US freight railway operators provide transport for third of the country’s exports on a network of over 225 thousand km (140,000 miles) serving almost each industrial and commercial sector. Companies operate on private railways for which they execute construction and modernisation works.
In the past three decades, these companies invested over USD 630 billion in rolling stock procurement projects (locomotives, cars), but also in infrastructure and equipment aimed to provide safe and efficient transport services. According to the Association of American Railroads (AAR), in 2015, rail freight companies invested over USD 30 billion to optimize and develop the railway system. The importance of rail freight transport in the US is significantly reflected in the country’s economic activity: recent statistics show that in 2014 these companies created an economic activity of USD 274 billion generating federal and state fiscal revenues worth USD 33 billion.
For this year, AAR announced that private rail operators will invest USD 22 billion in the maintenance and modernisation of the US rail private network. The investment, estimated at USD 60 million/day, goes to the modernisation of lines and locomotives, but also to the implementation of the modern technologies necessary to meet latest demands and to establish a safer network.
“This year’s private network spending, a combination of capital expenditures and maintenance, is part of a continued trend of remarkable proportions, including more than USD 630 billion since the industry was partially deregulated. (…) We pay so taxpayers do not, an undeniable benefit to the U.S. economy. Our role in moving the country’s freight is critical and we look to be a productive part of a bipartisan infrastructure debate”, AAR President Edward R. Hamberger said.
Some of 2017 announced investments
Several rail transport operators, members of AAR, announced their investments for 2017 of which mostly stipulate the implementation of the Positive Train Control, as the deadline is 2018. This project was extended by the US competent authorities, as the initial deadline, 2015, could not be met by most operators. Starting with 2018, the deadline could be extended by another two years, but under different conditions. Beside this project which triggered huge challenges among companies and at political level, for 2017, operators plan to launch new projects to upgrade and extend the infrastructure network, to buy new rolling stock and to upgrade the existing trains.
BNSF, an operator that owns routes of over 52,000 km, announced that this year’s capital investments are worth USD 3.4 billion, of which USD 2.4 billion will be allocated to maintenance projects, the replacement and modernisation of railways including over 32,000 km of network. The company will allocate USD 400 million to extension projects, USD 100 million to the implementation of the Positive Train Control (PTC) system and USD 400 million will be invested in the procurement of locomotives, cars and equipment. “This year’s capital plan ensures we continue to operate a safe and reliable rail network while capturing the new opportunities our customers will present to us,” Carl Ice, BNSF president said.
CSX Transportation, an operator with a network of around 34,000 km announced that the investment plan for this year is worth USD 2.2 billion, of which 55% will be dedicated to infrastructure projects and 12%, around EUR 270 million, to PTC deployment. “We have invested USD 1.8 billion through the end of 2016 and we plan to invest about USD 270 million in 2017. CSX is on track to meet the legislative timeline for PTC. As we look at the path to achieving this goal, we now believe the total cost of PTC implementation will be about USD 2.4 billion before any third-party recoveries,” Frank Lonegro, executive vice president said.
Union Pacific Railroad’s network connects 23 countries and invested USD 34 billion in infrastructure and operations over the past decade. This year’s investments will amount to USD 3.1 billion of which USD 300 million will go to PTC projects. “The 2017 capital plan reflects our continued commitment to safety, productivity and future profitable growth,” Rob Knight, Union Pacific chief financial officer said.
Kansas City Southern announced investments of around USD 560 million in 2017, of which 45% (USD 252 million) will be allocated to maintenance projects and 6% (around USD 33 million) will be allocated to the implementation of new technologies. For PTC, the company will invest 10% of this year’s capital investments. The company’s executives said that this year will be “the big push year for PTC” and anticipate “a substantial reduction in spending” for this category beginning in 2018. “General and maintenance spend will reduce in 2017, given the improvements in infrastructure we have made over the past several years,” KCS Executive Vice President Jeff Songer said.
Norfolk Southern Corporation operates a network of over 31,000 km. Within the investment plan for 2017, the company will allocate USD 1.9 billion to maintain its network to necessary safety and traffic performance parameters and to improve the efficiency of operations. This year, the company opened a new locomotive maintenance and repair centre in Chicago, a region where Norfolk Southern operates another repair facility.
Although a passenger transport operator for Chicago’s metropolitan area, Metra is a AAR member. The operator’s investments for 2017 are worth over USD 1 billion, part of which being allocated to operation costs. USD 2.6 million will go to PTC and USD 90.5 million to the continuation of the rolling stock programme. This project stipulates the rehabilitation of 18 locomotives and 43 cars and the procurement of 21 new cars.
Canadian National Railway Company, AAR member for US operations, announced that the 2017 investments worth USD 1.78 billion, USD 285 million will be allocated for PTC deployment in the US. The system will be implemented on a network of 5,600 km and by 2020 the company will allocate USD 1.2 billion for this project.
Amtrak, the national passenger transport operator is included on the list of AAR members covering the transport services on a network of around 34,000 km, in 46 countries with 300 trains operated daily. Recently, Wick Moorman, the company’s CEO, announced it needs a “new era of investments” in infrastructure, rolling stock fleet and development of stations. In his speech, Moorman underlined 5 projects that motivate significant investments such as the construction of bridges, tunnels and the extension and optimisation of Chicago and Washington’s networks, as well as the modernisation of locomotives and construction of railways, and the implementation of modern signalling systems. One of the important projects is the Northeast Corridor (735 km) for freight and passenger traffic for which the authorities announced the development strategy for the next 3 decades. In the 2017 budget, Amtrak asked for a federal grant of USD 1.8 billion which includes PTC deployment, the procurement of vehicles, but also the implementation of infrastructure projects.
by Pamela Luica
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