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Kansas City Southern Tuesday said it had accepted the first two 710ECOTM Repower locomotives from LaGrange, Ill.-based Electro-Motive Diesel, Inc., with the cars on display at the railroad’s yard in Kansas City, Mo. (photo below) through Tuesday. The two locomotives are the first of 27 being delivered by EMD.

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EMD said the order would allow the Class I railroad “to convert a group of tired GP40 and SD40 locomotives into EMD GP22ECO and SD22ECO repower units as well as GP22ECO-M mother/slug combinations--providing the ultimate operating flexibility for the locomotives, which will be deployed in both The Kansas City Southern Railway Company (KCSR) and Kansas City Southern de Mexico, S.A. de C.V. (KCSM) systems.” KCS said 11 locomotives will be deployed in the U.S., while 16 would operate in Mexico.

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The supplier says the 710ECOTM Repower locomotives "minimize fuel consumption while maintaining emissions compliance. In addition, the reduction of emissions makes the locomotives eligible for both state and federal funding as clean air projects-meeting all relevant criteria with a cost effective solution," EMD said.

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"The 710ECOTM Repower solution provides a unique combination of emissions reduction, fuel savings, and locomotive reliability," said Scott Arvidson, executive vice president and COO of KCSR.  "Those were key factors in the decision, allowing KCS to meet our commitment to continuously improve railroad operations while simultaneously addressing future environmental concerns."

"Shifting market conditions, high fuel costs, and more stringent environmental regulations are posing difficult challenges for railroad operations," said John Hamilton, EMD president and CEO.  "By implementing the 710ECOTM Repower solution, KCS has taken a leadership role in demonstrating how the latest locomotive technology can effectively accommodate these conflicting demands."

 

--> Kansas City Southern Tuesday said it had accepted the first two 710ECOTM Repower locomotives from LaGrange, Ill.-based Electro-Motive Diesel, Inc., with the cars on display at the rai ...
Nine people have been confirmed dead and more than 70 have been injured as the result of a rear-end collision on the Washington Metro Red Line. The accident—the deadliest one in Metro’s 33-year history—occurred just after 5:00 p.m. Monday (June 22) near the Fort Totten station. ...

Freight railroads could benefit from what Morgan Stanley analysts William Greene and Adam Longson describe as “a large increase in North American auto production” during the third quarter. Citing the latest Wards North American auto production forecast, Greene and Longson “estimate that the likely increase in [railroad] auto volumes could add up to 2.0% and 1.0%-to-3.5% to our EPS [earnings per share] estimates for the railroads in 2009 and 2010, respectively.”

“Among freight carriers, railroads are the laggards in the group, and we've been hesitant to build in a large volume rebound given economic headwinds.  However, if the latest auto production forecasts are correct,we will need to bring forward our auto recovery and raise our auto volumeforecast materially,” Morgan Stanley said, adding, “While not a game changer for EPS, it could have a large impact on sentiment.”

The analysis particularly noted improved prospects for Norfolk Southern, due to its “large Ford exposure,” and Union Pacific, through its “large auto franchise.”

Beyond specific companies, Morgan Stanley stated, “While the auto production forecast may not be a significant catalyst by itself, we think analyzing auto carloads alone understates the significance.  A number of commodities, namely steel and chemicals, have a large automotive component. Steel inventories are already low and our steel analyst expects U.S. production to increase in [the second half of 2009] on greater demand, particularly in the automotive sector.” 

--> Freight railroads could benefit from what Morgan Stanley analysts William Greene and Adam Longson describe as “a large increase in North American auto production” during the third quarter. Citing the latest Wards North American auto production f ...

Jacksonville, Fla.-based RailAmerica, Inc., which oversees numerous short line and regional railroads, says it successfully sold $740 million of eight-year senior secured notes in the private-placement market last week. Proceeds from the bond sale will be used to refinance debt under RailAmerica’s existing credit facility.

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The company said buyers included Citigroup, Deutsche Bank Securities, JP Morgan, Morgan Stanley, and Wachovia.

