MP173 Falcon:NEI (not enough information). Great report. I really appreciate it. So, do they run freights thru the Royal Gorge? Tomorrow I will google map the area and figure it out. I visited the Royal Gorge in 1964 as a kid...I can understand your comment about Burlington not going any further west. What is your opinion on "railbanking"? ed
Falcon:NEI (not enough information).
Great report. I really appreciate it. So, do they run freights thru the Royal Gorge? Tomorrow I will google map the area and figure it out. I visited the Royal Gorge in 1964 as a kid...I can understand your comment about Burlington not going any further west.
What is your opinion on "railbanking"?
ed
Actually, the Santa Fe not only wanted to go further west than Canon City - they did. It was the Santa Fe, not the DRGW, that built through the Royal Gorge. Their target was Leadville which, at the time, was an important mining center and the target of many rail construction projects of the era (including the Georgetown Loop). The story of why the Santa Fe surrendered its Royal Gorge alignment is told in considerable detail in George Hilton's book on narrow gauge railroads.
So what is the actual cost to the UP to keep the rails (in whatever condition they are in) in place?
I know that the line was very expensive to operate due to the grades, but with the huge increases in rail traffic (except during this recession), it would seem very short-sighted to give up a potentially usefull line.
Over the years, I wonder how many railroads regretted their prior decisions to abandon lines that at the time seemed surplus, but recently could have been put to good use.
zardozOver the years, I wonder how many railroads regretted their prior decisions to abandon lines that at the time seemed surplus, but recently could have been put to good use.
Perhaps BNSF now regrets putting the Stampede Pass line back in service, at a cost of $165 million.
Zardo:
The whole idea was (and I suppose still is) to route lower priority trains over Tennessee Pass to keep Moffat open (and the tunnel clear) for the passenger train and the higher priority trains. Uncle Pete was ready to start double and triple tracking the west side of the tunnel (Fraser to Winter Park) to queue-up trains going into the hole as soon as the thing vented (instead of holding them back at Tabernash) and was getting serious until the slump and the decline in coal trains off the North Fork Branch hit.
The lower priority trains would be thrown at low speed (TWC for a while) to the south until the signal system could be reset. (they could at least move and progress east). Very little merchandise and no TOFC/COFC traffic is out there now except for the UP Roper local and the BNSF rights trains.
I don't think UP would have spent the $$$ in the recent ugly court fights and last fall's resurfacing in spots if they were gonna walk away from the line entirely. (and the C&S line at Leadville may yet start shipping revenue material again)
I think this "high cost of operation" statement can be overstated for Tennessee Pass. Any mountain summit entails higher cost of operation than the equivalent miles of tableland, but some summits are relatively worse than others. Fuel cost is very closely proportional to the amount of elevation that has to be gained, thus if you have two alternative routes with common end points, one with 1,000 feet of altitude gain and another with 2,000 feet of altitude gain, fuel burn for the second that is related to the climb will be twice that of the first. Locomotive cost might be a wash between two alternative routes. Crew cost is idiosyncratic depending upon how the agreements are written. Track maintenance costs are idiosyncratic based upon terrain, climate, curvature, and geotechnical. For example, Tennessee Pass is a fairly dry summit with fairly benign geotechnical aspects relative to some other mountain summits. Its total degrees of curvature is significantly less than the Moffat.
Point of all this is that it can obscure more than illuminate to announce that Tennessee Pass has high cost of operation. So does the Moffat. So does Donner Pass. So does Marias Pass. Question is, how much higher than alternative routes, and for what traffic types, and for what traffic level. Without some level of detailed analysis it's really hard to say whether this higher operating cost has a large influence on the decision to reopen or close a line, or not much of an influence.
RWM
Railway ManI think this "high cost of operation" statement can be overstated for Tennessee Pass.
The "high costs" I was refering to were, 1) the number of locomotives needed to move X amount of freight over a 3+% grade vs. a 2.2% grade, 2) the fuel to run said locomotives, and 3) the cost of owning and maintaining an entirely seperate right of way.
Additional factors would be the destination of said freight. If it was heading due east from Denver towards North Platte, then going over TP would seem to be silly, although this doesn't count the extended route miles north to go thru the Moffat (I do not know the actual mileage differences between the two routes); if the freight was to head south towards Texas, then TP would seem to be a better choice.
As Muddy pointed out, keeping the line seems to be woth it for the reasons he stated, but then I do not have the benefit of seeing the 'big picture' (hence my question).
