December 30, 1996

The Honorable Jolene M. Molitoris
Administrator
Federal Railroad Administration
400 Seventh Street, S.W.
Washington, D.C. 20590

Dear Administrator Molitoris:

The TRB Committee for an Assessment of Federal High-Speed Ground Transportation Research and Development was established at the request of the House and Senate Transportation Appropriations Subcommittees and the Federal Railroad Administration (FRA). With this letter, the committee responds to the second task in its charge, which is to "...consider whether a private-sector led consortium...or some other management structure should be formed to conduct the various components of the high-speed rail initiative on behalf of or in association with the FRA starting in fiscal year 1998." To carry out its charge, the committee held its second meeting on July 15-16, 1996, and its third meeting October 30-31, 1996, both in Washington, D.C. Enclosed is a committee roster that indicates attendance by members at each of the committee's meetings^*.

In order to address the element of the Congressional charge to evaluate alternative research management structures, the committee conducted the two meetings cited above with three purposes: (1) to conduct an outreach effort to the R&D program's constituent groups, (2) to review other R&D organizations and consortia that might serve as models for high-speed rail (HSR) R&D, and (3) to deliberate upon the input from the constituents (the "what" that needs to be managed) and the other R&D organizations (the "how" to manage) in order to answer the charge. At both meetings, the committee met in open sessions with FRA R&D staff and R&D program constituents, and then met in Executive Sessions to deliberate on what they had heard and to develop this report. The committee understands that the primary focus of the R&D program is deployment of the technology and recognizes its most active group of "constituents" is comprised of those states working to deploy HSR technology. Other constituent groups that the committee views as key to that deployment include Amtrak, suppliers of HSR equipment and related systems, freight railroads, commuter rail systems, and researchers.

OUTREACH TO R&D PROGRAM CONSTITUENTS

In the first letter report, the committee emphasized under "Concluding Comments", the need for "...effective outreach...", and the report stated "...the committee anticipates inviting representatives from each of these groups to participate in discussions at its next meeting." Accordingly, the agendas for both the July and October meetings were structured to provide the committee with input from representatives of the R&D program's constituents. Enclosed is a list of names and affiliations of the constituents who participated in these two meetings.

At the July meeting, these constituents were asked to address two key questions: what do they need from the HSGT R&D program, and how might they provide input into the R&D management process? The discussion during that meeting focused on the status of several specific R&D projects under way and to what extent the output of each would help to advance the deployment of HSR technology in any U.S. corridor.

In anticipation of evaluating alternative R&D management structures for the high-speed ground transportation (HSGT) R&D program, the committee concluded that before they could address the question of "how" R&D should be managed, they needed to know more about "what" needs to be managed. Therefore, the committee decided to conduct a "strategic planning workshop" during the October committee meeting, with the purpose of gaining an understanding of the intellectual underpinnings of the R&D program by focusing on the strategic questions that, in turn, will guide R&D to support deployment of HSR technology. Discussion of these strategic questions with representatives of the R&D program's constituency groups was intended to provide the committee with a broader perspective to determine whether the major elements of the program are the appropriate ones.

The strategic questions discussed were further refinements of the first of the "Fundamental Questions" outlined by the committee in the first letter report. These questions were as follows:

• "Should the program be directed toward coordinated development of HSR technology among corridors in the interest of economies of scale, or should it be directed to stand-alone corridor projects, recognizing site-specific factors?

• To what extent can the program's resources be leveraged by other sources, private or public?

• Is the research customer perspective remaining foremost in the direction of the program, i.e., can the states and Amtrak be assured that the research results will aid their deployment of the technology?

• And the related question, will the findings of the Commercial Feasibility Study continue to be considered at the related decision points in the research program development?"

Although the discussion with constituents focused on the first of these questions, the third question was thoroughly addressed as well.

The strategic questions are as follows:

• Should the institutional scope of R&D cover a national network or, as FRA's goal states, individual corridors?

• Should the scope of technology development be generic for a broad range of applications or specific for shorter-term application in specific corridors?

