March 2004
"Everyone would share in the hangover"In testimony today before the Railroad Subcommittee of the House Transportation and Infrastructure Committee, Association of American Railroads President and CEO Edward R. Hamberger said that there are two groups of rail customers—those "who cling to the belief that government should dictate the marketplace," and those who "understand and recognize how deregulation has improved service and lowered rates."
Testifying against railroad reregulation bills pending in Congress that have been championed by some captive shippers, Hamberger cited "the overwhelming outpouring of opposition to these bills from railroad customers. Almost 400 railroad customers have written since last fall to oppose reregulation."
"The financial community," Hamberger said, "has consistently stated that reregulation will lead to capital starvation and disinvestment." He quoted John Barnes of Deutsche Bank, who recently said, "In the beginning, there would be short-term benefit for captive shippers through lower rates. However, instant gratification usually comes with a headache the next morning, and there would be no Advil strong enough for the long-term damage associated with railroad reregulation . . . . Over the long-term, everyone would share in the hangover: shareholders, customers, railroads, the entire transportation system, the U.S. and global economies. In the worst case scenario . . . a repeat downward spiral similar to the 1970s could occur, with multiple bankruptcies that could cripple the transportation system."
Hamberger also quoted from several of the shipper letters, including one from the Alliance for Auto Manufacturers, which wrote that reregulation would "undo the progress made since the Staggers Act." Another letter came from the CEO of Kokomo Grain, who wrote, "I do not want to see those gains and benefits thrown aside with a move towards blanket reregulation." Dyno Nobel, a chemical company, called reregulation "remarkably short sighted," and said that "in the long run, all rail users will be losers because the inevitable result will be to devastate the ability of the railroads to continue providing their present level of service, much less to make vitally needed investments for the future."
Hamberger told the Subcommittee that, prior to the Staggers Rail Act, the railroad industry had been governed by "a failed system of almost total regulation that had lasted for more than 90 years, leaving in its wake bankrupt railroads throughout the Northeast and Midwest, declining market share, billions of dollars in deferred maintenance, soaring accident rates, and scant improvement in productivity." Since Staggers, he said, "Market share has increased after decades of decline, more than $320 billion in private dollars has been invested to maintain and improve infrastructure and equipment, productivity has increased by 183%, average rail rates have dropped by 60% on an inflation adjusted basis, and train accident rates have fallen by 68%."
Balfour Beatty Rail consolidates operationsBalfour Beatty Rail, Inc., is moving several operations of its Pittsburgh, Pa., facility to its Jacksonville, Fla., office. Effective immediately, the financial services, project procurement, human resources, and general administrative functions will be relocated. About 19 employees are affected. (Balfour Beatty Rail employs 505 people.)
"This is a difficult but necessary step in order to enhance our competitiveness in the railway services market," said Joe Carlin, president and CEO of Balfour Beatty Rail. The move will "align operations to enable improved responsiveness, increased efficiencies, and highly focused customer support" and accelerate "the timing of planned growth programs," he added.
Balfour Beatty Rail recently opened two offices in the Western Pennsylvania region. One will serve its short line and industrial customers; the other houses the Civil Construction Business Unit.
South Korea opens its first high speed rail lineSouth Korea has launched its first high speed rail line, the KTX (Korea Train eXpress), between Seoul and Pusan. Earlier today, the Prime Minister of the Republic of South Korea conducted an inaugural ceremony at the Seoul station. KTX's 46 high speed trainsets will cover the 412 kilometers in two hours and 40 minutes vs. four hours and 10 minutes on conventional Saemaul trains.
The first leg of the new high speed line between Seoul and Daegu (281 km) will open for revenue service on April 1 with operation at 300 kph. KTX will run on upgraded conventional lines between Daegu and Pusan and between Daejon to Mokpo. The Korean National Railroad is expecting Seoul-Pusan ridership to increase from 223,000 to 314,000 per day.
KTX trains will serve four stations: Seoul and Daegu and the intermediate stations of Cheonan and Daejon. Three additional stations will be introduced at Osong, Gimcheon, and Ulsan once the final 131 km of new high speed line from Daegu to Pusan is completed by 2010.
In 1994, the Korean High Speed Rail Construction Authority awarded a contract worth 1.5 billion Euros to Alstom and the Eukorail-led consortium to supply the line's rolling stock. (Eukorail is the Korean-based subsidiary of Alstom.) The order also included traffic control systems, catenary, and maintenance services. As project co-leaders, Alstom and Eukorail were responsible for the system’s design, engineering, manufacturing, installation, integration, and commissioning.
In 2002, following Alstom's technology transfer--including rolling stock manufacturing, and technical training and support of Korean engineers--Korean manufacturers delivered the first "made-in-Korea" KTX trainset, based on TGV technology developed by Alstom and SNCF. Of the 46 trainsets, 34 were manufactured locally.
RailAmerica to sell Freight Australia for $214 millionIn a continued effort to reduce debt and focus on its core North American rail business, RailAmerica has agreed to sell 100% of its ownership of Freight Australia. Pacific National, an Australian rail freight logistics firm, will pay $214 million for the railroad, which RA purchased in April 1999 from the Victorian State Government for $103 million.
The transaction is slated to close during this year's second quarter, subject to approval by the State of Victoria and the Australian Competition and Consumer Commission. Pacific National paid a cash deposit of $11 million when the deal was struck, and will pay the balance at closing.
"This transaction will allow RailAmerica to realize the value from the investment it made in 1999 [in Freight Australia] and redeploy the proceeds toward significant debt reduction and other general corporate purposes," said William G. Pagonis, chairman of RA's Board of Directors. "Upon closing of the transaction, $59 million of senior debt will be paid off with the proceeds of the sale."
RailPower's hybrid locos approved for funding in CaliforniaOne each of RailPower Technologies Corp.'s Green Goat® and Green Kid hybrid yard locomotives have received funding approval under the Carl Moyer emissions reduction program for use in California's South Coast Air Quality Management District. The Green Kid will be used by Railserve, Inc., and RailPower is finalizing end-user arrangements for the Green Goat. A customer is expected to be announced shortly.
BNSF/KSU partner on international grain export education programBurlington Northern and Santa Fe has teamed up with Kansas State University (KSU) to offer an educational program on rail transportation's role in the U.S. grain export market. Participating BNSF executives will be among the instructors of short courses geared to international grain buyers. In addition, the Burlington Northern Santa Fe Foundation, a BNSF subsidiary, will contribute $250,000 over the next five years for the construction of a transportation exhibit at the new International Grains Program (IGP) Executive Conference Center now under construction at KSU.
"We have long recognized that the more successful we help our customers become, the more successful our railroad will be," said Matthew K. Rose, chairman, president, CEO of BNSF. "That’s why this investment makes so much sense for us. Kansas State has established itself as a global leader in training international grain export buyers, and this program is helping to attract those buyers to the farmers, elevators, and grain export marketers we serve."