Zardoz -- I really wasn't referring to your prior post specifically. I was going to write this yesterday but was never anywhere close to where I could use the laptop. The point I'm trying to make is that saying "Tennessee Pass is costly to operate" really doesn't explain too much, because it's costly compared to Route X or Route Y, and we have to dig into the details to find out how much more costly it really is -- if any! It's not very easy to do this even with inside information, and from the outside, it would require me expending around 10-20 hours per route to come up with some naive numbers that compared two routes.
Returning to general principles, if you have two routes with common endpionts, enough traffic to fully utilize the capacity of only one, and neither has any appreciable local traffic, then it's usually sensible to put all the trains on one route and cease service on the other. Which route you choose is the question. I think anyone can stand on the outside, look at the coal origins and destinations, and see which route is more plausible of the Moffat and Tennessee Pass alternatives. But that has much more to do with crew costs, equipment turn times, and total mileage of the line haul, and much less to do with the relative costs of maintenance costs of the two routes, operating cost differences between the two routes, and locomotive requirements of the two routes. For most of the traffic, the Moffat will have one less crew district, for starters.
zardoz So what is the actual cost to the UP to keep the rails (in whatever condition they are in) in place? I know that the line was very expensive to operate due to the grades, but with the huge increases in rail traffic (except during this recession), it would seem very short-sighted to give up a potentially usefull line. Over the years, I wonder how many railroads regretted their prior decisions to abandon lines that at the time seemed surplus, but recently could have been put to good use.
Let me try to answer all three questions:
(1) The "cash" cost of keeping the railroad in place (that is, the money UP has to pay out from its treasury every year) is probably minimal, principally real estate taxes (and liquidation might not have a big effect on UP's tax bill because of the way railroad real estate taxes are apportioned) and some small amount for occasional inspections, weed control (maybe) and the like. The real "cost" is something called "opportunity costs" - the income UP is foregoing by not liquidating the property and reinvesting the proceeds elsewhere. For example, if the NLV of the property (ie., the amount UP would realize from disposition of the property less the costs it incurs in salvaging and disposing of the track and real estate) is, say $20 million (I made up this number), and UP could invest this money somewhere else and get a 6% annual return (a number I also made up), the "opportunity cost" of keeping the railroad in place is $1,200,000 per year. Railroad's certainly think about that kind of thing (and STB considers it in abandoment decisions) but it doesn't represent cash bleeding from the corporate treasury.
(2) Obviously, UP must have believed that the TP line had some potential future value as a transportation corridor, or they would not have left it in place as long as they did. But there's a real question of how valuable this line would be to handle future traffic increases. At this point in time, it would take a major capital investment to put it back in service. And what is it going to be used for? Certainly not the mixed traffic it was used for in SP days. SP didn't have an viable alternate Central Corridor route (the Moffat line couldn't handle stack trains, and SP didn't have an outlet to the east at Denver). UP does - its Wyoming main line. It makes far more sense for UP to invest in capacity on that line than on the TP line, for the reasons I discussed in an earlier post. About all TP would be good for now is an alternate route for some of the Colorado/Utah coal now on the Moffat line. How much is that traffic really going to increase in the future as the older power plants that use it are retired? And where does the traffic go once it hits Pueblo? The historic routing via the Hoisington line isn't available and it makes no sense to route it up the joint line to Denver (which has its own congetion problems). The only way the TP line could be of any real use is if a new railroad were built to tie the existing trackage east of Pueblo into the KP line (if you look at a map, the KP line dips to the south east of Denver), but that's a really big investment.
I don't know what's going on the the hallowed halls of UP in Omaha right now, but the recent transfer of dispatching for the Canon City-Parkdale segment to RGX tells me that UP has concluded that the TP line will not be useful in the future. UP wouldn't have done this if they felt that there was a reasonable prospect of reopening the line. Keep in mind that they have been dispatching the line and maintaining the signals since the line was sold to RGX over 10 years ago. Why? The only explanation is that they wanted to keep operational control of the RGX line in the event the TP route was restored to service. The transfer of dispatching and signals to RGX after all these years indicates this is no longer a concern.
