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Corridor Improvements Demonstrates Need for Applying Best Practices'
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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:
[Hyperlink, http: //www.gao.gov/cgi-bin/getrpt?GAO-04-94]:
GAO Highlights:
Highlights of GAO-04-94, a report to the Chairman, Committee on
Commerce, Science, and Transportation, U.S. Senate
Why GAO Did This Study:
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.
What GAO Found:
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 3-
hour 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.
What GAO Recommends:
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 heckerj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Northeast High-Speed Rail Improvement Project Has Not Achieved Trip-
Time Goal:
Amtrak Did Not Exercise Effective Management of the Northeast High-
Speed Rail Improvement Project:
FRA's Oversight of the Northeast High-Speed Rail Improvement Project
Was Limited:
Best Practices Framework Would Support Effective Management of Large-
Scale Intercity Passenger Rail Infrastructure Projects:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Northeast Corridor High-Speed Rail Improvement Project
Work Elements, by Category and Status as of March 2003:
Appendix III: Methodology Used to Develop a Framework of Best Practices
for Managing Intercity Passenger Rail Infrastructure Projects:
Definition and Classification of Best Practices:
Literature Reviewed and Organizations Contacted to Identify Best
Practices:
Limitations:
Appendix IV: Brief History of the Northeast Corridor and Northeast
High-Speed Rail Improvement Projects:
Appendix V: Selected Sources of Best Practices for Managing Large-Scale
Infrastructure Projects:
GAO Products:
Non-GAO Products:
Appendix VI: Comments from the National Railroad Passenger Corporation:
Tables:
Table 1: FRA's Estimated Cost of the Project, by Major Category:
Table 2: Amounts Spent by Amtrak on the Northeast High-Speed Rail
Improvement Project, by Category of Spending, as of March 2003:
Table 3: Best Practices, by Framework Category:
Figures:
Figure 1: Ownership of the Northeast Corridor:
Figure 2: Status of Work Elements Listed in FRA's 1994 Master Plan, by
Milestones, as of March 2003:
Figure 3: Geographic Location of Remaining Work Elements and Major
Beneficiaries, as of March 2003:
Figure 4: Growth in Estimated Cost of Route Electrification, May 1992
to March 2003:
Figure 5: Best Practices Framework for Managing Large-Scale
Infrastructure Projects:
Figure 6: Critical Path Method Graphical Representation of Project
Schedule:
Figure 7: NECIP Appropriations, Fiscal Years 1976 to 1998:
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:
Letter 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)[Footnote 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;[Footnote 2] upgrading
and improving tracks, signals, and other infrastructure; and acquiring
26 high-speed 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."[Footnote 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 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.[Footnote 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. 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.[Footnote 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.
Figure 1: Ownership of the Northeast Corridor:
[See PDF for image]
[End of figure]
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
high-speed 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.[Footnote 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
trip-time 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 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 3-hour service by 1999.[Footnote 7] FRA
estimated a cost of about $3.1 billion (in 1993 dollars)[Footnote 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 large-scale 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 high-speed rail corridors and that those states
had invested more than $1 billion to improve local rail lines for that
purpose.[Footnote 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.[Footnote 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 three-quarters 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.[Footnote 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
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 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:
* Initiate electrified service. This milestone consisted of 16 work
elements[Footnote 12] 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.
* 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.
* 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
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:
* 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;
* capacity enhancement--18 work elements were designed to enhance
capacity by, for example, reconfiguring interlockings to accommodate
traffic growth;
* recapitalization--15 work elements were designed to rebuild or extend
the useful life of the infrastructure by, for example, replacing
bridges;[Footnote 13] and:
* 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 about $1.2 billion for recapitalization. FRA did not
include a cost estimate for the 19 other work elements.[Footnote 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.
Trip-time reduction;
Number of work elements: 20;
Estimated cost[A]: $1,255.1.
Capacity enhancement;
Number of work elements: 18;
Estimated cost[A]: 606.4.
