For railroad suppliers who are wondering how BNSF Railway's large capital improvement programs will fare under new ownership, there's reassuring news in the transcript of an in-house interview between Warren Buffett and BNSF CEO Matt Rose that was taped for the benefit of employees.
While Buffett's Berkshire Hathaway, Inc. is borrowing $8 billion to finance the $26 billion purchase of BNSF, he assured the railroad's employees that he won’t use railroad assets to pay off Berkshire debt, and will continue to invest in the railroad's infrastructure. “It’d be crazy if we didn’t,” said Buffett. “We’re not going to buy a business and starve it.”
The interview was included in a regulatory filing Dec. 21.
A formal groundbreaking Monday marked construction of Toronto's Sheppard East light rail extension of roughly 8.4 miles along Sheppard Avenue from the Don Mills subway station.
Sheppard East LRT is being billed as the first piece of the C$6 billion, 15-year plan to add at least 76 miles of streetcar routes throughout Canada’s largest city. The C$1 billion Sheppard East project will replace the Scarborough East bus line, with funding coming from Ontario and the federal government, with the province covering roughly two-thirds of the cost.
"Today we start the renaissance of public transit in the city of Toronto, and from my perspective it's been far too long in coming," Mayor David said at the groundbreaking event. “It should have been done 30 years ago, but all of us can look back and say we did it today."Adam Giambrone, chairman of the Toronto Transit Commission, said the city "learned a lot" from criticism of the line and other projects, and claimed support for the Sheppard LRT has grown. "People are concerned about construction as they are with road construction, but ... virtually everybody wants it to happen," Giambrone said. "The question they're asking is not why or if, but how fast can you get it into place?"
Giambrone, justifying LRT’s implementation, said that while the mode is more expensive to build, its operating efficiency far exceeds that of comparable bus service.
Added Ontario Transportation Minister Jim Bradley, "This project is critical to improving public transit, and it will have significant long-termbenefits to the surrounding communities.
Metrolinx, the regional transportation authority, will ownthe new light rail line but the Toronto Transit Commission will operate it. Theongoing political tension between Metrolinx and TTC extends to the rail gaugeto be used for the new construction.
Though TTC’s existing streetcar fleet currently operatesover a wide gauge of 4 feet, 107/8 inches, “Metrolinx has now become involved in the financing of the TransitCity lines and it’s calling for standard gauge,” says Railway Age ContributingEditor Greg Gormick. “The gauge hasn't been decided and it is certain to be asource of friction between the TTC and Metrolinx.”
Chicago-based FreightCar America, Inc. announced Sunday that Chief Executive Officer Christian Ragot had stepped down from his post “by mutual consent.”
Edward Whalen will succeed Ragot; Whalen joined FreightCar America as one of a group of investors who acquired its predecessor company in 1991. He served as FreightCar America's senior vice president of marketing and sales from December 2004 to September 2008, at which point he retired, the company said.
Whalen said in a statement that his top priority was to "optimize the company's performance in 2010, with a continued view to preserving our strong balance sheet."
New York City Mayor Michael R. Bloomberg joined Metropolitan Transportation Authority Chairman and CEO Jay H. Walder Monday in announcing completion of the first phase of the Number 7 subway extension at the Hudson Yards in Manhattan, a $2.1 billion project funded by the city and managed by MTA.
"The second of two tunnel boring machines has reached the southern wall of the 34th Street Station cavern after mining a combined 2,900 feet from their starting point at 26th Street under 11th Avenue," MTA said in an announcement that appeared to be timed for maximum political value. "The extension will help transform the Hudson Yards vicinity into a vibrant 24-hour neighborhood, containing a mix of commercial, residential, retail, open space, and recreational uses. In January of 2005, the City Council approved the Bloomberg Administration's plan for re-zoning the Hudson Yards area, including the Eastern Rail Yards. Today, the City Council will vote on the plan for the Western Rail Yards, which would complete the public approvals process for the development of the area."
The Number 7 line extension, extending the line west of Times Square, is one of three multibillion-dollar MTA tunneling projects now under way. New York City Transit riders who have been hit with service cuts and fare increases this year have been asking how MTA can spend billions for new lines when it can scarcely find the money to to operate its existing lines. Mayor Bloomberg implicitly addressed that question.
"It's been a half century since City government expanded its subway system, but that drought will soon be at an end," said Bloomberg. "Too often, government falls victim to the temptation to abandon long-term infrastructure projects amidst short-term downturns, and that's why big things never get done. The redevelopment of the Hudson Yards has been talked about for decades, but with the expansion of the number 7 line, its potential will finally be realized."
MTA's Walder (pictured at right), who has been getting a bad press for proposing to eliminate frees student fares on subways and buses in orderto save $140 million a year, also took the long view: "This week's milestone is a clear indicator that the MTA is delivering on a major expansion project that will increase capacity within our transit system and generate economic growth in a vastly underserved area," he said. "Much like our joint efforts to improve bus service throughout the city, this partnership between the city and MTA will benefit New Yorkers for generations to come."
Jacksonville, Fla.-based RailAmerica, Inc. said its subsidiary RaiLink Canada Ltd. has closed on a transaction with Canadian Pacific to terminate its lease of the Ottawa Valley Railway (OVR) line.
Under the terms of the agreement announced Friday, RailAmerica, Inc. received C$73 million (US$69 million) in gross proceeds. The company estimates net cash proceeds after taxes and transaction related expenses of C$69 million to C$70 million.
