Should China expand U.S. railroads?

Posted by Fred Frailey
on Saturday, September 20, 2014

Angola railwayMichael Ward, the esteemed chief executive of CSX Transportation, when asked about his railroad’s chronic state of congestion, says you don’t build a church for Easter Sunday. Is that his final answer? We are left to conclude that CSX would rather offer substandard service at higher and higher rates than expand capacity to match demand. Oh, he’d expand capacity if a unit of government would pay for it. It seems that while the railroad industry stands in desperate need of people who think big, what we get are pygmies. But let’s stop picking on Michael. Any other railroad CEO who reads this: I could probably say the same about you.

So what should float into my line of vision but an idea from David Williams, a transportation consultant. David says: Let the Chinese finance and build the U.S. rail infrastructure that railroads say they cannot afford to build.

This is not a frivolous suggestion. China has demonstrated its ability to finance and build a high-speed rail network within its borders, on a scale that stuns we cautious Americans. Last month in Angola, whose railroad system was shattered by a 26-year civil war that ended a dozen years ago, a ribbon-cutting was held to celebrate the rebuilding of the 835-mile Benguela Railway from the border with the Democratic Republic of the Congo to the Atlantic Ocean. The $1.8 billion project was paid for by the Chinese government and (to quote a news service) “inplemented by the 20th Bureau of China Railway Construction Corporation.” You can see the work done by the Chinese in the photo . . . concrete ties . . . welded rails. Looks like a meter-gauge version of a U.S. heavy-haul railroad.

“China acquired mineral rights and mining operations in eastern Angola and the Congo, an extremely rich area in minerals including diamonds, gold and uranium,” David explains. “Angola will repay the Chinese investment in line restoration, support, and rolling stock with a combination of excused extraction charges and exported products. It was a aid-and-trade package. Port privileges and servicing were also extended to the Peoples Liberation Army/Navy on the Atlantic.”

Would the 20th Bureau of China Railway Construction Corporation like to come to America?

There is a lot to be done. Just ask any exhausted passenger on Amtrak’s Lake Shore Limited and Capitol Limited. The westbound versions of these trains typically get to Chicago four hours late after running the gauntlets of CSX in upstate New York and Norfolk Southern between Cleveland and Chicago.

Out west, BNSF Railway is trying valiantly, spending $5 billion of capital dollars this year to catch up with demand but so far only treading water. The Canadian railroads strain to bring two huge grain harvests to the water’s edge while their oil business grows rapidly. Only Union Pacific and Kansas City Southern among the Class I freight railroads appear to be keeping their heads above water.

So why not the Chinese? They can come up with the money, provide the engineering talent, and necessary supervision. We get our super-railroads and repay the mega-billions with user fees or a piece of the action, that is, equity in partner railroads. A side benefit is that the more they invest in this country, the less China’s military is apt to snarl at us.  

It’s an idea worth debating because it rises to the challenge of thinking big. — Fred W. Frailey

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