)                        station                  
                         Track program (installation of concrete              
                            ties, track resurfacing/relining,     
                                         ballast                  Complete
                                        cleaning)                 
                                   Replace miter rails             Incomplete 
                          Canton Viaduct clearance improvements   Complete    
                           Install 25kV 60Hz center-fed system     Incomplete 
                          Provide clearance for electrification   Complete    
                          Noise and vibration mitigation program   Incomplete 
                          Install signal system compatible with   Complete    
                                     electrification              
                         Extend centralized electrification and               
                         traffic control from New Haven to        Complete
                         Providence                               
                            Install positive stop/civil speed      Incomplete 
                                    enforcement system            
                                  Route 128 improvements          Complete    
                            Kingston, R.I., station intermodal     Incomplete 
                                 transportation facility          
                            Construct Amtrak New Haven service    Complete    
                                         facility                 
                             Procure Amtrak high-speed trains      Incomplete 
                            Grade crossing elimination program     Incomplete 
                         Install approach warning signs and bells Complete    

Appendix II
Northeast Corridor High-Speed Rail
Improvement Project Work Elements, by
Category and Status as of March 2003

                         (Continued From Previous Page)

Category Work element Status

Capacity enhancement Penn Station-extend platform 11 (tracks 20 and 21)
and 5x switch connection Complete

(Work elements providing Reconfigure Harold interlocking Incompletea
additional capacity to South station capacity improvements Incomplete
preserve the 3-hour trip time Reinstall Devon, Conn., to New Haven fourth
track Incomplete
while accommodating higher Construct Shore Line East passing sidings
Incomplete

intercity, commuter, and
freight train frequencies.) Construct New London, Conn., to Providence,
R.I., passing sidings Incomplete

Construct Providence to Boston passing sidings Incomplete

Shore Line East both sides fully accessible stations Incomplete

Provide third track for freight service Incomplete

Reconfigure existing interlockings Incomplete

Install high-speed universal interlockings Complete

Install gauntlet tracks Incomplete

Install new interlockings Unknown

Canton Junction, Mass., to Boston signal modifications Complete

Construct high level platforms Incomplete

Construct Amtrak Boston service facility Complete

Amtrak medium and heavy overhaul facility Unknown

Modify onboard cab signal equipment Unknown

Recapitalization Pelham Bay Bridge replacement Unknown

(Work elements to Walk Bridge/Saga Bridge replacement Incomplete reconstruct or
                  extend the Peck Bridge replacement Complete

      useful life of the railroad's Niantic Bridge replacement Incomplete

                                       ph

with up-to-date building                                                        
codes.) Convert open deck bridges                                               
Complete                                                                        
                                  Replace deteriorated bridges and culverts     
                                  Incomplete                                    
                                  Replace/upgrade overhead bridges in Rhode     
                                  Island Complete                               
                                  Hellgate Line hanging beam removal Incomplete 
                                  New Haven Line substation replacement         
                                  Incomplete                                    
                                  New Haven Line catenary replacement           
                                  Incomplete                                    
                                  Commuter equipment testing Unknown            
                                  Fence selected sensitive areas Complete       
                                  Penn Station fire, life safety improvements   
                                  Incomplete                                    
                                  Step and touch traction return mitigation     
                                  Complete                                      

        ysical assets or to comply Groton Bridge replacement Incomplete

                                  Appendix II
                       Northeast Corridor High-Speed Rail
                     Improvement Project Work Elements, by
                      Category and Status as of March 2003

                         (Continued From Previous Page)

Category Work element Status

Other work elements Reconfigure Kingston station Unknown

(Work elements planned by Construct direct connection to Middleboro,
Mass., secondary Unknown participating organizations in Maintenance and
operating costs allocation study Incomplete addition to those in the
Freight clearance improvements Incomplete above categories.) New Haven
Line go/no-go signal improvements Complete

Install New Haven Line fiber optics system Incomplete

Install public address system Incomplete

Construct pedestrian bridges Incomplete

Shore Line East South Side station relocations Incomplete

Provide improved intercity and commuter parking Incomplete

Provide key station Americans with Disabilities Act access Incomplete

Construct Amtrak station improvements Incomplete

Construct Davisville, R.I., layover facility Unknown

Construct Readville, Mass., layover facility Unknown

Construct New Haven Line and Shore Line East New Haven car storage
yard/New Incomplete Haven Yard modifications

Construct Providence layover facility Incomplete

Construct Connecticut Department of Transportation New Haven shop Complete

Extend Shore Line East from Old Saybrook to New London Complete

Add Rhode Island Department of Transportation Kingston to Providence
service Unknown

Source: GAO analysis of Amtrak, FRA, and commuter railroad data.

aAccording to Long Island Rail Road officials, this work element has been
absorbed into another project.