(3) I've been involved in a large number of western railroad abandonments. In the vast majority of cases, the railroads have no regrets about the decision to abandon. Keep in mind that, outside of bankruptcy or near bankruptcy scenarios (i.e., the railroad needs the cash from the salvage to meet the payroll, which was more common than you might think in the 70's), a railroad will not fully abandon a line unless it concludes that the line is absolutely hopeless. If it has any question that the line might be useful in the future, the railroad will simply get STB authority to discontinue service, and then leave the line in place. Also, most (but not all) abandonments involve lines that are only capable of handling local traffic (i.e., traffic that originates or terminates on the line), so they aren't even candidates for handling increased traffic flows. There have certainly been some abandoned lines which railroads would like to have back, but not many.
Were it not for the costs of blowing a bigger hole of a Moffat tunnel, would Tennessee pass have been past tense a long time ago?
The answer comes down to traffic patterns. There's four basic timeframes to look at:
The question was never quite about the capacity of the Moffat Tunnel, because it was never quite at capacity. Looking at the question another way, had the D&RGW always had the Kansas Pacific line (it never had it) or some other line from Denver direct to the Kansas City gateway, Tennessee Pass probably would have ceased to be a through route for overhead traffic the day the Dotsero Cutoff opened.
Railway Man [snip] Returning to general principles, if you have two routes with common endpionts, enough traffic to fully utilize the capacity of only one, and neither has any appreciable local traffic, then it's usually sensible to put all the trains on one route and cease service on the other. Which route you choose is the question. I think anyone can stand on the outside, look at the coal origins and destinations, and see which route is more plausible of the Moffat and Tennessee Pass alternatives. But that has much more to do with crew costs, equipment turn times, and total mileage of the line haul, and much less to do with the relative costs of maintenance costs of the two routes, operating cost differences between the two routes, and locomotive requirements of the two routes. For most of the traffic, the Moffat will have one less crew district, for starters. RWM
Ahh - but not all trains are alike, or 'fungible' / identical. It seems to me that if you think about the possibility of having to utilize the principles of 'triage' or 'marshalling' by assigning trains to a route that matches their characteristics better - or at least, 'less badly', then a conceivable use for Tennessee Pass might appear.
Just to vary the example a little: Suppose the UP's Wyoming line and Moffat line are again full up to capacity - or projected to be, in the near future - with traffic, but UP still needs to get a few more trains from east to west. So where/ which is the 'least cost' and fastest alternative to get additional capacity - by either constructing additional parallel 2nd or 3rd main tracks, with likely permitting hassles or delays - or return Tennessee Pass to service ?
And though RWM's coal train example above is seemingly a 'no-brainer', he points out that it may not be that cut-and-dried. Further, if the coal train does go best on the Moffat or Wyoming lines - then consider a 'bare-table' move of an empty intermodal train that needs to get from one of the Chicago terminals back to Los Angeles - Long Beach sometime during the next week. That equipment is very light, so not a lot of tons would have to be dragged to the top of Tennessee Pass, and it's flexible, too, so the curvature shouldn't bother it too much. And as a empty move, it doesn't need a lot of HP for a lot of upgrade speed, either, so no helpers or DP. Maybe assign a single 4400 HP AC-motor unit to it and let it slog to the top without worrying about overheating the motors, then drift downgrade at the higher track speed with DB. Who cares how long that train of empties is off in the back country ? At least it's not clogging up the TransCon main, sidings, yards, and refueling points while other hotter traffic is trying to get through. This may be an extreme scenario, but it might be plausible in the grand scheme of things - sacrifice and trade-off somewhat higher costs on the Tennessee Pass route to obtain much greater savings or revenue increases on the other routes.
Well, just a thought. You fellas who know the territory, routes, and operations intimately can probably see the 'holes in the boat'. But I think UP has about the same view of that line as I do about a lot of the stuff I have in my attic and basement - I'm not sure that I'll ever really have a solid use for it again, but I don't think I want to throw it away just yet, because it would be really hard and/ or expensive to replace . . . Or maybe the UP's officials are just 'packrats' like many of the rest of us, only on a grander scale - 'bigger toys for the bigger boys', y'know ?
- Paul North.
Do we have any in house experts on the net liquidation value of railroads? What would the components of the cost equation be?
Obviously on the cost side would be de-constructing the line, the cost of removing the rail, ties, etc. Are there other costs involved?Revenue side would have the sale or use of the rail. Is the rail CWR? or stick? Would it have operational value or would it be scrapped? What about ties? Any value to those? Ballast? Who owns the land (ROW)? I am not a lawyer and dont know how ROW is owned (by railroad) or adjacent landowners? What about wire (copper?) for signals?
Is the big driver in NLV the price of scrap steel?
