American Railroads

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Location: Middleburg (Jacksonville), Florida, United States

Published in Trains magazine, Railfan & Railroad, Passenger Train Journal

Wednesday, October 25, 2006


Bombardier

An artist’s rendering of the forthcoming Ile de France commuter trains. Bombardier of Canada expects to build 372 trains that will operate on a Paris suburban network, and includes an initial order of 172 trains valued at an estimated $1.7 billion.

Bombardier to build French commuter trains

Bombardier Transportation of Canada today said that it has been selected by SNCF, French National Railways, to supply the future Ile-de-France commuter train, after a call for tenders launched in February 2004.

The contract is for the delivery of 372 trains that will operate on the Greater Paris-Ile-de-France suburban network, and includes an initial order of 172 trains valued at an estimated 1.35 billion ($1.7 billion U.S.). The total value of the contract is estimated at 2.7 billion ($3.4 billion U.S.) the firm said in a press release from its Montréal headquarters.

SNCF announced its decision at the conclusion of its board meeting today, convened to review the opinion of its contract committee.

Neither Bombardier nor SNCF said when they would sing the contract, saying only it would take place “in the near future.”

Delivery of the first trains is scheduled to begin in November 2009 and continue until 2015.

The new train will be designed, manufactured and built at the Bombardier Transportation facility in Crespin, in the Valenciennes region, France.

The Ile-de-France commuter train is an articulated train with extra-wide coaches, wide seats and wide doors to increase speed of passenger movement. Each train consists of seven or eight cars in a single unit and can also be operated as a double or triple unit.

The capacity of the trains will vary from 800 to 1,000 passengers, depending on the configuration and layout.

CSX looks to Midwest for rail yards

CSX Corp. has changed the focus of its hunt for a place to build a major rail cargo transfer yard from the Chicago suburbs to Indiana and Ohio.

CSX is actively talking to local officials in both states, according to Garrick Francis, a CSX spokesman.

The Northwest Indiana Times reported on Sunday the yard would be used for both cargo container transfers to trucks and some rail services such as equipment inspections, Garrick said.

“We are constantly looking at ways to expand and improve, and one part of that could involve an intermodal center in the Indiana or the Ohio areas,” said Francis.

Intermodal rail yards have the potential to create thousands of jobs because retail distribution centers and sometimes manufacturers build facilities adjacent to them.

The Center Point Intermodal Center, in Joliet, has created about 6,000 jobs since it opened in 2002. It serves BNSF’s intermodal yard.

Earlier this year, a CSX spokeswoman said the railroad was evaluating sites in Northwest Indiana and the southeast Chicago suburbs for such a facility, but Garrick confirmed that search has now shifted away from Illinois.

The Toledo Blade reported earlier this month that CSX officials were to meet with village council members and local residents about a proposal for an intermodal yard in the village of North Baltimore, about 25 miles south of Toledo.

The city of Hammond has also been pursuing such a facility for Gibson Yards, currently site of the largest rail auto transfer yard in the U.S.

The County of LaPorte would also like to attract such a facility to Union Mills south of the City of LaPorte. The CSX main line runs through the area.

Local and state officials confirmed last week there are active negotiations with Norfolk Southern Corp. to build an intermodal rail yard just west of the city.

NS would not confirm that negotiations are underway, but local property owners say real estate agents representing the railroad have approached them.

The Ports of Indiana said there are ongoing discussions with railroads about locating in intermodal site in LaPorte County.

“Railroads will decide where they want to be,” said Jody Peacock, Ports of Indiana spokesman, “but we are working with railroads trying to make it happen in Indiana.”

STB judges NS to be ‘revenue adequate’

The Surface Transportation Board said Monday that Norfolk Southern Railway Co. was the only big U.S. railroad last year earning a rate of return on its investment judged “revenue adequate.”

The board calculated the weighted cost of financing and operations – known as the cost of capital – at 12.2 percent for the railroad industry. That expense mainly consists of the cost of accessing money through the debt and equity markets, the Virginian Pilot of Norfolk, Va., reported.

Norfolk-based NS beat that with a 13.2 percent rate of return on net investment, the ratio of railroad operating income to capital investments. The second-best railroad was BNSF of Fort Worth at 10.3 percent. Third was the Soo Line Railroad Co., the U.S. operations of Canadian Pacific Ry., at 8.9 percent.

Being a revenue-adequate railroad can affect the rates charged by the railroads in certain cases, according to the STB NS was also the only railroad in 2004 to be revenue adequate, according to the board.

It has been difficult for railroads to meet that standard because until recent years, they’ve been saddled with low rates and slow growth, making it difficult to pay for big investments in track and trains, said Anthony B. Hatch, an independent railroad consultant based in New York.

NS would not disclose its individual cost of capital, company spokesman Richard W. Harris said.