“RailAmerica was able to acquire permanent, long-term capital financing with attractive terms and great flexibility, a move that positions us to grow the company,” said RailAmerica President and Chief Executive Officer John Giles.

RailAmerica is owned by funds managed by affiliates of Fortress Investment Group.

--> Jacksonville, Fla.-based RailAmerica, Inc., which oversees numerous short line and regional railroads, says it successfully sold $740 million of eight-year senior secured notes in the private-placement market last week. Proceeds from the bond sale will be use ...

Toronto’s C$1.2 billion (US$1.1 billion) streetcar contract lacks C$400 million (US$353 million) in funding, and faces a June 27 deadline, as the city urges the federal government to allow stimulus money to be applied to the purchase. But Ottawa officials so far insist they cannot comply with such a request.

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The move could jeopardize the planned order, won by domestic supplier Bombardier Transportation, for the largest streetcar order in North American history, placed by the Toronto Transit Commission. The city and Ontario province each has committed to supply one-third of the overall funding required.

Federal Infrastructure Minister John Baird has suggested that Toronto could indirectly tap the stimulus fund by accelerating construction projects that can be completed in two years and usingany savings to pay the federal share of the streetcar contract.

But Baird said the city’s need to replace 204 aging streetcars does not qualify for the federal government’s Infrastructure Stimulus Fund. “It's a fantastic project,” he said. “It's just not eligible for this program. And [that's] not just a technicality.”

Beyond the impact on replacing the existing fleet, any voided deal would jeopardize plans to purchase up to 400 additional streetcars for the “Transit City” plan designed to expand streetcar reach within Canada’s largest city and also to the city's nearby suburbs.

 

--> Toronto’s C$1.2 billion (US$1.1 billion) streetcar contract lacks C$400 million (US$353 million) in funding, and faces a June 27 deadline, as the city urges the federal government to allow stimulus money to be applied to the purchase. But Ottawa officia ...
Dahlman Rose & Co., LLC Director Equity Research and Railway Age Contributing Editor Jason H. Seidl recently discussed the railroad sector with The Wall Street Transcript (TWST), a service for investors and industry researchers that provides commentary and insight through interviews with ...

Companhia do Metropolitano de Sao Paulo (CMSP), the state-owned transit operator that runs the Sao Paulo metro system in Brazil’s largest city, has awarded a $193 million contract to a consortium led by Bombardier Transportation to modernize 156 passenger rail cars. The 30-year-old electric multiple-unit (EMU) trains provide service on CMSP’s Metro Line 1-Blue in Sao Paulo, formerly the North-South Line.

Bombardier says its share of the contract is valued at approximately $120 million. The Canadian manufacturer is working with two Brazilian partners, Temoinsa and Tejofran.

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The modernization project includes upgrades to door systems and bogies, as well as installation of new interiors, propulsion systems, communication and air conditioning systems, windows, and other improvements. The cars will be modernized at Bombardier’s rail services center in Hortolandia, Brazil, outside of Sao Paulo. Deliveries are scheduled to begin in August 2010.

“This contract is important for Sao Paulo as it will provide the city with improved rail equipment and support CMSP’s efforts to deliver enhanced service to public transit users,” said Carlos Levy, president and chief country representative, Bombardier Transportation Brazil. “We are very pleased to be continuing our successful relationship with CMSP and our consortium partners.” 

Bombardier Transportation Services President Laurent Troger said, “This is a complete vehicle modernization project that will extend the useful life of CMSP’s rolling stock well beyond 30 years. It will employ the latest technologies on a fast track delivery schedule to improve vehicle reliability and maintainability. In the end, these refurbished cars will help our customer operate transit service with increased efficiency and cost effectiveness.”  

--> Companhia do Metropolitano de Sao Paulo (CMSP), the state-owned transit operator that runs the Sao Paulo metro system in Brazil’s largest city, has awarded a $193 million contract to a consortium led by Bombardier Transportation to mod ...

A potential dispute between the Obama Administration and House leaders could affect the timing of up to $450 billion in surface transportation funding sought for the next six fiscal years, beginning Oct. 1. SAFETEA-LU, which expires Sept. 30, provided $286.4 billion over a four-year period.