The courses will be held at the IGP Executive Conference Center. Scheduled for dedication on May 1, the 20,000-square-foot facility will house meeting and instructional facilities, including a grain grading laboratory, and the rail transportation education exhibit. (IGP's national program is supported by funding from U.S. Wheat Associates, American Soybean Association, U.S. Grains Council; state wheat associations in Colorado, Kansas, Nebraska, Oklahoma and Texas; and some of the nation’s leading grain export marketers.)
"The IGP facility on the Kansas State University campus is a natural site to showcase the critical role that BNSF and the rail industry play in our process of marketing grain internationally," commented David Frey, administrator of the Kansas Wheat Commission. "BNSF handled record volumes of grain with the huge 2003 harvest. The U.S. grain industry, especially in the interior of the country, is dependent on the efficiency of rail transport, and BNSF makes U.S. grain attractive to overseas buyers."
ASLRRA safety awards announcedThe American Short Line and Regional Railroad Association has announced the winners of its 2003 Safety Awards. The program, which is co-sponsored by CANAC, Inc. and MARSH USA, uses ASLRRA's new Severity Index based on the railroad employee injuries and man-hours. There are five categories based on man-hours worked, plus an additional category for switching and terminal railroads. In each category there are four award levels: Gold, Silver, Bronze, and Copper. The awards will be presented during on April 23, 2004, at the ASLRRA's Annual Meeting in St. Louis.
0 to 10,000 hours:
Gold, Chattooga & Chickamauga Railroad; Silver, Valdosta Railway, L.P.; Bronze, Texas South-Eastern Railroad; Copper, R.J. Corman Railroad Co./Cleveland Line.
10,001 to 50,000 hours:
Gold, Grainbelt Corporation; Silver, York Railway Company; Bronze, Arkansas Louisiana & Mississippi Railroad; Copper, Livonia, Avon & Lakeville Railroad Corporation.
50,001 to 250,000 hours:
Gold, Kiamichi Railroad Company LLC; Silver, Columbus & Ohio River Rail Road Company; Bronze, Illinois & Midland Railroad Inc.; Copper, San Joaquin Valley Railroad Company.
250,001 hours and above:
Gold, Iowa Interstate Railroad; Silver, Willamette & Pacific Railroad; Bronze, Lake Superior & Ishpeming Railroad Company; Copper, Buffalo & Pittsburgh Railroad, Inc.
Switching and terminal railroads:
Gold, Terminal Railroad Association of St. Louis; Silver, Birmingham Southern Railroad Company; Bronze, The Belt Railway Company of Chicago; Copper, Patapsco & Back Rivers Railroad Company.
In addition to the ASLRRA Safety Award, 168 railroads with no FRA reportable injuries in 2003 will be given the "Jake With Distinction Award"; 31 railroads with no reportable injuries but which have had train accidents will be presented a "Jake Award."
All ASLRRA safety awards have been determined based on the railroads’ injury reports to the FRA and then rated based on the new ASLRRA severity index ratio.
Owner/operator truckers ratify new CN agreementOwner/operator truck drivers represented by the Canadian Auto Workers (CAW) have ratified a new collective agreement with CNTL, a wholly-owned subsidiary of CN. The agreement is retroactive to January 1, 2004. There are approximately 380 owner/operators covered under the agreement that provide local trucking services for CN's major intermodal terminals in Canada. Previously, CN’s CAW members representing shopcraft, clerical, and intermodal employees ratified new collective agreements with CN and ended their strike.
Metra steps up safety effortsThree successive fatalities within the space of three weeks earlier this month involving young children—a ten-year-old who bolted from his mother at a station and was hit by an express train, a teenage girl wearing headphones, and another teenage girl who used a hole in a fence to take a shortcut to school—have prompted Chicago’s Metra commuter rail system to launch a large-scale safety awareness campaign.
Described as "the most aggressive public safety effort in its nearly 20-year history," the campaign is aimed specifically at keeping children safe around railroad property.
As a start, every police agency in the six-county Metra service territory is being contacted and asked to step up their patrols and enforcement around the railroad. Metra is asking local police to remove trespassing youths from railroad property and notify their parents. Also, every school superintendent in Metra service territory is being contacted and asked to address safety issues with students and remind them that railroad tracks should never be used as an alternative or shortcut. Metra is requesting each school host assemblies to show rail safety presentations like Metra's "Be Smart, Be Safe" train safety video for children. In addition, school administrators are being asked to read messages over school public address systems during daily announcements. Metra will continue to honor school requests for Operation Lifesaver presentations.
Other, more aggressive parts of the campaign include placement of 30-second public service announcements on local television stations, full-page newspaper ads, and informational seat-drops on all Metra trains urging parents to reach out to their children about train safety.
BNSF offers new Customer Subscription ServiceBurlington Northern and Santa Fe rail customers now can receive service advisories via E-mail. By signing up for BNSF's Customer Subscription Service (https://www.bnsf.com/bnsf.sph/myBNSF), they will be notified of the type of condition affecting their shipments--including date, time, and location--and when normal service will resume.
"We listened when our customers asked for detailed, timely information about service conditions," says Fritz Draper, BNSF's vice president-Business Development. "With the new system, customers will receive notices only if their traffic is affected, so the information will be more relevant to their day-to-day operations."
E-mail's will be generated for such service conditions as weather-related interruptions, maintenance-of-way activity, traffic embargoes, track outages, and derailments. The notifications will list, by car, any customer shipments impacted, including equipment numbers and estimated time of arrival (ETA) at the destination. BNSF also will send updated ETA data as it becomes available.
In addition to service advisories, customers can choose to receive information on shipment status (bad-ordered equipment, ETA, or change in arrival), customer updates (marketing news, facility updates, iPower news, customer letters), and pricing (intermodal public pricing, pricing updates).
NS and Honda dedicate new rail yard Today, Norfolk Southern and Honda Manufacturing of Alabama LLC dedicated a new $15 million rail yard in Lincoln, Ala. The 125-acre, eight-track yard can load up to 1,120 vehicles into a combination of 104 bilevel and Auto-Max® cars. The yard will be used to load and transport Odyssey minivans manufactured at a Lincoln plant and additional Honda models in the near future. Currently, two daily outbound trains serve the 2.8 million square foot plant, which has the capacity to produce 300,000 vehicles annually.
"This is the first Honda plant that Norfolk Southern serves directly, and we are proud to have been selected," said NS Vice Chairman and Chief Marketing Officer Ike Prillaman at the dedication ceremony. "With the expansion of the plant, we will continue to seek new ways to create extra value for
Honda to help them operate their business efficiently in distributing their vehicles to the marketplace."
Honda's Lincoln plant employs about 3,100 associates. Its second assembly line will begin producing Honda Pilot sport utility vehicles this spring and is expected to expand the workforce to 4,300.