Victrola1 Were it not for the costs of blowing a bigger hole of a Moffat tunnel, would Tennessee pass have been past tense a long time ago?
Moffat tunnel isn't the only place you would need a bigger hole, particularly in the double stack era. As I recall, there are a whole bunch (over 20) other tunnels on the east side of Moffat tunnel, many of whchi also hav erestriive clearances. For course, they aren't as long as the Moffat.
But I don't think the TP line would have been past tense a long time ago, because the Pueblo interchange (and later the Puteblo trackage rights operation ) was pretty important to DRGW even after the Moffat tunnel was opened and DRGW got control of the Denver & Salt Lake. Going through Denver and then down the front range was likely seen as a non-starter even in a pre-double stack era.
MP173 Do we have any in house experts on the net liquidation value of railroads? What would the components of the cost equation be? Obviously on the cost side would be de-constructing the line, the cost of removing the rail, ties, etc. Are there other costs involved?Revenue side would have the sale or use of the rail. Is the rail CWR? or stick? Would it have operational value or would it be scrapped? What about ties? Any value to those? Ballast? Who owns the land (ROW)? I am not a lawyer and dont know how ROW is owned (by railroad) or adjacent landowners? What about wire (copper?) for signals? Is the big driver in NLV the price of scrap steel? ed
I've done/been involved in a few. On the plus side, you have the rail and the OTM (plates, bars, anchors, etc.). On a branch line, most of it will usually be remelt only, but there might be some relay quality. A main line may have more relay quality, but often a main line that is abandoned has been in decline for a long time and a lot of the rail is too small, too far gone, etc., to be relay quality.
There may be some relay quality ties, if the line hasn't been out of service for a long, long time, and the ties weren't all expired at the time of shutdown anyway. Signals are usually all junk but there might be some instrument houses, if new, that have some reuse value, particularly for grade-crossing signals which are fairly standard. Wayside signal instrument houses tend to be very location-specific and are only good for components and the house itself -- if they are new. If it's old shelf-type relay equipment, it's landfill-time.
Land is usually worthless except in terminals in cities. The over-the-fence value of pure right-of-way is usually nil because the only potential buyers are the adjacent landowner to either side. In theory you could sell the right-of-way to some other user of contiguous corridor such as pipeline, fiber, electric utility, but for them to convert it to that purpose they may have severe permitting issues. If the right-of-way is already in use for utilities, the railway may retain it and continue to lease it for that purpose.
On the debit side, you have the costs of:
Most of the recent NLVs I've done have come up negative, but its idiosyncratic. Fisheries and navigable waterways are a big deal. Removal of a single drawbridge over a navigable waterway might run $20 million.
Railway Man The answer comes down to traffic patterns. There's four basic timeframes to look at:
If UP abandoned or offered for sale the TP route would BNSF try to grab it up? It would certainly cut the mileage from the gulf coast / Texas area - Pacific NW vs over Moffett with maybe same or less number of crew. Any idea how much traffic might be available for BNSF? The STB might even direct the sale or transfer to BNSF. Of course trackage rights would need to be in place Leadville - Dotsero and over Rock and Rail?
blue streak 1 Railway Man The answer comes down to traffic patterns. There's four basic timeframes to look at: If UP abandoned or offered for sale the TP route would BNSF try to grab it up? It would certainly cut the mileage from the gulf coast / Texas area - Pacific NW vs over Moffett with maybe same or less number of crew. Any idea how much traffic might be available for BNSF? The STB might even direct the sale or transfer to BNSF. Of course trackage rights would need to be in place Leadville - Dotsero and over Rock and Rail?
I can't and won't pretend to speak for BNSF. But how would it reduce mileage between the PNW and Gulf Coast versus their own route via Laurel, Cheyenne, Trinidad, and Fort Worth? And, why would the STB want to make such a thing a condition?
I don't know that I'm an "expert" on NLV, but I think I have a reasonable understanding of it, since it's frequently an issue in abandonments.
