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Risk Credits

With a cost / benefit ratio of 20/1, there is no incentive for railroads to implement PTC on their own. As discussed in a number of postings on this blog, there are no business benefits provided by PTC directly, in that PTC has nothing to do with the efficiency of traffic management. Some folks are still confused on this point in that they refuse to accept the fact that it is the wireless data system that PTC requires which can deliver data required for advanced resource management, as in “Where is my train and how fast is it moving”.  PTC is just one user of the wireless network.  This point has been well demonstrated by Norfolk Southern, that by means of a simple wireless data system, is currently implementing proactive traffic management before and without PTC. However, there is, or rather there was before the mandate, a possibility of railroads to achieve indirect business benefits from the deployment of PTC.

Prior to the mandate, there had been some possible movement in the FRA to consider the overall risk of a track segment as to whether or not a combination of changes could be made that may have a NET decrease in risk even though one or more of the changes may actually increase risk, e.g., removing signals that were no longer required … or … making the transition to one-man crews. HOWEVER, by implementing PTC in concert with doing either or both of those would result in a net decrease in risk given the safety value of PTC that prevents train crew errors. Therefore, prior to the mandate, implementing PTC provided the railroads with the possibility to implement other projects of significant business value that may not have been accepted by the FRA otherwise. With the mandate, the railroads no longer have that bartering position … or maybe they do.

Jumping to the present, and again thinking about the PTC mandate and the phenomenal cost for which the railroads so far are near-totally responsible, then perhaps a concept can be brought to the table to ease the financial blow of the knee-jerk PTC mandate by Congress due to the Metrolink-UP accident in September 2008. I am referring to the railroads being given Risk Credits relative to their degree of PTC implementation. That is, for every segment of PTC installed, then the railroads get a certain amount of risk credits to use for the pursuit of other activities that may be deemed to increase risk, but provide substantial business benefits, again one-man crews, removing signals, whatever. Such credits, like pollution credits, may even be tradable between railroads by those who don’t need the credits and those that could use them. Hmmmmmm! Great Idea, me thinks. Spread the word.

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Strategic Railroading™
Given recent tech advances there is now an unprecedented opportunity to advance railroad operations and the integration of high speed rail with freight. Real-time traffic management and communication is possible without significant development and deployment costs, but it will take a technology strategy working hand-in-hand with an operational strategy, it will take Strategic Railroading.™
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