Administration of Metroliner and Turbo-Train Projects

Published by the Government Accountability Office on 1971-01-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             T TO THE CONGRESS

                tion Of

FAderal Railroad Admuwstratlon
Department of Transportation

                 COMPTROLLER      GENiiRAP,   OF    THE   UNITED   STATES
                                WASHINGTON     DC     20548

B- 164497(5)

To the     President        of the Senate     and the
Speaker      of the      House   of Representatives

         This   1s our report       on our review          of admmlstratlon                 of
the Metrolmer          and Turbo-Tram           proJects      by the Federal
Rallroad      Admmlstratlon,         Department          of Transportation

          Our     review  was made  pursuant                   to the Budget          and Ac-
countmg         Act, 1921 (31 U S C 53), and                  the Accountmg             and
Audltmg         Act of 1950 (31 U S C 67)

           Copies    of this report      are bemg    sent to the Dlrector,
Office      of Management       and Budget,      the Secretary      of Txans-
portatlon,        and the Admlnlstrator,        Federal    Rallroad    Ad-

                                                      Comptroller           General
                                                      of the Umted          States
                                                                      1        r

DIGtiST                                                                    1


       1   INTRODUCTION                                                    4
               Photograph       of Metroliner    train                     7
               Photograph       of Turbo-Train                             8
           METROLINER AND TURBO-TRAIN PROJECTS                             9
               Metroliner       demonstration                             11
                     TechnIcal      problems delayed the
                        start of the demonstration                        11
                     Status of the Metroliner          demonstra-
                        tion                                              14
                     Federal costs                                        15
                     Suburban stations                                    17
               Turbo-Train        demonstration                           18
                    Technical       problems delayed and
                        curtailed      the demonstration                  20
       3   GAO PROPOSALS AND AGENCY COMMENTS                              22
       4   SCOPE OF REVIEW                                                23

       I   Letter    dated September 28, 1970, from the
              Assistant    Secretary for Administration,
              Office of the Secretary,    to the General
             Accounting     Office                                        27
  II       Principal      officials      of the Department    of
              Transportation         and Department     of Commerce
              responsible        for the administration      of the
              activities        discussed   in this report                29
GAO        General     Accounting   Office
NHRR       New York,     New Haven and Hartford          Railroad

                                      Federal RaIlroad  Admtnlstratlon
                                      Department of Transportation     B-164497(5)


    The Federal Railroad Admlnlstratlon      (Agency) sponsors demonstrations        to
    determine whether high-speed ground transportation         can improve intercity
    transportation      During fiscal years 1966-70 the Agency obligated        over
    $25 million    for demonstration  programs     (See footnote,   p, 4,)

    The Agency 1s sponsoring    two high-speed passenger-train  demonstratlons--
    the Metroliner    between New York City and Washington, D C , and the Turbo-
    Train between New York City and Boston, Massachusetts       The obJectives
    of the two demonstration    proJects were to test the trains while in op-
    eration,and    to determine the public's  response to new equipment and ser-

     To accomplish the ObJeCti Ves, the Agency planned that the Metroliners
     would make 18 round trips dally--nine   between Washington and New York
     City and nine between Phlladelphla,   Pennsylvania,  and New York City ex-
     cept Saturdays, Sundays, and holidays when reduced service would be pro-
     vided    The Turbo-Trains would make four round trips daily between New
     York City and Boston

     The estimated cost to the Government for both demonstrations          is about
     $19 3 million      Because significant    delays were encountered   in the start
     of these proJects and because equipment failures       were experienced    during
     the trains'   operation,   the General Accounting Office (GAO) reviewed the
     planning and administration       of these proJects

     The Penn Central Transportation     Company (Railroad)  began routine   pas-
     senger servtce with six Metroliners     In January 1969. The offlclal     dem-
     onstration   did not start until October 1, 1970--3 years late--and      with
     seven round trips dally between Washington and New York City          The Turbo-
     Train demonstration   did not start until April 1969--over    2 years late--
     and with only one round trip daily.       (See pp 11 and 20.)

     GAO found that the Metroltner   and Turbo-Train      demonstration      proJects had
     not accomplished their ObJectlves   as originally        planned, because tech-
     nical problems with the trains had delayed the         start of the proJects and
     had prevented   the contractors from maintaining       operational     enough cars
     to run the number of round trips necessary to        fully    accomplish the dem-
     onstrations    obJectives.
Since the trains wcfe an advancement of -the state of the art and never
before had been constructed    or used In the UnIted States, the Agency did
not know whether the trains would operate as antlclpated         Nevertheless,
In 1966 the Agency authorized      the Railroad to contract for constructton
of 50 MetrolIners   and agreed to lease two Turbo-Trains    being developed
by the United Aircraft   Corporation.       (See p 9.)