The concept itself isn't difficult. To compute NLV, assume that the railroad is shut down. Now assume that the railroad holds a big auction and sells off everything on the right-of-way (including the right of way) that it can sell. At the end of the day, it ends up with a big pile of gold sitting on the desk of its President. From that pile of gold, the President has to remove some pieces of eight and use them to pay contractors for tearing up the tracks, tearing down the bridges (if they aren't sold in place), tearing down the structures, generally getting the demolition debris off the ROW, etc. He also has to pay the expenses of selling off the assets (which, in my example are the costs associated with the auction). The pile of gold that's left on the President's desk after all of this is paid is the true net liquidation value of the property. It's as simple as that. (I left out the part where the President tries to run off to Mexico with the bag of gold, is caught, and spends the rest of his life as Bernie Madoff's cellmate)
What make make NLV seem complicated isn't the concept - it's the context in which the issue usually arises. It usually arises in regulatory or condemnation proceedings BEFORE the property is actually liquidated (and, in fact, the property may never be liquidated if it is being condemned as a complete unit for continued rail service). So, at that point, we don't really know what the actual liquidation proceeds are going to be or what the actual disposal and removal costs are going to be. They must be estimated, and that's the process that can get a little tricky. With that overview in mind, let me turn to your specific questions:
1. The disposition costs, as you recognize, include all of the costs needed to remove the infrastructure, whatever they may be. A large railroad, which has done this type of work before, can usually make a pretty good estimate of removal costs based on an inventory and inspection of a line. "Big ticket" items that can vary substantially from line to line are things like major bridges and the like, which may actually have a "negative" liquidation value (ie., they cost more to remove than their salvage is worth). On the other hand, if the bridges don't have to be removed (for example, if it's likely the ROW will be sold as a trail), that can be a major savings.
2. The value of rail is definitely affected by its condition - reusable rail is more valuable that scrap rail. CWR may be a consideration if the rail is removeable and reusable as CWR. It's not a consideration if the rail is going for scrap or rerolling. Ties can have value, based on their condition (there's a market for reusable ties and landscape ties). Railroad personnel will usually make a "sample" inspection of rail and ties for purposes of developing an estimate (for example, they may do a detailed inspection of a 100 tie section every mile). I'm not so sure about ballast. I don't think I ever saw an abandonment where a liquidation value was assigned to this material (probably because it was normally left in place),
3. Estimating the value of real estate can be pretty tricky. The first question is whether the railroad has "marketable title". In other words, does the railroad have anything to sell once rail use has ended and the tracks have been removed?. Answering that question requires examination of conveyance documents. Sometimes, the railroad has the "fee", the same kind of title you have for your house. In this case, the property has marketable title. In some cases, the railroad only has an easement for railroad use, which terminates when the railroad use ceases. In this case, the railroad doesn't have marketable title. Sometimes it's some kind of interest in between, which may more may not be marketable title" depending on what it is (real estate "ownership" isn't really a "yes or no" concept - ownership is a continuum running from full ownership to mere possession). It's really impossible to generalize what kind of title a railroad has to ROW property in the abstract. It varies from carier to carrier, line to line, and often parcel to parcel (you'll typically see in a railroad's abandonment filing an estimate of the amount of reversionary and non reversionary land in the ROW). Add to that a couple of other complications. Many states have "marketable title" statutes which extinguish reversionary intersts after a certain period. In this kind of a case, even though the railroad's title may appear, from the deed, to be reversionary, the reversion may be unenforceable, so the railroad's title is marketable. Also, the National Trails System Act trumps restrictive easements and reversionary interests for rail property which is used for a trail (the owner may be entitled to compensation from the feds where this occurs, but that's beyond the scope of this note). So, the property might have title which is sufficiently marketable to support a trail deal.
The general approach employed by the STB is that property that does not have "marketable title" is valued at '0' for purposes of computing NLV (on the theory that the railroad has nothing to sell, and therefore won't get anything for it). However, that will be trumped if the railroad has an agreement with someone to purchase the property (on the theory that the best indicator of value is what someone has agreed to pay).
If the railroad has "marketable title", the next step is to estimate what the railroad will receive for sale of the property. If this is an issue in a particular regulatory proceeding, it will normally require an appraisal (unless, again, the railroad already has an agreement to sell the property). If you've ever bought or sold a house, you know what that is, although a ROW appraisal is typically much more extensive.
Structures may or may not have value, depending on whether they are reasonably likely to be sold for alternate use.
(4) Metallics (including rail, copper, etc) are typically a big part of NLV. The metallics value, for example, was a major factor in STB's valuation of the Coos Bay line, and a big downturn in metallics prices caused STB to reopen the proceeding and recompute NLV. But the relative importance of the metallics will depend on the particular abandonment. For example, for an abandonment of a line in an urban area where the RR has marketable title to the ROW, the real estate value will probably be much higher than the metallics.
Clear as mud?