"This new rail facility plays a vital role in making sure our Odyssey minivans--and soon, Honda Pilot sport utility vehicles--will arrive in a timely manner and in excellent condition," said Chuck Ernst, plant manager at Honda Manufacturing of Alabama.
NS joins U.S. Customs security programThe U.S. Customs and Border Protection has recognized Norfolk Southern as a certified member of the Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary government-business initiative to improve supply chain and border security.
Through C-TPAT, NS and other rail, air, and sea carriers "confirm their secure handling of import/export freight, share best practices, and communicate security guidelines to their customers and transportation partners," according to the Class I.
"C-TPAT complements our ongoing efforts to ensure safe, reliable rail service," said Robert E. MartĚnez, NS vice president-business development. "This program should help create an increasingly secure and efficient U.S. supply chain."
Charlotte LRT cost risesThe estimated cost of Charlotte’s 9.6-mile CATS light rail line has risen from $371 million in 2002 to $398.7 million. The increase is due to a new bridge and to real estate costs that have been higher than anticipated. The revised figure was announced at a meeting of the Metropolitan Transit Commission on March 23. It was also announced that the Charlotte City Council had formally approved the purchase of 16 S70 light rail vehicles from Siemens for $52.5 million.
Bear Stearns upgrades NS stockNorfolk Southern stock has been upgraded from "peer perform" to "outperform" in a research report by Bear Stearns analyst Thomas R. Wadewitz. His forecast is based on anticipated traffic growth, an easing of inflation, and declining internal costs.
U.S. awards Iraqi transport contract Reuters reported on March 23 that the government had awarded a contract valued at up to $325 million to the Arlington, Va.-based joint venture of Contrack/AICI/OCI/Archirodon to rehabilitate or build aviation, port, highway, and rail facilities in Iraq.
Vancouver port to double on-dock rail A $C130 million expansion of the container terminal at Vancouver, B.C., will include the doubling of on-dock rail to 8,000 feet. The 18-month project is part of an agreement announced March 24 under which P&O Ports Canada, Inc. will operate Centerm in Vancouver harbor for the Vancouver Port Authority. Container traffic at the port is expected to increase from 1.54 million TEU in 2003 to 4 million by 2020.
Railway Age announces 2004 Short Line and Regional Railroads of the YearRailway Age has named Northumberland, Pa.-based Nittany & Bald Eagle Railroad Co. as 2004 Short Line Railroad of the Year and Brewster, Ohio-based Wheeling & Lake Erie Railway Co. as 2004 Regional Railroad of the Year. The awards will be presented at the annual meeting of the American Short Line and Regional Railroad Association in St. Louis on April 23.
"This year’s awards are presented to carriers who have consistently proven that persistence pays off," said Railway Age Publisher Robert P. DeMarco. "Nittany & Bald Eagle recovered from a loss of 50% of its annual carloads in just three years. And Wheeling & Lake Erie solved a grain shipper and grain receiver’s trucking problems by bringing rail into the equation. Their focus on initiating shorter-haul moves and providing quality customer service has helped them boost both carloads and revenues."
The Nittany & Bald Eagle Railroad Co. (NBER)—one of eight North Shore Railroad Co. properties—is being honored for its remarkable turnaround efforts. The winning entry was submitted by NBER Director of Marketing Todd Hunter.
After losing four core customers that provided nearly 8,000 carloads or 50% of its business, NBER aggressively marketed its services and expanded operations. Its first priority was to increase aggregate business. What started as an 8,000-ton stone move in 1984 rose to a 1.1 million-plus ton move in 2003. The short line now runs a 12-car shuttle twice a day over eight miles, eliminating more than 20,000 truckloads from area highways. NBER developed several other short-haul moves, which have added up to $1 million a year in revenue. In 2003, NBER was presented with ASLRRA’s marketing award for this business growth. The short line also was selected as one of the top "100 Best Businesses in Central Pennsylvania" by PA Business Central Newspaper.
"The Nittany has been able to weather significant hits by taking advantage of and creating new opportunities," says Jeff Stover, executive director of the Lewisburg, Pa.-based SEDA-COG Joint Rail Authority, owner of the 70 miles of track that NBER operates. "Through our classic public-private partnership, we are trying to make it easy for companies to do business with us. It’s not ‘no, we can’t do that,’ but ‘how can we help you do that?’"
NBER also improved track infrastructure in 2003. Working with the SEDA-COG JRA and the state of Pennsylvania, NBER completed installation of 12 more miles of new continuous welded rail (for a total of 36 miles in just five years) and 4,300 new crossties. NBER’s parent company brought in a full-time track surfacing gang to resurface the entire main line. The railroad now operates as a 40 mph Class III on its 55-mile, 286K compliant main line.
The Wheeling & Lake Erie Railway Co. (W&LE) is being recognized by Railway Age for outstanding achievement in marketing and attention to customer service. Jeff Sunderland, W&LE’s Market Manager-Grain, Food, and Forest Products, submitted the winning entry.
Among the largest Class II’s with more than 800 miles of track, W&LE handles nearly 130,000 carloads annually. In 2002, it identified a number of local, short-haul grain opportunities with its traditional unit grain train elevators—markets dominated by short-haul truck moves of 75 miles or less. Determining that rail could offer cheaper rates and more timely delivery to receivers, W&LE marketed its service and purchased 22 4,750-cubic-foot covered hoppers. W&LE teamed up with large on-line grain shipper Sunrise Cooperative—with grain elevators in Clarksfield and Monroeville, Ohio—and grain receiver Star of the West—with a flour mill in Kent—to start a "Partners in Wheat Production" program. Star had been receiving 60% of its shipments via truck, and Sunrise was among its truck carriers. Because the milling company wanted to expand its on-site storage capacity, and access to its facility was already difficult due to lack of space and congestion, Star and Sunrise decided to give W&LE a chance to carry wheat by rail. Under a 10-year contract, W&LE specified competitive rail rates, and Sunrise spent $1 million to provide additional storage space for Star. To handle the increased wheat shipments and growth in other on-line grain business, W&LE acquired another 50 covered hoppers.
The partnership program resulted in a reliable supply of high-quality wheat for Star, an increase in revenue for Sunrise, an increase in new business for W&LE, and a more reliable wheat market for Sunrise-area farmers. The percentage of wheat now moving by rail into Kent is 65% and it continues to grow. Sunrise shipments to Kent have increased by 300%, and now all move by rail.
This success led to additional truck-competitive rail business. In less than a year since the partnership began, W&LE moved more than 400 carloads carrying 1.3 million bushels of wheat, soybeans, and corn to local receivers, taking more than 1,600 trucks off Ohio roads. According to Sunderland, "it’s a win-win-win all around."
The awards will be announced in the April issue of Railway Age.