RailAmerica’s subsidiary will terminate its lease of the CP-owned OVR rail line between Smiths Falls and Camspur, near Petawawa, Ontario, effective upon clearance of the remaining cars from the line. Under the Canada Transportation Act, CP has 60 days to decide if train service will be restored on the line.
RaiLink Canada will continue to maintain and operate the CP-owned rail lines between Sudbury and Mattawa, Ontario, Mattawa and Temiscaming, Quebec, and Mattawa and Camspur until dates in 2010 to be determined by CP.
OVR consists of 342 mainline miles of track and primarily transports bridge traffic, chemicals, and pulp and paper products. For the nine months ended September 30, 2009, total revenue for OVR was C$13.3 million, operating income was C$4.6 million, depreciation/amortization expense was C$0.4 million, and capital expenditures were C$0.7 million. RailAmerica said it will record the income or loss from these operations in discontinued operations beginning in the fourth quarter of 2009.
Ontario's provincial government has committed C$600 million (US$568 million) toward Ottawa's C$2.1 billion (US$2.0 billion) transit expansion project, most likely involving light rail transit. The C$2.1 billion is part of a C$6.6 billion transit plan meant to expand the Canadian capital’s transit reach through the next 25 years, including more expansive rail options to and from downtown.
"This is the single largest transit infrastructure investment Ontario has made in Ottawa's history," Premier Dalton McGuinty said at a news conference Friday. "It will help get people out of their cars and into clean, efficient public transit. I am confident that the city will be prudent as they decide what is best for Ottawa."
Ontario’s participation had been considered problematic, as it balked over a plan to build a rail line from Tunney's Pasture to Blair Road, including a 3.2-kilometer (2-mile) tunnel under downtown, and extend Transitway bus service into more suburbs. Ottawa now will seek federal funds to match those of the provincial government.
For their part, federal officials have announced funding for a feasibility study of commuter rail service running from Ottawa to Pontiac and Renfrew. Member of Parliament Lawrence Cannon, who represents Pontiac and also serves as federal Foreign Affairs minister, said the federal portion of the C$272,000 study will be C$136,000.
Ansaldo STS USA says it has been awarded an $11.9 million subcontract agreement with Mass Electric Construction Co. as a part of the Washington Metropolitan Area Transit Authority’s (WMATA) “Rehabilitation of Red Line MetroRail System—Dupont Circle to Silver Spring” project.
Ansaldo STS USA is responsible for upgrading the Automatic Train Control system, which includes replacing switches and signals and upgrading eight interlockings from mechanical relays to Microlok®II solid state controls. Ansaldo STS USA is also responsible for replacing the Emergency Trip Stations, Public Address system, and Closed Circuit TVs at stations with related communications design.
"This project complements our May 2009 contract award at WMATA’s Silver Spring location in that this work connects the two sections and employs similar technology,” said Mark Cirucci, vice president customer operations for Ansaldo STS USA. “We are proud to support WMATA’s commitment to quality systems and the safety of their passengers, employees, and community.”
The Association of American Railroads reported that total freight traffic remained down from 2008 levels for the week ending Dec. 12, 2009, though on the intermodal side there was a slight increase in container volume.
U.S. railroads originated 261,933 carloads during the latest week, down 10.2% from the corresponding week last year and down 18.5% from the same week in 2007.
Intermodal traffic added up to 204,950 trailers and containers, down 3% from a year ago and 14.3% from 2007. Compared with the same week in 2008, container volume rose 3.6% and trailer volume dropped 24.5%. Compared with the same week in 2007, container volume fell 7.7% and trailer volume dropped 35.2%.
Twelve of the 19 carload commodity groups were down compared with the same week last year, but there were increases in grain mill products (16.1%), chemicals (14.8 %), metallic ores (14.7%) , motor vehicles and equipment (11.2%), grain (8.1%), waste and scrap metal (6 %), and nonmetallic minerals (2.2%). Declines ranged from 0.7% for farm products excluding grain to 24.9% for crushed stone, sand, and gravel.
Total volume on U.S. railroads for the week ending Dec. 12 was estimated at 29.3 billion ton-miles, down 9.8% from the same week last year and 13.3% from 2007.
Canadian railroads reported volume of 66,894 cars for the week, up 1.9% from last year, and 38,441 trailers or containers, down 7.4%. Mexico’s two major railroads reported originated volume of 12,583 cars, up 2% from the same week last year, and 6,768 trailers or containers, up 13.6%.
Members of the Brotherhood of Locomotive Engineers and Trainmen on Thursday ratified a new collective bargaining agreement with the BNSF Railway that gives them wage increases totaling 11% over the five-year life of the contract.
More than 3,500 engineers voted, with 75% favoring the agreement. It will take effect Jan. 1, 2010, and runs through Dec. 31, 2014.
The contract settles wage and work rule matters, with health and welfare issues to be addressed in industry-wide negotiations.
In addition to pay increases, BLET engineers will also receive an increased 401(k) contribution from the railroad. Those with 25 or more years of service will receive an extra week of vacation for a total of six weeks.
BLET National Vice President Steve Speagle, who helped negotiate the contract, said "the high percentage of those who voted in favor showed that the engineers recognize the value of the agreement in this economic climate."
RailComm has successfully commissioned a Centralized Traffic Control (CTC) system for the Capital Metropolitan Transportation Authority’s diesel multiple-unit (DMU) rail service in Austin, Tex. The Track Warrant Control portion of the system was launched just 32 days from the signed Notice to Proceed.