Coordinating with third-party entities can create challenges.
In numerous instances across the FasTracks projects, challenges involving third parties—such as federal regulators, local jurisdictions, and utility companies—surfaced that were not accounted for in the original contract negotiations.
For example, RTD experienced challenges getting approvals from local governments on the North Metro project. Interviewees expressed that local jurisdictions see the rail construction process as a way to extract upgrades to other adjacent infrastructure that jurisdictions may not be able to pay for due to local budget limitations. These can include upgrades to drainage infrastructure, streets, and other elements that extend beyond the project’s scope. Since the local jurisdictions cannot see the fully completed designs in a DB contract, they may request more change orders than they otherwise would have. For example, for North Metro, RTD tried to streamline the design-review process in inter-governmental agreements, but differing processes within a jurisdiction (e.g. between the design and planning entities and the public works entity) sometimes created situations where certain departments were aware of design plans and others were not. In some cases, this dynamic led to change orders and finger-pointing.
Similarly, contracts do not always account for ambiguous regulatory practice. The P3 approach for the Eagle P3 projects allowed RTD to shift significant risk to the private sector, but there was a “legal gray area” when complications arose concerning compliance with freight rail regulations. RTD was the first transit agency to deploy positive train control (PTC) technology during construction of FasTracks.390 PTC refers to technologies that automatically stop trains before collisions and incidents occur. PTC was part of the original designs for the Eagle P3, which was viewed as an innovative aspect of the project, but one that resulted in confusion about risk and responsibility when regulatory challenges arose.
Because RTD’s commuter rail lines were designed to operate using electrified service, the traditional form of crossing gate warnings was not available. In early agreements, it was decided that PTC would include some technologies that could provide constant warning times. Federal Railroad Administration (FRA) regulations vaguely state that any “electromagnetic, electronic, or electrical” device at each crossing warning system be maintained in accordance with the system’s limits for any warning system apparatus.391 As for gate arms, regulations state that gates should close no less than three seconds after flashing lights appear and remain positioned no less than five seconds prior to any train.392
Once testing began, the Colorado Public Utilities Commission and FRA were not satisfied with the warning times, but did not have a specific regulation to challenge, as the design followed industry standards. After the University of Colorado A Line was opened for service a software glitch in the at-grade safety gates at vehicle crossings caused the gates to open and close at static times that did not account for potential train delays or early arrivals.393 This error required the agency to operate under a waiver from the FRA.394
The regulators’ primary experience prior to this project had been on rural freight projects, and there was general agreement across all stakeholders—including the regulators, RTD, and DTP—that the regulation of crossing gates for passenger rail in an urban setting was uncharted territory. Under current FRA policy in Section 255, a minimum of 20 seconds is required for grade crossing warning systems to signal an oncoming train, however no maximum number has been imposed.395
RTD’s contract indicated that the agency was responsible for regulatory compliance, since they are the Railroad of Record. However, the lack of clarity over interpretation of the regulation ultimately left DTP responsible for additional costs incurred, as they were the concessionaire for the Eagle P3 and RTD believed they would comply with the regulations. The proposed solution while the issue was sorted out was to deploy crossing gate guards (“flaggers”) at each gate on the University of Colorado A and G lines.396 DTP filed a lawsuit for $122 million for the cost of crossing guards, and RTD filed a countersuit of $120 million for bridges that were not designed to the proper standard and had to be rebuilt, which left less time for testing of crossing gates.397
This issue does highlight a somewhat unique regulatory risk with rail transit projects. These projects generally require the final approval of some independent regulatory body before service can commence. The risk allocation for this factor and how much contractors would apply to this risk (if so allocated) is an important consideration.
RTD also experienced challenges with water and utility regulators and operators. Water management policies in the intermountain west have created the notion that “water is king” which presents challenges for major projects whose alignments run next to water infrastructure. In the case of the North Metro line, the project is adjacent to a large wastewater treatment plant, crosses the Platte River three times, and parallels an irrigation canal. Acquiring land from the entities that manage these assets was a challenge and ultimately, RTD negotiated five major agreements with third parties that were not originally in place when they issued the notice to proceed to contractors.
Further issues arose when coordinating utility relocation. RTD was the party of record in agreements with utility companies, and the agency considered coordination with utilities as an area that needs improvement. Despite RTD being the party of record, there was originally no clear delineation of who—RTD or DTP—would provide reports on testing activities to utility companies. For example, reports of a breaker tripping were never reported to Xcel Energy, which strained relationships between RTD, DTP, and Xcel Energy. As a result, RTD indicated that rather than relying on contractors to provide utility companies with reports of test activities, the agency itself should be responsible for these notifications as the party of record.398
Early coordination between internal and external stakeholders can help to mitigate unanticipated challenges. Bringing entities that are not directly party to the contract but that are otherwise affected by a project into negotiations sooner rather than later can avoid delays or costly changes later in the project.