For more information, contact Marybeth Luczak, Executive Editor, Railway Age, (212) 620-7236; E-mail: mluczak@sbpub.com.
BNSF to invest $40 million in Memphis facilityBurlington Northern and Santa Fe announced March 23 that it will make a capital investment of $40 million to expand its intermodal facility in Memphis, Tenn. City and county tax incentives were a factor in BNSF’s decision.
"This cooperative agreement with the City of Memphis and Shelby County is a critical step that will enable BNSF to successfully meet our projected growth demands for container traffic," said Fritz Draper, the railroad’s vice president-Business Development. "As a result, we anticipate doubling our capacity to 400,000 lifts within the next five years, and we also have the capacity to meet future expansion needs."
SEPTA cancels bids, restarts procurementCiting a need to "to enhance competition, preserve the integrity of the procurement process, and to ensure that [our] interests are protected," the Southeastern Pennsylvania Transportation Authority has cancelled all bids for a procurement of 104 new electric mulitple-unit railcars for its regional rail system and is inviting new bids. SEPTA’s action followed an initial recommendation on Feb. 19 for a contract award to United Transit Systems, a consortium of Korea’s Rotem and Japan’s Nissho-Iwa Ltd. UTS’s contract award was formally protested by Kawasaki Railcar.
Though UTS was the lowest bidder at $237 million, it had the lowest technical score: 125 out of a possible 175 points. Kawasaki was the second-lowest bidder at $251 million and highest technical scorer at 163 points. The controversy swirled in Philadelphia’s local newspapers for several weeks; allegations were made that UTS was awarded the contract solely on the basis of its promise to build a railcar manufacturing plant in the old Philadelphia Naval Yard and hire about 140 local workers. SEPTA officials at one time were quoted in local newspapers as saying they weren’t concerned about the fact that Rotem, which has built passenger railcars in other parts of the world, has virtually no experience in North American transit car design and construction.
"A legal issue has been raised concerning a potential ambiguity in the Request for Proposals and whether, as a result, the number of competitors may have been inadvertently narrowed," SEPTA General Manager Faye Moore said in a statement. "The rebid should encourage more competition that, in the end, will benefit the taxpayers."
KCS gains ground in TFM arbitration caseThe AAA International Centre for Dispute Resolution hearing the dispute between Kansas City Southern and Grupo TMM, S.A. issued an interim award on March 19, 2004, finding that the Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (Grupo TFM) Acquisition Agreement "remains in force and is binding on KCS and TMM in accordance with its terms," KCS said in a statement issued earlier today.
Under the Acquisition Agreement, KCS would acquire all of the shares of Grupo TFM, which owns all of the common stock of Mexican freight railroad TFM, S.A. de C.V.
The dispute, according to KCS, arose out of TMM’s attempt on Aug. 22, 2003, to terminate the Acquisition Agreement after its shareholders voted against it. The arbitration panel concluded that the rejection of the Acquisition Agreement by TMM's shareholders "did not authorize TMM's purported termination of the Agreement," said KCS. Both parties "will now move on to the second phase of the arbitration, which will decide the remaining issues, including KCS’s remedies and damages."
CAW strike on CN endsMembers of the Canadian Auto Workers (CAW) union have ratified new collective agreements with CN and will end their strike. The three-year agreements are retroactive to Jan. 1, 2004. CAW-represented shopcraft, clerical, and intermodal employees are scheduled to return to work on the first daylight shift of Saturday, March 20.
Bombardier closing seven rail plants, cutting 6,600 jobsIn a sweeping restructuring of its rail division, Bombardier Inc. is cutting 6,600 jobs, about l8.5% of Bombardier Transportation’s work force, and closing four North American and seven European plants. The cost of the downsizing is estimated at $C777 million ($US580 million) over three years. When the plan is fully implemented Bombardier expects to save $C600 million a year.
Production has stopped or been suspended at four North American locations: Barre, Vt.; Pittsburg, Calif.; and Kingston and Burnaby in Canada. This year Bombardier will close plants at Amadora, Portugal, and Doncaster and Derby Pride Park in Britain. Scheduled to shut down next year are facilities in Prattein, Switzerland; Kalmar, Sweden; and Wakefield, Britain.
At a news conference on March 17, Bombardier Inc. President and CEO Paul Tellier commented, "We are beyond the days where we had to have plants in every state in Germany and every province in France to get contracts." He said Bombardier Transportation currently operates 35 production sites in 15 European companies, where 85% of the work force reductions will take place.
(Railway age’s sister publication in Europe, International Railway Journal, had this observation: "There has been huge over-capacity in the rail vehicle manufacturing industry for many years, particularly in Europe. The numerous mergers and takeovers largely failed to address this number until quite recently. Adtranz tried but failed to reduce the number of plants it had, and Bombardier inherited the problem when it took over Adtranz in 2001.")
Bombardier also said that since 65% of its costs are in materials, the restructuring initiative includes "new arrangements with suppliers to better coordinate materials procurement." Tellier said this program "will rationalize the number of suppliers the business utilizes, increase parts standardization, and centralize negotiation processes to achieve economies of scale wherever possible."
The restructuring had been unexpected, but details were not released until Bombardier issued its earning report for the fiscal year that ended Jan 31, 2004.
Bombardier recorded a charge of $C457 million of the $C777 million restructuring cost in the quarter that ended Dec. 31.
The company—which in addition to Bombardier Transportation includes Bombardier Aerospace and Bombardier Capital—had total FY 2004 revenues of $C21.3 billion, and ended the year with a backlog of $C45.9 million.
Amtrak, Bombardier/Alstom settle disputeAmtrak and the consortium of Bombardier/Alstom have reached an out-of-court settlement of their legal dispute involving the $1.2 billion procurement of 20 Acela Express high speed trainsets and 15 HHP8 electric locomotives for the Northeast Corridor.
Under the terms of the settlement, both parties will drop all claims. Amtrak will pay up to $42.5 million of $70 million in payments it has withheld from the consortium. A 10-year maintenance contract entered into last year with Northeast Corridor Maintenance Service Company (NECMSC) for the trainsets will be terminated in October 2006 instead of 2013, with Amtrak assuming all responsibility for maintenance at that time.
In November 2001, Bombardier filed a lawsuit against Amtrak in U.S. District Court for the District of Columbia seeking damages. Amtrak promptly countersued, seeking its own damages. The settlement, said Amtrak President and CEO David Gunn, is a better outcome than "continuing to spend unnecessary time and money on costly and attention-diverting litigation." He said that efforts now will instead be focused "on improving the performance of Acela Express and delivering the best service we know how for the passengers who enjoy and depend on it."
Bombardier President and CEO Paul Tellier said the consortium is satisfied with the out-of-court settlement and "will respect Amtrak’s strategy to provide maintenance services and will take the necessary steps to ensure a seamless transition between now and October 2006." NECMSC will continue to provide parts and technical advice to Amtrak’s mechanical department during the transition period.