GAO found that, although the contracts          for the demonstrations    provided
that, In general,     revenues from the operation      of the trains    In excess of
cost be shared, the contracts       did not provide that a reduction       be made
In the amounts of the contracts         In the event the trains did not run as
often as anticipated.        Because It was not known whether the trains would
work satisfactorily,      the contracts    should have provided     for such a reduc-
The Department of Transportation   dtd negotiate     a $500,000 reduction     ln
the Metroliner   contract because the tra-rns cannot be used to the extent
planned     The $500,000 does not appear significant     when compared with
the remaining   contract cost of $10.7 million    and the substantial     reduc-
tlon in the use of the Metroliners     during the demonstration       Because of
the recent start of the demonstration,      the amount of the Government's       in-
vestment that ~117 be recovered from revenues IS unknown          (See pp 15
and 17 )

The Agency has made full lease and maintenance payments for the Turbo-
Trains In accordance with contracts whlch,as of October 1, 1970, totaled
about $1,085,000 and $924,000, respectively    Because of the lImited
operating  schedule of the trains, no recovery of the Government's    In-
vestment through excess revenues 1s expected     (See PP 18 and 19 )
The Metrol-rner       demonstration    IS planned to run for 2 years from Octo-
ber 1, 1970          In April 1970 the RaIlroad informed the Secretary of
Transportation        that a research and development program using some of the
Metroliners     as prototypes       was essential to overcome the Metroliners'
technlcal     deflclencles       and to ensure success of the demonstration        As
of November 30, 1970, the Agency was negotlatlng            contracts    with Westlng-
house Electric        Corporation    and General Electric  Company--builders    of
the MetrolIner--for         go-day studies of technical    problems      (See p 14 >
The Turbo-Train   demonstration   was scheduled to end October 22, 1970       On
October 12, 1970, the Secretary of Transportation        announced that It
would be extended on a month-to-month       basis pendlng negotlatlons  for ad-
ditional  use of the trains.     As of November 30 the Agency was still     ne-
gotiating   with United Aircraft   Corporation.

Because technical    problems have not been resolved,     it appears that any
long-term   extension of the demonstration    would contribute   little   toward
the improved service which the Agency antlclpated       would be provided     by
the Turbo-Trains      It 1s also questionable   whether an extension would
provide addltlonal    beneflclal data on public reactlon to the Turbo-
Trains.    (See p 21 )

              OR SUGGESTIONS

    When the Department sponsors future demonstration    programs involving   new
    or novel equipment, It should encourage the use of a prototype      to ensure,
    to the extent possible,   that the equipment ~111 perform as anticipated.
    Future contracts   should provide for price adJustments if the equipment
    IS not used to the degree planned.     (See p 22.)

    The Department agreed with GAO's flndlngs and proposals and on Decem-
    ber 21, 1970, the Agency issued a policy statement (FRA 4400.9) which
    provided for adopting the GAO proposals In sponsoring  future demonstra-
    tions    (See p 22 )

    Members of the Congress have expressed Interest    in the reasons for the
    delays in the start of the Metroliner  and Turbo-Train   demonstrations
    and in the current status of these proJects


       The General Accounting       Offlce has revlewed           selected    as-
pects of the two high-speed         passenger-train         demonstratxon
proJects   of the Federal Rallroad          Admlnlstratlon        (Agency),
Department    of Transportation          The   demonstration       trains   are
operated   by the Penn Central       Transportation         Company (Rail-
road) between New York City and Boston and between Washlng-
ton and New York City           The Agency 1s responsible,            however,
for the management of the proJects               This    report    contains
our observatrons     on the conduct and current             status of the
two proJects      The   scope    of our   review    1s   described      on
page 23.

        The Agency was created wlthln             the Department       of Trans-
portatlon       when It was establlshed         on April    1, 1967         The
Agency comprises           (1) the Bureau of Rallroad         Safety,     trans-
ferred     from the Interstate          Commerce Commlsslon, which 1s re-
 sponslble      for the safety of rallroad           equipment    and the hours
of service        of rallroad      employees,    (2) the Alaska RaIlroad,
transferred        from the Department        of the Interior,        which LS
responsible        for asslstlng      In the development       of the economy
of Alaska,        and (3) the Office        of High-Speed     Ground Transpor-
tation,      transferred       from the Department       of Commerce, which
1s responsible          for carrying     out the provlslons       of the High-
Speed Ground Transportation              Act of 1965, as amended
 (49 U.S.C. 16311, as It relates              to research     and development
on high-speed         ground trans ortatlon         systems and the conduct
of demonstration           programs H

      The High-Speed   Ground Transportation      Act of 1965 autho-
rized the Agency to sponsor demonstration         proJects   to deter-
mine the contrlbutlons     that high-speed    ground transportation
modes could make to more efflclent        and economical   IntercIty

1 In this report,  we have attributed   all Government lnvolve-
 ment In the proJects    to the Agency.    All actlons taken
 prior   to April 1, 1967, however, were the responslblllty
 of the Department    of Commerce

transportation      systems    The two high-speed   passenger-train
demonstrations      account for about $19 mLlllon    of the $25 mll-
lion obligated      by the Agency for demonstration     proJects    dur-
lng fiscal     years 1966-70.

