Opening: The Importance of Change

Thank you for that kind welcome. I’m really glad to join y’all again for RSI’s annual meeting.

Thank you for allowing me the opportunity to join you all today. It’s always a pleasure to have the chance to get together with this group.

As we all know, Chicago is a city rich in rail history. As you flew into town for this meeting, you only had to look out the window to see that Chicago remains the crossroads of America’s rail network.

I want to take an opportunity to cover some big picture issues and some topics of specific interests to RSI’s membership.

But everything I will share with today you is guided by one premise: Change is not only inevitable… it is necessary for progress!

I know that most of you here are in business to bring about positive change. It is one of the keys to your success. Quality maven Edward Deming once said about this, “It is not necessary to change. Survival is not mandatory.”

So while change is a process we invite and encourage, we must work carefully to balance the pace of change with the progress of safety.

It should be evident, even intuitive to everyone that change will result in positive outcomes for the public and the railroad community as a whole by working together.

Not change for change’s sake, but change driven by thoughtful, inventive and purposeful advances, in technology, in business processes and practices, in manufacturing methods and quality control, in service delivery and technological reliability.

Ideas Informing Progress and our Decision-Making:

Three central tenets guide us in this process of positive change at the Department of Transportation under the leadership of Secretary Norman Mineta:

We seek to be Pioneers in Transportation - leaders pursuing "best practices" that benefit the taxpayers and the nation. Managing transportation assets to achieve greater safety, mobility, economic growth, security, and environmental quality.

We seek to be Architects of the Future, visionary in our understanding of what is necessary and possible in transportation.

And, finally, we are steadfast in seeking to be Defenders of the Homeland, preserving, protecting and defending our nation, our way of life, and our citizens.

In short, we are actively committed to realizing the benefits of a world-class transportation system for the betterment of the American people, and our nation as a whole.

Safety Accomplishments:

One major area of positive change is the progress being achieved by the railroad industry in improving rail safety.

Over the past year, I have appeared before several Congressional panels where I had the chance to tell the great story about our collective safety accomplishments.

...And what a story it is. To appreciate where we are, one really needs to step back and look at safety with the big picture in mind. Just consider the fact that:

Accidents have declined nearly 70 percent since the late 70’s;

Over the last three years, we’ve had the lowest number of rail-related deaths and employee fatalities on record;

Despite more than 2 million movements of hazmat cars, last year marked the lowest number of train accidents involving a release in five years; and,

Pretty impressive if you ask me -- no doubt these and other achievements could not have come about without the hard work of so many including our industry suppliers and manufacturers.

Truth be told, there is no way all of these dramatic improvements could have occurred without your innumerable contributions.

Status of FRA Proceedings:

Another area marked by significant change is the quickening pace of FRA’s rulemaking proceedings. Congress is holding the Department accountable for the timely completion of major rulemakings, and therefore, the Secretary is holding me accountable.

Last May, we published a final rule on Roadway Maintenance Machines. Staff members are putting the final touches on supporting regulatory documents to accompany a notice of proposed rulemaking on occupational noise exposure for railroad operating employees.

We expect to issue a final rule on Performance Standards for Processor-Based Signal and Train Control Systems in the next few months…………..and to take much anticipated final action on the Sounding of Locomotive Horns at Highway Rail Grade Crossings.

Finally, we will also be issuing a final rule Expanding the Application of FRA Alcohol and Drug Regulations to Foreign Railroad Foreign-Based Employees Performing Train or Dispatching Service in the U.S.

Meanwhile, FRA has been busy with other regulatory work, as well.

Highway-Rail Crossing Safety:

We are currently working hard on a new Secretarial Action Plan on Highway-Rail Grade Crossing Safety, that has been requested by the appropriations committees for submittal with our 2005 budget this coming February.

The 1994 Action Plan provided a coherent policy framework that made possible a great deal of progress at the Federal, State and local levels.

Secretary Mineta looks forward to becoming the champion of a new charter for highway-rail crossing safety. Help us make it the best it can be. I am stirring the pot within DOT to get more intermodal participation in these efforts.

I strongly encourage RSI members to participate in this process by sharing your ideas for cost effective highway-rail crossing enhancements.