The Acela Express program has been trouble-plagued since shortly after its inception in 1996, when Amtrak awarded the Bombardier/Alstom consortium a performance-based contract for the equipment and its operation and maintenance, which included construction of three specialized maintenance facilities in Boston, New York, and Washington, D.C. First, there was the discovery that the carbodies were slightly wider than specifications called for, limiting the degree of tilting the trainsets could accomplish through some curves. This was followed by discovery during testing of excessive truck hunting and wheel wear. Resolution of that issue postponed revenue service for several months. Then, shortly after the first trainsets were placed into service in December 2000, cracks were discovered on locomotive yaw-damper brackets, which caused the entire fleet to be pulled from service for further modifications. There were numerous other small but annoying technical glitches—locomotive roof shrouds that broke off during operation, door problems, etc. ("Crapper doors that don’t work," David Gunn quipped at one point.) Blame flew back and forth, with the consortium at one point alleging that Amtrak had provided inaccurate data regarding the Northeast Corridor infrastructure’s ability to handle high speed equipment designed to operate at speeds up to 150 mph.
Amtrak’s customers, though, didn’t seem to notice.
All the technical glitches have been addressed, and the Acela Express service continues to grow in popularity. Thirteen daily roundtrips are now in service between New York and Washington, D.C.; 10 between New York and Boston. More than six million passengers have used the service since its introduction.
CSX plans $1.2 billion offeringCSX Corp. announced March 16 that it has filed with the Securities and Exchange Commission to periodically sell up to $1.2 billion in debt, stock, warrants, and preferred securities. The company said it would use net proceeds for such purposes as reducing or refinancing debt, capital expenditures, working capital, and redemption of securities. Proceeds may also be used for "implementation of work force reductions, improvements in productivity, and other cost reductions at major surface transportation and international terminals."
UTU seeks to reverse "devastating" setbackIn a statement to a meeting of UTU Designated Legal Counsel (DLC), new United Transportation Union President Paul. C. Thompson addressed "the sad fact that Byron Boyd, Charlie Little, Ralph Dennis, and John Rookard have pled guilty to conspiring with certain DLC to solicit and/or accept cash payments."
"I would be less than candid if I did not tell you that these charges and guilty pleas are devastating to this organization and have placed a black mark on this union and on the DLC program," said Thompson. "While I do not know all the evidence, I have read the indictments, and plea arguments, and have spoken with many of our members and will tell you again that this entire matter has done great damage to this union and its reliability."
Thompson pledged "to ensure that on my watch, and for all time to come, this will never happen to this union again."
He said he would appoint a committee of experienced union officers, counsel from the UTU Board of Ethics, and the coordinator of DLC to recommend "constructive changes."
"Strong medicine may be needed to heal this union, and I intend to do whatever is necessary to achieve that end," said Thompson.
Boyd and Little are former presidents of UTU. Dennis was union insurance director. Rookard was a top assistant to Boyd.
Wabtec wins $19 million braking equipment order Union Tank Car has awarded Wabtec Corp. subsidiaries WABCO Freight Car Products and Cardwell Westinghouse a $19 million contract for air brakes, draft gears, hand brakes, and UBX™ brake assemblies. Delivery is slated for later this year.
"We’re pleased to be providing all of Union Tank’s braking equipment requirements for 2004," said Paul E. Golden, president of Wabtec’s Freight Car Group. According to Golden, Union Tank will be the first railcar builder to benefit from the "competitive advantages" of Wabtec’s new UBX™ brake assembly. The lightweight UBX combines "different components, pipes, and brackets into a one-piece module that mounts directly onto the freight car truck," making it easy to install.
"We expect the UBX module to streamline our purchasing and assembly process," said Dan Welch, supply chain director-manufacturing for Union Tank. "As a result, we have decided to make UBX the standard for all of our railcar production needs."
AAR targets untagged freight cars Of the over one million freight cars currently in service in North America, about 0.8%, or 14,000, have missing or incorrect AEI (Automatic Equipment Identification) tags. For the past two years, the industry has been measuring the number of cars in those categories and has managed to reduce the number from over 1% of all cars, with the ultimate goal of 100% compliance.
From April 1-14, Association of American Railroads member railroads will be conducting an AEI tagging "blitz," whose goal is to reduce the number of untagged/incorrectly tagged cars to 0.5%. An AAR AEI Task Force, chaired by Fred Meek of Union Pacific, is organizing this effort.
CSXT names former NS executive to COO post CSX Transportation has named Tony L. Ingram executive vice president and chief operating officer, responsible for all rail operations, including transportation, safety, engineering and mechanical, and service design. Ingram served most recently as senior vice president-Transportation Network and Mechanical for Norfolk Southern.
"Tony is a terrific person with proven transportation expertise, coming from Norfolk Southern’s excellent team of industry experts and leaders," said CSX Corp. Chairman, President, and CEO Michael J. Ward of the announcement on March 15. "Tony will bring an intense focus to our operations, which are neither as effective nor efficient as they need to be. For example, in the first quarter, our expense levels remain too high and are largely offsetting revenue gains. I have every confidence that Tony will be a key contributor in transforming our operations and helping realize our productivity and revenue growth goals."
A 33-year railroad veteran, Ingram joined the NS predecessor Southern Railway in Atlanta as a management trainee. He rose through the ranks, holding positions in engineering and labor relations, before moving to train operations. Ingram has a bachelor’s degree in business administration from Jacksonville State University and attended Northwestern University’s Advanced Transportation Management Program and Duke University’s Management Development Program.
CN and CAW reach tentative agreementCN has reached new tentative collective agreements with the Canadian Auto Workers (CAW) union, whose shopcraft, intermodal, and clerical have been on strike since Feb. 20. CN is withholding details of the three-year agreements until they are ratified. The CAW expects to schedule ratification votes early this week.
14th International Wheelset Congress to be held in OctoberThe International Wheelset Congress (IWC) will hold its 14th conference in Orlando Oct. 17-21. Every three years, the Congress covers rail wheel, axle, and bearing technology, manufacturing, serviceability, and safety. This year’s theme--technology to increase safety and value in a global market--was developed, keeping in mind today’s "pressure to reduce costs, while improving safety," according to conference Organizing Committee Chairman John Oliver.
IWC’s Orlando event is sponsored by the U.S. Department of Transportation, the Federal Railroad Administration, Amsted Rail Group, Timken, European Railway Wheels Association, Transportation Technology Center, Inc., Standard Steel, and K-IV Enterprises, LLC.
This is the first IWC since 1978 that has been held in the U.S. Previous conferences have taken place in Italy, Germany, England, France, Japan, Austria, Spain, Canada, Australia, and China.
For details, visit the Congress’s Website, www.14WheelsetCongress.com.