Recapitalization;
Number of work elements: 15;
Estimated cost[A]: 1,230.4.
Other;
Number of work elements: 19;
Estimated cost[A]: [B].
Total;
Number of work elements: 72;
Estimated cost[A]: $3,091.9.
Source: GAO analysis of FRA data.
[A] In 1993 dollars.
[B] Not available.
[End of table]
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 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.[Footnote 15]
Figure 2: Status of Work Elements Listed in FRA's 1994 Master Plan, by
Milestones, as of March 2003:
[See PDF for image]
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).
[End of figure]
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 2000[Footnote 16]--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.[Footnote 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 under design.
Amtrak said that this, in conjunction with completion of the
Connecticut Department of Transportation's catenary[Footnote 18]
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.
Figure 3: Geographic Location of Remaining Work Elements and Major
Beneficiaries, as of March 2003:
[See PDF for image]
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.
[End of figure]
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)[Footnote
19] project cost estimated in FRA's 1994 master plan. Amtrak has spent
about $2.6 billion[Footnote 20] and three commuter railroads, two
freight railroads, and two state governments have spent about $625
million.[Footnote 21] Most of Amtrak's spending was for the acquisition
of high-speed trains and related maintenance facilities (about $1.1
billion),[Footnote 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.
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.
Acquisition of trains, locomotives, and maintenance facilities;
Amount spent: $1,127.2.
Electrification;
Amount spent: 716.7.
Track and infrastructure;
Amount spent: 652.1.
Environmental impact statement mitigation activities;
Amount spent: 94.7.
Product development;
Amount spent: 33.8.
Total;
Amount spent: $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.
[End of table]
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:
[See PDF for image]
[A] The 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.
[B] Contract 2 was scheduled for completion in October 1999.
[End of figure]
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.[Footnote 23]
Through March 2003, Amtrak had spent about $1.1 billion for these
items. Amtrak attributed much of the cost 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.[Footnote 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.[Footnote 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,
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.[Footnote 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.[Footnote 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 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
high-speed 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.[Footnote
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 program-level
(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 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 short-term funding
shortfalls for individual work components and not longer-term 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 trip-time 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 It Had Limited Authority to Oversee the
Project:
In general, FRA adopted the position that it lacked specific authority
to oversee the Northeast High-Speed Rail Improvement Project. According
to 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
program[Footnote 29] to better safeguard the federal investment in
transit projects funded through the agency's fixed guideway grants
program (called the "New Starts" program).[Footnote 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 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.[Footnote 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.[Footnote 32]
Federal laws and requirements dictated FRA's involvement with these
activities:
* 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.
* 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 1992[Footnote
33] 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 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.[Footnote 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.
* 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 high-speed
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),[Footnote 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 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.[Footnote 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 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.[Footnote 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,[Footnote 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:
* 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.[Footnote 39]
* Assess risks and identify mitigation measures. Early identification
and assessment of risks to a project allow for prompt intervention.
* Comprehensively manage the project's finances. Tools for financial
management can include project financial plans that provide for
accurately estimating and effectively controlling costs.
* 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.
* 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:
[See PDF for image]
[A] Preconstruction 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.
[B] Not applicable--postconstruction elements of risk assessment and
financial management may be captured under project lessons learned or
other categories.
[End of figure]
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.[Footnote 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.[Footnote 41]
Plans for individual projects can take years to complete. For instance,
preconstruction planning for the Alameda Corridor Project lasted more
than a decade.[Footnote 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 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.[Footnote 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.[Footnote 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.[Footnote 45] Assessing and mitigating risks reduces the
probability of later encountering problems that can cause cost
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:
[See PDF for image]
[End of figure]
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.[Footnote 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 Inspector General testified before
Congress that, in his opinion, financial plans should be prepared for
projects costing $100 million or more.[Footnote 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,[Footnote 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
funding can result in poor planning, higher costs, delays, and even a
project's termination.[Footnote 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.[Footnote 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 higher-quality, 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.[Footnote 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.[Footnote 52]
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.[Footnote 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.[Footnote 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 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:
* Preparation of comprehensive project management plans that are
updated as needed.
