STATEMENT OF JOHN M. SULLIVAN, ADMINISTRATOR, FEDERAL RAILROAD ADMINISTRATION, DEPARTMENT OF TRANSPORTATION, ACCOMPANIED BY ROBERT E. PARSONS, ASSOCIATE ADMINISTRATOR FOR RESEARCH AND DEVELOPMENT; JOSEPH W. WALSH, ASSOCIATE ADMINISTRATOR FOR SAFETY; RAYMOND K. JAMES, CHIEF COUNSEL, AND LEON D. SANTMAN, DIRECTOR, MATERIALS TRANSPORTATION BUREAU Mr. SULLIVAN. Thank you, Mr. Chairman. With me today are Bob Parsons, Joe Walsh, Ray James, and Lee Santman. Mr. Chairman, if I may I will quickly highlight the remarks contained in my formal opening statement and submit the full statement for the record. Mr. Chairman and members of the committee, I am pleased to appear before you today to testify on our draft bill entitled the "Federal Railroad Safety Authorization Act of 1980." It consists of authorization requests for fiscal years 1981 and 1982 and several amendments designed to improve the FRA enforcement capability. We are requesting an authorization of $28 million for fiscal year 1981, $15.8 million of which is for salaries and related expenses of field personnel; $5.9 million for the automated track inspection program; $4.3 million for salaries and related expenses of safety headquarters personnel together with data gathering and dissemination, planning, and evaluation activities and administration_of the grants-in-aid program; and $2 million for grants to States. For fiscal year 1982, we are requesting authorization of such sums as may be necessary. In the past, $10 million per year has been authorized for safety research and development undertaken pursuant to the Federal Railroad Safety Act of 1970, while most R. & D. has been funded under the DOT Act. The Department recommends that the specific R. & D. authorization be deleted from the Safety Act and reliance be placed on the DOT Act for R. & D. authorization. The total number of reportable railroad accidents decreased from 11,333 in 1978 to a projected 9,917 in 1979. The projected number of accidents in 1979 is based on 11 months of actual data. Trackcaused accidents accounted for 41.5 percent of the total in 1979. There is a correlation between individual carrier's profitability and their respective accident rates. The increase in the number of accidents that can be attributed to defects in way or structure over recent years compared with other causes provides clear evidence of an undermaintained and deteriorating rail plant. The railroad industry faces a capital shortfall over the decade 1976-1985 of $13 to $16 billion; the return on invested capital is among the lowest of major industries. The industry's difficulties in earning an adequate return on existing investment stem in part from Federal regulation which has constrained management ability to adjust rates, merge corporate entities, provide new services, and abandon obsolete facilities and services. The administration supports the effort of this committee to free the industry from the outmoded constraints that keep the railroads from using innovative marketing techniques which they need to compete effectively. While FRA agrees that the financial condition of the railroad industry is basic problem behind the poor safety performance of many carriers, the poor financial condition of the industry makes all the more important FRA's insistence that minimum safety conditions be met. Otherwise the industry is tempted to put its money in areas with a higher short-term revenue benefit and rely on good luck to keep down the number of accidents. The financial penalties which FRA assesses for noncompliance with its safety standards help to provide the railroad mechanical and engineering departments, which are responsible for repairs, with justification for increased maintenance budget allocations. Our total civil penalty collections for calendar year 1979 set a new record of over $7.5 million. Since October 1977, FRA has collected $5 million more in civil penalties than it did in its first 10 years of existence. The most impressive achievement has been in the area of hazardous materials. In calendar year 1979 we collected $634,020 for 258 violations. This is over twice the amount of all fines and penalties for violations of the hazardous materials regulations in the previous 12 years of FRA history. Recently, the FRA has deliberately focused resources on a few carriers with poor safety records. This method of concentrated monitoring has produced dramatic results and will enhance future enforcement efforts. Systemwide assessments of three railroads were completed in 1979. Assessments of the Chicago, Rock Island, and Pacific Railroad, the Illinois Central Gulf Railroad and