Appendix III

Methodology Used to Develop a Framework of Best Practices for Managing
Intercity Passenger Rail Infrastructure Projects

This appendix discusses our development of a best practices framework for
the management of large-scale infrastructure projects, including how we
defined and classified best practices, what reports and organizations we
consulted, and what limitations apply to our framework.

Definition and Classification of Best Practices

We defined best practices as those "practices successfully implemented by
organizations recognized for their outstanding capital decision-making
practices."1 Best, or leading, practices can provide a beneficial model
for other organizations to use to improve efficiency and performance. In
this case, best practices form a framework to boost efficiency and
performance when managing large-scale infrastructure projects.

We identified 28 best practices related to project management and grouped
these 28 best practices into five umbrella categories to create a
framework. (See table 2.) These umbrella categories include (1) conducting
comprehensive project planning, (2) assessing risks and identifying
mitigation measures, (3) comprehensively managing project financing, (4)
establishing accountability and oversight, and (5) incorporating the
diverse interests of stakeholders.

                 Table 3: Best Practices, by Framework Category

Conduct comprehensive project planning

Prepare written, comprehensive, long-term plan

Good data and information systems, in addition to effective information
control systems, are essential to supporting sound capital planning and
decision making

Establish goals; goals should be written, clear, and detailed

Establish project master schedule; set milestones and implementation dates

Project plan-a flexible and dynamic document that is reviewed and updated
throughout project

Project plan is used to manage and control project implementation; plan
includes performance measurement baselines for scheduling and cost, major
milestones, target dates, and risks associated with the project

1See GAO/AIMD-99-32.

Appendix III
Methodology Used to Develop a Framework
of Best Practices for Managing Intercity
Passenger Rail Infrastructure Projects

                         (Continued From Previous Page)

Conduct risk assessments

       Conduct risk analysis and manage risks through mitigation measures

    Assess risks regarding schedule, cost, feasibility, and project failure
    Determine how risk affects the technical, legal, political, social, and
         financial aspects of the project from beginning to completion

                   Conduct comprehensive financial management

Cost controls-techniques to restrain actual costs within the limits of the
project budgets while satisfactorily accomplishing project objectives
(critical during construction)

Consider full life-cycle costs of projects Develop good, firm, reasonable,
               realistic cost estimates; maintain cost baselines

Incremental funding may result in project cancellation, schedule slippage,
and rising costs; balance budgetary control and managerial flexibility
when funding capital projects

    Allow for inflation in multiyear projects; include all costs in year of
                                  expenditures

                     Encourage accountability and oversight

Adhere to planned budgets Follow planned schedules with minimal revisions

Measure actual costs and schedules against those in project plan baseline;
investigate deviations

Strengthen accountability for achieving goals
Can break up and fund project in separate phases; funding not guaranteed
from one phase to the next (separate funding for planning)

Key management group functions as a single point-of-contact, and is
responsible for project accomplishment

Establish incentives for accountability-tie performance to pay and
personnel decisions

Hold project managers accountable for meeting cost, schedule, and
performance goals
Monitor project performance against goals (cost and schedule)
Conduct independent assessments and/or reviews
Require reporting to external organizations

Incorporate stakeholder interests

Involve federal, state, local, interest groups, 3rd party service
providers, public, and other stakeholders in strategic planning Conduct
public and community outreach, to include community wishes; satisfy
objections; account for quality of life issues Communicate frequently with
stakeholders

Source: GAO.

                                  Appendix III
                    Methodology Used to Develop a Framework
                    of Best Practices for Managing Intercity
                     Passenger Rail Infrastructure Projects

Literature Reviewed and Organizations Contacted to Identify Best Practices

To identify the 28 best practices, we reviewed literature on, and
interviewed organizations involved in, the management of large-scale
infrastructure projects. This literature included previous GAO reports on
or related to best practices; documents from OMB, FTA, and FHWA. We
primarily relied on our 1998 Executive Guide: Leading Practices in

Capital Decision-Making as a base for the framework.2 We supplemented this
literature with material from FTA's Project and Construction Management
Guidelines, OMB's Capital Programming Guide, and other sources.3

We also interviewed representatives of the following organizations to
substantiate our selection of the best practices identified in the
literature:

o  Alameda Corridor Transportation Authority,

o  Burlington Northern and Santa Fe Railway Company,

o  Connecticut Department of Transportation,

o  CSX Corporation,

o  Federal Highway Administration,

o  Federal Railroad Administration,

o  Federal Transit Administration,

o  Long Island Rail Road,

o  Massachusetts Bay Transportation Authority,

o  Norfolk Southern Corporation,

2See GAO/AIMD-99-32.