* Preparation of comprehensive project financial plans that are updated
at least annually.
* 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.
* 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.
* 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
non-stop 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 trip-time 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
long-term, 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
[Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-2834 or [Hyperlink, heckerj@gao.gov]. Key
contributors to this report included Matthew Cail, Elizabeth
Eisenstadt, Bert Japikse, Richard Jorgenson, Nancy Lueke, Steve Martin,
and E. Jerry Seigler.
Sincerely yours,
Signed by:
JayEtta Z. Hecker:
Director, Physical Infrastructure Issues:
[End of section]
Appendixes:
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 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.
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.
[End of section]
Appendix II: Northeast Corridor High-Speed Rail Improvement Project
Work Elements, by Category and Status as of March 2003:
Category: Trip-time reduction;
(Work elements either contributing directly to lowering trip time or
permitting higher speeds)
Category: Trip-time reduction;
Work element: Realign curves;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Reconfigure Shell interlocking;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Stamford, Conn. station center island platforms;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Reconfigure New Haven, Conn., terminal area;
Status: Complete.
Category: Trip-time reduction;
Work element: Reconfigure Old Saybrook, Conn., station;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Track program (installation of concrete ties, track
resurfacing/relining, ballast cleaning);
Status: Complete.
Category: Trip-time reduction;
Work element: Replace miter rails;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Canton Viaduct clearance improvements;
Status: Complete.
Category: Trip-time reduction;
Work element: Install 25kV 60Hz center-fed system;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Provide clearance for electrification;
Status: Complete.
Category: Trip-time reduction;
Work element: Noise and vibration mitigation program;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Install signal system compatible with electrification;
Status: Complete.
Category: Trip-time reduction;
Work element: Extend centralized electrification and traffic control
from New Haven to Providence;
Status: Complete.
Category: Trip-time reduction;
Work element: Install positive stop/civil speed enforcement system;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Route 128 improvements;
Status: Complete.
Category: Trip-time reduction;
Work element: Kingston, R.I., station intermodal transportation
facility;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Construct Amtrak New Haven service facility;
Status: Complete.
Category: Trip-time reduction;
Work element: Procure Amtrak high-speed trains;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Grade crossing elimination program;
Status: Incomplete.
Category: Trip-time reduction;
Work element: Install approach warning signs and bells;
Status: Complete.
Category: Capacity enhancement;
(Work elements providing additional capacity to preserve the 3-hour
trip time while accommodating higher intercity, commuter, and freight
train frequencies)
Category: Capacity enhancement;
Work element: Penn Station--extend platform 11 (tracks 20 and 21) and
5x switch connection;
Status: Complete.
Category: Capacity enhancement;
Work element: Reconfigure Harold interlocking;
Status: Incomplete[A].
Category: Capacity enhancement;
Work element: South station capacity improvements;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Reinstall Devon, Conn., to New Haven fourth track;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Construct Shore Line East passing sidings;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Construct New London, Conn., to Providence, R.I.,
passing sidings;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Construct Providence to Boston passing sidings;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Shore Line East both sides fully accessible stations;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Provide third track for freight service;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Reconfigure existing interlockings;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Install high-speed universal interlockings;
Status: Complete.
Category: Capacity enhancement;
Work element: Install gauntlet tracks;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Install new interlockings;
Status: Unknown.
Category: Capacity enhancement;
Work element: Canton Junction, Mass., to Boston signal modifications;
Status: Complete.
Category: Capacity enhancement;
Work element: Construct high level platforms;
Status: Incomplete.
Category: Capacity enhancement;
Work element: Construct Amtrak Boston service facility;
Status: Complete.
Category: Capacity enhancement;
Work element: Amtrak medium and heavy overhaul facility;
Status: Unknown.
Category: Capacity enhancement;
Work element: Modify onboard cab signal equipment;
Status: Unknown.
