Decision No. 30-R-2002

January 21, 2002

File No. R8050/709-254.80

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APPLICATION

On September 5, 2001, Alberta Transportation and Utilities (hereinafter Alberta Transportation) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.

On October 19, 2001, the Canadian National Railway Company (hereinafter CN) filed its answer to the application, and on October 29, 2001, Alberta Transportation filed its reply to the answer.

Pursuant to subsection 29(1) of the Canada Transportation Act (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties have agreed to an extension of the deadline until January 23, 2002.

BACKGROUND

Provincial Highway 21 runs in a north-south direction, generally between Calgary and Edmonton, and beyond. Alberta Transportation intends to twin Provincial Highway 21 in the area of the subject road crossing, expanding the roadway from a two-lane highway to a four-lane divided highway, in order to accommodate highway traffic that it estimates will increase by approximately 150 percent by the year 2021.

CN's Wainwright Subdivision crosses over Provincial Highway 21 on a northwest-southeast axis. The existing subway structure was completed in 1978. The main feature of the proposal is the addition of a span on the western end of the subway that will accommodate the expansion of Provincial Highway 21 below.

On October 18, 1974, the Railway Transport Committee of the Canadian Transport Commission (hereinafter the RTC), one of the Agency's predecessor, issued Order No. R-19511, which authorized the Department of Highways and Transport of the Province of Alberta (now Alberta Transportation and Utilities) and CN to construct a subway to carry Secondary Highway No. 823 (now Provincial Highway 21) across and under the railway track at mileage 254.80 of CN's Wainwright Subdivision. The subway replaced an existing at-grade crossing adjacent to the present structure. The Order provided that 80 percent of the costs of construction was to be paid from the federal Railway Grade Crossing Fund. Five percent of the costs of construction was apportioned to CN and the remaining 15 percent was apportioned to the Department of Highways and Transport of the Province of Alberta.

While the existing subway was constructed to accommodate a potential second railway track, there is, at present, only one railway track which occupies the southern portion of the superstructure. Similarly, in order to accommodate potential expansion of Provincial Highway 21 into a four-lane divided highway, the parties agreed, when the subway was originally constructed, that the western abutment of the subway would be built in such a way that it could be converted into an intermediate pier upon which another span could be added. The parties originally disagreed as to whether the portion of the structure that was built to accommodate a future second railway track should be included as part of the "basic grade separation". Designation of this part of the structure as part of the basic grade separation would mean that the costs of its construction could be included in any shareable costs assigned by the Agency in its decision. That issue was, however, resolved by the parties during the course of the proceedings.

ISSUE

The issue to be addressed is what proportion of the costs is to be borne by each party with respect to the reconstruction of the subway.

POSITIONS OF THE PARTIES

Alberta Transportation estimates that the total costs of the project will be $2,116,000. Alberta Transportation submits that CN should be responsible for 25 percent of the total costs of the project, based on the apportionment of costs by the RTC for the construction of the existing subway. After the application of the 80 percent contribution from the Railway Grade Crossing Fund towards the costs of the original subway, the RTC apportioned the remaining costs in the following manner: 25 percent to CN and 75 percent to the Department of Highways and Transport of the Province of Alberta.

Alberta Transportation submits that pursuant to section 3 of the National Transportation Agency's Guidelines on the Apportionment of Costs of Grade Separations (hereinafter the Guidelines), the benefits accruing to each party have been considered. Alberta Transportation further submits that the purpose of these Guidelines is to avoid having to revisit the matter of benefits each time a grade separation is reconstructed.

Alberta Transportation states that it is senior at the subject road crossing as it was senior at the original at-grade crossing. Construction and subsequent reconstruction of the subway would not have been required without the presence of the railway line. Thus, the subway is, in fact, a liability to Alberta Transportation.

Alberta Transportation is of the opinion that both parties will benefit from the proposal as, in addition to the forecasted growth in highway traffic, CN can better accommodate railway traffic volumes that have increased in the form of longer trains and increased tonnage hauled. Alberta Transportation thus submits that as both parties have increased their facilities since 1978, the original 25/75 percent cost apportionment formula is still reasonable and equitable.

Alberta Transportation further asserts that both parties have a responsibility to ensure the safety of the travelling public.

Alberta Transportation states that it will be responsible for the costs of the highway approaches, the highway surface and the drainage and lighting facilities. With respect to the maintenance of the reconstructed subway, Alberta Transportation submits that the costs of maintenance should be apportioned according to the Guidelines. Thus, CN should be responsible for the costs of maintaining the substructure and superstructure of the subway, including the track structure, retaining wall and railway drainage. Alberta Transportation submits that the parties have agreed to these terms.

Alberta Transportation indicates that construction was tentatively scheduled to begin in May 2002, with completion by October 15, 2002. It has subsequently moved these dates back by one year, so that all outstanding issues in dispute may be resolved prior to the commencement of construction.

CN questions the present day need for the project. CN submits that Alberta Transportation's use of traffic projections for the year 2021 is not a good reflection of what is required for present highway volumes. Based on the present average of 21 trains per day, CN submits that the current daily train/vehicle cross product is below 200,000, the generally accepted level to warrant a grade separation. CN therefore does not consider that Alberta Transportation's proposal is relevant to present day traffic needs.

CN disagrees with the inclusion of certain costs within Alberta Transportation's cost estimate for the project. Alberta Transportation separated its estimate of the costs of the project into two components, one for costs associated with the extension of the structure and one for the reconstruction of the roadway. CN asserts that the $700,000 assigned by Alberta Transportation to the roadway component of the project should not be included in any shareable costs. This component largely consists of the costs of grading and excavating earth for the purposes of the roadway. CN submits that the roadway work should be considered beyond the scope of the basic grade separation as this work would be required regardless of the construction of the grade separation.