3U.S. Department of Transportation, Federal Transit Administration, EG&G
Dynatrend Inc. Project and Construction Management Guidelines, 1996 Update
(Wellesley, Mass.: June 1996). Office of Management and Budget, Capital
Programming Guide Version 1.0, Office of Management and Budget
(Washington, D.C.: July 1997).

                                  Appendix III
                    Methodology Used to Develop a Framework
                    of Best Practices for Managing Intercity
                     Passenger Rail Infrastructure Projects

o  Providence and Worchester Railroad,

o  Rhode Island Department of Transportation, and

o  Union Pacific Railroad.

Limitations	Our report highlights the best practices we identified through
our review of federal agency reports and interviews. As such, it is not
intended to suggest that the identified best practices are the only
methods for managing largescale intercity passenger rail infrastructure
projects or that other management methods are flawed. In addition, our
best practices framework is not meant to be all-inclusive. There may be
other best practices that would also be applicable to the management of
large-scale infrastructure projects. Finally, difficulties in managing the
Northeast High-Speed Rail Improvement Project may have arisen even when
best practices were used. Best practices serve as a useful framework for
effectively managing large-scale intercity passenger rail infrastructure
projects, but they are not meant to cover every aspect of project
management and may not address all problems or difficulties that
organizations encounter during project management.

Appendix IV

Brief History of the Northeast Corridor and Northeast High-Speed Rail
Improvement Projects

Although interest in improving passenger rail service on the Northeast
Corridor dates to the 1960s, it was the Railroad Revitalization and
Regulatory Reform Act of 1976 (4R Act) that formally established the
Northeast Corridor Improvement Project (NECIP)-a program of infrastructure
improvements designed to enable high-speed passenger rail service between
Boston and Washington, D.C. Among other things, the 4R Act established
certain goals for NECIP and authorized Amtrak to make necessary
improvements in its rights-of-way between Boston and Washington, D.C., to
enable high-speed rail service. In particular, by 1981, Amtrak was to have
achieved regularly scheduled and dependable intercity passenger rail
service between Boston and New York City (called the "north-end" of the
Northeast Corridor) in 3 hours 40 minutes, and between New York City and
Washington, D.C. (called the "south-end" of the Northeast Corridor), in 2
hours 40 minutes. The act further directed the Secretary of Transportation
to determine the practicability of establishing regularly scheduled and
dependable passenger rail service between Boston and New York City in 3
hours, and between New York City and Washington, D.C., in 2 hours 30
minutes. The 4R Act authorized $1.75 billion to accomplish these goals.
Congress appropriated about $1.5 billion for fiscal years 1976 to 1980.

FRA initially managed NECIP and developed a program of improvements that
included rehabilitating and upgrading the line between Boston and
Washington, D.C.; electrifying the line between Boston and New Haven,
Connecticut; and rehabilitating and upgrading the track electrification
system between New York City and Washington, D.C. It also included
repairing, rehabilitating, or replacing bridges; eliminating most
railroadhighway grade crossings; and improving stations. Amtrak was a
subcontractor to FRA and was primarily responsible for track and signal
work. The project was to be substantially completed by 1981.

The project began to experience problems early. In a February 1978 report
to Congress, the U.S. Department of Transportation (DOT) concluded that
because of funding problems and a need to better coordinate elements of
the project with various users of the Northeast Corridor (such as commuter
and freight railroads), it was not likely that NECIP would be completed by
1981 and that additional investment in infrastructure improvements and
passenger rail equipment would be required to achieve a 3-hour trip

Appendix IV
Brief History of the Northeast Corridor and
Northeast High-Speed Rail Improvement
Projects

between Boston and New York City.1 In January 1979, DOT further stated not
only that the project had been inadequately planned, but also that another
$750 million would be needed to complete the project (for a total of $2.5
billion). Completion would be delayed until at least 1983.2 In May 1980,
the Passenger Railroad Rebuilding Act of 1980 authorized an additional
$750 million for NECIP. It also required FRA to transfer responsibility
for the project to Amtrak by October 1, 1985. The project's legislative
history suggests that Congress was concerned about the project's schedule
delays and growing costs. Congress was also interested in seeing the
project completed by the transfer date.

