Thanks to Chris / CopCarSS for my avatar.
QUOTE: Originally posted by Murphy Siding Future Model : Hang on a minute, my head is spinning , and I can't get it to stop. If the DM&E borrows 2 billion dollars, the figure they say need to BORROW, how does that not necessarily imply debt???? I'm not sure I understand your comments about the utility companies having the DM&E's back? In the real world of business, the utilities would buy their coal from the devil and ship it on horseback, if that was the most cost effective source. They won't pay the DM&E a premeum and I can't see how the DM&E would be able to do it at a discount?
QUOTE: Originally posted by Murphy Siding Future Model: I wouldn't doubt that Midwest power entities would welcome the thought of the third railroad shipping from the PRB. It's unclear if any of them have actually backed this project. ( As in "put your money where your mouth is"). But, please explain how having 3 railroad choices is going to be any more competitive than 2 ? Also. isn't the DM&E, with 2 billion dollars in new debt going to have a harder time "being competitive" than 2 existing lines with a lot lower overhead costs?
QUOTE: Originally posted by MP173 can anyone address the pricing of Powder River Coal? It is my understanding that in the early years, it was extremely lucrative to BN and CNW/UP. That high rate of return was no doubt necessary to build up the infrastructure. My impression is that PRC is not what it used to be. A comment here, a comment there gives me that impression. Add a third routing and suddenly not only will UP and BNSF rates fall, but also the return for DME will fall. $2billion of debt is a lot to service on low rated coal. ed At least for the first several years, PRB coal was NOT a big moneymaker for (then) BN because of the massive capital investment required for track, locomotives and cars. There was a TRAINS article about 7 to 10 years (IIRC) after BN started hauling PRB coal which said that overall BN at that time had not made any money on the stuff. There was an article within the past five years that said rates were about to go up for a number of utilities because the initial contracts were about to expire; the original deal was for the utilities to buy the cars (because BN couldn't afford them) and in return the utilities got a very low freight rate.
QUOTE: Originally posted by nanaimo73 Now, since it's not going to happen, I would rather hear everyone's views on which paint scheme this imaginary railroad would use, and what would it be called ?
QUOTE: Originally posted by nanaimo73 Gabe, a merger where DME shareholders exchange their DME stock for new KCS stock would work for KCS. I do not know how it would effect existing KCS stock. I don't think a majority of DME shareholders would approve. I don't see any benefit to DME in merging with KCS.DME is set up to send traffic east. www.dmerail.com KCS could have bought just the line to Chicago from CP when I&MRL was formed or when I&MRL was sold. I think all they care about now is getting traffic through south Texas.The August 2003 Trains has a good article about this.
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