Category: Recapitalization;
(Work elements to reconstruct or extend the useful life of the
railroad's physical assets or to comply with up- to-date building
codes)
Category: Recapitalization;
Work element: Pelham Bay Bridge replacement;
Status: Unknown.
Category: Recapitalization;
Work element: Walk Bridge/Saga Bridge replacement;
Status: Incomplete.
Category: Recapitalization;
Work element: Peck Bridge replacement;
Status: Complete.
Category: Recapitalization;
Work element: Niantic Bridge replacement;
Status: Incomplete.
Category: Recapitalization;
Work element: Groton Bridge replacement;
Status: Incomplete.
Category: Recapitalization;
Work element: Convert open deck bridges;
Status: Complete.
Category: Recapitalization;
Work element: Replace deteriorated bridges and culverts;
Status: Incomplete.
Category: Recapitalization;
Work element: Replace/upgrade overhead bridges in Rhode Island;
Status: Complete.
Category: Recapitalization;
Work element: Hellgate Line hanging beam removal;
Status: Incomplete.
Category: Recapitalization;
Work element: New Haven Line substation replacement;
Status: Incomplete.
Category: Recapitalization;
Work element: New Haven Line catenary replacement;
Status: Incomplete.
Category: Recapitalization;
Work element: Commuter equipment testing;
Status: Unknown.
Category: Recapitalization;
Work element: Fence selected sensitive areas;
Status: Complete.
Category: Recapitalization;
Work element: Penn Station fire, life safety improvements;
Status: Incomplete.
Category: Recapitalization;
Work element: Step and touch traction return mitigation;
Status: Complete.
Category: Other work elements;
(Work elements planned by participating organizations in addition to
those in the above categories)
Category: Other work elements;
Work element: Reconfigure Kingston station;
Status: Unknown.
Category: Other work elements;
Work element: Construct direct connection to Middleboro, Mass.,
secondary;
Status: Unknown.
Category: Other work elements;
Work element: Maintenance and operating costs allocation study;
Status: Incomplete.
Category: Other work elements;
Work element: Freight clearance improvements;
Status: Incomplete.
Category: Other work elements;
Work element: New Haven Line go/no-go signal improvements;
Status: Complete.
Category: Other work elements;
Work element: Install New Haven Line fiber optics system;
Status: Incomplete.
Category: Other work elements;
Work element: Install public address system;
Status: Incomplete.
Category: Other work elements;
Work element: Construct pedestrian bridges;
Status: Incomplete.
Category: Other work elements;
Work element: Shore Line East South Side station relocations;
Status: Incomplete.
Category: Other work elements;
Work element: Provide improved intercity and commuter parking;
Status: Incomplete.
Category: Other work elements;
Work element: Provide key station Americans with Disabilities Act
access;
Status: Incomplete.
Category: Other work elements;
Work element: Construct Amtrak station improvements;
Status: Incomplete.
Category: Other work elements;
Work element: Construct Davisville, R.I., layover facility;
Status: Unknown.
Category: Other work elements;
Work element: Construct Readville, Mass., layover facility;
Status: Unknown.
Category: Other work elements;
Work element: Construct New Haven Line and Shore Line East New Haven
car storage yard/New Haven Yard modifications;
Status: Incomplete.
Category: Other work elements;
Work element: Construct Providence layover facility;
Status: Incomplete.
Category: Other work elements;
Work element: Construct Connecticut Department of Transportation New
Haven shop;
Status: Complete.
Category: Other work elements;
Work element: Extend Shore Line East from Old Saybrook to New London;
Status: Complete.
Category: Other work elements;
Work element: Add Rhode Island Department of Transportation Kingston to
Providence service;
Status: Unknown.
Source: GAO analysis of Amtrak, FRA, and commuter railroad data.
[A] According to Long Island Rail Road officials, this work element has
been absorbed into another project.
[End of table]
[End of section]
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."[Footnote 55] 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.
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.