In a separate matter, Norfolk Southern Ry.’s parent company, Norfolk Southern Corp., stated on Monday that its regular dividend of 18 cents per share of common stock will be payable on December 11 to shareholders of record on November 3.

NS service resumes in Pennsylvania

Freight and passenger rail traffic slowly resumed through Beaver County, Pa. on Monday, three days after a fiery train derailment toppled ethanol tankers into a river and prompted temporary evacuations of neighboring homes.

Authorities said Norfolk Southern resumed service at 12:50 a.m., soon after emergency workers extinguished a fire in a tanker on the trestle connecting Beaver Falls to New Brighton, according to the Pittsburgh Tribune-Review.

Typically, between 50 and 70 Norfolk Southern trains run through New Brighton daily at about 45 mph, railroad spokesman Rudy Husband said. With service resumed at just 10 mph as crews complete repairs to the tracks and trestle, and some trains rerouted over other lines, delays will continue over the next few days, he said.

Husband said damage to the trestle was not significant, and crews expected to retrieve two tank cars from the Beaver River early today.

A spokesman with the National Transportation Safety Board said investigators are still trying to determine why the 83-car train derailed. The crew reported a routine trip interrupted at 10:30 p.m. Friday when the brakes abruptly lost pressure, halting the train. The crew then saw the train was on fire, with 23 ethanol-carrying tank cars off the tracks.

Texas’ Cotton Belt plan takes another step

A commuter rail line would eventually ferry up to 10,000 passengers a day along a route between Grapevine and southwest Fort Worth and link directly to Dallas’ light-rail system, under a transit plan presented Monday.

The Fort Worth Transportation Authority at a meeting unveiled its proposal for the Cotton Belt commuter rail line, which would cut diagonally across Tarrant County, the Fort Worth Star-Telegram reported.

Officials say this is the best of all the options studied.

About 40 people attended the meeting, including several Grapevine residents who said they intend to vote for a half-cent sales tax Nov. 7. The tax would be divided so that three-eighths of a cent would go to commuter rail and the rest for other uses.

“I think this is a positive step toward change,” said Dan Schock, who travels to Dallas for his software business and would like an alternative to driving. “People won’t change until they see a reason to change.”

If Grapevine, Texas voters approve the measure, the rail line could be operating by 2011. It’s named after the former Cotton Belt Railroad, which became part of Southern Pacific and later absorbed into Union Pacific following a merger.

The $7 million generated annually by the Grapevine tax would speed up construction of the line by several years, officials from the city and the T say.

The Cotton Belt would carry up to 10,000 passengers a day by 2030, said Tim Baldwin of URS, a consulting company hired by the T. The region’s other commuter rail line, the Trinity Railway Express, carries about 8,000 passengers a day.

The T has spent the past year analyzing ways to move the large numbers of people already traveling between fast-growing Northeast Tarrant County and southwest Fort Worth.

The officials settled on the Cotton Belt system, which could cost up to $390 million to get started.

The system would provide an alternative for commuters traveling through the Texas 114/121 Grapevine funnel, Baldwin said.

Meanwhile, North Texas’ mass transit network will see about 40 miles of new rail lines by 2030 under a long-range plan adopted unanimously Tuesday night by the Dallas Area Rapid Transit (DART) board of directors, the Dallas Morning News reported.

It also will bring passenger rail service to the Cotton Belt freight rail line through Far North Dallas and northern suburbs but will not fully address Dallas’ concerns about running trains behind hundreds of homes.

A proposed $700 million light-rail line along LBJ Freeway was not included in the plan.

“We’ve done a good job of meeting the city in the middle,” said DART board Chairman Mark Enoch.

Dallas officials had asked DART to postpone Tuesday’s vote for several weeks so they could learn more about the proposals. The board declined to table the matter before launching into three hours of negotiations on its plans.

One of the major discussion points was Dallas’ request that DART spend $250 million to dig an open trench for the rail line through Far North Dallas. The city wanted the trains to run below ground level to reduce their impact on homes nearby.

DART refused to spend $250 million on a trench, something it has not built for other neighborhoods with rail lines, but it did agree to set aside $50 million to help address neighborhood concerns. The meeting drew dozens of Far North Dallas residents who urged DART to listen to the wishes of the Dallas City Council.

The board spent 90 minutes hearing testimony and deliberating on the plan. When it became apparent that the board was going to vote in favor the plan, several members of the audience grew upset, shouting, “This is insulting!”

Board member Terri Adkisson of North Dallas said she was disappointed with some things in the deal but ultimately voted for it.

“My personal belief is that North Dallas has gotten shortchanged,” she said. “But going forward, one of the strengths of DART is that its member cities walk forward united.”

Other audience members were upset to learn that the DART board worked out many of the details in a work session before the regular meeting.

