The U. S. Supreme Court ruled Monday in favor of the Shell Oil Co. and two railroads that claimed that they should not have to repay most of the $8 million that the government spent on environmental cleanup at a former chemical storage site.
The 8-1 high court ruling overturned a U.S. Circuit Court of Appeals ruling holding Shell, along with BNSF and Union Pacific, responsible for almost all of the cleanup costs, though the circuit court acknowledged that the involvement of the plaintiffs in the contamination had been relatively small.
Monday's ruling upheld that of a federal judge who found the railroads' share of the cleanup costs to be 9%.
Nicholasville, Ky.-based R.J. Corman Railroad Group LLC is acquiring most of the assets of Brossard, Que.-based locomotive manufacturer Railpower Technologies Corp. Financial terms of the deal were not disclosed.
Railpower, which has been operating under court protection from its creditors since early February, said the deal includes all assets except cash and the land and property located in St-Jean-sur-Richelieu, Que., as well as two road switching locomotives. The deal is set to close on May 20, pending court approval.
The offer won't provide any value to shareholders, Railpower said, though it added that the deal is "in the best interests" of the company.
Railpower said R.J. Corman plans to hire approximately 75% of Railpower's current work force, or roughly 29 employees. Railpower recently shut down its active operations and cut its already diminished workforce by half, to 39 employees.
As part of the deal, R.J. Corman has agreed to sell to certain current Railpower managers certain assets in the agreement, including the RTG cranes technology, and grant a "non-exclusive, perpetual, fully-paid royalty free license" to use intellectual property rights.
An R.J. Corman spokesman said the company would continue to advance Railpower's Gen-Set technology.
R.J. Corman adds Railpower’s assets to its stable of nine short line railroads, 19 derailment and emergency services locations, and 10 locations providing track materials.
Moncton, New Brunswick-based Industrial Rail Services Inc. Monday formally was awarded contracts worth about C$100 million (US$85 million) to restore 98 VIA Rail passenger cars that ply the Montreal-to-Toronto route.
Funding is from the C$691 million in federal funds the government has pledged to improve VIA Rail services throughout Canada.
"This government's support of VIA Rail, through the Economic Action Plan, will create skilled jobs and stimulate the economy across Canada," said Minister of State Rob Merrifield. "We are pleased to be taking action that will provide faster, more frequent, more reliable passenger rail service across Canada."
The refurbishment will take place at the company’s facility in Moncton, formerly a locomotive repair and rebuild shop for Canadian National.
U.S. carload freight traffic for the week ended April 25 remained lower than the comparable week one year ago, down 22.4%, according to the Association of American Railroads. AAR noted traffic rose 2.1% from the preceding week. But compared with year-ago levels, carload freight fell 20.7% in the West, 24.7% in the East.
U.S. intermodal volume slumped 17.8% from year-ago levels, though it, too, gained ground on the previous week, up a modest 0.7%. Volume of 27.7 billion ton-miles, off 21.1% from a year ago but also up 1.8% from the previous week.
Canadian carload freight fell 23.5% for the week compared with last year, while intermodal retreated 14.1%. Mexico’s two major railroads reported carload freight fell a modest 5.7%, while intermodal actually gained ground, up 0.5%.
Combined North American rail volume for the first 16 weeks of 2009 on U.S., Canadian, and Mexican railroads showed an 18.4% decline in carload freight traffic, and a 15.8% fall in intermodal traffic, compared to the comparable period in 2008.
Along with a sharp drop in railroad traffic came a corresponding decline in accidents and incidents in this year's first two months.
Preliminary statistics posted Friday by the Federal Railroad Administration's Office of Safety Analysis show a 22.1% decline in total accidents and incidents in January-February 2009 compared with the corresponding period in 2008. Fatalities of all types declined 8.0% to 92.
Train accidents were down 27.8% to 307, with collisions down 34.1% to 270 and derailments down 30.5%% to 216. Yard accidents declined 34.1% to 155.
Track causes were cited in 87 train accidents, down 40.8% from the 2008 period; equipment causes in 51, down 13.6%; and human factors in 109, down 28.3%.
Fatalities at highway/rail crossingswere down 18.6% to 31, and trespasser fatalities declined 1.8% to 54.
There were seven employee fatalities in January-February 2009, four more than in the 2008 period. Employee injuries declined 21.1% to 643.
Plans for regional passenger rail service in central Florida are in jeopardy following a Florida state Senate vote Thursday rejecting the $1.2 billion project by a 23-17 vote. In a last-ditch vote Friday evening, the Senate again spurned the measure, this time by a 23-16 margin.
Supporters of SunRail service, planned for five central Florida counties in the Orlando metropolitan area, appeared resigned to the outcome. “It'll take some maneuvering to get it done. I think the forces of evil have won," said Orlando Mayor Buddy Dyer.
The state Senate Friday afternoon was to consider one last attempt at passage, with language added to the measure approving a $200 million insurance policy necessary to operate train service. Supporters were successful in obtaining a two-hour extension of the 6:00 p.m. close of the current legislative session, in order to bring the issue up for one last vote.