[End of table]
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.[Footnote 56] We
supplemented this literature with material from FTA's Project and
Construction Management Guidelines, OMB's Capital Programming Guide,
and other sources.[Footnote 57]
We also interviewed representatives of the following organizations to
substantiate our selection of the best practices identified in the
literature:
* Alameda Corridor Transportation Authority,
* Burlington Northern and Santa Fe Railway Company,
* Connecticut Department of Transportation,
* CSX Corporation,
* Federal Highway Administration,
* Federal Railroad Administration,
* Federal Transit Administration,
* Long Island Rail Road,
* Massachusetts Bay Transportation Authority,
* Norfolk Southern Corporation,
* Providence and Worchester Railroad,
* Rhode Island Department of Transportation, and:
* 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 large-scale 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.
[End of section]
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
railroad-highway 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 between Boston and New York City.
[Footnote 58] 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.[Footnote 59]
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.
Figure 7: NECIP Appropriations, Fiscal Years 1976 to 1998:
[See PDF for image]
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.
[End of figure]
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.[Footnote 60] 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.[Footnote
61] 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
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.[Footnote 62]
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 mid-and late 1980s, including the Coalition of Northeast
Governors,[Footnote 63] 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.[Footnote 64] 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 trip-time
improvements, which included electrifying the line between Boston 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 3-hour 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.[Footnote 65] 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.
[End of section]
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.
Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-764T]
Washington, D.C.: May 8, 2003.
Mass Transit: Many Management Successes at WMATA, but Capital Planning
Could Be Enhanced.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-744]
Washington, D.C.: July 2, 2001.
Executive Guide: Leading Practices in Capital Decision-Making.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?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.
[Hyperlink, 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.
[Hyperlink, 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.
[End of section]
Appendix VI: Comments from the National Railroad Passenger Corporation:
NATIONAL RAILROAD PASSENGER CORPORATION:
60 Massachusetts Avenue, NE,
Washington, DC 20002
tel 202 906.3960
fax 202 906.2850:
AMTRAK:
David L. Gunn:
President and Chief Executive Officer:
February 12, 2004:
Ms. JayEtta Z. Hecker
Director:
Physical Infrastructure Team:
United States General Accounting Office
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Hecker:
Amtrak appreciates the opportunity to review GAO's Report on the
management of Northeast High-Speed Rail Improvement Projects
("Northeast Projects"). These Projects represented an important first
step in this country in the development and implementation of high-
speed corridor service. Clearly, the success of future projects like
this will depend on appropriate levels of funding, accountable project
management and oversight, and comprehensive yet flexible project
planning.
Upon my arrival as President and Chief Executive Officer of Amtrak in
May of 2002,1 immediately restructured Amtrak's management and budget
processes. It was my belief that the Company had lost focus in a number
of critical areas including management of Capital projects. We have
gotten control of our budget and we have streamlined the organization -
reducing duplication and establishing clear lines of authority and
accountability. Our recently published Five-Year Strategic Plan is
based on accountable project management and comprehensive budget-based
financial controls.
The comments in the Report regarding Amtrak's management of the
Northeast Projects, which spanned nearly a ten-year period, raise many
of the same issues that I have had to address during my brief tenure at
Amtrak. Indeed, on a regular basis, I deal with many of the
consequences of decisions made during the life of these Projects. It is
safe to say that I would have handled certain issues differently, but
it would be unfair of me to comment, with the benefit of hindsight, on
specific historical decisions. I would make two general observations,
however.
1. It is clear that the Northeast Projects suffered, especially during
the early critical years, from a lack of certain and dependable federal
funding. The amount of financial support from year-to-year was
inconsistent; in some years, funding was earmarked for specific
projects, while in other years the funding was in the form of a general
capital appropriation. Though I doubt that the
nation will undertake soon another rail development project of the size
and complexity of the Northeast Projects, the success of any future
project will require certain and dependable federal financial support.