        The obJectIves    of the two high-speed         passenger-train
demonstrations      were to test the trains'         operating      character-
lstlcs    and to measure and evaluate        public     response to new
equipment     and to changes in various        service     factors       The
demonstration      between Washington      and New York City,          which
began on October 1, 1970, utilizes           Metroliners--high-speed
electric    trains      The demonstration     between New York City
and Boston utlllzes       two three-car     gas-turbine       tralnsets,
commonly referred       to as Turbo-Trains          (See photographs         of
trains    on pp. 7 and 8.1

        Two types of rail         passenger      trains     were selected      for
conducting        the demonstrations,         because of the different             con-
dltlons     on the routes over which each type of train                     would
operate         The route between Washington               and New York City was
fully    electrified      but the route between New York City and
Boston was not and thereby              prohlblted      the Metroliners        from
operating       all the way to Boston              Further,     the route between
New York City and Boston contained                   numerous curves and draw-
bridges     that prohlblted        attainment        of high speeds with the
Metroliner        or conventional       equipment.         The Turbo-Trains        are
designed to attain          higher     speeds than conventional           equlp-
ment, especially         on curved track,          wlthout    requlrlng     substan-
teal improvements         In the roadbed             The Turbo-Trains       are ca-
pable of operating          at speeds of about 170 miles per hour
 (mph)            The Metroliners       can operate        at speeds of about
150 m p.h

        Although    the Agency Initiated      the demonstration          proJ-
ects, the Railroad         and the suppliers     of the Metrollners--
Budd Company,                       Electric    Corporation,       and,General,
Electric      Comp                  essor or the Turbo-Trains,            the
United Alrcraft        Corporation,    have incurred      substantial       ex-
penditures       in support of or In relation        to the demonstration
proJects         As of October 1, 1970, the total          estimated      cost
to the Government for the Metroliner             demonstration        was about
$12 9 million          The Railroad    and its equipment        suppliers
have reported       costs of over $60 mllllon        In support of the

demonstration         The Government IS paysng the entrre        cost of
the Turbo-Train       demonstration,    which, as of October 1, 1970,
was estimated     at about $6 4 mllllon         The Government,    how-
ever, 1s leaslng       the Turbo-Trains     for about $1 1 million
from Unlted Alrcraft       Corporation    which reported    that It had
Incurred    expenditures     of about $7.5 mllllon     In the develop-
ment of the Turbo-Trains

        The prlnclpal    offlclals   of the Department   of Transpor-
tation    and Department      of Commerce responsible  for the admln-
lstratlon    of the actlvltles      discussed  In this report   are
llsted    In appendix    II



                       AND TURBO-TRAIN PROJECTS

      The Metrolrner      and Turbo-Tram           demonstration     proJects
have not accomplLshed         their     objectrves    on a timely     basrs
and have not been conducted             as orlgrnally      planned.     Technl-
cal problems encountered           with the trains       delayed the start
of the proJects      and prevented         the contractors       from marntaln-
rng operatronal      enough cars to run the number of round
trips  necessary     to fully       accomplrsh     the projects'     obJectives.

        The Metroliners        and Turbo-Trains        were an advancement
of the state of the art,,               No slmllar   equipment had ever been
constructed     or used In regular            passenger    service     In the
United States,,        In 1966 the Agency agreed to lease two
Turbo-Trains      being developed          by the United Aircraft         Corpo-
ratlon*and     authorized        the Railroad      to contract      for the con-
structlon     of 50 Metroliners,           without   knowing whether the
trains    would be able to operate to the degree antrclpated
for the demonstrations.               In view of the slgnlflcant          Govern-
ment funds committed to the demonstrations,                    the Agency
should have encouraged             the development      and testing      of proto-
types to provide         greater      assurance that later         demonstra-
tions could be carried             out as planned.

        The Agency's     contracts   with the Railroad       and with the
lessor of the Turbo-Trains          did not provide      for a reduction
In the amount of the contracts            In the event the trains
could not be used as planned.             As the Agency did not know
whether the trains        would perform as antlclpated,          a provl-
slon should have been included            In the contracts     to protect
the investment       of the Government.        The Department     informed
us, however,      that a reduction       of $500,000 In the amount of
the contract      had been negotiated       with the Railroad       In con-
slderatlon     of the fact that the Metroliner           demonstration
which began on October 1, 1970 (3 years after planned),was
decreased    In scope.       No reduction    has been made rn the pay-
ments required       under the contracts       with United Aircraft
Corporation     for the lease and maintenance          of the

Turbo-Trains,     even though    the    scope of the demonstration
was substantially     reduced.

      Our more detalled    comments on the admlnlstratlon       of
the demonstrations     are contained rn the following     sectlons
of this chapter.


       On April   15, 1966, the Agency awarded a contract      to the
Pennsylvania     Rallroad   Company-- now part of the Penn Central
Transportation      Company-- to conduct a high-speed   passenger-
traLn demonstration       between Washlngton   and New York City,   a
distance     of 226 miles.

       The purpose of the demonstration               was to test public             re-
sponse to Improved passenger rail               transportation            and to pro-
vlde information         on public     response to varrous            service     fac-
tors In lntercnty          rail   passenger service,         such as changes In
fare levels,       faster,      more convenient      servrce,       Improved tram
informatlon,       and improved baggage-handling              facllltles.           Con-
ventlonal    train      equipment,     as well as the new Metroliner
equipment,     was to be used to measure these service                      factors.