Railway ManI can't and won't pretend to speak for BNSF. But how would it reduce mileage between the PNW and Gulf Coast versus their own route via Laurel, Cheyenne, Trinidad, and Fort Worth?
Made Hasty post. Looking more of West Texax to Utah and other points. Also traffic that is now on the Moffett route and a resulting mileage reduction Pueblo - Dotestro
.
Railway ManAnd, why would the STB want to make such a thing a condition?
Who knows: The state of Colorado as another post stated would not like the route abandoned. Politics can be confusing and unpredicable. plus the there may be a NLV.
Railway Man blue streak 1 Railway Man The answer comes down to traffic patterns. There's four basic timeframes to look at: If UP abandoned or offered for sale the TP route would BNSF try to grab it up? It would certainly cut the mileage from the gulf coast / Texas area - Pacific NW vs over Moffett with maybe same or less number of crew. Any idea how much traffic might be available for BNSF? The STB might even direct the sale or transfer to BNSF. Of course trackage rights would need to be in place Leadville - Dotsero and over Rock and Rail? I can't and won't pretend to speak for BNSF. But how would it reduce mileage between the PNW and Gulf Coast versus their own route via Laurel, Cheyenne, Trinidad, and Fort Worth? And, why would the STB want to make such a thing a condition? RWM
I can't speak for BNSF either, but I would point out again that BNSF transferred its trackage rights between Pueblo and Canon City to Rock & Rail some years ago. They would need to operate over this segment in order to make any use of the TP line as a through route. As such, it's difficult to see why they would have done this if they had an interest in eventually acquiring the balance of the TP line.
As far as STB is concerned,if UP filed for abandonment of portions of the TP route, BNSF (or anyone else) would have the statutory right to acquire the segement covered by the abandonment filing (but nothing else) for NLV. That right is routinely recited in STB abandonment decisions. However, STB does not have authority to condition an abandonment on the sale of any additional trackage (or trackage rights over additional trackage).
Clear as mud? You bet.
No doubt every situation is it's own situation which needs to be analyzed.
There was a NLV situation several years ago in our area. CSX wanted to abandon it's line to North Judson, In. and the city wanted to purchase it. They finally did, but it took awhile.
gotta run
Railway Man MP173 Do we have any in house experts on the net liquidation value of railroads? What would the components of the cost equation be? Obviously on the cost side would be de-constructing the line, the cost of removing the rail, ties, etc. Are there other costs involved?Revenue side would have the sale or use of the rail. Is the rail CWR? or stick? Would it have operational value or would it be scrapped? What about ties? Any value to those? Ballast? Who owns the land (ROW)? I am not a lawyer and dont know how ROW is owned (by railroad) or adjacent landowners? What about wire (copper?) for signals? Is the big driver in NLV the price of scrap steel? ed I've done/been involved in a few. On the plus side, you have the rail and the OTM (plates, bars, anchors, etc.). On a branch line, most of it will usually be remelt only, but there might be some relay quality. A main line may have more relay quality, but often a main line that is abandoned has been in decline for a long time and a lot of the rail is too small, too far gone, etc., to be relay quality. There may be some relay quality ties, if the line hasn't been out of service for a long, long time, and the ties weren't all expired at the time of shutdown anyway. Signals are usually all junk but there might be some instrument houses, if new, that have some reuse value, particularly for grade-crossing signals which are fairly standard. Wayside signal instrument houses tend to be very location-specific and are only good for components and the house itself -- if they are new. If it's old shelf-type relay equipment, it's landfill-time. Land is usually worthless except in terminals in cities. The over-the-fence value of pure right-of-way is usually nil because the only potential buyers are the adjacent landowner to either side. In theory you could sell the right-of-way to some other user of contiguous corridor such as pipeline, fiber, electric utility, but for them to convert it to that purpose they may have severe permitting issues. If the right-of-way is already in use for utilities, the railway may retain it and continue to lease it for that purpose. On the debit side, you have the costs of: Removing hazards to navigation (can be very, very expensive) Removing hazards to life (sealing tunnels, barring access to bridges by all-terrain vehicles, removing dangerous or crumbling buildings) Removing hazards to the environment, such as embankments that will erode into fisheries, bridges that will crumble into fisheries, treated timber that will leach chemicals into groundwater or streams, and proper disposal of such; Removing grade crossing surfaces, signals, signage, and resurfacing crossings, etc. Re-establishing any shared utility services such as pipeline cathodic protection, water lines, gas lines, etc. Preparing the NEPA documentation and environmental permitting Re-establishing natural contours and reseeding in