Effective project planning and financial accountability is extremely
difficult to achieve if the amount of and uses for financial support is
uncertain from year-to-year. With regard to the Master Plan repeatedly
referenced in your Report, it appears to have been more of a wish list
than a plan. Amtrak apparently did not use it as a planning tool for
the Northeast Projects and we have not used it in developing our
current Strategic Plan applicable to Northeast Corridor infrastructure
improvements. Our current plan to bring the Northeast Corridor to a
state of good repair is, in fact, far more detailed than the Master
Plan.
2. I note the Report recommendations regarding adoption of best
practices for future projects. These practices strike me as common
sense approaches to sound project management and financial
accountability. While Amtrak does not currently have any projects of
the magnitude of the Northeast Projects, we have incorporated, as
appropriate, many of these practices as part of the management
restructuring, project accountability and budget-based financial
reporting changes that I have implemented since my arrival in May 2002.
Amtrak's management of the Fire and Life Safety Tunnel Project in New
York and the Oakland Maintenance Facility in California are examples of
projects on which some of these changes are being implemented.
We have also enclosed additional general comments to the Report and we
would appreciate their inclusion in the Report.
Sincerely,
Signed by:
David L. Gunn:
President and ChiefExecutive Officer:
Enclosures:
Comments of the National Railroad Passenger Corporation on the GAO's
Report to the Chairman, Committee on Commerce, Science, and
Transportation, U. S. Senate concerning, Amtrak's Management of
Northeast Corridor Improvements:
1. GAO's investigation of Amtrak's management of High Speed Rail
Improvement Projects focused on three components: 1) Amtrak's
acquisition of high speed electric trainsets and locomotives ("Trainset
Acquisition Project"); 2) electrification of the Northeast corridor
between New Haven and Boston ("Northend Electrification Project"); and
3) other infrastructure improvements to the Northeast Corridor between
New York City and Boston. GAO was informed by Amtrak at the beginning
of the investigation that with respect to the Trainset Acquisition and
Northend Electrification Projects - the two most significant components
of Amtrak's high speed program in terms of budget (together, these
Projects represent approximately two-thirds of the funds expended to
date by Amtrak on its high-speed rail program) and scope - -Amtrak was
involved in complex and extended litigation with the contractors for
these Projects involving potentially millions of dollars of losses and
damages. The GAO assured Amtrak that it did not intend to affect the
course or result of the litigation and for the most part it
successfully steered clear of issues relevant to the litigation during
the course of the investigation.
Because of this ongoing litigation involving the Northend
Electrification and Trainset Acquisition Projects, Amtrak is not in a
position to provide specific comments with respect to the Report's
findings and conclusions as such may be impacted by the specific
allegations in these cases. However, Amtrak's inability to comment
should not be considered agreement by Amtrak that the Report is
factually accurate or complete, or that the GAO's investigation of
these matters and release of the Report, at this time, are appropriate.
In general, Amtrak would note that issues related to project
management, costs, schedule and utilization of best practices are
directly related to allegations raised in the litigation of these
Projects. This information is essential to understanding Amtrak's
management of high-speed projects in general. The GAO did not consider
in its Report how the actions of the contractors for these Projects
affected Amtrak's management of these Projects and its overall program.
For instance, the contractor for the Northend Electrification Project
is currently being investigated by the United States Department of
Justice ("DOJ") for possible civil and criminal fraud violations in
connection with their handling of that Project. Given the working
relationship between Amtrak and the contractor on this very important
Project, the outcome of DOJ's investigation would most certainly impact
a determination of whether the scheduling, budget and other aspects of
Amtrak's management of the Project were appropriate. Accordingly, the
GAO's investigation of Amtrak's management of these Projects and its
high-speed program was limited, and Amtrak believes that the findings
of fact and conclusions of the Report are necessarily incomplete.
2. The Report's reliance on the FRA Master Plan as the key source
document to establish criteria for costs and schedules for measuring
Amtrak's management of work elements included in that Plan is
misplaced. Amtrak did not specifically adopt the Plan or manage its
high-speed projects in accordance with it. The GAO acknowledges this
fact in its Report yet insists nonetheless in measuring Amtrak's
performance against the Plan. By 1994, when the Plan was released,
Amtrak's high-speed work program was already fully underway. In fact,
by that time, Amtrak was already in the process of replacing its
initial electrification contractor and the Environmental Impact
Statement for the Northend Electrification Project, which ultimately
identified a number of new mitigation projects, was in process.
