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70 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors required to support a specified service--number of trips, journey times, and OTP. For a staged development, the agreement will define each stage by the service specification and the corre- sponding infrastructure improvements. It is essential to link specific improvement projects (1) to specific train frequencies, journey times, and punctuality metrics, properly supported by analysis results from operations simulations and accepted by the host freight railroad and the commuter rail agency, and (2) with defined actions to be taken by the host railroad in the event of non-compliance. The approach illustrated in Table 4-3 is an example of how specific capital improvement should be linked to commuter rail service requirements, including a service speci- fication (number of trips, journey time, station stops, and delay metrics). The agreement must be enforceable. Absent enforceability, there is a serious risk that infrastructure investments will fail to yield the expected benefits. The commuter rail agency normally contracts with the freight railroad to carry out investment projects. Experience has shown that a fixed-price contract with the railroad for each project, with provision for adjustments for materials prices, is the best approach, giving the railroad flexibility and an incentive to manage the project efficiently. Time-and-materials or other cost reimburse- ment approaches are less successful, resulting in extra work with limited benefits for the com- muter rail agency. Ongoing Operations and Maintenance Services As well as capital improvements, the commuter rail agency's agreement with the freight railroad must cover payments of O&M services, normally track and structures maintenance, signal system maintenance, and dispatching. Absent Amtrak's right to be charged for these services at incremental costs, cost-charging calculations will include a component for a share of management, overhead, and capital costs. Additional charges may be agreed upon so that, for example, maintenance can be performed overnight or during specified off-peak hours so as not to interfere with commuter operations. The parties may make use of the kinds of oper- ating and maintenance cost analyses described in Chapter 3 to determine how costs are to be shared. As with capital projects, it is critical that the agreement between a commuter rail agency and the host freight railroad specifies in detail the obligations of each party to the agreement: For the commuter rail agency to pay the agreed-upon fee for the services provided. For the host railroad to meet service requirements for the passenger train journey time, num- ber of daily trips, and maximum acceptable delay minutes, following the format shown in Table 4-3. On more complex corridors, it is likely that operations simulations will be needed to demon- strate that the agreed-upon service performance is feasible with the proposed O&M practices and to give all parties confidence to enter into the agreements. 4.4.5 Operations and Maintenance Services Agreements Separate from access agreements and associated payments by tenants to host railroads for infra- structure maintenance and dispatching, a commuter rail agency will need to establish contracts for all other O&M services: Services on host freight railroad tracks, including: Train operations--provision of engineers, conductors, and other on-train personnel. Equipment maintenance--routine servicing, daily inspection and maintenance, scheduled and emergency equipment inspection and maintenance, and major overhauls. Services at passenger stations and terminal--cleaning, maintenance, ticket sales, etc.

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Content of Shared-Use Access and Operating Agreements 71 Additional services on commuter rail agencyowned corridors, including: Dispatching and corridor operations management. Track and structures maintenance. Signal and train control system maintenance. Contracting for major infrastructure projects. To provide these services, commuter rail agencies can elect to create an operating entity to perform O&M functions or contract out to an independent service provider. In practice, all newly established commuter services have elected to go the contracting route (with one exception), selecting a service provider from among qualified organizations. The exception is the Front Runner commuter service in Salt Lake City, where the Utah Transit Authority chose to operate the service itself, to ensure close control of service and financial perfor- mance. (The Utah Transit Authority also operates a light rail system.) Otherwise, only com- muter rail agencies taking over an existing service have elected to create an operating subsidiary, usually by taking over staff and management from the former provider. An example is the Northern Indiana Commuter Transportation District, which assumed operating responsibil- ity in 1979 for the service formerly operated by the Chicago South Shore and South Bend Railroad. The commuter rail agency normally selects a contractor using a conventional bidding process. Commercial firms, Amtrak, or the host railroad may be interested in providing contract O&M services, depending on local circumstances. Some examples of commuter rail agency contracting include: The Sounder commuter services in the Seattle area are operated by the host railroad, BNSF. The service operates in part over busy freight corridors, and BNSF preferred to have full control over operations in the corridor. Equipment maintenance is provided by Amtrak, which has a suitable facility in the area. In the Boston area, MBTA commuter rail services are operated by the Massachusetts Bay Commuter Railroad Company--a consortium that includes Veolia, a railroad operations con- tractor, and Bombardier, an equipment manufacturer. MARC commuter rail services from Washington, D.C., to Maryland suburbs are operated by the two host railroads--Amtrak for services on the NEC and CSX for services on CSX freight lines. As is evident from these examples, a commuter rail agency can either contract for all ser- vices with one provider (the bundled approach) or let separate contracts for each service, including train operations, car and locomotive maintenance, and track and infrastructure maintenance. Advocates of the unbundled approach believe that the agency can get a lower cost, because there is more competition for each contract. Advocates of a bundled approach believe that one contract is easier to administer than multiple contracts and that better ser- vice is obtained when one provider is fully accountable and cannot blame another provider for any service shortcomings. Typical O&M contracts have a 5-year initial term, renewable for further terms if both parties agree, after which the contract is re-bid. Payment type is typically cost reimbursement with a vari- ety of incentives, both for good service performance (e.g., OTP, aggregate delays, provision of the agreed-upon number of cars on each train and functioning car equipment such as air condition- ing and heating, and customer satisfaction) and for cost reductions. In conclusion, there is no one best approach for obtaining contract O&M services. The path chosen depends on local circumstances, particularly which providers already have operations in the region, the interest level of a host railroad, and the size and complexity of the proposed operations. In all cases, however, the contract should include meaningful incentives both for