any areas where the line existed on permit in national protected lands, state protected lands, or other land-use convenents, or where an unprotected/unmaintained embankment might damage adjacent lands Removal of bridges or culverts that if not maintained, might affect waterways or drainage or runoff onto adjacent properties, or damage adjacent bridges, particularly highway bridges, and re-establishment of channelization and bank protection. Sealing of any penetrated levees Mitigation of any leaching into or silation of fisheries or waterways that might result from removal of the track structure and bridges. Protection of any overhead or adjacent structures from subsidence of tunnels that might collapse or cuts that might slough. Most of the recent NLVs I've done have come up negative, but its idiosyncratic. Fisheries and navigable waterways are a big deal. Removal of a single drawbridge over a navigable waterway might run $20 million. RWM
Similary, I don't dispute your statement that you've been involved in NLV's where the land was nearly worthless outside of terminals. Again, that's certainly possible (for example, if the rural ROW is nearly all government right-of-way grant property, which is reversionary). But it's not any kind of norm. In the recent Coos Bay case, for example, the STB determined the ROW of the line had a NLV of nearly $7 million, and almost all of the right of way was outside of terminals. The fact that the only likely buyers in many cases are the adjacent landowners doesn't mean that the land is worthless. My experience is that adjacent owners are usually quite interested in buying the ROW, and that's true even if the railroad's title is less than perfect. In the Coos Bay case, for example, the STB assumed that the liikely purchasers of the ROW, in most cases, would be adjacent landowners.
UP's giving of dispatching rights is likely significant, as noted previously.
So - Might UP be thinking instead of implementing its southern version of BN/ BNSF's affiliation and operating 'haulage' arrangements with Montana Rail Link ? Let someone else maintain and use the line for local traffic, but keep it available for flexibility for future use ? Just a thought.
The disposition of the railroad right of way is subject to many factors. This was my work for 15 years and I shall offer some insight.
First, the concern about Federal Land Grant ROW is negligible because the vast majority was acquired by other means; and those like the UP Overland route remain as prime corridores. Branch and secondary lines are hardly ever established by land grants; none in my experience.
A great majority of ROW was purchased from the adjacent landowner. These purchases may be constrained by: was it acquired by condemnation or threat thereof, do state statutes limit the railroads ownership rights, and does case law establish prescident.
But after those possibilities have been identified and merchantable title established the adjacent landowner is usually a willing buyer and will convert the ROW into how the adjacent property is used. These adjacent owners do not want their properties 'contaminated' with whatever a new owner may have in mind and are willing, in most situations, to pay near to the market price to put the land back together.
Urban ROW's are unique, especially as cities expand into what was rural when the RR was established. These cannot be simply analyzed, but much property in those areas can be sold, and at a very good price.
Falcon48 My experience is different than yours. I don't recall ever dealing with an NLV which was negative for an entire line. Even the Coos Bay line which had some major bridges, had a subtantially positive NLV. That said, it's certainly possible that there could be lines which are negative because of relatively low liquidation values and high disposition costs (major bridges and the like). Similary, I don't dispute your statement that you've been involved in NLV's where the land was nearly worthless outside of terminals. Again, that's certainly possible (for example, if the rural ROW is nearly all government right-of-way grant property, which is reversionary). But it's not any kind of norm. In the recent Coos Bay case, for example, the STB determined the ROW of the line had a NLV of nearly $7 million, and almost all of the right of way was outside of terminals. The fact that the only likely buyers in many cases are the adjacent landowners doesn't mean that the land is worthless. My experience is that adjacent owners are usually quite interested in buying the ROW, and that's true even if the railroad's title is less than perfect. In the Coos Bay case, for example, the STB assumed that the liikely purchasers of the ROW, in most cases, would be adjacent landowners.
Technically, the Coos Bay line had a positive NLV, but only if the portion that was immediately before the STB was considered -- and only if you agree with the STB's methodology. Add in the Coos Bay Drawbridge, and it goes negative.
But this is all beside the point, on which I think you, diningcar, and I have all had ample experience and all would find it just dandy to work together, the point being that NLV is idiosyncratic to the line in question. I think my experience with land values might have been more glum than yours or diningcars simply because the ones I've been involved with had environmental and political problems that confounded the analysis.
