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42 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors agency and the host railroad will have performed capacity analyses as described in Section 3.2 and have determined what improvements are required to accommodate the planned passenger service as well as freight traffic growth. The improvement plans will reflect: Service quality and performance requirements for both passenger and freight operations. Improvements in track quality to meet requirements for planned passenger train speeds. Signal and train control system investments to comply with regulatory requirements, espe- cially a PTC system suitable for planned speeds and able to provide the required line capacity. Some forms of PTC may not meet regulatory requirements for operations over 79 mph and also may reduce rather than increase capacity. Investments to increase capacity, such as adding or lengthening passing sidings, adding a sec- ond track, or changing signal block spacing. Any more detailed factors that affect capacity, such as a need to provide capacity for specified freight operations during passenger service peak period or to maintain total daily freight capacity while restricting freight train movements through commuter stations during peak travel hours for safety reasons. Investments in passenger station infrastructure, including purchasing or leasing land for the station and constructing the station. In many cases, a station will host multiple public trans- portation services to serve as a transportation hub. In such cases, station design and cost shar- ing will have to be worked out with other agencies sharing the facility. Once physical requirements have been defined, the next step is to estimate the cost of imple- menting the improvements and to plan the construction work. Activities and responsibilities of this step will depend on whether the construction is on a corridor that has been purchased or leased by the passenger rail agency or is on an active host freight railroad. On a corridor owned by the passenger rail agency, the agency can retain an engineering firm to prepare detail designs for the improvements, estimate costs, and select an experienced contractor to perform the construction work. The contractor and the agency will have to work with any ten- ant freight railroad to schedule construction work so that rail freight service can continue. Cost estimates must take into account the impact of accommodating ongoing freight and passenger operations, where applicable. On a corridor owned by an active freight railroad, the host freight railroad will develop a cost estimate (taking into account the need to work around ongoing freight operations) and manage construction under a contract with the passenger rail agency. A freight railroad may retain an experienced engineering firm to do the cost estimates and design work, depending on the work- load in the railroad's engineering departments and the nature of the work. Similarly, the railroad will determine whether to use contractors or its engineering department employees and equip- ment for the construction or upgrading work. Railroad union agreements often govern the con- ditions under which contractors may be used. As the source of funding for these projects, the passenger rail agency must review the railroad's cost estimates for reasonableness and properly inspect completed work before releasing payments. 3.3.3 Sharing Infrastructure Capital Costs Many passenger rail agencies understand that a host railroad will obtain some benefits from infrastructure improvements to accommodate a proposed passenger rail service. Because there are identifiable benefits for the host railroad from these investments, passenger rail agencies believe that the freight railroad should contribute funds toward to the cost. There are two situ- ations where cost sharing will be on the table in negotiations: Where investment in the corridor is already under consideration in the railroads planning. For example, a railroad may plan to replace an older automatic block signal (ABS) system with