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Murphy - Let's try this again. What you are asking is why would someone invest in an IO with no guaranteed minimum of return? In other words, what if an IO has all this immaculate trackage and no one shows up to run trains over it? It could happen on some stretches (see the fallback to state and regional ownership post), but the facts are rail service is needed, is wanted, and will be used. If the base costs are ameliorated to give the IO's the upper hand over public support for highways and waterways, and given the huge efficiency advantages trains have over trucks, it seem unlikely that any mainline IO woult be wanting for customers. Those customers in return are paying a fee that both covers all the associated costs, and provides a percentage profit margin. <br /> <br />Say for example TOC's are charged an average of $5000 dollars to run over an IO's tracks. 10% of that is $500. If the IO is hosting as few as 20 trains per day, then thats over 3.6 million in net earning per year for that one line. If an IO owns 10 such lines in the country, they're averaging $36 million in profits per year on the low end. If that's divided among 10 million share holders, that's $3.60 in earnings per share. Not bad. Granted, that is a simplistic example, but when you look at the number of current trains per day running over the nation's rail system, and average that out over all trackage, mainline and secondary, you can see that the numbers favor the IO's. If OA results in shorter faster trains, then the number of annual users will go up. On the surface, it seems like a win-win for current shareholders. <br /> <br />If however, there is no attempt at ROW cost equalization among the modes, instead forcing the IO's to go it on there own in competition with the public support for highways and waterways, then your negative scenario is much more likely to play out.
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