The FRA's Master Plan essentially amounted to a collection and
integration of wish lists of potential projects identified by Amtrak,
the FRA and the commuter authorities for ways to address deferred
maintenance of the rail line, reduce trip time and improve reliability
as the commuter and intercity service increased. The Plan predates any
serious or in-depth engineering of the identified projects or any
environmental reviews. Indeed, a number of the projects either proved
inappropriate, not capable of implementation, or environmentally
unjustified once further examined. The Master Plan does not attempt to
prioritize the work or fully define the scope of any of the projects.
Some of the improvements were, in fact, included in Amtrak's work
program, only to be deleted at a later date due to cost - e.g.,
replacement of the Thames and Niantic River bridges. Other work
continues to this day - e.g., Amtrak has an extensive program under way
with Metro North and the State of Connecticut to continue the curve
modification program and implement the Shell interlocking improvements.
Because none of the complexities of this work was ever considered in
the Master Plan, it does not represent an accurate cost estimate or
work schedule for the various projects.
Finally, GAO's focus on the Master Plan as the exclusive measuring
stick for evaluating progress on high-speed projects fails to take into
account the dynamic nature of the overall program in particular as it
relates to the initial 3-hour trip time goal between Boston and New
York and the comparative costs and benefits associated with the various
additional infrastructure projects necessary to achieve that goal. By
as early as 1995, it was assumed that the 3-hour trip time could only
be achieved using a non-stop high-speed train between Boston and New
York. Regularly scheduled service with intermediate stops was planned
for 3' 10". Amtrak's current schedule is approximately 15 minutes off
that revised goal with elimination of this time possible once ACSES is
fully implemented and other track improvements in Metro-North and
ConnDot territory are completed. It is unclear if the costs of other
infrastructure improvements necessary to further reduce the trip-time
an additional 10 minutes (to a true 3-hour service) would be
financially justified by the net ridership increase resulting from such
a trip-time reduction. The Report fails to adequately account for this
change in trip-time goal and the effect it may have had on Amtrak's
management of high-speed projects.
3. The Report fails to note that Amtrak's leadership and resultant
management philosophy and practices related to rail infrastructure
projects have changed since May 2002; and that many of the "best
practices" listed in the Report were followed during Amtrak's
management of high-speed improvement projects and many more are being
implemented on a systematic basis under current management.
4. The Report's conclusions that Amtrak did not fully integrate
stakeholder interests and that it did the work required to accommodate
high-speed trains and reduce trip times but did little to focus on
capacity enhancements are an underserved criticism of Amtrak's
management of its high-speed rail program. Amtrak held countless
meetings with dozens of stakeholders of often competing interests along
the Northeast Corridor. Amtrak entered into numerous agreements with
stakeholders that specified the parties' respective obligations and
rights with respect to many of the projects identified in the FRA's
Master Schedule and many projects that were not identified (copies of
these agreements were provided to GAO). In addition, the GAO's Report
fails to note that many of the capacity related improvements listed in
the Master Plan resulted from anticipated operation of 52 intercity
trains per-day, a level that Amtrak does not plan to achieve. As a
result, coordination of such projects with stakeholders proved
unnecessary.
[End of section]
(544059):
FOOTNOTES
[1] In this report, all financial amounts are in nominal dollars unless
otherwise noted.
[2] In 1994, this section of the Northeast Corridor was not
electrified, and Amtrak had to switch from electric to diesel
locomotives at New Haven.
[3] U.S. General Accounting Office, Executive Guide: Leading Practices
in Capital Decision-Making, GAO/AIMD-99-32 (Washington, D.C.: December
1998).
[4] 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. As discussed further in appendix I, this report does
not analyze detailed information regarding either the high-speed 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.