        Under the terms of the contract,            the Railroad      agreed to
(1) upgrade and malntaln           to certain    speclflcatlons       the road-
bed and the facllltles          between Washington        and New York City,
(2) procure        at least 28, but no more than 50, electrically
propelled     rail    passenger    cars (Metrollners),         and (3) assist
In the conduct of the demonstration.                The Agency was respon-
sable for (1) assisting          In the development         and preparation
of speclflcatlons         for the Metroliners,         (2) approving     a con-
tract    for the manufacture         of the rallcars      and (3) consulting
with the Railroad         on the nature and extent          of experlmental
features     of the demonstratron.

Technical problems          delayed     the    start
of the demonstration

       At the time the contract   was awarded, the Agency estl-
mated that the demonstration     would begin about October 1967
and run for 2 years.     The Agency planned that the Metro-
liners   would make nine round trips   dally  between Washington
and New York City and an addltlonal     nine round trips   dally
between Philadelphia    and New York City except Saturdays,      Sun-
days 9 and holidays,   when reduced service   would be provided.

      October 1967 was established    as               the anticipated       start-
ing trme because both the Agency and                   the Railroad     felt    that
the most time-consuming    task prior  to                the rnltlatron      of the
demonstration   would be to upgrade the                  roadbed to accommodate

the higher   speeds of the MetrolIners.         The Metrollners,    ac-
cording   to the contract,      would be capable of operating      at
speeds of 150 m p.h. and of traveling         between the two cltles
In a maximum elapsed time of 3 hours, wrth four IntermedIate
stops.    The Railroad    ordered the 50 Metrollners        In May 1966
and they were to be dellvered         rn an operative   condltlon   by
 September 30, 1967.

         In April      1966, the Railroad        began upgradlng       Its roadbed
to provide        for the safe operation           of the Metrollners.          A slg-
nlflcant     number of railroad           crosstles       were replaced,      a sub-
stantlal     amount of continuous           welded track was laid,           and a
maJor portion          of the catenary      wire--the       overhead electric
wire--was     replaced.         This work was substantially            completed
in October 1967, but the Metrollners                   were not dellvered        be-
cause of technical            problems which arose as manufacturing
progressed,         prlmarlly     because of the sophlstlcated            nature of
the equipment.           The maJor technical          problems which delayed
delivery     of the Metroliners          are presented        below.

       1. Pantograph-catenary         rnteractlon.     The ablllty    of          the
          pantograph--     the power collection       device on top of
          the raIlcars--      to conduct electrlcal       current  from           the
          catenary     wire to the rallcars        at high speeds had             not
          been determined       prior    to the time the Metrollner               was
          being tested.        Th1.s problem was solved during        the
          testing    of the trains.

       2. Use of two propulsson-braklng               systems for the Metro-
           liners       The Railroad,        with the Government's        concur-
           rence, required        the rallcar       manufacturer     to use
           propulsion-braklng         systems from each of two suppll-
           ers.     Unantlcspated       interfacing     problems arose when
           rallcars     having one system were joined             with rallcars
           having another       system.       These compatlblllty       problems
           were solved during         the testing      of the trains.

       3. Dynamic-braklng    system:    In addltlon   to air brakes,
          dynamic brakes-- brakes using electrical        current--
          were required    on all the Metroliners.      Dynamic
          brakes were necessary      as a safety precaution      to pre-
          vent overheating    of traLn wheels as a result        of brak-
          rng at high speeds using only air brakes.           The
          dynamic-braking    system provided     by one supplier    did

           not meet the specrfrcatrons       Included In the contract
           for the constructron      of the rarlcars.   The problem
           was resolved   by rncreasrng    the use of the arr brakes
           over that anticipated.       It should be noted that the
           trams   ~7111 stop wrthln    the distance  specrfred,   us-
           rng both dynamic and air brakes or air brakes alone.

       4. Short-clrcurted        substations:         The Metroliners       short-
          crrculted      the Railroad       substations--the       point    at
          whrch electrical         current    IS transferred       from a
          higher voltage       level     to the ll,OOO-volt        catenary
          wire--by      drawing more electrlclty            than the substa-
          trons could produce.            The problem was solved by mod-
          rfyrng     the substatrons        to permit the Metroliners           to
          draw sufflclent        electrical      current.

        Pending the Railroad's              ability      to maintain      enough Metro-
liners     rn an operative          condrtlon       to start     the demonstration,
the Agency authorized             the Railroad         to use the available
MetrolIners       In regular        passenger       service.       On January 16,
1969, the Rarlroad           placed SIX Metroliners              In regular      passen-
ger service       between FTashlngton             and New York City.          The ser-
vice began with one train               of six Metroliners            making one round
trip dally.         During the operation              of the train      under normal
service     condltlons,        the Metroliners           encountered      addltronal
technlcal     problems with the electrical                   and propulsion         sys-
tems.     Each Metroliner           has approximately          3,000 electronic
components which require               a high level        of maintenance         to pre-
vent equipment        failure.        The problems encountered              with the
propulsion      system were concerned prlmarlly                    with overheating
of the trains'        transformers          and gear boxes.
         The start     of the demonstration            was delayed by the m-
ability     of the Railroad          to upgrade and maintain           the track
to the contract          specifications         m addition       to the technical
problems encountered             wrth the trams.           Agency officials         In-
formed us that the contract                 had been amended to delete            the
precise     track specifications              and to substitute,       therefore,
a mlnirnum level         of track maintenance           work by the Railroad
during the demonstration               period.       The maintenance       work will
 Include    installing       additional        continuous-welded       rail    and
repairs     such as resurfacing             tops of rail-heads        and renewing
railroad      crosstles.