Drugs a possible factor in UP collision, says NTSBThe body of the engineer of a Union Pacific freight train involved in a fatal collision with another UP train on Feb. 21 in Carrizozo, N. Mex., has tested positive for marijuana, according to the National Transportation Safety Board, whose investigation of the accident is still under way. The two crewmembers of the eastbound UP train died in the collision; the two crewmembers aboard the westbound train were not injured.
The NTSB’s update said, in part:
"During the course of the investigation, NTSB investigators were informed that a green leafy substance and smoking paraphernalia were found on the remains of the eastbound train's engineer. . . .The green leafy substance and burnt vegetation from the smoking paraphernalia tested positive for marijuana.
"Toxicological results from the westbound grain train crew and the eastbound train deceased conductor were negative for all drugs tested. Toxicological results from the deceased engineer from the eastbound train were positive for marijuana. . . . The crew of the eastbound train had passed three wayside signals that informed the crew of the need to reduce speed and to be prepared to stop their train before passing the last signal, which was just before the point of the collision. The signal testing by the NTSB signal group, which included representatives from the Federal Railroad Administration and the State of New Mexico railroad inspectors, determined that the signal system had displayed the correct signal aspects for the train to reduce speed and stop before the collision. Event recorder data indicated that the throttle of the eastbound train was in a high power setting and that the speed of the train was not reduced in a manner that would comply with signal indications. Sight distance testing at the location of the signals in advance of the location of the accident and at the location of the stop signal at the point of the collision revealed no sight obstruction to the signals. The event recorders from both locomotives of the striking (eastbound) train recorded a speed of 36 mph at impact, with no input from the crew for several miles before the collision, including no braking action before impact."
RailAmerica separates chairman and president/CEO positionsRailAmerica has split the chairmanship and president/CEO offices. William G. Pagonis, who served previously as vice chairman of the Board and chairman of the Corporate Governance and Nominating Committee, has been named chairman of the Board. Gary O. Marino will retain his position as president and CEO.
The separation "is an important element in developing an effective corporate governance system," according to Pagonis, who noted that a number of Fortune 500 companies have recently taken similar action.
Charles Swinburn, who currently serves on the Compensation and Government Relations Committees, has been appointed chairman of the Corporate Governance and Nominating Committee, succeeding Pagonis. John M. Sullivan will replace Pagonis on the company’s Compensation Committee.
Pagonis has served on RailAmerica’s Board of Directors since February 2000. He is currently SVP-Head of Supply Chain for Sears Roebuck and Co., and president of Sears Logistics Services, Inc., a wholly owned subsidiary of Sears. Pagonis, a retired U.S. Army Lieutenant General, served in Desert Shield/Desert Storm as logistics commander for General Schwarzkopf.
College scholarship program announcedThe Metropolitan Railway Club of New York (MRCNY) is offering college scholarships, in memory of Richard J. Collins, to the dependents of club members in good standing. High school seniors and college students must submit their applications by May 1. Successful applicants will be selected in June, and a minimum award of $500 will be made prior to the fall 2004 semester. Applicants are not eligible to receive this scholarship in consecutive years. For more information, contact MRCNY’s John Hyland at 400 West 31st Street, New York, NY 10001.
Commuter train bombings terrorize MadridNearly 200 riders died and more than 1,400 were injured when 10 bombs exploded on four rush-hour commuter trains in Madrid on March 11. The bombs, brought onboard in backpacks, were detonated on Spanish National Railways (Renfe) EMUs.
According to International Railway Journal, Railway Age’s sister publication, three bombs went off on a train at Atocha station, four on a train approaching Atocha, two on the bilevel train at El Pozo, and one on a train at Santa Eugenia. (El Pozo and Santa Eugenia are on the Madrid–Guadalajara line.)
It’s still unclear to U.S. officials if Basque separatist group ETA or Al Qaeda are behind the attacks.
Boyd pleads guilty, gives up UTU positionsByron A. Boyd Jr., one of two current and two former United Transportation Union officers indicted last year on racketeering charges, pleaded guilty to one count in a federal court in Houston on March ll. He faces maximum penalty of 20 years in prison and a $250,000 fine when he is sentenced on June 10. Boyd has also lost his positions as UTU president and president of the UTU Insurance Association.
The principal charges against the UTU officers involved the acceptance of payments from lawyers to gain access to the names of injured union members. Injury lawsuits can bring large settlements in the courts. Former UTU President Charles L. Little and former union insurance director Ralph J. Dennis entered guilty pleas last year. One of Byron Boyd’s aides, John R. Rookard, pleaded guilty on March 10.
"The investigation into union corruption and union officials who abuse their authority through bribery and greed will continue," said U.S. Attorney Michael Shelby.
Pennsylvania grants funds to small roadsPennsylvania Gov. Edward G. Rendell announced the release of $6 million in capital funds for small-railroad improvements. The Allegheny Valley Railroad of Allegheny County, Pa., will get $1 million for continued track rehabilitation. Delaware & Hudson, based in Clifton Park, N.H., will receive $995,256 for expansion and rehabilitation of facilities at the Philadelphia Naval Yard. For the Western New York & Pennsylvania of Warren, $2 million is earmarked for improvements on the former Erie Lackawanna line. Wheeling & Lake Erie of Brewster, Ohio, will receive $500,000 continued work on a line serving Allegheny County. An Indiana company, RFI Energy, Inc., will be granted $2 million to obtain access to the Buffalo & Pittsburgh to serve an RFI coal facility.
Global Railway buying YSD assetsCalgary-based Global Railway Industries Ltd. announced March 11 that will acquire the manufacturing assets of YSD Industries, Inc. The transaction is expected to be completed on March 23. YSD is based in Youngstown, Ohio, where it went into business 80 years ago as Youngstown Steel Door. It currently has sales of around $15 million annually.
"YSD complements our Prime Railway Services division both geographically and in terms of product mix," said Mike Kohut, president and CEO of Global. "Prime is based in Canada and manufactures railcar doors and replacement parts, which are sold mostly to Canadian freight carriers while YSD is based in the United States and manufactures railcar doors and parts primarily for new railcars to OEM's and U.S. based freight carriers."
TieTek owner raises money for expansionNorth American Technologies Group, Inc., whose TieTek subsidiary manufactures composite railroad crossties, says it is raising expansion money through the issuance of $7 million of Series AA Convertible Preferred stock and warrants to institutional investors. The company has the right to sell an additional $7 million of preferred stock and warrants. TieTek constructs crossties from recycled plastics and scrap tires. Expansion now under way will quadruple production capacity at its plant in Marshall, Tex.
CSXT plans June track blitzCSX Transportation will rehabilitate its main line between Elkhorn City, Ky., and Spartanburg, S.C. during a 10-day blitz starting June 20. The railroad plans to install more than 154,000 feet of rail and 95,000 crossties. It will also surface 25 miles of track and repair or resurface bridges, tunnels, and grade crossings. The blitz will involve around 720 people working on 15 different teams. Most line-haul traffic will be diverted to other railroads and gateways. CSXT estimates that under its normal 12-hour curfew, the work would take 20 works and cause "significant disruption."
