Positive Train Control (PTC): Calculating Benefits and Costs of a New Railroad Control Technology

The purpose of this analysis was to quantify the business benefits of Positive Train Control (PTC) for the Class I freight railroad industry. This report does not address the safety benefits of PTC. These were previously quantified by the Rail Safety Advisory Committee (RSAC), which identified nearly a thousand “PPAs” (PTC-preventable accidents) on U.S. railroads over a 12-year period, and determined the savings to be realized from each avoided accident. The RSAC finding was that avoidance of these PPAs was not, by itself, sufficient (from a strictly economic point of view) to justify an investment in PTC. Examples of potential business benefits include: • Line capacity enhancement • Improved service reliability • Faster over-the-road running times • More efficient use of cars and locomotives (made possible by real-time location information) • Reduction in locomotive failures (due to availability of real-time diagnostics) • Larger “windows” (periods during which no trains operate and maintenance workers can safely occupy the track) for track maintenance (made possible by real-time location information) • Fuel savings This paper presents the results of the analysis. It is important to recognize, however, that the state of the art in making these estimates is not sufficiently mature to make exact answers feasible. Presented here are the best estimates now possible, with observations as to how better information may be developed. Benefits were estimated in the above areas and the cost of deploying PTC on the Class I network (99,000 route miles and 20,000 locomotives) were calculated. The conclusions of the analysis were as follows: • Deployment of PTC on the Class I railroad network (99,000 route miles, 20,000 locomotives) would cost between $2.3 billion and $4.4 billion over five years • Annual benefits, once the system was fully implemented, were estimated at $2.2 billion to $3.8 billion • Internal rate of return was estimated (depending on timing and cost) to be between 44% and 160%