the Louisville and Nashville Railroad, L. & N., included analyses of track, equipment, signals and operating practices. A number of improvements were made by these carriers following the FRA analysis. FRA's assessment of the L. & N., in conjunction with Emergency Order No. 11, led to a 40-percent reduction in the number of accidents on that line. While L. & N. had reported 465 train accidents in the first 7 months of 1978, the railroad reported only 285 accidents in the first 7 months of 1979. Over the same period, reportable damages were down from $14.8 million to $7.3 million. Fatalities fell from 17, 16 of which were at. Waverly, Tenn., to none reported. Injuries fell from 74 to 6. In late 1978, the Congress mandated a study of the size, weight and length of railroad freight cars under section 10 of the Federal Railroad Safety Authorization Act of that year. The report of the study has now been transmitted to the Congress by the Secretary of Transportation. In summary, we found that the growth in car size has not had a significant net impact on facilities resulting from railroad operations. However, there is no question that heavier axle loadings are seriously aggravating deferred maintenance of track and roadbed, and contributing to the overall train accident picture. Proper responses to this problem appear to fall into two categories. First, track maintenance and internal rail inspections must keep pace with increased dynamic loadings. For most mainline operations, heavier cars will necessitate heavier rail sections, continuous welded rail, and better attention to roadbed. Of course, it would not be feasible or prudent for the Federal Government to control maintenance and rehabilitation programs. The FRA can only insist that realistic standards for track and structures and realistic inspection procedures be observed. A second clear area of need identified by the study is the performance of certain "bad actor" cars, particularly covered hopper cars. In the near future, we hope to be able to announce a cooperative venture which will further isolate the most critical design problems and develop a program for addressing those cars most in need of attention. Mr. Chairman, this completes my prepared statement. Mr. Bob Parsons, associate administrator for R. & D. is here today and I would like to have Bob spend a few minutes briefly explaining the findings of the car size study to the committee. Then we would be happy to respond to your questions. [Testimony resumes on p. 37.] [Mr. Sullivan's prepared statement and attachment follow:] STATEMENT OF ADMINISTRATOR JOHN M. SULLIVAN FEDERAL RAILROAD ADMINISTRATION March 25, 1980 Before the House Subcommittee on Transportation and Commerce, Committee on Interstate and Foreign Commerce FY 1981 and 1982 Safety Authorization Request Overview Mr. Chairman and members of the Committee, I am pleased to appear before you today to testify on our draft bill entitled the "Federal Railroad Safety Authorization Act of 1980." It consists of authorization requests for Fiscal Years 1981 and 1982 and several amendments designed to improve the FRA enforcement capability. We are requesting an authorization of $28.0 million for FY 1981, $15.8 million of which is for salaries and related expenses of field personnel; $5.9 million for the Automated Track Inspection Program; $4.3 million for salaries and related expenses of safety headquarters personnel together with data gathering and dissemination, planning and evaluation activities and administration of the Grants-in-aid program; and $2.0 million for grants to states. FY 1982, we are requesting authorization of such sums as may be necessary. In the past, $10 million per year has been authorized for Safety Research and Development (R&D) undertaken pursuant to the Federal Railroad Safety Act of 1970, while most R&D has been funded under the DOT Act. The Department recommends that the specific R&D authorization be deleted from the Safety Act and reliance be placed on the DOT Act for R&D authorization. Before discussing the specific amendments included in the bill, I would like to first outline the accident trends and then highlight some of our accomplishments since my last appearance here. Train Accidents The total number of reportable railroad accidents decreased from 11,333 in 1978 to a projected 9,917 in 1979. The projected number of accidents in 1979 is based on 11 months of actual data. The apparent decrease in 1979 may be somewhat misleading due to the adjustment in the reporting threshold from $2,300 in 1977 and 1978 to $2,900 in 1979. However, since the 1979 numbers indicate a decrease from |