We welcome the chance to take stock of accomplishments and point the way to achieve further reductions in the number and severity pf crashes and casualties at grade crossings. In addition, we want to identify effective strategies to combat railroad trespassing.

Our efforts to explore new ways to reduce grade crossing accidents also include a search for new grade crossing safety technologies. For example, we have been working with several communities to evaluate the effectiveness of Automated Horn Systems which, as many of you know, are wayside horns located at crossings that simulate the sound of a train horn. Other innovative crossing technologies are also being discussed under the auspices of DOT’s Intelligent Transportation System.

Remote Control Locomotive Operations:

People react to change in different ways. In 1967, King Whitney, Jr. said the following:

“Change has considerable psychological impact on the human mind. To the fearful it is threatening because it means that things may get worse. To the hopeful it is encouraging because things may get better. To the confident it is inspiring because the challenge exists to make things better. Obviously, then, one’s character and frame of mind determine how readily he brings about change and how he reacts to change that is imposed on him.”

One area where we are seeing this reaction to change in real terms is the implementation of remote control locomotive operations.

On behalf of the Senate Commerce Committee, Chairman McCain and Senator Hollings have asked FRA to perform an audit of remote control locomotive operations, providing initial findings in 6 months and a final report in 18 months.

We welcome the chance to respond to this request. FRA has been closely monitoring implementation of this technology.

The scale and variety of these operations has grown to the point that a more formal review and report should be especially helpful to us in assessing the need for additional enforcement or regulatory actions.

As of May 1, revised accident/incident rules are helping us collect better information on incidents involving remote control technology. I trust railroads are taking care to ensure the quality of this data.

In our ongoing examination of remote control operations, we have found much to praise and several areas of concern that we have brought forward for action.

As we go forward with the audit, I have encouraged railroads that have deployed remote control operations on their systems to take a good look at their consistency of implementation.

We have also worked hard to listen to the input of rail labor on remote control issues. After all, it is their members who are most affected by the safety of remote control operations.

We’ll keep the channels of communication open among the railway supply community, rail labor, management and FRA to ensure technology is used wisely and well.

During our on-going examination of Remote Control, the railway suppliers have been extremely helpful in educating us about the nature of the technology, its current capabilities and its future potential. The information that we have learned from you has helped guide our deliberations on this subject. As we continue to examine this issue, I want to reiterate our willingness to listen to your ideas about assuring safety as new technologies are introduced across America’s railroads.

System Security:

I want to briefly discuss what has become one of the most important challenge facing our Nation today – Security.

Security has become a top priority for virtually every Department in the Federal government and, Secretary Mineta has been particularly forceful in directing DOT’s efforts to protect the security interests of our transportation network.

The railroad industry has won high praise in the security community for proactively conducting risk assessments to identify potential vulnerabilities and for developing security contingencies to mitigate those vulnerabilities.

The Department of Homeland Security (DHS) has been tasked with developing a National Security Plan.

We anticipate that the Transportation Security Administration, which is now a part of DHS, will be responsible for developing the transportation components of the national security plan.

Needless to say, these plans may offer RSI and its members additional opportunities to help defend and protect America’s railroads, and more importantly, our homeland.

We have pledged to support TSA in these efforts by providing technical guidance and expertise regarding railroad issues.

We hope that a National Security Plan can incorporate and build upon the enhancements already completed by the industry.

We really do not have any details to share with you at this time about this endeavor. However, once we have received more guidance from TSA, we will provide additional updates.

The successful protection of the security interests of the railroad industry will depend on the active involvement of all stakeholders. I invite you to share any ideas that you may have on ways to improve railroad security with us.

By working together, I am convinced that we can successfully meet the security challenges that lie ahead of us. As you have heard many times before, when it comes to security, failure is not an option.

DOT Transportation Investment Programs:

Let me assure you that we coming around to the home stretch of today’s remarks. Before I close, I want to spend a bit of time talking about new proposals and revitalized programs for federal investments in infrastructure.

Investing in our infrastructure is not only important for the nation’s economic health in general, it is critical for sustainable growth in the nation’s rail supply industry.

Surface Transportation Reauthorization:

Several months ago, the Administration unveiled the details of our proposed legislation for surface transportation reauthorization; SAFETEA.

First and foremost, this Administration’s proposal ensures the highest possible investment in our country’s critical transportation infrastructure.