CN adds that the project is not justified at this location on the grounds of safety as suggested by Alberta Transportation.

CN further submits that the twinning of Provincial Highway 21 will offer no benefit to CN and will only expose it to additional maintenance costs. The project will also temporarily impede CN's operations. With respect to Alberta Transportation's suggestion that CN will benefit from added capacity, CN submits that the frequency of rail traffic has not increased and has remained virtually static between 1992 (20 trains per day) and today (21 trains per day).

Notwithstanding the above arguments, CN states that if the project were to proceed, it should not be required to contribute to the costs of construction. With respect to Alberta Transportation's suggestion that the present cost apportionment should reflect that of the original structure (25/75 percent), CN states that because the original structure affords Alberta Transportation more than twice the established road allowance (in terms of width), any previous obligation to provide passage was more than fulfilled upon completion of the existing structure.

In response to CN's position respecting the present day need for an expanded structure, Alberta Transportation points out that projected highway traffic for 2004 will be 10,280 vehicles per day, resulting in a road-rail traffic cross product of over 200,000. Further, its long-range projections indicate that volumes will more than double, going from 8,450 vehicles per day in 1999 to 20,629 vehicles per day in 2021. Alberta Transportation adds that while the number of trains may have increased only slightly, the length of the trains has increased significantly. The above cross product arguments are thus somewhat misleading, because if there was no separation of grade, the longer trains would increase waiting time at an at-grade crossing significantly.

With respect to CN's submission that the costs associated with the roadway portion of the project should be excluded from the basic grade separation, Alberta Transportation states that roadway grading is essential in order that the new roadway lanes match the elevation of the existing road. Its estimate did not include items such as pavement structure or sub-base that would be required regardless of the construction of the grade separation. The costs of the components that were included were derived by taking the difference between the construction of the roadway without the existence of a railway company and the construction of the roadway to accommodate a subway grade separation.

ANALYSIS AND FINDINGS

In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings.

Subsection 101(3) of the CTA provides that if a person is unsuccessful in negotiating an agreement or amendment mentioned in subsection (1), the Agency may, on application, authorize the construction of a suitable road crossing, utility crossing or related work, or specifying who shall maintain the crossing.

Subsection 101(4) of the CTA provides that section 16 of the Railway Safety Act, R.S.C., 1985, c. 32 (4^th Supp.), applies if a person is unsuccessful in negotiating an agreement relating to the apportionment of the costs of constructing or maintaining a road crossing or utility crossing.

In cases where the parties involved cannot agree on the apportionment between them of the liability to meet the construction, alteration, operational or maintenance costs relating to the road crossing, the provisions of section 16 of the Railway Safety Act enable the proposing party or each other person who stands to benefit from the completion of the work to refer the matter to the Agency for a determination of the costs.

The Guidelines form the basis of the Agency's determinations of cost apportionment applications involving construction or reconstruction of structures designed as grade separations. The Guidelines take into account, among other things, the benefit accruing to each party for the construction or reconstruction, as well as the responsibility that each party has to co-exist at crossings.

Notwithstanding precedent Agency decisions and the Guidelines, every case before the Agency is assessed based on its own merits and, accordingly, with respect to grade separations, the Agency may issue decisions that vary from the Guidelines depending on the circumstances surrounding each particular situation and any other factors that it considers relevant.

The Guidelines define "basic grade separation" as that portion of the work which is required to provide adequate facilities for present day needs at the time of construction or reconstruction of the grade separation. In this case, with respect to the issue of the need for the project, the Agency finds that on the basis of the Alberta Transportation's highway traffic projections for the year 2004 and the frequency of rail traffic submitted by CN, the cross product will exceed 200,000. This figure is the generally accepted "exposure factor" utilized to substantiate the necessity for a grade separation at roadway-railway crossings, although other factors may contribute to the necessity for a project. In the present case, the Agency is satisfied that the reconstruction of the grade separation is required to meet present day needs, and determines that the proposed works constitute the basic grade separation.

With respect to the issue of including the costs of roadway construction, the Agency finds that the highway grading work is required in order to ensure that all traffic lanes are at the same elevation and also to provide the same vertical clearance under the subway, and is consequently primarily due to the presence of the subway. The costs of this grading work, within the proposed limits submitted in this matter, should therefore be included in the shareable costs of the project.

The Agency notes that the parties are in agreement with respect to the responsibilities for the maintenance of the proposed structure.

Based on the submissions of the parties in this matter, the Agency considers that while this project benefits both parties, it is primarily attributable to highway development. Alberta Transportation has proposed the project to accommodate the expansion of the existing two-lane subway to accommodate four lanes of highway traffic, in light of its projections of significant growth in highway traffic. The Agency also notes that RTC Order No. R-19511 not only apportioned construction costs, but also assigned construction and maintenance responsibilities to both parties in authorizing the construction of the original subway. The Agency is therefore satisfied that both parties have an established responsibility at this road crossing.

Subparagraph 3(b)(i) of the Guidelines provides that when the reconstruction of an existing structure, at which both parties have an established responsibility, is due primarily to highway development, the highway authority shall normally pay 85 percent of the costs of the reconstruction of the basic grade separation, and the railway company the remaining 15 percent.

CONCLUSION

In light of the above findings, pursuant to subsection 101(3) of the CTA, Alberta Transportation is authorized to carry out the work as shown on the drawings submitted to the Agency.

In view of its finding that the project is primarily required for highway development, the Agency, pursuant to subsection 101(4) of the CTA, determines that 85 percent of the costs of the reconstruction of the subway shall be paid by Alberta Transportation and 15 percent by CN.

The responsibilities for maintenance of the revised structure shall remain as previously established for the existing structure.