“It was a lack of judgment and a lack of democracy and a lack of public responsibility on the DART board’s part,” said Far North Dallas resident Genny Mantzuranis.

Dallas City Council member Ed Oakley observed the hours of negotiations that led to the compromise.

“There are going to be some folks who are very unhappy,” Mr. Oakley said. “But at the end of the day, this is going to be the best solution.”

After the vote, City Council member Ron Natinsky, who negotiated extensively with DART, said the agency’s attitude toward Far North Dallas has not changed in the 15 years it has considered putting rail on the Cotton Belt.

“I don’t think this is over,” he said. He added that Far North Dallas residents plan to work at the state and federal level to change legislation that would force transit agencies such as DART to abide by a city’s wishes when it builds rail lines.

Complicating matters was the relatively small amount of money that DART said it would have for rail projects: $1.6 billion. That led to squabbles over several proposed projects and their merits.

As with any negotiation, the process was not without some winners and at least one loser.

Dallas got its wish for a rail line extension dubbed Southport to a proposed freight and trucking hub in southern Dallas.

“Looking at the stakes, this is the best chance the southern sector has had for development in years and years,” Mr. Enoch said.

Another winner could be the proposed West Dallas line, which would run along either Fort Worth Avenue or

The biggest loser Tuesday was a proposed light-rail line along LBJ Freeway. That project was not a priority with Dallas, and it barely missed the DART board’s funding cut, even though estimates indicate it would draw 9,800 riders a day.

“We’re all here to think about what’s best for the region,” said DART board member Angie Chen Button of Garland. “I would hate to think that the city of Dallas doesn’t think that almost 10,000 riders is important.”

The LBJ line didn’t make the list because of its cost and for political reasons. DART board members did not want to spend $1.2 billion of the $1.6 billion available on two east-west rail lines in the northern half of the region.

“For too long, the southern sector has been neglected. My concern is that we do not put all our money in the northern sector,” said Joyce Foreman of Dallas, the board’s vice chairman.

DART officials said they hope their sales tax revenue will exceed forecasts, allowing them to pay for part of the LBJ line and get federal funding for the rest.

Construction on any new rail lines that are part of the 2030 plan would not start until around 2020 at the earliest. The first projects would open around 2025. Other projects could open by 2030.

October 25

NS net income up 38 percent

Norfolk Southern Corp. (NYSE: NSC) reported record third-quarter net income of $416 million, or $1.02 per diluted share, a 38 percent increase compared with $301 million, or $0.73 per diluted share, for the same period of 2005. Third-quarter income from railway operations increased 35 percent to a record $715 million.

“We have consistently driven financial and operational performance to higher levels throughout each quarter this year,” said Wick Moorman, Norfolk Southern’s CEO.

“In the third quarter our performance enabled us to produce excellent results and set records for railway operating revenues, income from railway operations and net income, while also significantly improving our operating ratio.”

For the first nine months, net income set a record at $1.1 billion, or $2.62 per diluted share, an increase of 19 percent compared with $919 million, or $2.24 per diluted share, for the same period of 2005. Nine-month results for 2005 included a benefit of $96 million from the effects of Ohio tax legislation, which increased diluted earnings per share by $0.23. Excluding this item, net income for the first nine months of 2006 would have been 33 percent higher than the $823 million, or $2.01 per diluted share, earned in the same period of 2005.

Record third-quarter railway operating revenues of $2.4 billion improved 11 percent compared with the same quarter a year earlier. For the first nine months, railway operating revenues increased 13 percent to a record $7.1 billion compared with the same period of 2005. Both improvements were largely the result of higher average revenues, including fuel surcharges. All markets, with the exception of automotive, posted significant revenue gains, and several set new revenue highs.

General merchandise revenues were $1.28 billion, an increase of 13 percent compared with the same period last year and a third-quarter record. For the first nine months, general merchandise revenues rose 15 percent to a record $3.87 billion compared with the year-earlier period.

For the quarter, coal revenues increased 9 percent to a record $595 million and improved 9 percent to a record $1.74 billion during the first nine months compared with the same periods of the prior year.

Intermodal revenues continued growth in both the quarter and for the first nine months, rising 9 percent to a third-quarter record of $515 million, and climbing 13 percent to a record $1.48 billion for the year-to-date compared with the same periods of 2005.

Railway operating expenses were $1.68 billion for the quarter, an increase of 3 percent compared with third-quarter 2005, and $5.15 billion for the first nine months, up 8 percent compared with the same period a year earlier. Higher diesel fuel prices contributed to the increases during both periods.

For the quarter, the railway operating ratio improved 5.4 percentage points to 70.1 percent. For the first nine months, the railway operating ratio improved 3.1 percentage points to 72.6 percent.

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