We will achieve this by building upon the legacy of earlier surface transportation legislation—and look forward to working with the Congress and all affected stakeholders to ensure swift passage of this legislation.

We have learned that guaranteed annual funding is one of the biggest success stories from ISTEA and TEA-21. We believe such guarantees should be retained and refined wherever possible.

And because states and localities have impressed upon us the need to exercise a degree of autonomy in allocating such funds, our proposal calls for increased funding flexibility for State and local authorities so that they can address specific areas of concern.

Finally, we intend to expand the range of innovative financing tools so states and localities can better leverage the federal funds they receive.

For this to occur, we still need to encourage more private sector investment in infrastructure projects.

One very encouraging example of this kind of public/private investment in rail is the local Chicago Region Environmental and Transportation Efficiency project (or CREATE), a billion dollar project to speed railroad movement through Chicago. This is an unprecedented coalition of six major Class 1 railroads, the City of Chicago and State of Illinois. We are working with local leaders to see that the DOT assists this important project.

Freight Rail Development:

On the rail development side, I’m pleased to report that the RRIF program is alive and well.

For those of you who may not be familiar with the program, RRIF, or the Railroad Rehabilitation & Improvement Finance program is intended to provide eligible borrowers direct loans or loan guarantees to develop or rehabilitate rail equipment and infrastructure.

We continue to meet with prospective applicants to identify potential federally financed improvement projects ranging from track rehabilitation, line acquisition and equipment purchases.

We’re working very hard to simplify what some have dubbed an intimidating and technically burdensome application process. We’re in the final phases of an unflinching third party review of our management of this program, so that we can live up to the expectations of Congress and the nation’s Short Line and Regional railroads.

Soon, we should be announcing the award of our largest RRIF loan to date.

Intercity Passenger Rail Reform:

Finally, I guess most of you won’t let me leave the Windy City without providing an update on Amtrak.

The most important thing for this group to know is that all of the Administration’s actions to date with respect to Amtrak have been geared toward keeping Amtrak in business, recognizing the strong relationships that exist between Amtrak and many of you in this room.

Without question, the political situation has never been better for a fundamental reassessment of the manner in which we deliver passenger rail services in the country.

George Bernard Shaw once said, “Reasonable people adapt themselves to the world. Unreasonable people attempt to adapt the world to themselves. All progress, therefore, depends on unreasonable people.”

I am unreasonable enough to believe that passenger rail policy can be done better, but funding alone won’t solve these systemic problems.

Congress followed the Administration’s lead and incorporated many reform provisions in Amtrak’s most recent appropriation last spring. The most important result is that this grant administration process, coupled with David Gunn’s effective leadership, has guided Amtrak through this past summer without a major financial disaster—a monumental achievement.

While pleased with this first step in redefining intercity passenger rail in America, we must recognize it for what it is - a first step.

The Administration strongly maintains that significant reform is necessary for Amtrak and intercity passenger rail to remain a viable means of transportation.

We have outlined what we mean by reform in the submission to Congress of the Passenger Rail Investment Reform Act two months ago.

The bill is currently undergoing consideration on Capitol Hill along with a number of other distinct and complimentary proposals.

The important thing I want this group to understand, and something that’s been lost in all the talk of long-distance trains, is that the Bush Administration has proposed the creation of a multi-year federal capital investment program for intercity passenger rail.

If Congress chooses to act on our proposal, then we could see a significant renaissance in passenger rail around the country. With it will come broadened opportunities for rail suppliers as funds are invested in infrastructure and rolling stock.

Please see that your voices are heard as Congress considers passenger rail reform. You have important ideas and perspectives to contribute.

CONCLUSION:

A final note: I want to thank RSI for its participation in the new RSAC Passenger Safety Working Group; Nicole Brewin of RSI’s staff attended our initial working group meeting and I’m told the group got off to a good start in early September, and made some hard choices at the outset, in terms of priorities.

One of the hallmarks of any successful organization is a commitment to excellence – constantly striving to make things better for the organization.

President Franklin Roosevelt once said, “there are many ways of going forward, but only one way of standing still.” Let us continue to strive to go forward together, making our railroad industry grow in prosperity and safety.

I am proud to be associated with RSI and its many members this afternoon. Thank you for allowing me some time to share with you.