Wall Street sources said the New York Metropolitan Transportation Authority, which has $12.6 billion of outstanding debt, will find it more costly to borrow new money following the disclosure this week that it faces an unexpected new shortfall in revenue.
That shortfall came to light when the MTA revised downward, by $350 million, its December estimate for revenue from a special payroll tax that was enacted to prune the agency's deficit.
The news led Moody's Investors Service to downgrade MTA's credit rating by one notch to A3. Moody's said the outlook is "stable."
The MTA delayed a $600 million offering of Build America Bonds planned for Wednesday. The MTA is already planning service and staff cuts.
In its new disclosure, the agency said: "The MTA is considering a variety of cost-saving and other measures in addition to those proposed in the December plan to deal with the anticipated additional revenue shortfalls in its operating budget."
Canadian National Thursday said it plans to establish a new C$100 million (US$93 million) CN Calgary Logistics Park (http://www.cn.ca/calgarypark) in Conrich, located in Rocky View County, northeast of Calgary, Alberta.
The 680-acre park is planned to include a state-of-the-art intermodal terminal with room for customers to co-locate with CN and custom-build their facility in place. The Logistics Park will be designed to include a multi-commodity transload and warehouse facility, an automotive compound, and a liquid/bulk transload and distribution facility.
The site is strategically located a few miles east of the Calgary Airport, on Twp Road 250/ McKnight Boulevard, providing fluid access to Stoney Trail and other major roadways.
"We are very excited about business prospects in Alberta and this investment in the Calgary area," said Claude Mongeau, CN president and chief executive officer. This facility is part of our program to grow a network of logistics parks that provide seamless and efficient transportation and distribution capabilities for customers, linking their facilities across North America." "Combined with CN's superior rail service offering, this is a win-win combination," said Mongeau.
The new facility will offer the potential for a total warehousing footprint of more than 2 million square feet to customers who need to distribute their goodsacross Western Canada, whether sourced from Asia through the West Coast or coming from eastern Canada and the U.S.
The project will be subject to regulatory approval, including a thorough environmental assessment and public consultation. With a scheduled opening expected in 2013, most of CN's Calgary yard operations will shift to the new Logistics Park. CN will continue to provide rail service to customers along existing lines in the city of Calgary.
President Obama’s Fiscal Year 2011 budget proposes $1.82 billion in funding for 27 major transit construction projects, including $834.6 million for 19 new projects.
“From New York City to Honolulu and areas in between, these projects will create jobs, diversify local transit options for consumers, and stimulate economic activity at a critical juncture in our continuing recovery,” said U.S. Transportation Secretary Ray LaHood (pictured at left).
Of the new projects on the list, 10 are new funding recommendations in FY 2011, and nine were recommended for funding in previous years, but still await construction grant agreements. The plan also provides $924.6 million for the continued funding of eight projects already under construction in New York, Dallas, Denver, Salt Lake City, Seattle, and Northern Virginia.
“Projects like these are at the very heart of President Obama’s agenda to clean up our environment, reduce our dependence on oil from overseas, and put people back to work,” said Federal Transit Administrator Peter Rogoff. “They will give our citizens a way out of punishing traffic jams and improve their quality of life.”
FTA’s Annual Report on Funding Recommendations for FY11 provides information and ratings for all projects in the New Starts and Small Starts programs.
The American Public Transportation Association says President Obama’s commitment in his new budget to continued high speed rail financing leaves one important component unfunded.
“We are disappointed the President’s budget does not include money to implement Positive Train Control, which employs a system capable of automatically controlling train speeds and movements to prevent certain accidents,” said APTA President William Millar. “We urge Congress to fund this system, which has a Congressional mandate.”
APTA also said: “We are pleased to see the President’s budget places an increased emphasis on sustainability and livability. We look forward to working with Congress and the Administration in supporting more livable communities and job creation. Adequate public transportation investment will play a significant role in creating jobs and advancing livability.”
In its latest quarterly report on the freight car market, Economic Planning Associates said railcar builders will continue to face “strong headwinds” this year, but anticipated gains in both commodity and intermodal traffic could stimulate new equipment demand later this year and lead to a pick-up in orders in 2011.
The year 2009 was unremittingly dismal for builders, said EPA: “Even the relatively low level of 21,682 assemblies last year far outpaced he level of only 8,336 cars that were ordered.”
This year, said EPA, “We expect assemblies of 16,000 units [and] in 2011 we look for deliveries of only 21,000 cars. . . . We look for new railcar deliveries to advance moderately to 34,800 cars in 2012 and then expand annually to the level of almost 60,000 units in 2015.”
It all depends on traffic, and prospects are brightening, said EPA: “Agricultural exports are slated to rise, the housing markets are improving, light-vehicle sales are expanding, manufacturing activities have revived, and a stronger economy will stimulate greater production of electricity. These activities will prompt the haulings of grain, lumber, motor vehicles and parts, chemicals, plastics, and coal.”
Transportation Secretary Ray LaHood Tuesday said President Obama's $79 billion budget includes an additional $1 billion for higher speed passenger rail (HrSR) corridors as well as $4 billion for a National Infrastructure Innovation and Finance Fund to issue grants and loans for projects, including freight rail, that provide "a significant economic benefit to the nation or a region."