• Can potential conflicts of passenger and freight rail interests implied by the focus on "Accelerail" (FRA's term for incremental high-speed rail) be resolved to allow deployment of HSR?

• Is R&D needed for separate, new, dedicated HSR lines/operations, such as Florida plans? (In addition, do opportunities for dedicated high-speed passenger lines exist where there are underutilized or duplicate freight lines that would save the cost of right-of-way acquisition?).

In the discussion of these strategic questions, the issues of barriers faced by constituents in implementing HSR technology were raised, and these are summarized below.

The constituents who participated in these two meetings in general agreed that there are several significant barriers to deployment. First, the constituents raised a number of issues related to regulations, both in terms of the protracted administrative process and in terms of the general approach to, or philosophy of, safety regulation. They agreed that the current regulatory process is too slow and unresponsive to adapt to changes in design and creates uncertainty about acceptable designs. This in turn led to the conclusion that safety regulations based on design standards tend to stifle innovation. They see the need for a change in regulatory philosophy to risk-based performance standards and a safety certification process to measure the effectiveness of new control systems, train equipment, and other new technologies. (Risk based performance standards specify performance results with a predetermined, acceptable margin of failure risk.) The committee agrees that a change in regulatory philosophy is needed and will include further discussion of it in its next letter report.

Other institutional barriers to be overcome include community impacts of HSR (e.g., noise, traffic disruptions and safety issues related to grade crossings, etc.). Coordination with freight railroads is also critical; resolving issues of liability and capacity are not small hurdles to deployment, particularly on already congested rail lines. States must recognize that deployment is being planned within the context of major restructuring of the freight rail industry through large mergers that may result in opportunities for passenger services, but in some cases may also create greater conflicts.

Viewpoints of the program constituents who participated in these discussions are consistent with barriers to implementation as described in the first letter report.

REVIEW OF OTHER R&D ORGANIZATIONS AND CONSORTIA

At the July meeting, James Costantino, President, ITS America, gave a presentation on its organizational structure and its relationship with the U.S. Department of Transportation; this type of structure was suggested in the Senate appropriations report as a possible model for HSR R&D. (ITS is the acronym for intelligent transportation systems. The model referred to in the committee's charge was "... private-sector led consortium ... established to plan and conduct a prototype test of the advanced highway system ...") Roy Allen, a committee member and Vice President, Research and Test, Association of American Railroads (AAR), also gave a presentation on the AAR Research and Test Department, as an example of a jointly-funded industry research organization based on the interoperability and commonality of equipment interchange and track network. The committee's consultant, Anne Strauss-Wieder, gave an overview on the organizational structure and functions of three industry-led R&D consortia: Health Effects Institute, Partnership for a New Generation of Vehicles, and U.S. Advanced Battery Consortium, as well as a proposed Automotive Safety Institute.

At the October meeting, Ms. Strauss-Wieder reported on interviews with the management of six industry-led R&D consortia, focusing on (1) the steps that led to the formation of their respective organizations, (2) characteristics of their management structure, and (3) lessons learned. The organizations reviewed were Electric Power Research Institute (EPRI), Gas Research Institute (GRI), Microelectronics and Computer Technology Corporation (MCC), National Center for Manufacturing Sciences (NCMS), Semiconductor Research Corporation (SRC), and Ohio Aerospace Institute (OAI).

The interviews revealed a similar process leading to the establishment of the consortia, beginning with a compelling need, or forcing function, for industry to come together to manage common research. Once the motivation existed, two parallel but interconnected efforts took place: (1) building a coalition among industry, government, and academia and (2) developing a "road map", or strategic plan, for the new organization. The common characteristics of these consortia are (1) a role as a neutral forum; (2) an emphasis on facilitating and managing projects, rather than conducting research (except MCC); (3) flexibility to change as the make-up of membership evolved; and (4) a structure that encourages the sharing of risks and leveraging of research dollars. Among the important lessons to be learned by examining these organizations is that a consortium cannot compete with its members. Although consortia are commercialization organizations, their their R&D tends to be conducted at the "pre-competitive" or generic stage, the results of which can then undergo product development by the individual member companies.