 Status   of the MetrolIner        demonstration

      Although    the technxal     problems with the Metcollners
have not been resolved,        the demonstration     began on Octo-
ber 1, 1970, and, under the contract           with the RaIlroad,       1.5
scheduled    to run for 2 years.        The demonstration      is to be
made with seven round trips        dally   between Washington       and
New York City Instead       of the more extended       service   origl-
nally   planned.     (See p. 11.1 At th e start        of the demonstra-
tlon the Railroad      had accepted 49 of the 50 Metroliners;
one MetrolIner     was used for spare parts,
         The Railroad  by letter      dated April        6, 1970, advised the
Secretary     of Transportation       that a research         and development
program should be undertaken             Immediately      to overcome the
technical     problems of the Metroliners.               The Railroad      sug-
gested that two of the Metroliners               be used as prototypes          to
determlne     remedies for known deficiencxes               and potentral
weaknesses not fully        apparent.         The Railroad     suggested also
that the remedies be applied            to four additional         Metroliners
which would be used as prototypes               under actual      service     con-
ditions.      Data from the prototype           operation     would then be
used to modify the remaining            fleet    of Metroliners.

        The Railroad    estimated  that the total       cost of this pro-
gram would be about $15 mllllon         and stated that such a pro-
gram was necessary       to avoid the threat     of total      failure     of
the proJect.       As of November 30, 1970, the Agency was nego-
tiating    contracts    with Westinghouse    Electric     Corporation
and General Electric        Company for go-day studies         of Metro-
loner technical      problems.    The Railroad's      proposal       is being
held in abeyance pendlng the results           of the studies,
Federal    costs

       The Agency's      contract     with the Railroad         provided    for a
Government contrlbutlon           of $9.6 million       for the conduct of
the demonstration.          Beginning      in  August   1967, the amount
provided     In the contract        was Increased     to about $11 million
by contract      amendments to provide          for improvements         to sta-
tion facilities,        nncludlng     the construction        of one new sub-
urban station,      the   necessary      track    and electrical       work for
a second suburban station,            and grade-crossmg          protection
along the demonstration           route.

        The Agency entered      into several    other contracts        for the
preliminary      design of the Metroliners,        collection      of reve-
nue data, auditing,         a computer simulation       of rail    opera-
tions,    terminal     unprovements,   and construction         of the sta-
tion facility      for the second suburban station.

       The Government's         cost for the demonstration           project,
as provided      for in the basic contract             with the Railroad,
was based, in part,          on the expected use of the Metroliners.
(See p0 ll*>         The Department has informed us that,               although
not provided       for in the contract,           a reduction     of $500,000
in the amount of the contract               has been negotiated       with the
Railroad     because the trains          cannot be used to the extent
planned.      In   our   opinion,     the   $500,000    reduction    does not
appear significant         when compared with the remaining               con-
tract    cost of $10.7 million           for the demonstration        and the
substantial      reduction       in the use of the Metroliners            during
the demonstration         period.

     A summary of the Government's      total   estimated  costs
for the Metroliner  demonstration    project    as of October 1,
1970, is presented  on the following      page.

                        Descrlptloq                                  cost

Contract     for operation      of demonstration                                    $ 9,600,OOO
Contract     addltlons.
     Improvements       to exlstlng   stations                    $     281,295
     Pop-out windows for rail         cars                                4,000
     Grade-crossing       protection                                     14,000
     Data for computer slmulatlon           of rail
         operations                                                      45,251
     Suburban stations'
           Lanham, Maryland                                           1,051,594
           Woodbrldge,     New Jersey                                    204,111
                         Total      addjtlons                                         1,600,251
        Less negotiated           contract      reduction                             -500,000

Contract       as amended                                                            10,700,251

Other     contracts.
        Design rallcars                                                 100,000
        Collection     of revenue data and audit                         36,785
        Computer slmulatlon         of rail     operations              125,842
        Improvements      to exlstlng      statlons                      40,556
        Suburban statlons:
              Lanham, Maryland                                           34,931
              Woodbrldge,    New Jersey - ._
                   Federal   Railroad      Admlnistratlon               608,886
                   Federal Hlghway Admlnlstratlon                       516 ,495a
                         Total       other   contracts                                1,463,495
Antlclpated      expenditures     during    demonstra-
      Experrmental      service   changes                               400,000
      Terminal     improvements                                         150,000
      Grade-crossing       improvements.
            Federal Railroad      Admlnlstratlon                         61,000
            Federal Highway Admlnlstratlon                              150,000
                         Total antlclpated             expendl-
                            tures                                                        761,000
                         Total,       Government       costs                        $12,924,746
aSectlon       11 of the Federal-Ald      Highway Act of 1968 authorizes          the
 Federal       Hlghway Admlnlstratlon      to purchase land and construct
 parking       facllltles   adJacent    to Federal-aid    highways 1.f such faclll-
 ties are        served by a mass-transit      commuter system.     Funds are being
 provided        by the Federal    Highway Admlnlstratlon      for construction       of
 a parklng        faclllty  for rail    commuters at the WoodbrIdge       statlon.