Faulty CPR maintenance blamed for Minot derailmentOn Jan. 18, 2002, 31 cars of a 110-car Canadian Pacific train derailed near Minot, N.D. Five tank cars carrying anhydrous ammonia "catastrophically erupted, and a vapor plume covered the derailment site and the surrounding area," in the words of the National Transportation Safety Board. One resident died after inhaling the fumes, 11 were seriously injured, and 322 people, including the two train crew members, sustained minor injuries.
On March 9, the NTSB announced that it had determined the probable cause of the accident to be "an ineffective Canadian Pacific Railway inspection and maintenance program that did not identify and replace cracked joint bars before they completely fractured and led to the breaking of the rail at the joint."
Four of the NTSB's conclusions had to do with the safety of the railroad industry's tank car fleet: "The low-fracture toughness of the non-normalized steels used for the tank shells of the five tank cars that catastrophically failed in this accident contributed to the cars' complete fracture and separation…. Using tank cars built before 1989 and fabricated from non-normalized steel to transport U.S. Department of Transportation class 2 hazardous materials under current operating practices poses an unquantified but real risk to the public…. The research program proposed by the Federal Railroad Administration to model the dynamic forces and evaluate the crashworthiness of tank cars in accident conditions is incomplete without a plan to validate the predictive model…A materials standard to define the minimum level of dynamic fracture toughness for the material in all tank cars that transport class 2 hazardous material over the entire range of operating temperatures would provide greater assurance that the tank car materials will perform in a safe manner."
NJ Transit awards Meadowlands link contractThe board of directors of NJ Transit has approved a contract amendment for Parsons Brinckerhoff Quade & Douglas to redesign a portion of the right-of-way in East Rutherford along the Pascack Valley Line to allow direct rail service to the Meadowlands Sports Complex. Construction of the long-debated rail link is scheduled to begin in 2005 and be completed by the end of 2007. NJ Transit Executive Director George D. Warrington commented: "For the first time in about 30 years, we have a practical, affordable, workable do-able program that we’re absolutely committed to bringing on line in less than four short years."
The Andersons expands its leasing operationsThe Andersons, Inc., has finalized the acquisition of rolling stock and leasing assets from Progress Energy, Inc., subsidiaries Railcar, Ltd., and Progress Rail Services Corp. The assets include approximately 6,700 railcars, 48 locomotives, and contracts to manage an additional 2,600 railcars for third-parties. (Most are currently under lease in the United States, Canada, and Mexico.)
The Andersons has formed a new Limited Liability Company, TOP CAT Holding Co., whose subsidiaries will own the assets. The Andersons’ Rail Group will manage them.
Financing was provided by $86.4 million in notes underwritten by BB&T Capital Markets, BMO Nesbitt Burns Inc., and CapStone Investments. Quadrant Financial Group, LLC, acted as the structuring agent and financial advisor for the transaction.
According to The Andersons’ President and CEO Mike Anderson, the company’s 10-plus years experience in the railcar leasing and management business "combined with an upward trend in the railcar market makes this a very good fit for us."
Billy Ainsworth, president and CEO of Progress Rail, commented: "The sale of these leasing assets will permit us to more fully concentrate on our growing and expanding core businesses."
Bush wants to kill high speed rail, againOne of Florida Governor Jeb Bush’s first acts when he took office in 1999 was to kill Florida Overland EXpress (FOX), a $6.3 billion project that would have linked Miami, Orlando, and Tampa with 200-mph, TGV-type high speed rail. Yesterday, Bush, joined by Tom Gallagher, Florida’s chief financial officer, said he will lead a petition drive to give voters a chance to repeal a 2000 constitutional amendment approving a high speed rail system. About 490,000 signatures will be needed to get the proposal on the November ballot.
"The cost of this, in my opinion, is extraordinary," Bush said, citing the estimated $2.6 billion project cost of the first leg connecting Orlando and Tampa. "We have priorities in this state. This rail initiative will deter our ability to invest in the priorities a majority of Floridians believe are important." Those priorities, he said, are education, the environment, and health care.
Gallagher said that Florida’s credit rating is at stake. "Florida is already nearing its legislative mandated debt limit of 7%," he said. "Taking on a substantial debt like high speed rail could negatively impact our state’s bond rating and impair our ability to get the best value for our dollar." Gallagher also said his review of the project raised concerns about ridership, escalating costs, and lack of private-sector participation. He will serve as chairman of Derail the Bullet Train, a group originally formed by Palm Beach County legislators.
Bush has unsuccessfully pushed bills in Florida’s House and Senate to get the proposal on the ballot in November. Last month, the Florida Transportation Commission said high speed rail would not alleviate traffic congestion and its cost would force the state to eliminate other transportation projects.
(The complete text in a letter Bush wrote to the Florida state legislature outlining, in detail, his objection to high speed rail, can be accessed by clicking HERE )
Digital Concepts wins short line contractBelt Railway Company of Chicago has awarded a contract to Digital Concepts for a Digital Traffic Control™ system to manage dispatching operations in Bedford Park, Ill. The system will include DigiNet™ services that enable seamless real-time exchange of operational data and graphical screens among multiple railroads’ dispatchers and managers. Data exchange with other systems will also be provided by EDI-161 and DigiCon’s Open Message Interface (OMI) transaction sets. BRC is the nation’s largest intermediate switching terminal railroad, dispatching more than 8,400 rail cars per day over approximately 30 miles of main line routes and 300 miles of yard track. It connects with all Class I’s serving the Chicago Switching District: BNSF, CN, CP, CSXT, NS, and UP.
BC Rail sale officially linked to police raidA British Columbia Supreme Court judge released a court document on March 2 confirming that a police raid on provincial legislative offices in December was part of an investigation involving the sale of BC Rail. The document was short on details. It did confirm that the seizure of files from the offices of aides to the finance and transport ministers--as well as from the home and office of a lobbyist for an unsuccessful bidder--was part of an investigation to determine if two officials gave "unauthorized information to persons interested in government business for the purpose of obtaining a benefit." CN was the winning bidder.
UTU suspends Byron Boyd without payByron A. Boyd, Jr., one of several current and former United Transportation Union officers who have been indicted on racketeering charges, was suspended from office on March 2. His duties were immediately assumed by Assistant President Paul C. Thompson.
A UTU statement said: "The International Executive Committee found Boyd guilty of violating the UTU charter and ordered he be ‘suspended’ from office ‘without wages’…. The board found Boyd guilty of violating the UTU Constitution with regard to hiring and directing of UTU employee Ralph Dennis, who pleaded guilty in federal court to charges of racketeering, fraud, bribery, and embezzlement."
