All of the proposed commuter rail  agencies have purchased or plan to purchase, lease, or pay to access  existing rights-of-way from freight railroads or other entities. 2.) 1.) When the commuter rail owns rights-of-way, there  is a role reversal between the freight railroad and the commuter rail  agencies from the typical relationship—that is, if a freight railroad uses the  commuter rail agency’s rights-of-way, the commuter rail agency is the host  and the freight railroad is the tenant. Commuter Rail Agencies and Freight Railroads Face Numerous Challenges in Negotiating and Sharing Rights-of-Way

According to officials from commuter rail agencies and freight railroads,  negotiating and sharing access to the same rights-of-way can be  challenging. As a result, freight railroads typically require that the commuter rail  agency contractually indemnify them from any liability in the event of a  passenger accident, and procure a certain level of insurance coverage to  guarantee the commuter rail agency’s ability to pay for all of the damages. Accepting these liability terms can be financially problematic for the  commuter rail agencies. Specifically, the act limits the aggregate overall damages that may be  awarded to all passengers for all claims (including punitive damages) from  a particular rail accident to $200 million. The act also permits Amtrak and  other providers of rail transportation to enter into indemnification  agreements allocating financial responsibility for passenger accidents. In  discussions with officials from commuter rail agencies and freight  railroads, we found some confusion as to whether the liability cap  established in the ARAA applies to commuter rail agencies. After  reviewing the legislation, we have concluded that the liability cap applies  to commuter rail operations on the basis of the plain language of the  statute and our review of the pertinent legislative history. Although there is no template for success, officials from commuter rail  agencies and freight railroads identified conditions or actions that can  help facilitate mutually beneficial arrangements between commuter rail  agencies and freight railroads. Although the officials discussed a range of ideas related to these themes,  there were several recurring suggestions, including understanding each  other’s position, identifying and using incentives to leverage cooperation,  securing adequate and flexible funding to help improve capacity and  infrastructure, and establishing good communication between both parties  (see fig. Three federal  agencies— FRA, FTA, and STB—have responsibility for different aspects  of rail transportation. FTA does not currently play a role in commuter rail access issues. Commuter Rail Agencies and Freight Railroads Have Differing Views on the Appropriate Role of the Federal Government

Commuter rail agencies and freight railroads do not agree on the  appropriate role for the federal government in commuter and freight rail  access issues. Recommendation

In order to facilitate and inform negotiations between commuter rail  agencies and freight railroads, we recommend that the Secretary of  Transportation and the Chairman of the Surface Transportation Board  determine whether it would be appropriate and useful for them to provide  guidance and information, such as tips for successful negotiations and  information on best practices, availability of federal resources, and the  applicability of the liability provisions in the Amtrak Reform and  Accountability Act of 1997, to commuter rail agencies and freight  railroads.
Why GAO Did This Study

Commuter and freight rail services have the potential to play increasingly important roles in the nation's economy and transportation system as demand for these services increases. Because the cost of building new infrastructure can be costprohibitive, commuter rail agencies typically seek to use existing infrastructure--which is primarily owned by private freight railroads. Consequently, commuter rail agencies must negotiate to purchase, lease, or pay to access the existing infrastructure from freight railroads. GAO was asked to examine (1) the challenges commuter rail agencies and freight railroads face when negotiating and sharing rights-of-way, (2) the actions that help facilitate mutually beneficial arrangements between commuter rail agencies and freight railroads, and (3) the role the federal government plays in negotiations between commuter rail agencies and freight railroads.

What GAO Found

Freight railroads and commuter rail agencies face a number of challenges when negotiating agreements and sharing access to the same rights-of-way, including reaching agreement on compensation, capacity, and liability issues. For instance, in negotiating the agreements, freight railroads typically require that the commuter rail agency contractually indemnify them from any liability in the event of a commuter rail accident and procure a certain level of insurance coverage. Officials from freight railroads said they seek these provisions to protect their shareholders from the potential costs associated with commuter rail accidents. However, accepting these liability terms--notably the expense of maintaining a high level of insurance--can be problematic for the commuter rail agencies. In 1997, Congress limited the aggregate damages that may be awarded to all passengers from claims from a particular rail accident to $200 million and permitted providers of rail transportation to enter into indemnification agreements. However, we found some confusion within the commuter and freight rail community as to whether the liability cap applied to commuter rail agencies, which could result in problems during negotiations. After reviewing the legislation, we have concluded that the liability cap applies to commuter rail operations. Although there is no exact formula for success, officials from commuter rail agencies and freight railroads identified actions that can help facilitate mutually beneficial arrangements--understanding each other's position, identifying and using incentives to leverage cooperation, securing adequate and flexible funding, and establishing good lines of communication. Although commuter rail agencies and freight railroads agreed on actions that could help facilitate win/win arrangements, they disagreed on the appropriate role for the federal government in negotiating access or resolving disputes between commuter rail agencies and freight railroads. The Federal Transit Administration (FTA), Federal Railroad Administration, and Surface Transportation Board (STB) have responsibility for different aspects of rail transportation. For example, FTA helps fund the planning and development of eligible commuter rail projects. However, none of the three agencies play a role in commuter rail access negotiations. Therefore, they have not provided any guidance or information to commuter rail agencies or freight railroads to facilitate and inform negotiations.