The primary source of funding for several of the industry-led consortia that were reviewed is some type of fees or surcharges based on their members' revenue or output. Several receive their most substantial funding through federal contracts and grants. In some cases, members also contribute additional funds for specific R&D projects, and one organization allows an offset for part of a member's fee contribution by the assignment of employees to the consortium corporate staff. Two consortia received start-up funds from state governments (NCSM from Michigan and OAI from Ohio), and OAI continues to receive about a quarter of its income directly from the state of Ohio.

COMMITTEE FINDINGS

Based on discussions with the constituents, the committee has reached three major findings. (1) The constituents are in general agreement that the subject areas selected by FRA are appropriate for implementation of incremental strategies being pursued by most states. (2) In response to its charge, the committee considered whether a private-sector led consortium or some other management structure should be formed. The committee concluded that there is a need for an advisory forum, particularly for states planning to deploy HSR, that would assist in coordinating R&D and deployment. (3) Research areas have been identified, not currently being pursued by FRA, that would support HSR deployment. These findings are discussed in the following sections.

FRA has selected three principal areas for research: (1) reducing grade crossing hazards, (2) improving train control systems, and (3) developing non-electric locomotives. With the exceptions of Florida and California's proposals for dedicated HSR lines and operations, the focus on Accelerail for R&D is appropriate according to state representatives and other constituents. (California is also pursuing incremental HSR in some corridors.) Most projects now being planned are for operations below 125 mph. "True" HSR technology--for speeds in excess of 150 mph--can be imported from proven, foreign sources to take advantage of R&D that has already been done. However, consideration should also be given to R&D products that would have applicability by dedicated as well as incremental HSR, such as improved methods for more efficient track and structures construction and maintenance, means for noise reduction or mitigation and others listed under Additional Research Subject Areas, as outlined below.

Focusing the R&D program on corridor or regional HSR deployment makes sense from the standpoint that the states are looking for "rapid" deployment, recognizing that they may have to live with investing in technology that may be made obsolete by new developments.

The committee has identified the need for an advisory forum, primarily for states planning to deploy HSR, that would serve as a mechanism for coordinating deployment. An advisory forum should also include in its membership Amtrak, freight railroads, commuter rail operators, passengers, suppliers and researchers. Of all the R&D consortia and organizations reviewed, the advisory functions of ITS America come closest to what is needed for HSR R&D and deployment. Functions of the advisory forum would be to provide the states a mechanism on a continuing basis to (1) develop a "road map" or strategic plan for R&D and deployment of HSR technology; (2) conduct a peer review of FRA's R&D program to provide direction on research subject areas and project oversight; and (3) to speak out on their common concerns, such as regulatory issues.

First, looking at the lessons learned from other R&D organizations, from the states' perspective, deployment of HSR technology is the forcing function for creation of an advisory forum. The constructive nature of the "strategic planning workshop" conducted during the October meeting demonstrated to the participants the need for an ongoing strategic planning process involving all the potential participants in R&D and deployment.

Second, the committee and the constituents agree that FRA's program is constrained by limited funding, a small staff, and by its choice of using states as the managing agents for the R&D. Although partnerships encourage the commitment of states to R&D successes, the committee is concerned that, as a result, FRA staff is not sufficiently close to the project details, and questions whether some contracting mechanism (other than cooperative R&D agreements with the states) or changes in the agreement structure could provide FRA with more direct project control. The committee concludes that to improve project oversight the program management could benefit from peer review by outside experts drawn from various constituencies to give advice on selection of research subject areas, selection of projects, identification of project objectives, selection of appropriate contract approach (including type of contractor and contract form), and assess progress of demonstration projects. The advisory forum would provide a means for advancing the states' common requirements for compatible and interoperable equipment and systems.

Finally, the advisory forum would provide the states, and other constituents as well, with a voice on issues such as regulatory reform (both process and philosophy). It would provide an administrative mechanism for resolution of the problems concerning deployment on freight lines. Public decisions about HSR deployment clearly must be sensitive to the strong resistance on the part of some freight railroads to provide capacity to passenger operations, and additional research subjects might be identified as part of this process.

