1. Operational Issues for Rail Projects APTA Legal Affairs Seminar 2008 Janie Sheng K&L Gates LLP janie.sheng@klgates.com (202) 778-9855

2. 2 Shared Use  What type of share?  Shared Corridor  Shared Track

3. 3 (cont’d)  Shared Corridor:  no major freight vs. passenger capacity issues  lower insurance cost  don’t have to use FRA-compliant equipment

4. 4 (cont’d)  Shared Track  Must use FRA-compliant equipment  i.e. vehicles that meet FRA safety and crashworthiness requirements for use on the general railroad system. See 49 CFR 238.  Otherwise, secure a waiver from FRA requirements for use of non-compliant vehicles.

5. 5 (cont’d)  FRA essentially requires temporal separation as part of the operation plan in Shared Track situations.

6. 6 Rail Line Capacity  Besides price, the most important issue for freight railroads is capacity on the line.  Capacity constraints are worse in dense urban freight corridors.

7. 7 (cont’d)  Tension between how many passenger trains public agency wants to run vs. how many trains freight railroads need to run.  Commission a capacity analysis.  Freight railroads will want to preserve the right to run additional freight.

8. 8 (cont’d)  Public agencies need to make sure freight railroads don’t have the right for future expansion and use up passenger rail capacity.

9. 9 Operations and Maintenance  Will you be purchasing the railroad right-of-way?  If NOT, then  Freight railroads may want to drive your passenger trains.  On-time performance issues.  Freight railroads may want to perform maintenance of way.  Public agency can still perform maintenance on passenger equipment.

10. 10 (cont’d)  If purchasing railroad right-of-way and track  More likely that public agency will be able to drive own trains and maintain own property.

11. 11 Liability and Insurance  “But for” liability protection.  Freight railroads want public agencies to indemnify them against any and all claims  Arising from grant of access, or  Provision of passenger rail service  Regardless of negligence  That would not have arisen but for the existence of the passenger rail service.

12. 12 (cont’d)  Public agencies should expect “but for” liability even if purchasing right-of-way.

13. 13 (cont’d)  How do public agencies manage the risk?  Insurance  Usually self-insurance + policies  Huge cost item for public agencies

14. 14 (cont’d)  Amtrak Reform and Accountability Act  Federal statute limits rail passenger liability to $200 million per occurrence.  Clearly applies to Amtrak  Appears to apply to commuter rail  Unclear whether it applies to third party claims

15. 15 (cont’d)  The industry has talked about establishing a Captive Insurance Pool with other passenger rail providers for lower premiums.

16. 16 The End.