In response to Railway Man's latest post, I'm in complete agreement with his observation that NLV is idiosyncratic to the line in question. Just because I haven't personally run across lines with a negative NLV doesn't mean there aren't such things. It all depends on the gross liquidation values of a particular line's assets and its disposition costs, and that varies from line to line. If the liquidation values are relatively low (for example because of poor real estate title, and/or poor condition of infrastructure assets) and the disposition costs are high (major bridge removal, environmental cleanup costs and the like), it's entirely plausible that you could have a line with negative NLV. My only point was that negative NLV isn't any kind of norm
Now that I think about it, I wonder if the UP Wallace ID abandonment might have been an example of a line with negative NLV. I wasn't personally involved in this one, so I don't know much about it, but I vaguely recall reading somewhere hat the line had contaminated ballast (possibly radioactive mine tailings) and that remediation cost many millions. If so, this could well have been an example of a line with negative NLV.
Paul_D_North_Jr UP's giving of dispatching rights is likely significant, as noted previously. So - Might UP be thinking instead of implementing its southern version of BN/ BNSF's affiliation and operating 'haulage' arrangements with Montana Rail Link ? Let someone else maintain and use the line for local traffic, but keep it available for flexibility for future use ? Just a thought.
I don't know what UP might be thinking, but I doubt that they have a haulage in mind. If this is what they had in mind, they probably would made the deal as part of the change of dispatching with RGX. Further, as I discussed in an earlier note, the TP line is probably of little value to UP as a through route (regardless of who operates it) without a reasonable outlet at Pueblo which, with the demise of the Hoisington line as an outlet, does not now exist. Taking traffic up the joint line to Denver and going east doesn't seem to be a good option, particulary because the joint line has its own congestion problems.
By the way, if you look at the abandonment filings for the TP line that were in the UP/SP merger application, you'll see that there was hardly any local traffic on the TP line. The major move was mine traffic (I think it was lead concentrate) moving from Malta, but the mine has since closed. There was also a seemingly regular move of scrap metal from Pando, but this was the debris of the periodic runaway trains that SP had on the grade to the sumit of the pass. For some reason, they always appeard to derail at Pando, and were cut up there.
Falcon48By the way, if you look at the abandonment filings for the TP line that were in the UP/SP merger application, you'll see that there was hardly any local traffic on the TP line. The major move was mine traffic (I think it was lead concentrate) moving from Malta, but the mine has since closed. There was also a seemingly regular move of scrap metal from Pando, but this was the debris of the periodic runaway trains that SP had on the grade to the sumit of the pass. For some reason, they always appeard to derail at Pando, and were cut up there.
You're thinking of the ASARCO's Black Cloud Mine in Iowa Gulch near Leadville. It was the last regular revenue customer between Parkdale and Gypsum. It mined lead and zinc with significant silver and gold values. The lead concentrate went to ASARCO's lead smelter at East Helena, Montana, and the zinc concentrate to National Zinc (Zinc Corporation of America after 1976) at Bartlesville, Oklahoma. It closed on January 29, 1999, with economic exhaustion of its ore body. Black Cloud produced about one carload of concentrate a day.
Other than the Black Cloud there wasn't much traffic on the line after 1982-83, when Climax Molybdenum closed and CF&I shut down its basic steel production eliminating its need for limestone and dolomite from the Monarch Branch. New Jersey Zinc closed its Eagle Mine at Belden (a lead, zinc, copper, silver, and gold producer) in 1977. National Gypsum was getting gypsum for its GWB plant at Adobe from Pleasanton until about 1981, as I recall, and some of the gypsum went to Ideal Cement at Portland as a cement additive, too. Slag ballast from the old AV Smelter at Eilers, on the Leadville Branch, was a fairly steady business during the summer months some years, but not every year. Until 1982-83, there was enough traffic for a Malta turn from Pueblo every night, but after 1983 the local traffic between Canon City and Gypsum, except for ballast, was handled by through freights.
Falcon48 the periodic runaway trains that SP had on the grade to the sumit of the pass. For some reason, they always appeard to derail at Pando, and were cut up there.
There were three modern-day runaways on Tennessee Pass, all on the west slope:
Pando was a convenient place to haul wreckage, but none of the trains made it that far.
The two last were post-merger.
I vaguely recall that there were more incidents than this that lead to movement of scrap railroad equipment from Pando, but I no longer have access to the source material. Possibly there were some less serious incidents that didn't warrant NTSB investigation.
When you said "post merger", I assume you meant SP/DRGW. The UP/SP merger didn't actually occur until Fall of 1996 (I think it was September).
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