Progress Rail Services Tuesday said it has signed a definitive agreement to purchase Electro-Motive Diesel, Inc. (EMD) for $820 million in cash from Berkshire Partners LLC and Greenbriar Equity Group LLC.
Upon completion of the transaction, La Grange, Ill.-based EMD, once part of the vast General Motors empire, would become a wholly-owned subsidiary of Albertville, Ala.-based Progress Rail, itself wholly owned by Peoria, Ill.-based Caterpillar Inc.
The acquisition is expected to close by the end of the year, pending final regulatory approvals. EMD will remain headquartered in LaGrange, Ill. John Hamilton will continue as president and CEO of EMD and will report to Progress Rail CEO Billy Ainsworth.
“This acquisition represents the latest step in our strategic plan to aggressively grow our presence in the global rail industry,” said Caterpillar Vice Chairman and CEO-Elect Doug Oberhelman. “Including today’s announcement and our acquisition of Progress Rail, Caterpillar has invested about $2 billion since 2006 to grow our profitable rail and transit businesses. Rail has proven to be a highly efficient and sustainable method for moving freight and people, and we see a positive long-term future for the continued growth of the rail industry.”
Said Progress Rail CEO Ainsworth, “The acquisition of EMD will enable us to provide rail and transit customers an industry-leading range of locomotive, engine, and emissions solutions, as well as unmatched aftermarket product and parts support and a full line of rail-related services and solutions.”
“We feel this is an ideal fit for EMD and our customers and we look forward to developing and providing an even greater portfolio of products and services for the rail and transit industry that we have proudly served for more than 85 years,” said EMD’s Hamilton.
“We are very proud to have had the opportunity to partner with EMD’s management in rebuilding this rail industry icon,” said Regg Jones, managing partner of Greenbriar. “Having redirected the company’s strategy and restored EMD back to strong operating and financial footing, we are confident EMD will continue its growth and success with Progress Rail.”
Richard Lubin, managing director of Berkshire Partners, added, “Our objectives coming in were to transition EMD to a strong, independent company focused on its customers, invest in EMD’s technology and capabilities, and drive operational improvement. We are delighted Progress Rail will be the new owner of this business.”
Caltrain officials say the Federal Railroad Administration has granted a waiver allowing operation of electric multiple-unit (EMU) passenger rail equipment built to European standards in mixed traffic.
The waiver, deemed by Caltrain to be critical to its electrification and modernization program, relies heavily on installation of Positive Train Control along Caltrain’s 55-mile San Jose-to San Francisco route. Without the waiver, Caltrain says it would be unable to complete its $1.5 billion project to electrify its route, which is linked to the Golden State’s 700-mile, $44 billion high speed rail plan.
Though the waiver allows EMU and diesel-hauled passenger equipment to operate concurrently, freight operations remain subject to temporal (time-of-day) separation along the route.
“People thought they could only get this level of service by having BART. This out-BARTs BART,” said Bob Doty, head of the joint Caltrain-high speed rail program. “This tiny little streak of rust out here will be the first in the United States to allow mixed operations of service.”
In a statement, FRA said “collision avoidance … is the first line of defense in assuring passenger rail safety, and that collision management, achieved through the operation of vehicles designed with CEM [crash energy management], is the second line of defense that effectively reduces the severity of an incident, should it occur.”
Supporters of California’s HSR project note that California must apply for a similar waiver from FRA for the statewide project, but since Caltrain has established a guideline, such a waiver might be more easily attained.
FRA says it will revoke the waiver if Caltrain fails to meet various criteria in implementing its plan. Caltrain must conduct crash tests after its new equipment is built, and must construct rail bridges at several intersections, as well as install PTC.
Doty said that in testing to date, EMUs passed each safety test laid out by the FRA, which had never tested its assumption that the European cars were less safe. “In every case, the equipment we wanted to bring in was equal to or better than what’s running in the United States today,” he said.
CSX officials Tuesday confirmed press reports of an accord reached late last week between the Class I railroad and New York State on implementing HrSR (higher speed rail) along the Empire Corridor, which links Buffalo, Albany, and New York City.
CSX is the owner of most of the route’s right-of-way, including between Buffalo and Schenectady, where the state is focusing on improving speeds from 79 mph to 110 mph. The agreement does not specify a 110 mph target; CSX has suggested 90 mph would be more readily attainable. Amtrak trains south of Albany reach 110 mph for a short distance.
The state seeks to build a third track along the route to facilitate HrSR passenger trains while minimizing interference with CSX operations. The new track apparently will meet CSX's insistence that it be separated by at least 30 feet from the nearest freight track, something CSX seeks to protect the safety of its workers and equipment. New York had balked at this measure in the past. Some land acquisition by the state may be required to meet this provision.
In a statement, CSX spokesman Robert Sullivan said the agreement “is consistent with CSX Transportation’s commitment to work with state and federal officials to help find ways to safely and efficiently enhance passenger service in upstate New York, while at the same time ensuring the continued delivery and growth of job-creating, vital, green freight rail service.”
“I appreciate CSX’s readiness to do their part to make the promise of high speed rail in New York a reality,” said Rep. Louise Slaughter (D-N.Y.) in a prepared statement. Slaughter has been generally supportive of passenger rail improvement efforts within New York and throughout the U.S.