       Under the terms of the contract,           the Rallroad      1s re-
qulred     to reimburse      the Government for its costs If the
Railroad's      additional      revenues from the demonstration         ex-
ceed Its addltlonal          operating    costs.  The  contract     provides
for payment to the Government of an amount equal to one
half of the excess of income over the operating                 costs up to
the Government's         costs of $10.7 million      under the contract,
as amended.       Since the demonstration        did not start until
October 1, 1970, the amount of the Government's                 investment
that will     be recovered        is unknown.

Suburban     stations
        So that more convenrent         service may be provided         during
the demonstration,         the Government agreed to partlclpate              in
the cost of constructing            two new suburban stations.          The
stations     are located      outside   Washington     In Lanham, Maryland,
at the Junctron       of the CapltaL Beltway and the Railroad's
main line and outside          New York City in Woodbridge,           New Jer-
sey, at the Junction          of the Garden State Parkway and the
RaIlroad's      main line.       The States of Maryland        and New Jer-
sey and Prince Georges County m Maryland                 agreed to partlc-
 lpate In the cost of constructing             the stations.      The total
estimated     cost of constructing         the stations      1s about
$4.2 mllllon,      ofwhrch     the Government has agreed to contri-
bute $2.4 mllllon.
        The station      In Lanham, Maryland,            was opened to servrce
on March 16, 1970.          As of October 1, 1970, two Metroliners
and four conventional          New York-bound          trains        and four Metro-
liners     and four conventronal         Washmgton-bound               trams    stop
at the Lanham station.             The station        m   Woodbrldge,         New  Jer-
sey, ~111 not open for service               until     about June 1971.            The
completion        of the Woodbridge       station      has been delayed be-
cause of a change in the original                  design of the station
that was necessary         to provide      a larger        faclllty        to accommo-
date the commuter traffic            and because of the heavy volume
of rail     traffic     at the statron's        location         that prevents
taking     any section     of track out of service                 for an extended
perrod of time.
        Prince Georges County, Maryland,                 will      own the station
burlding      at Lanham and wrll        lease the parking               lot from the
 State.     The Railroad      will   own the platforms               and pedestrian
tunnel,       The Woodbridge station           ~111 be owned entirely              by
 the State of New Jersey.

       To test public  reaction      to improved interclty      service
and to test the operating       characteristics     of gas-turbine
powered Turbo-Trains,      the Agency entered     into contracts       with
the United Aircraft    Corporation      and with the New York, New
Haven and Hartford    Railroad     (NHRR) to permit the use of
Turbo-Trains   over its shoreline       route between Boston and
New York City.

        In January 1966, the Agency entered               into a contract
with the United Aircraft             Corporation    for the lease of two
three-car      Turbo-Trains       for 2 years for about $1.2 million.
In addition,       the Agency agreed to provide             about $250,000 for
the cost of tests considered              necessary by the Agency to de-
termine whether the Turbo-Trains                met the specifications       set
forth     in the lease contract.           Among the tests performed         were
brake tests and stop-distance              tests.    Although     the Turbo-
Trains satisfactorily            passed these tests by December 1968,
the trains,      as accepted,        did not meet the ride-quality         and
noise-level      specifications.          As a result,      the lease costs
were reduced by $98,000.

       In February     1967, the Agency entered              into a contract
with Unlted Aircraft         Corporation      to service        and maintain
the Turbo-Trains       for a 2-year period          (corresponding        to the
period   of the lease) for about $2 million                 and for safety and
comfort modrfications         to the Turbo-Trains           for about $326,000.
Service and maintenance          of the trains        included     cleaning    of
the interior      and exterior,      fueling,     furnishing       of spare
parts,   and providing       a maintenance      facrllty        to accomplish
these tasks,        The Agency contracted         also with United Air-
craft   Corporation     for the availa3ility            of the Turbo-Trains
for testing     and training      prior    to the start of the lease pe-

      The contracts    with United Aircraft    Corporation     provided
that,   during the 2-year lease period which began October 22,
1968, the Agency would make fixed monthly lease and mainte-
nance payments of about $47,000 and $40,000,         respectively.
The monthly payments were established,       in part,     on the ba-
sis of anticipated     use of the trains;   however, the contracts
did not provide     for a reduction   in the payments in the event
the trains    could not be used to the degree anticipated.

          Although    technical  problems resulted     In a srgnlflcant
reductron        In the use of the trains     compared with the planned
utilization,        the Agency pald the fixed monthly lease and
maintenance        payments whrch, as of October 1, 1970, totaled
about $1,085,000          and $924,000,  respectively.

        The Agency entered Into contracts         with NHRR for (1) lm-
proving    and malntainlng    certain    portlons    of the roadbed be-
tween Woodlawn, New York--the         point at which the trains           op-
erate at slower speeds in and out of Grand Central                Station
In New York City--and       Boston,   (2) additional      testing    of the
Turbo-Trains,     (3) tram' lng of NHRR personnel         In the opera-
tion of the train,       and (4) Insurance      on the Turbo-Trains.

