Management & Operations

Idea to merge rail systems has lessons for us all

Posted on June 6, 2018 by James Blue, GM

The merger would be undertaken in three phases over 30 years. Importantly, the plan would need an additional annual investment of $2.4 billion over that time frame.
Metro-North
The merger would be undertaken in three phases over 30 years. Importantly, the plan would need an additional annual investment of $2.4 billion over that time frame.
Metro-North

The recent release of a report recommending restructuring and expansion of the New York region’s three commuter rail networks has lessons for the industry that go far beyond commuter rail and New York. Accordingly, they are worth a read by everyone in our industry. The report, “Trans-Regional Express: Transforming the New York Region’s Commuter Rail System Into an Integrated Regional Rail Network,” conducted by the think tank New York Regional Plan Association, can be found here.

The report calls for a $71.4-billion merger of the Long Island Rail Road, Metro North and New Jersey Transit commuter rail lines to form an integrated “Trans-Regional Express” region-wide network, or “T-REX” for short. The merger would be undertaken in three phases over 30 years. Importantly, the plan would need an additional annual investment of $2.4 billion over that time frame, above the investment program already needed by existing agencies to fund the Gateway project and the two additional tracks they want to build.

What T-REX says about us all
The T-REX report, though New York-centric, has three important aspects that should draw all of our attention. First its ambition and scale, like Los Angeles’ commitment to transition its entire bus fleet to zero-emission, will affect the industry as a whole. These effects range from the kinds of cars and technology that the upgraded and merged services will demand to the production schedules of their car builders and supply chains to the effects on federal, state, and regional funding sources, including the bond markets. That alone makes these recommendations, if adopted, a big deal.

There are two more aspects that deserve our watching. Because the legacy infrastructure was all inherited from private railroads built more than a century ago, many areas in the greater region are at best poorly served, or at worst, are not served by direct regional rail service at all, including important economic centers. The asset management challenges must sound familiar not only to places like Chicago, San Francisco, and Cleveland, but legacy systems are challenged virtually everywhere else, where bus lines still follow old streetcar lines or bus networks that were taken over from private sector companies.

Governance may be most challenging
The third takeaway is perhaps most difficult. The merger of these lines also implies a new governance structure, perhaps like that of the Port Authority of New York and New Jersey, which governs the region’s ports, airports, the bus terminal, the Port Authority Trans-Hudson rail line, and several tunnels and bridges. Whether in charge of bus or rail lines, these regional bodies are complex, because they cross multiple political lines, including states in more cases than this one. And, unless there are clearly defined responsibilities with defined funding sources and some levels of autonomy, they become troubled. The ones that have worked best keep it simple, with a narrow mission, defined roles, and enduring funding.

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