Funding difficulties during the 1980s led to changes in the project. (See
fig. 7 for NECIP appropriations.) By January 1982, because of federal
budget constraints, plans for the project had largely eliminated the
construction of many larger-cost items, such as electrifying the line
between New Haven and Boston. According to a former NECIP project
director, these changes also resulted from a desire by the federal
government to hold the project's cost escalation to predetermined levels.

1U.S. Department of Transportation, Two-Year Report on the Northeast
Corridor (February 1978).

2U.S. Department of Transportation, Northeast Corridor Improvement
Project, Redirection Study (January 1979).

Appendix IV
Brief History of the Northeast Corridor and
Northeast High-Speed Rail Improvement
Projects

Figure 7: NECIP Appropriations, Fiscal Years 1976 to 1998

Dollars in millions

600

500

400

300

200

100

0 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 Years

Source: FRA.

Note: In fiscal year 1998 direct appropriations for NECIP ended. However,
after fiscal year 1998 funding for the project was obtained from other
sources, including the Taxpayer Relief Act of 1997.

When FRA transferred NECIP to Amtrak in October 1985, FRA officials
generally considered the project complete in that additional funding for
remaining major work elements was not envisioned.3 A total of about $1.2
billion (out of the $2.5 billion authorized) had been spent on the project
at the time of transfer. Although NECIP achieved significant improvements
to the Northeast Corridor's infrastructure and met some goals of the 4R
Act, such as reducing the travel time between New York City and
Washington, D.C., to 2 hours 40 minutes, it failed to achieve other goals,
such as reducing the travel time between Boston and New York City to 3
hours 40 minutes.4 FRA primarily attributed this shortcoming to a lack of
funds for electrifying the line from New Haven to Boston. Both FRA and
Amtrak officials told us that NECIP had largely focused work on the
south-end of the Northeast Corridor, not the north-end, because of
significant

3Although NECIP was considered generally complete at the time of transfer,
there were still a number of items, such as signal installation and
construction of service facilities, to be finished. These were estimated
to cost about $187 million. As part of the grant agreement, FRA required
Amtrak to complete the construction of all elements of NECIP by September
1988.

4In November 1986, FRA reported that the trip time between Boston and New
York City was 3 hours 57 minutes. See U.S. Department of Transportation,
Northeast Corridor: Achievement and Potential (November 1986).

Appendix IV
Brief History of the Northeast Corridor and
Northeast High-Speed Rail Improvement
Projects

deterioration of the infrastructure on the south-end resulting from years
of deferred maintenance and neglect. In November 1986, DOT reported that
when Congress authorized and funded NECIP in 1976, the Northeast Corridor
had literally begun to disintegrate at both its northern and southern
ends.5

Between 1985 and 1990, funding for NECIP decreased sharply. During this
time, appropriations for the project averaged about $21 million per year,
compared with about $250 million annually during fiscal years 1976 through
1984. As the result of efforts by various organizations in the midand late
1980s, including the Coalition of Northeast Governors,6 interest again
rose in high-speed passenger rail service between New York City and
Boston, because of its potential to mitigate increasing highway and air
congestion, as well as air pollution levels. These efforts culminated in
the 1992 Amtrak Authorization and Development Act. The act required the
Secretary of Transportation to develop a master plan for a coordinated
program of improvements that would result in regularly scheduled, safe,
and dependable passenger rail service between Boston and New York City in
3 hours or less. A total of $470 million was authorized for fiscal years
1993 and 1994 to plan this effort and make capital investments. Congress
actually appropriated $429 million. Amtrak established the Northeast
High-Speed Rail Improvement Project to implement this act.

In July 1994, FRA issued the master plan for the high-speed rail project
required by the Amtrak Authorization and Development Act.7 The plan
established three milestones for the project: (1) initiate electrified
train service between Boston and New York City, (2) initiate 3-hour train
service between these cities, and (3) complete the infrastructure
improvements designed to enhance track capacity and extend the useful life
of existing assets. FRA identified 72 work elements to achieve these
milestones. These work elements related to three main categories-trip-time
improvement, capacity enhancement, and recapitalization of the
infrastructure. The triptime improvements, which included electrifying the
line between Boston

5See U.S. Department of Transportation (1986).