        The Railroad     acquired    NHRR on January      1, 1969, and
under contract       with the Agency operated        the Turbo-Trains
during    the demonstratson.         The contract    provided      for the
Agency to share equally           In any Increase    In the total      passen-
ger revenue from shoreline           operations   resulting      from opera-
tion of the Turbo-Trains.            An Agency offlclal       informed    us,
however,     that,   because of the operating        schedule of the
trains,     no recovery    of revenue was expected.

        Because NHRR was In bankruptcy    at the time the demon-
stration    was planned in 1965, the Agency 1s paying the total
cost of the demonstration.       Prior  to the decision  to extend
the demonstration     period (see p. 211, the Agency estimated
the cost of the demonstration       to be $6.4 mllllon.

Technical    problems delayed        and
curtailed    the demonstration

        When contracting       for the lease of the Turbo-Trains            in
January 1966, the Agency planned that the trains                  be de-
livered      about 10 months later,        with the demonstration       pro-
gram to begin shortly          thereafter.        No specific  date was set
for the start of the demonstration.                  Because of engineering
and construction        problems,      the trains     were not accepted un-
til    October 21, 1968--approximately             23 months after   the
scheduled      delivery    date.     These problems concerned primarily
the ride quality        and noise level        of the trains.     As previ-
ously stated,        the lease costs were reduced because the
trains     did not meet the contract           specifications   for ride
quality      and noise level.

        Shortly   after   the Railroad      acquired     NHRR, it requested
the Agency to provide         for additional       testing    of the braking
capabilities      of the Turbo-Trains.          The Railroad     informed
the Agency that the previous           tests had not been satisfactory
for its purposes and had not been witnessed                 by Railroad       em-
ployees who were currently          responsible       for train    operation.
In February      and March 1969, the Agency conducted a series
of stop-distance        and braking    tests to the satisfaction            ofthe
Railroad.       The estimated     costs of these additional           tests
was about $30,000.

        The demonstration       began on April     8, 1969, with one
Turbo-Train     making one round trip daily          between New York
City and Boston.        Although     it was planned that each Turbo-
Train would make two round trips             daily between New York City
and Boston, technical         problems with the trains        resulted    in
the demonstration       consisting      primarily   of one Turbo-Train
making one round trip         daily    and the other train      being used
for backup purposes in the event of equipment failure.                    The
technical    problems were concerned primarily            with the reli-
ability    of the trains'       gear boxes, which resulted         In in-
creased maintenance        and which prevented       the lessor from en=
suring the availabllity          of both trains.

      The Agency anticipated          spending about $300,000 for ex=
perimental  service   changes        designed  to measure public   reac-
tion to improved Intercity           service;  however,  the equipment

failures  prevented   operation of the Turbo-Trains       to the                  ex-
tent necessary    to conduct the experimental    service.
      In addition,      the Railroad        would not increase     the speed
of the Turbo-Train        to enable it to make two daily           round
trips   because the Railroad        felt     that the roadbed and numer-
ous grade crossings         between New York City and Boston made it
unsafe to operate the trains            at higher      speeds.   The trains
were operated      at about 100 m.p.h.,          although    they were cap-
able of speeds up to about 170 m.p.h.                  The Agency antici-
pated spending about $850,000 for grade-crossing                  and right-
of-way improvements,         but these improvements          were held in
abeyance pending action          by the Congress on the Federal-Aid
Highway Act of 1970 (Public           Law 91-605,       approved Decem-
ber 31, 1970) which provides             for the elimination      of all
grade crossings      along the route of both demonstrations.
        The limited     Turbo-Train    demonstration         was scheduled     to
end October 22, 1970.           On October 12, 1970, the Secretary               of
Transportation       announced that the demonstration              would be ex-
tended on a month-to-month          basis, pending negotiations            for
further    use of the trains.        In addition,         the Agency autho-
rized the Railroad        to extend the insurance            coverage on the
Turbo-Trains      through October 2, 1971, at a premium of
$47,520.       As of November 30, 1970, the Agency was negotiat-
ing with the United Aircraft           Corporation        for additional     use
of the Turbo-Trains         and had authorized         the Corporation     to
renew its lease for the maintenance              facility      at Providence,
Rhode Island.

        Because of continuing          technical     problems with the
trains'    gear boxes, which materially              affect    the serviceabil-
ity of the Turbo-Trains,           it appears that any long-term                ex-
tension    of the demonstration           without    resolving      these prob-
lems would contribute       little        toward providing        the public
with the degree of improved service which the Agency antici-
pated would be provided          by the Turbo-Trains,             In addition,
unless the Turbo-Trains          can be used to provide             further     im-
proved service,     it is questionable            whether an extension            of
the demonstration     will     provide       the Agency with any further
beneficial     data on public        reaction     to the service         provided
or on the operating       characteristics           of the Turbo-Trains.