The project has been supported by Gov. Charlie Crist, a Republican, but 15 Republican senators voted against the proposal Thursday. One, Sen. Paula Dockery, was cautiously optimistic, noting, "We still have one day [Friday] to go. There's always a few tricks in the book."
SunRail, a proposed 61.5-mile route roughly paralleling Interstate 4, ran into trouble when state legislators objected to provisions protecting CSX Corp. from liability in the case of an accident. CSX would remain as a tenant on the right-of-way following its sale by CSX to the Florida Department of Transportation for $600 million.
GE Transportation announced that it has delivered and equipped six LOCOTROL® remote control locomotive systems to CN at its Johnson Yard in Memphis, Tenn.
GE Transportation, a subsidiary of Fairfield, Conn.-based General Electric Co., said it has now installed more than 300 systems on seven railroads in North America and Europe.
The system is a derivative of two separate products--the LOCOTROL Distributed Power System currently used in more than 10,000 locomotives around the world, and the LOCOTROL Tower Control system used in Canada and Australia.
"This approach provides an economical, reliable, low-risk solution to meet all the U.S. Federal Railroad Administration's Advisory 2000-1 Guidelines for Remote Control Locomotives," said the supplier.
Canada’s national capital Wednesday unveiled plans for a downtown tunnel to serve light rail transit, a plan backed by city business interests and some city council members, but questions remain about LRT’s exact routing.
A two-mile twin-tunnel LRT line would stations at LeBreton, Downtown West, Downtown East, Rideau Centre, and the University of Ottawa. The tunnel is part of a planned 7.8-mile line, expected to cost $C1.4 billion (US$1.2 billion). Ottawa expects funding assistance from Ontario province and the federal government.
The current proposed alignment could miss portions of the downtown business district, running too far north, some business leaders said. Rather than turning north beginning at Kent Street, the route should continueunder Albert Street for three additional blocks, before turning north at Metcalfe Street, according to Hume Rogers, representing the Downtown Coalition.
Despite concerns, Rogers said the coalition believes the LRT tunnel plan is “light years” ahead of the city’s former surface rail plan. That plan was opposed by downtown property owners, prompting a newly elected city council elected in 2006 to scuttle the proposal.
Ottawa city officials say the current plan’s proposed turn beginning at Kent Street avoids sharp turns, thus offering a more pleasant ride and reducing wheel squeal and wear.
Kansas City Southern Thursday reported it lost $7.5 million, or 8 cents per share, in its first quarter, hurt by declining volume, declining fuel surcharge revenue, and $11 million in nonrecurring charges. The loss contrasted with earnings of $32.9 million, or 39 cents per share, in the first quarter of 2008.
Revenue dropped 23% to $346 million from $450.6 million in the comparable 2008 quarter. Results included a charge of $5.9 million, or 4 cents per share, related to debt retirement costs, and a charge of $5.1 million, or 4 cents per share, related to a foreign exchange loss associated with the weakened Mexican peso.
Analyst estimates expected KCS to notch revenue of $377.4 million and post a profit of 6 cents per share. Despite the shortfall, KCS shares rose in morning trading on the New York Stock Exchange, and were up 2% in early afternoon trade.
Noted Dahlman Rose & Co. Director Equity Research (and Railway Age Contributing Editor) Jason Seidl: “With the rail industry trying to cope with the most drastic volume
declines in recent history, we believe management will continue to
focus its efforts on cutting costs and reducing capital expenditures. Indeed, KSU expects 2009 capital expenditures to be roughly 50% below
2008 levels at nearly $300 million (KSU had $100 million in capital
spending in the first quarter). This should enable the company to
generate free cash flow in 2009. Despite the significant spending
reduction, the company does plan to complete its Victoria-Rosenberg
line in the second quarter. While many may question the need for
expansionary capital in a recessionary environment, this line should
help reduce costs and improve service for the railroad’s burgeoning
cross border intermodal business."
Also, "First quarter results were also negatively impacted by the company accidently booking two preferred dividend payments. Tthis is purely a timing issue, as 2Q will not have a payment now. The operating ratio deteriorated 450 basis points year-over-year to 86%, in line with our estimate."
Joe Szabo won Senate confirmation Wednesday to become head of the Federal Railroad Administration.
His longtime friend Senate Assistant Majority Leader Dick Durbin (D-Ill.) took the floor to give Szabo a warm endorsement, saying that the fifth-generation railroader and former United Transportation Union officer understands better than most the demanding and sometimes dangerous conditions under which railroad employees work.
Durbin also said Szabo will bring his enthusiasm for Amtrak to his new job, which in addition to its primary goal of ensuring that railroads are safe will also involve the administration of President Obama's high speed passenger rail initiative.
Szabo will be informally sworn into office May 5 so that he can take over his new duties without delay, with a more formal ceremony to be announced later.