6The Coalition of Northeast Governors is a nonprofit organization formed
to facilitate communication between the governors of states in the
Northeast. It conducts studies of various issues, including
transportation. The states represented are those in the Northeast, from
New Jersey to Maine.

7U.S. Department of Transportation (1994).

Appendix IV
Brief History of the Northeast Corridor and
Northeast High-Speed Rail Improvement
Projects

and New Haven and acquiring high-speed trains, were intended to either
directly lower trip times or increase trains' operating speeds. The
capacity enhancements, such as reconfiguring "interlockings" (where trains
can switch from one track to another track), were intended to maintain the
3hour trip time while accommodating the increased train traffic planned by
Amtrak and other users of the Northeast Corridor. The recapitalization
improvements, such as replacing various bridges, were intended to rebuild
or extend the useful life of the Northeast Corridor.

FRA's plan estimated that the total cost of the trip time, capacity, and
recapitalization improvements would be about $3.1 billion (in constant
1993 dollars) and that the project would be completed by January 1, 2010.
Electrification was to be completed by the fall of 1997, and there was to
be full 3-hour service between Boston and New York City in 2001. The plan
assumed adequate funding from the federal government and users of the
Northeast Corridor (such as commuter railroads), as well as close
coordination of the project's work elements between Amtrak and various
stakeholders, such as states, transportation agencies, and commuter
railroads. Coordination with stakeholders was particularly important,
since (1) Amtrak did not own various sections of the north-end of the
Northeast Corridor, including the sections between New Haven, Connecticut,
and New Rochelle, New York, and between Boston and the Massachusetts/Rhode
Island state line, and (2) there was significant commuter railroad traffic
on the north-end of the corridor.

Amtrak was the manager of the Northeast High-Speed Rail Improvement
Project and began work using both contractors and its own workforce. It
relied on contractors primarily to electrify the line and manufacture the
high-speed trains. Amtrak used its own workforce to perform infrastructure
work, such as track improvements and signal work. Amtrak initiated
electrified service in January 2000, even though the electrification work
was not substantially completed until July 2000.8 High-speed rail service
was initiated in December 2000. Through March 2003, a total of about $3.2
billion had been spent-about $2.6 billion by Amtrak and an additional $625
million by commuter rail agencies and state governments.

8According to Amtrak, as of March 2003, the electrification work had not
yet been fully completed, since the corporation had not yet accepted the
work and certified it as complete. In addition, there were a number of
contract claims that had been filed but not yet settled.

Appendix V

Selected Sources of Best Practices for Managing Large-Scale Infrastructure
Projects

GAO Products	Federal-Aid Highways: Cost and Oversight of Major Highway and
Bridge Projects-Issues and Options. GAO-03-764T. Washington, D.C.: May 8,
2003.

Mass Transit: Many Management Successes at WMATA, but Capital Planning
Could Be Enhanced. GAO-01-744. Washington, D.C.: July 2, 2001.

Executive Guide: Leading Practices in Capital Decision-Making.

GAO/AIMD-99-32. Washington, D.C.: December 1998.

Non-GAO Products	U.S. Department of Transportation, Federal Highway
Administration. FHWA Major Projects-Resource Manual for Oversight
Managers. Washington, D.C.: January 2002.
http://www.fhwa.dot.gov/programadmin/mega/mega.htm (viewed 5/19/03).

U.S. Department of Transportation, Federal Highway Administration. FHWA
Guidance-Financial Plans. Washington, D.C.: May 2000.
http://www.fhwa.dot.gov/programadmin/contracts/fpgatt.htm (viewed
5/19/03).

Office of Management and Budget. Capital Programming Guide Version 1.0,
Supplement to Circular A-11, Part 3: Planning, Budgeting, and Acquisition
of Capital Assets. Washington, D.C.: July 1997.

U.S. Department of Transportation, Federal Transit Administration. EG&G
Dynatrend Inc., Project and Construction Management Guidelines, 1996
Update. Wellesley, Mass.: June 1996.

Appendix VI

Comments from the National Railroad Passenger Corporation

Appendix VI
Comments from the National Railroad
Passenger Corporation

Appendix VI
Comments from the National Railroad
Passenger Corporation

Appendix VI
Comments from the National Railroad
Passenger Corporation

Appendix VI
Comments from the National Railroad
Passenger Corporation

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