                                        CJMPTER 3

                                  GAO PROPOSALS AND

                                  AGENCY COMMENTS

        We proposed that the Secretary                 of Transportation           (1) In
sponsoring      future     demonstration         projects      lnvolvlng     new or
novel equipment,          encourage      the   use    of  prototypes      to   deter-
mine the operating           characterlstlcs          of the new equipment and
thereby provide          assurance,      to   the   greatest      extent possible,
that the equipment ~111 be capable of meeting the program's
objectives       on a timely basis and (2) Include                   appropriate      pro-
vlslons    In future       contracts       for the use of equipment              to con-
duct demonstrations           that ~111 provide           for adJustmentI of the
contract     price     In the event the equipment does not perform
as anticipated

       By letter     dated September 28, 1970 (app. I>, the Assls-
tant Secretary       for Admlnlstratlon,      Department    of Transporta-
tion,     agreed with our flndlngs       and stated that the Agency
would adopt our proposals          In sponsoring     future  demonstration
projects.        On December 21, 1970, the Agency issued a policy
statement      (FRA 4400.9) which provided        for adoptlng    the GAO
proposals      In sponsoring    future   demonstrations.

                                    CHAPTER 4

                                SCOPE OF REVIEW

        Our review was conducted              at the Agency's        headquarters
 offlce     In Washlngton,       D.C.     We dlrected       our review to the
 planning      for and admlnlstratlon             of the two high-speed
 passenger-train         demonstration        projects.      In revlewlng       the
 admlnlstratlon        of the proJects,          we directed     our attention
 to determlnlng        (1) the reasons for the delay In the start
of the demonstrations,            (2) the reasons for the use of only
one train        to conduct the Turbo-Train             demonstration,       (3) the
manner rn which the projects                are achlevlng      their    intended
purposes,        and (4) the current          status of the demonstration
projects.          Our review Included         an examlnatlon       of the con-
tracts     for the conduct of the demonstration                  prodects.       We
reviewed       also legrslatlon,         correspondence,       and other records
related      to the proJects.          In addltlon,       we interviewed        offl-
clals     of the Agency responsible              for the conduct of the dem-
onstration        proJectsO


                                                                                   APPENDIX I
                                                                                      Page 1

                      OFFICE   OF THE SECRETARY             OF TRANSPORTATlON
                                   WASHINGTON,        D C       20590


                                                 September              28, 1970

      Mr. Bernard Sacks
      Assrstant Dlrector
      Crvll Dlvlslon
      U.S. General Accounting Offxe
      441 G Street,   N. W.
      Washrngton, D. C. 20548

       Dear Mr. Sacks-
       This is m reply to your letter       of June 11, 1970, requesting     our
       comments on a draft of a proposed report to the Congress entltled,
       "Review of Admlnlstratlon      of Contracts for the High-Speed Ground
       Transportation   Demonstration    ProJects."   We are provldlng   our
       comments by reference     to each of the [see GAO note, p 281
       recommendations   of the report,
       The report recommends that In future demonstratrons        FRA encourage
       the development of a prototype    of the equipment to be used, and
       that future demonstration   contracts   Include appropriate    provlslons
       for the adjustment of the contract     price If the equipment cannot
       be used to the degree antlclpated     when the program began.                       rk
                                 [See GAO note,             p     281

       In answer to the [see GAO note, p. 281 recommendations,        the FRA will
       encourage where approprxate,     the testing   of prototype equxpment prior              to
       sponsoring  future demonstrations    that Involve   new or novel equipment.

      Secondly, the FRA will include in future demonstration       contracts
      appropriate  provisions   for the adJustment of the contract     prxe if
      the equipment cannot be used to the degree anticipated       when the
      program began. We have negotiated      a $500,000.00 reduction    in price
      with the Penn Central Transportation     Company for changed condrtlons
      under the Metrollner    Demonstration  contract.

    Page 2

                                     [See GAOnote ]

   We appreciate   the opportunity     afforded    us to comment on your draft

                                               Alan L. Dean


GAO note.   The deleted comments relate to matters which were dxscussed
            in the draft report but omltted from this flnal  report.

                                                    APPENDIX II
                                                        Page 1
                    PRINCIPAL OFFICIALS

                                          Tenure of office
                                          From           --TO

  (note a>:
    John A. Volpe                  Jan.      1969    Present
    Alan S. Boyd                   Jan.      1967    Jan.      1969
   Alexander B. Trowbridge
      (acting)                     Jan.      1967    Mar.      1967
   John T. Conner                  Jan.      1965    Jan.      1967
    Alan S. Boyd                   June      1965    Jan.      1967
   Carl V. Lyon (actlng)           July      1970    Present
   Reginald N. WhItman             Feb.      1969    June 1970
   A, Scheffer Lang                May       1967    Jan. 1969
    wles B. Mitchell   (acting)    Dec.      1969    Present
    Edward J. Ward (acting)        Ott,      1969    Dec. 1969
    Robert A. Nelson               Oct.      1965    Oct. 1969

     Page 2

                           PRINCIPAL    OFFICIALS





aPosltion      created by Department  of Transportation             Act
 (Public      Law 89-670), dated October 15, 1966.
    All functrons,      powers, and duties       of the Secretary     of Com-
    merce under certain       laws and provlsxons       of law relating
    generally    to railroads      were transferred     to and vested In
    the Secretary     of Transportation        on April   1, 1967, by the
    Department     of Transportation      Act.

                                                               US    GA0Wash.D   C