The Northern
Indiana Commuter Transportation District’s Board of Directors is mulling a
proposed 5-percent fare hike which would, if approved, take effect on July
1.
The hike isn’t a
done deal yet-- “Nothing’s final,” NICTD General Manager Michael Noland told
the Chesterton Tribune on Tuesday--but there’s no way around the fact
that the South Shore commuter line will need to raise additional revenues to
offset the estimated $1.5 to $2 million in new annual expenses associated
with operating the Positive Train Control (PTC) system when it goes on line
in 2019.
PTC is a federally
mandated technology which relies on GPS, radio signals, and computers to
monitor a train’s position and automatically slow or stop trains in danger
of colliding or derailing due to excessive speed.
Under a law passed
by Congress in response to a 2008 collision between a commuter train and
freight train in Chatsworth, Calif.--a crash which killed 25 and injured 102
more--all passenger and freight railroads had until Dec. 31, 2015, to
implement PTC. The cost and complexity of designing and installing the
technology, however, subsequently prompted Congress to extend the deadline
to Dec. 31, 2018.
NICTD will make
that deadline, Noland said. That’s not the issue: in October 2015 the NICTD
board awarded a $79,998,877 contract to Parsons Transportation Group to
design and install PTC--funding for which NICTD bonded--and the project is
moving along smartly.
The issue, instead,
is this, Noland said: PTC is a complicated system and will require the hire
of as many as 10 new technicians to operate it. Among other things, a 24/7
PTC Help Staff will need to be fielded in order to monitor the system,
trouble-shoot it, and communicate with engineers on the ground.
Add to that the
annual cost of a required purchase of “significant layers of insurance we do
not have today,” which Noland estimated at $500,000 to $750,000.
Noland did cite one
other reason for the proposed fare hike unrelated to PTC: on Jan. 1 Metra
increased the fare for passengers boarding at Hegewisch, which is the South
Shore line’s easternmost stop in Illinois but--because the facility is owned
by Metra--is subject to the Metra fare schedule. NICTD accordingly needs to
raise its own fares for the sake of equity, Noland said. “Otherwise the
Illinois folks will migrate east to save a few bucks.”
Noland emphasized
that before he makes a final recommendation to the NICTD Board of Directors
at its March meeting, he and his staff, along with several board members,
will be discussing other possible options. One of them: demand-based
pricing. At the moment, rush-hour commuters--the South Shore’s “bread and
butter,” Noland acknowledged--get a 30-percent discount at peak-demand
times, while the off-peak discretionary rider pays full fare.
That arrangement,
Noland said, goes against the grain, for instance, of pricing in the airline
industry, which charges premium fares for the “highest demand time” while
offering deals at “low demand time.”
On the other hand,
Noland noted, the airlines are really only competing against themselves,
while the South Shore is competing against passengers’ own “individual modes
of transportation” as well as against ride-share services like Uber. Price
the peak fare too high, he said, and commuters will simply drive themselves
to work.
The most recent
South Shore fare hike took effect on July 1, 2017: it was the second phase
of a two-phase 5 percent hike enacted to raise additional
revenues--estimated at $1 million annually--to be used
exclusively for capital projects and investments. As Noland noted a year
ago, NICTD exhausted its bonding capacity, what he called its “self-funding
ability,” when it bonded for the PTC project.