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[quote user="MP173"]Dave: The last time I looked, Justice Department has not decided that the railroads needed to be broken up, ala Bell or Standard.  In fact the government has taken the opposite view over the past 50 years and has approved nearly all mergers. Is that situation going to change?  I believe that railroads have finally achieved a level of pricing power that has not been available and they need to be extremely careful in how they are to proceed. Your proposal to move to an open access system is very interesting and provides an interesting amount of discussion and thought.  I personally never seeing the railroads giving up that right to own and control their own infrastructure, unless either Justice comes knocking on their doors or there is a very compelling reason for open access.  Take away the right of way and the infrastructure and what is a railroad left with? Cars and locomotives, people and systems.  The ease of entry, which the trucking companies fight constantly will be open to a number of companies. Will that foster competition?  Cant answer that.  On certain lanes it no doubt would, on others it probably would not. Dave, the solution is simple.  If there is a demand for more railroad competition between points, then the investment dollars will flow to that project.  In other words land will be acquired, track laid, sidings built and trains will be run on those tracks.  A private company could build it's own ROW and open access could become a reality.  Expensive?  Very.  Likely to occur?  Probably not.  The projected returns on investment are not there.  Look at DME's proposed expansion.  Government money is being used in the forms of loans.  Why?  There were NO PRIVATE LENDERS or INVESTORS willing to provide capital. The current returns for railroads does not warrent massive expansion or massive investment.  Private capital is now heading in the direction of other companies as more and more publicly traded companies are being taken private.  The reason is very very simple.  The anticipated returns are high. So, in summary...Justice Department has not deemed BNSF, UP, NS, CSX, CN, CP to be on the same level of Bell, Standard or even Microsoft.  Until there is a movement by either Justice or STB there is no motivation for the railroads to implement the OA plan.  At this time there is not a groundswell of private capital to invest in purchasing land for ROW, and building an infrastructure.  Only a government funded load has been provided to expand the railroad system and the parties are mixed as to whether or not that debt can be serviced.  There are other capital improvements which are government based such as the NS tunnel clearing and the Southern California project but for the most part the government is pretty silent regarding public funds for the railroad industry. With very little private investment, other than retained earnings and very little public investment (DME) there is simply not the returns to justify further investment at this time.  What will trigger that further investment?  Higher returns. ed [/quote] Ed, Look closely at all the high falutin' finance data coming from the Class I's, and you will see that even 25 years after Staggers, massive retrenchment, monopolistic pricing power, et al, the railroads still are nowhere near being able to recover their cost of capital.  I've got new for ya, Bud - such will never happen with a continuation of the integrated model.  The lack of intramodal competition inherent with all monopolies equates to very little generation of new business. The history of US railroads is one of massive federal aid from the get go to the present.  Always has been, always will be, because we are dealing with an anachronism.  Demand for new rail service has always been implicit, but the integrated model squelches the desire for potential shippers to invest their time and money in such a venture.  Because let's face it - who but a masochist wants to be subjected to monopolistic abuses?
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