The committee recognizes that although the advisory forum might perform some of the functions of an organization such as ITS America, the costs would have to be considered in relation to the size of the R&D program. In continuing to carry out its charge, the committee will continue to involve the program's constituents in discussions of ways to improve the effectiveness of the program to ensure deployment of the technology being developed.

The constituents participating in these discussions identified several additional areas for future research, including methods for lowering costs of construction and of electrification, advances in positive train control and positive train separation, improved methods of understanding the "scientific basis" of costs and of cost allocation between freight and passenger operations, and improved methods for travel demand forecasting. Research into technical and economic issues associated with interoperability of different train control systems would be worthwhile. Also to be explored is a better understanding of how rail network capacity might be enhanced by the separation of rail routes for freight and passenger traffic. Separate passenger routes could perhaps be shared by high-speed and conventional passenger trains because of less speed differential than with freight trains. These routes could potentially be used by high-speed freight trains, if such equipment is developed and becomes economically feasible. In addition to capacity, other passenger/freight compatibility issues include track maintenance needs and costs, signal and train control system implications, and the need for additional safety devices. Safety regulatory processes could also be a subject of research. The committee urges FRA to include these subject areas in future research plans.

The advisory forum described above could also periodically conduct a review of additional areas requiring research.

One committee member, Tony R. Eastham, has recently moved to Hong Kong to take a new position and will be stepping down from the committee at the end of the year. We thank Dr. Eastham for his valuable service to the committee and are currently seeking a replacement for him, particularly considering those candidates with knowledge of international HSGT operations and research activities.

The committee's task for 1997, as defined by the Congressional conference report, is to "...assess whether specific projects in FRA's program are likely to yield useful research results and the prospect of state and/or private deployment." The committee anticipates undertaking this task and will explore in more detail some concerns about current projects and whether the research products will meet program goals.

We thank the FRA staff for their continued cooperation in assisting the committee. We hope the committee's findings are constructive and look forward to continued discussions of this important research program.

Joseph M. Sussman
Chair, Committee for An Assessment of Federal HSGT R&D

Enclosures

* As is standard policy for NRC committees, the members of this committee met in Executive Session at the outset of each meeting to discuss any potential or perceived conflicts of interest that might have arisen for any of them. The committee has agreed to abide by TRB policies to deal with conflicts of interest that may arise in the bidding for or winning of FRA contracts by firms with which members are associated. In the interest of full disclosure, we note the following FRA-related activities.

First, FRA funds a research program from its high-speed ground transportation (HSGT) R&D program that TRB administers on FRA's behalf, as described below. The total funding TRB manages is $500,000 in 1996, which represents 1.5 percent of the HSGT R&D expenditures. The funds are used to encourage researchers to develop potential innovations in train control and risk reduction at grade crossings. TRB has established policies and procedures to ensure that this committee can evaluate the HSGT R&D program independent of any impact its evaluation might have on TRB or the NRC. The Innovations Deserving Exploratory Analysis (IDEA) Program for Intelligent Transportation Systems (ITS) includes a component that supports projects on ITS applications for the development and deployment of advanced rail system technologies, including high-speed rail systems. Funding is provided by FRA at the level of about $500,000 annually. The program is administered by the Special Programs Division of TRB. IDEA investigations explore the feasibility of innovative and unproven new concepts or evaluate novel applications of advanced technologies from defense or industry to ITS practice. An IDEA award is a pass-through of funds to provide one-step, short-term support.

Secondly, FRA has a standing arrangement to fund research projects at MIT through a Basic Ordering Agreement (BOA). In a project expected through this BOA, my colleagues and I will develop an analytic procedure for risk assessment, which could have application in future FRA safety regulatory analyses. This $100,000, one-year task, however, is not directly related to the FRA HSGT R&D program, and is funded separately by FRA's Office of Safety.

Enclosure 1 November 25, 1996