Bombardier Transportation has won a $241 million contract to supply, install, operate, and maintain a 3.6-kilometer (2.2-mile) INNOVIA Monorail 300 system for the King Abdullah Financial District, the new financial and business center under development in Riyadh, Saudi Arabia. Bombardier was awarded the contract by Saudi Oger Ltd., a Saudi Arabian construction company responsible for turnkey construction of the system.
Engineering and design will be performed at Bombardier's site in Kingston, Ontario, and manufacturing of the 12 cars will be carried out by Bombardier in Pittsburgh.
Bombardier will design and supply all of the system-wide Electrical and Mechanical (E&M) elements for the six-station monorail system, including six INNOVIA Monorail 300 trains (12 cars) with BOMBARDIER CITYFLO 650 automatic train control technology for driverless operation as well as providing project management, systems engineering and integration, testing, and commissioning.
Washington Metropolitan Area Transit Authority’s Board of Directors has approved a contract with Kawasaki Rail Car Inc. to manufacture 428 rapid transit cars, known as the 7,000-Series model, for $886 million.
Approximately 300 cars will be used to replace Metro’s older 1,000-Series cars, in service since Washington Metro began operations in 1976. Another 128 cars will be used for Metro’s planned service extension to Dulles International Airport. The cars will begin arriving on the property for revenue service in 2013, with all 428 cars delivered by 2016.
WMATA officials said the cars will have improved crash energy management systems, extra leg room, and other amenities. Metro Interim General Manager Richard Sarles says it’s a significant move in following through on a National Transportation Safety Board recommendation.
“Metro remains dedicated to providing the best service, equipment, and facilities possible for our customers,” said Metro Board Chairman Peter Benjamin. “Today’s action will allow us to move forward with a critical item that will enhance safety and help bring our system nearer to a state of good repair.”
Vancouver’s TransLink incentive to expand, and market, rail and transit options. The momentum is likely to continue.
L.B. Foster Co. announced Friday that it is extending its previously announced cash tender offer for all outstanding shares of common stock of Portec Rail Products, Inc., until July 30. The tender offer, made through wholly owned subsidiary Foster Thomas Co., was previously set to expire June 1.
As of May 27, 5,658,470 shares of common stock had been tendered in and not withdrawn from the offer. These tendered shares constituted 58.93% of the outstanding shares of common stock.
U.S. carloadfreight and intermodal traffic once again looked better in the week ended May 22, compared with 2009 levels, but “has leveled off after 12 consecutive weeks ofgains,” the Association of American Railroads reported. U.S. carload traffic was up 10.6% from the comparable week in 2009, but down 12.4% from 2008. Intermodal traffic rose 12.7% from last year but was down 7.9% from 2008.
Fifteen of 19 carload commodity groups were up from last year, led by a 100.2% jump in metallic ores and a 79.7% increase in metals. Other significant increases included coke, up 59.7%, motor vehicles and equipment, up 46.8%, and waste and scrap materials, advancing 32.4%. Declines in four carload commodity groups were led by farm products excluding grain at 12.2%.
Canadian carload freight traffic rose 32.1% from 2009’s corresponding week, while intermodal rose a similar 33.2%. Mexican carload freight traffic gained 13.4% in the week ended May 22 compared with one year ago, while intermodal rose 35.5%.
Combined North American rail volume for the first 20 weeks of 2010 on 13 reporting U.S., Canadian, and Mexican railroads was up 9.6% from last year, while intermodal traffic increased by 10.9%.
Florida East Coast Railway said Friday James Hertwig will become President and CEO of the company effective July 1, 2010. Hertwig previously was president and CEO of Carolina Freight Carriers Corp., president of Landstar Logistics, Inc., and, most recently, president of CSX Intermodal.
Hertwig currently serves on the Board of Directors of the Intermodal Transportation Institute at the University of Denver and isbeginning his third term on the Board of Directors for the Intermodal Association of North America.
“Jim’s experience and skill set are an ideal fit for the FEC and will be extremely beneficial in driving the Company’s growth and long-term franchise value,” said FEC Chairman John Giles.
Hertwig succeeds David Rohal, who remains with Jacksonville, Fla.-based RailAmerica, Inc., as senior vice president, and also remains on the FEC Board of Managers. RailAmerica and FEC are both owned by Fortress Investment Group LL,
A joint venture between Russian Railways and Salzburg, Austria-based Alpine Bau GmbH, called Alpine-RZDstoy GmbH, will carry out work on the project to reconstruct railway tunnels 6 and 7 on the Sochi–Matsesta line. The agreement between the joint venture’s owners was signed Friday in Sochi, Russia, during the V International Rail Business Forum “1520 Strategic Partnership.”
The document was signed by Russian Railways Vice President Oleg Toni and Alpine Holding Supervisory Board Chairman Dietmar Aluta-Oltyan. Work will be carried out on the reconstruction of railway tunnels 6 and 7 on the Sochi–Matsesta line.
The work will involve systems of management quality control, and environmental management based on international ISO 9000 and 14000 standards, as well as OHSAS 1800 occupational health and safety standards. The work is scheduled to be completed by the end of 2012.
Sochi is the site of the 2014 Winter Olympics.