These programs augment the customary multibillions budgeted for intercity, commuter/regional, metro, and light rail passenger systems and certain freight rail improvements.
“President Obama’s budget builds on an historic first year for this Department of Transportation,” said Secretary LaHood (pictured at left). “In addition to making critical investments in our nation’s infrastructure, we jump-started high speed rail across America, launched a campaign against distracted driving and proposed landmark transit safety legislation. This budget reflects our priorities and values by continuing to invest in safety, livable communities, and an improved national transportation system.”
Secretary LaHood said the budget promotes safety in a number of areas, including $14 million for the FAA to hire 82 new safety and certification inspectors and safety technical specialists and $30 millionto add 260 positions to support the Obama Administration’s Public Transportation Safety Program Act of 2009, "which the administration proposed to Congress last year to ensure a high and standard level of safety across all transit systems."
The additional $1 billion for passenger rail follows President Obama and Vice President Biden’s Jan, 28 announcement of $8 billion in Recovery Act funds for states across the country to develop America’sfirst nationwide program of higher speed intercity passenger rail service.
Secretary LaHood said the budget highlights "the importance of livable communities, and providing greater choices for transportation users through the integration of transportation, housing and commercial development decisions. This budget provides $527 million for livable communities by establishing an Office of Livable Communities, creating a program to improve local and state project planning and development capabilities, and funding programs that expand transit access for low-income persons.
A budget summary document is available at www.dot.gov.
In the first 11 months of 2009, rail crossing fatalities declined 17.8% to 222 compared with the same period to 2008, and trespasser fatalities were down 7.2% to 399, according to a preliminary report released Jan. 30 by the Federal Railroad Administration's Office of Safety Analysis.
These accounted for 621 of the total of 649 U.S. rail fatalities reported in the period. There were 15 employee fatalities, down 34.8% from the 23 reported in the same period in 2008.
The accident/incident numbers were down across the board in the 2009 period: train accidents, down 27.6% to 1,644; collisions, down 2 9.5% to 124; derailments, down 28.8% to 1,166; and yard accidents, down 29.1% to 888.
A podcast of the interview with Railway Age’s 2010 Railroader of the Year, BNSF Chairman, President, and CEO Matt Rose, is accessible on Railway Age's website by clicking www.railwayage.com, then clicking “Video: BNSF's Matt Rose interview” in the upper right corner of the web page.
Conducted by Railway Age Editor William C. Vantuono, the interview with Rose covers a range of subjects facing the U.S. freight rail industry—including the freight industry’s role in U.S. passenger rail fortunes of the future—as BNSF prepares to be acquired by Berkshire Hathaway, Inc. later this month.
Rose (pictured at left) holds two distinct advantages to help shape that future, Vantuono says. “First, he joined our industry at a critical point in its history, around the time the Staggers Rail Act was passed. He had a chance early on to work under the experience guidance of several highly regarded veterans, and learn from them. Second, he's young enough to have many years to go—and a chance to help determine our industry's direction, to nurture its growth, to provide guidance, to influence public opinion.”
The video link is co-sponsored by Plasser American and Western-Cullen-Hayes.
Cyclonaire Corp. says it has launched a new website at www.cyclonaire.com., “designed to educate the user on the products and capabilities of Cyclonaire. The site features a quick and easy path to obtain information on pneumatic conveying as well as offering a full range of conveying components, parts, and accessories on-line.”
The York, Neb.-based company says users also will find resource materials to help in selecting the proper system to handle specific needs.
Union Pacific’s response to STB said the railroad “is disappointed by [the] decision invalidating certain chlorinerates covering a few dozen shipments per year. Under STB rules, its task was tochoose between two groups of shipments to determine which group is most like UPchlorine shipments involved in the case. The Board concluded that a group ofshipments consisting entirely of chlorine shipments was less comparable to thechlorine shipments in the case than a group consisting almost entirely of othercommodities that are less hazardous to the public and priced under differentmarket conditions than chlorine.
“Furthermore, the Board chose US Magnesium’s group of mostly non-chlorine shipments on the basis of astatistical analysis that the Board candidly admitted might not bestatistically valid and that resulted in a virtual dead heat between thecompeting groups. This statistical analysis was never discussed by anyone inthe record of the case, had never been proposed by the Board in any othercontext, and does not appear in the Board’s rules. UP believes that astatistically insignificant exercise that produces a toss-up, has no precedentin case law or rules, and contradicts the Board’s own findings that chlorinecarries greater risks and moves in markets distinct from ammonia and otherhazardous products, constitutes the essence of arbitrary and capriciousdecision-making. Accordingly, we plan to appeal.
“The Board sharply criticized UP forusing so-called ‘re-billed movements,’ which are shipments that move over two or more railroads. We respectfully disagree. This is like saying that if you are comparing airline rates from Kansas City to Los Angeles, you would exclude rates to L.A. for passengers who will catch another airline from L.A. to Hawaii—and instead you would select rates for a bus from Kansas City to Phoenix for a ‘comparison.’
"Union Pacific’s top priority is providing safe transport of all goods to the benefit of the communities weserve. Union Pacific is obligated by federal law to carry Toxic InhalationHazard (TIH) materials, which require significantly enhanced and costly safetyand security measures. We believe that the rates we charge to chlorine andother TIH shippers, such as US Magnesium, should reflect the costs and risksassociated with transporting their products.”