Hello all. I have a question concerning how much railroad track would cost per mile, and buy railroad track i mean jointed, not in the best shape railroad track. Lets say there is a 25 mile railroad line in rural iowa/illinois. Its owned by some big railroad, and someone wants to buy it. I found that the RCP&E bough 670 miles from the Canadian Pacific for $210,000,000. I divided that by 670 miles and got $313,432... per mile. Then I saw that Ed Ellis bought a 140 mile line that was in bad condition for $2,750,000. That came out to $19,642 per mile. Anyone know an average/estimate on how much 1 mile of bad track would cost? Thanks!
How many miles of track are you wanting to purchase? The price would depend on many factors such as location, owning railroad, and on-line customers, to name just a few considerations. Only an actual railroad that has trackage for sale would be able to answer your question.
And why did you ask your question twice ?
Oversimplified....start separating the physical plant from the real estate, the operating potential, the existing liabilities (taxes, enviromental, legal, ...and on and on) and you never get apples to apples comparisons,...you wind up with the whole damned fruit stand.
(Hint: most of the Cls. 1's I'm around have properties that they hang on to because they don't dare abandon or sell them for good reason, there are reasons the outside world thankfully is blissfully unaware of.[most cases not environmental, sorry enviro-wacko lemmings.])
Way over simplified $50,000 per mile and up.
Low value will be based on "net liquidated value", or scrap value. First figure out land value, how many acres at what "across the fence value. Pretty straightforward if out on the prairie. Complicated in town. Easements and permits may or may not have value. Deduct cost to sell land and discount future cash flows since probably will not be able to sell it all at once.
Next is track and signals. What weight of rail in what condition? bolted or welded. Easy to figure tons per mile, add 10% for OTM, spikes, tie plates, joint bars, bolts. Price each separately as tie plates and joint bars may or may not be quite valuable. Now deduct cost to remove. Deduct cost to repair grade crossings. Deduct net cost to remove bridges and drainage structures, if required. Ballast is not usually worth the cost to pick it up.
The good news is that if a RR wants to abandon they have to figure this all out and put in the application.
If line has a going concern value, figure profit as a short line and apply a reasonable multiplier (whole nother can of worms).
This is not a simple exercise. Unless you offer too much, price will be settled in negotiations.
Mac
cacole How many miles of track are you wanting to purchase? The price would depend on many factors such as location, owning railroad, and on-line customers, to name just a few considerations. Only an actual railroad that has trackage for sale would be able to answer your question. And why did you ask your question twice ?
Lets say 25 miles in Rural Iowa/Illinois, Owning railroad is CP, UP, BNSF, Etc. and there are 3 grain elevators and 1 ethanol facility. For some reason, my thread was taking forever to come on here, so i thought i would upload it again. Then when i entered this one on here, the other one popped on. Sorry about the double post. As you said, an actual railroad that has trackage for sale would really help narrow it down. Does anybody know of a railroad that is selling trackage in iowa/illinois and where i could find the information on it?
"+1" to almost all the posts above, esp. mudchicken's.
The Original Poster was surprisingly close to the mark, although he didn't realize it - somewhere between $20,000 and $300,00 per mile is a fair range, "depending" on the kinds of factors mentinoed above. Such valuations are too site- and situation-specific to know much more without knowing which line and doing a lot of research and spending some money for a knowledgeable expert/ consultant.
- Paul North.
I posted the first thread a couple days ago, but it never uploaded. So I thought I'd upload a second, but when I uploaded the second, it uploaded the first at the same time. Since the price varies from 2 huge numbers, does anybody know of a rail line for sale somewhere in Iowa/Illinois so I could try to narrow it down a little more? Thanks!
Rafter / RafmanRailfan
A rail line is worth what the buyer and seller agree that it is worth. For price per mile, divide price by mileage.
The original question is similar to, "How much does a car cost?" It depends on the car. Someone who owns a vintage Yugo might pay to have it towed away. If you want a road-ready original Stutz Bearcat (or a track-ready Indy racer) you might have pocket change from a ten million dollar sight draft.
Note that sale price is only the first cost. Toss in maintenance expenses, taxes, insurance of several kinds...
Thanks. I'll stick to little bitty trains in my garage.
Chuck
This link below is way different from what the Original Poster asked for, but I can't find anyplace else to put it - i.e., one of the HSR or grade crossing elimination threads, etc.:
Minnesota DOT's "Passenger Rail" "Appendix E - Cost Estimating Methodology for High-Speed Rail on Shared Right-of-Way" (68 pages, approx. 2.51 MB electronic file size in this "PDF" format) -
http://www.dot.state.mn.us/passengerrail/mwrri/files/Appendix%20E-Cost%20Estimating%20Methodology.pdf
From: http://www.dot.state.mn.us/passengerrail/mwrri/phase7.html
and: http://www.dot.state.mn.us/passengerrail/mwrri/index.html
Our community is FREE to join. To participate you must either login or register for an account.