The board said Boyd would be reinstated with all lost pay if a federal court in Houston absolved him of the charges. The trial is set for March 22.
Pelletier dismissed as VIA Rail chairmanCanadian Transport Minister Tony Valeri announced March 1 that Jean Pelletier had been dismissed as chairman of VIA Rail because of "totally unacceptable" comments he had made about a former VIA employee.
The employee, Myriam Bedard, said last week that she lost her job as a VIA spokeswoman two years ago after she questioned truncations involving a Montreal advertising firm. Pelletier’s response was that these were the comments of "a poor single woman…looking for pity."
This was big news in Canada, because Bedard won two gold medals in the 1994 Winter Olympics in Norway.
Pelletier was chief of staff to Canada’s former Prime Minister Jean Chretien.
Connecticut set to buy Metro-North carsPolitical leaders in Hartford have reached a bipartisan agreement that could lead to the $60 million purchase of 20 new Bombardier EMU cars and at least one locomotive for Metro North’s New Haven Line. The agreement calls for $25 million in new state bonding backed by the Connecticut Transportation Fund, which is fed by state gas taxes. This would be added to $35 million previously allocated from a traffic mitigation fund created by the state legislature in 2003. The order would hasten delivery of the new rolling stock by a year or more.
A name change for UP’s logistics subsidiaryUnion Pacific’s logistics subsidiary Timera, Inc., has been renamed PS Technology--its original moniker. Founded in 1988, the company delivers "crew management, timekeeping, and intermodal logistics solutions."
"The PS Technology name has significant meaning and value in the transportation marketplace," according to UP. "With this announcement, the organization reinforces the strategy of delivering the best solutions to the transportation industry."
While the company will remain headquartered in Boulder, Colo., former Vice President-Business Development Wayne Tatro will take over the position of president and CEO. He will be responsible for the strategic direction and day-to-day leadership of the company.
NS opens new bulk transfer facility Norfolk Southern announced today the opening of a new Thoroughbred Bulk Transfer (TBT) terminal in Greer, S.C. Transplastics, a division of Quality Carriers, Inc., and provider of dry and liquid bulk transportation services, will operate the facility. The company operates three additional terminals for NS, including a location in Spartanburg, S.C. NS has a network of 28 TBT terminals in 16 states.
The Greer facility will "extend distribution and terminal operations for plastics, chemicals, agriculture, and construction shippers in the South," said Mike Webb, manager of Modalgistics, NS’s supply chain and distribution services group.
It offers 50 car spots with separate tracks for food products, and can handle both dry and liquid bulk products. The facility features paving, security, a steam boiler for product heating, and 24-hour access and truck scales.
New partnership focuses on rail noise/vibration preventionTransportation Technology Center, Inc., has teamed up with noise control consultant Harris, Miller, Miller & Hanson, Inc. (HMMH) to offer "comprehensive" noise and vibration measurement, testing, analysis, and abatement services for railroad equipment.
The joint venture plans to provide "new, state-of-the-art measurement and analysis techniques" that will permit "near real-time identification and evaluation of noise sources on stationary and moving rail equipment," according to Carl Hanson, senior vice president of Burlington, Mass.-based HMMH. The firm assesses new and existing equipment for equipment builders and operators of urban, intercity, and high speed rail systems--including DART, MUNI, and Tren Urbano--and has developed noise and vibration guidance manuals for the Federal Railroad Administration and the Federal Transit Administration.
In evaluating railroad performance, measurements of noise and vibration inside passenger cars can help determine ride quality and compliance with procurement specifications, and external noise measurement can verify compliance with federal rail-noise standards.
"Customers find that adding noise and vibration testing to other planned performance evaluations is convenient and very cost effective," said Robert Swearingen, manager-business development at TTCI. "Problems identified can be resolved and retested quickly and economically." TTCI performs testing nationwide on urban and transit equipment and helps transit agencies solve noise and vibration problems.
Albany panel vetoes Metro-North car orderThe New York MTA’s effort to speed up an order for 120 commuter cars for Metro-North has been blocked, at least temporarily, by the Capital Program Review Board in Albany. That board has members appointed by the governor, the mayor of New York City, the state assembly speaker, and the state senate majority leader. Mayor Bloomberg, a Republican, has strongly opposed the Metro-North car purchase at this time, claiming that it would divert funding from another MTA agency, New York City Transit. The mayor’s representative on the Capital Review Board can vote only on NYCT proposals, so it fell to the representative of Speaker Sheldon Silver, a Democrat, to cast a vote vetoing the Metro-North purchase 18 months ahead of the original schedule.
Minnesota survey shows support for commuter railThe Northstar Corridor Development Agency (NCDA) on March 1 released the results a statewide poll indicating that more than 60% of Minnesotans support a proposed commuter rail system. The agency said the poll was conducted by Decision Resources Ltd. of Minneapolis and included "all major demographic, geographic, and ideological categories." The first phase of the Northstar proposal calls for commuter rail service on a 40-mile line along Highways 10 and 47 from Big Lake to Minneapolis. Reversing an earlier position, Minnesota Gov. Pawlenty recently said he would join NCDA in seeking $37.5 million in low-interest bonding authority from the 2004 Legislature.
Arkansas court action will cut UP earningsUnion Pacific announced on March 1 that its first quarter earnings would be cut by about eight cents a share due to a decision by the Arkansas Supreme court upholding the award of $30 million, including $25 million in punitive damages, to a man hurt at a UP grade crossing in 1998. Severe weather, higher fuel costs, and crew shortages also had an impact.
UP’s earlier guidance had targeted first-quarter earnings 30% to 40% higher than the 57 cents per share earned in the first quarter of last year. That would have produced earnings this year of 74-to-80 cents a share. A Thomson First Call survey estimated earnings of 79 cents prior to UP’s revised guidance.
UP said the cost of the Arkansas court’s award would be recorded against first-quarter earnings, though it was considering an appeal to the U. S. Supreme Court.
"As we look to the remainder of the quarter, our outlook is unclear," said UP Chairman and CEO Dick Davidson. "March revenue is generally the strongest of the quarter and our current business demand remains encouraging. We are hopeful that a solid March performance will help us regain some of the momentum we lost earlier in the quarter."
TEA-21 reauthorization extendedCongress has given itself another two months to produce a new six-year highway/transit funding bill. TEA-21 was due to expire last Sept. 30 but was extended until Feb. 29. Congress voted on Feb. 27 to extend TEA-21 spending levels for two more months. President Bush signed the extension into law on Feb. 29, forestalling a potential furlough of 5,000 workers. The White House has stayed firm with a $256 billion reauthorization plan, which is substantially lower than either house of Congress wants. The Senate has approved a $318 billion program; the House has been considering a $375 billion plan that would require an increase in the federal gasoline tax—one of a number of actions that the Administration has said would invite a veto.