[5] Number 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.
[6] In September 1985, FRA entered into a grant agreement that
transferred responsibility for the Northeast Corridor Improvement
Project to Amtrak as of October 1, 1985.
[7] U.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."
[8] This is about $3.6 billion in 2002 dollars.
[9] U.S. General Accounting Office, Intercity Passenger Rail: Assessing
the Benefits of Increased Federal Funding for Amtrak and High-Speed
Passenger Rail Systems, GAO-01-480T (Washington, D.C.: March 2001).
[10] U.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).
[11] Status 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.
[12] The 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.
[13] These 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.
[14] FRA 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.
[15] Of 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.
[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.
[17] For 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.
[18] The overhead wire that delivers the electricity to the locomotive
for traction, or movement.
[19] $3.1 billion in 1993 dollars.
[20] This figure does not include about $100 million in disputed costs
between Amtrak and the electrification contractor.
[21] This 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.
[22] Of 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.
[23] In June 1992, Amtrak had estimated a cost of about $450 million
for high-speed trains.
[24] This is interest on the permanent financing only. It does not
include interest paid on interim loans used during construction of the
equipment or facilities.
[25] According 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.
[26] Amtrak 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.
[27] The 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.
[28] As of fall 2003, the electrification work had still not been
completed and Amtrak had not accepted the final system.
[29] The 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. §5327 and implemented through
regulations codified at 49 C.F.R. part 633.
[30] New 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.
[31] FTA's project management oversight program is financed from 0.75
percent of funds available under 49 U.S.C. §5309, and 0.5 percent of
funds available under 49 U.S.C. §5307 and §5311. In fiscal year 2002,
FTA received about $29 million to conduct its project management
oversight program.
[32] According 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.
[33] As amended by the Federal Railroad Safety Authorization Act of
1994.
[34] Federal 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.
[35] According 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.
[36] U.S. Department of Transportation, Office of Inspector General,
Amtrak's High-Speed Rail Electrification Project (December 1999).
[37] Additional restrictions were placed on grants to cover operating
losses.
[38] See app. III for a discussion of the methodology we used to
compile this framework and app. V for a list of best practices sources.
[39] Planning is linked to an organization's strategic goals, which are
based on a needs assessment that identifies the need for a project.
[40] See GAO/AIMD-99-32.
[41] The 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.
[42] Called the Alameda Corridor because of the street it parallels,
the project created a 20-mile, $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.
[43] U.S. Department of Transportation, Federal Transit Administration,
EG&G Dynatrend Inc., Project and Construction Management Guidelines,
1996 Update (Wellesley, Mass.: June 1996).
[44] U.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).
[45] See GAO/AIMD-99-32.
[46] U.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).
[47] U.S. Department of Transportation, Controlling Costs and Improving
the Effectiveness of Federal Highway Administration and Federal Transit
Administration Programs, CC-2003-148 (Washington, D.C.: July 22, 2003).
[48] The 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.
[49] See GAO/AIMD-99-32.
[50] See GAO/AIMD-99-32.
[51] Report of the ONE DOT Task Force on Oversight of Large
Transportation Infrastructure Projects (December 2000).
[52] FTA terms these agreements "full funding grant agreements," where
funding is committed subject to annual appropriations.
[53] U.S. General Accounting Office, Mass Transit: Project Management
Oversight Benefits and Future Funding Requirements, GAO/RCED-00-221
(Sept. 15, 2000).
[54] See GAO/RCED-00-221.
[55] See GAO/AIMD-99-32.
[56] See GAO/AIMD-99-32.
[57] U.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).
[58] U.S. Department of Transportation, Two-Year Report on the
Northeast Corridor (February 1978).
[59] U.S. Department of Transportation, Northeast Corridor Improvement
Project, Redirection Study (January 1979).
[60] Although 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.
[61] In 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).
[62] See U.S. Department of Transportation (1986).
[63] The 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.
[64] U.S. Department of Transportation (1994).
[65] According 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.
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