The administration seeks an 18-month extension of current surface transport funding, expressing doubts that a comprehensive six-year package can be achieved by the next fiscal year to replenish the Highway Trust Fund, expected to be depleted by August.

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But Rep. James Oberstar, D-Minn., chair of the House Transportation & Infrastructure Committee (pictured at left), and Rep. Peter DeFazio (D-Calif.) argue that the House measure, unveiled Thursday, would expedite funds to states by simplifying regulatory procedures, while creating more accountability for how states spend their federal funds. DeFazio says the accountability would allow cities to mix and match road and transit projects, fostering modal coordination now lacking in federal transport policy.

House Republicans also seek to expedite the funding procedure. "Many important projects do not break ground for several years, tying up limited federal resources while project sponsors navigate the complicated maze that is the federal approval process," Rep. John Mica, R-Fla., said in a written statement.

Oberstar said the Department of Transportation would reduce its oversight of 108 different categories for federal funding to four major funding formula programs. As for rail specifics, the bill would set aside $50 billion for high speed rail purposes and $99.8 billion for transit.

 

--> A potential dispute between the Obama Administration and House leaders could affect the timing of up to $450 billion in surface transportation funding sought for the next six fiscal years, beginning Oct. 1. SAFETEA-LU, which expires Sept. 30, provided $286. ...

Nicholasville, Ky.-based R.J. Corman Railroad Group, LLC Thursday announced it had finalized its acquisitionof Railpower Technologies Corp., based in Brossard, Quebec, and its wholly owned U.S. subsidiary Railpower Hybrid Technologies, based in Erie, Pa.

“We are pleased and honored to beable to continue the development and production of the Railpower Gen-Setlocomotives for the railroad industry,” said owner Rick Corman in a statement. “The combination of the R.J. Corman Railroad Group service orientation and the demonstrated technical leadership of the Railpower team will result in Gen-Set locomotives being designed and built by a company that operates railroads.”

“With the state-of-the-art technology on board the Railpower Gen-Set locomotives, we are excited about buildingthem for the future and appreciate all the support we received during theacquisition process,” said Bruce Greinke, executive vice president and chief operating officer for Railpower, LLC.

--> Nicholasville, Ky.-based R.J. Corman Railroad Group, LLC Thursday announced it had finalized its acquisitionof Railpower Technologies Corp., based in Brossard, Quebec, and its wholly owned U.S. subsidiary Railpower Hybrid Technologies, based in Erie, Pa. ...

Railroaders looking for even the slightest signs of a recovery got just that Thursday. In its latest weekly report, the Association of American Railroads announced that traffic on U.S. railroads in the week ended June 13 "continued to show signs of gradual improvement."

"Rail carloadings and intermodal were up from the previous week with carloads at their highest level in 10 weeks. While traffic showed signs of improvement from the previous week, compared year-over-year traffic remains down," said the association.

Carload traffic totaled 261,956 cars, up 0.6% from the previous week this year, but down 19% from the same week in 2008. Intermodal volume totaled 189,508 trailers or containers, up 0.4% from the previous week but down 17% from last year.

Total U.S. volume for the latest week was  estimated at 27.7 billion ton-miles, down 17.8 % from the same week last year.

Eighteen of 19 commodity groups were down from 2008, with declines ranging from 5.5% for coal to 61.4% for metals and products. The only group showing an increase was farm products other than grain, up 4.8%.

Canadian railroads reported volume of 56,978 carloads for the week, down 26.6% from last year, and 39,081 trailers or containers, down 18.8 %. Mexico's two major railroads originated 12,441 carloads, down 14.4% from last year's twenty-third week, and 4,762 trailers or containers, off 29.0%.

Total North American roll volume for the first 23 weeks of 2009 on 14 reporting railroads included 7,677,555 carloads, down 20.2% from last year, and 5,307,734 trailers and containers, down 16.7%.

 

 

 

--> Railroaders looking for even the slightest signs of a recovery got just that Thursday. In its latest weekly report, the Association of American Railroads announced that traffic on U.S. railroads in the week ended June 13 "continued to show signs of gradu ...
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