Mergers, abandonments, limited capacity, and the taxpayer,...OH MY!!

[Anonymous]

A theme that I've often seen to come up editorially in trains magazine generally plays some version of ~Highways are near gridlock, America is choking, rail lines are maxing out in capacity,.. ---SOOOOO, the TAXPAYER needs to build additional capacity for the freight railroads, as a patriotic duty to country and flag~ (well, ok the last part might be a bit of a stretch, but it generally is portrayed as what is "best for the country").

While admitting there have been some success stories (Alameda corridor, etc) I can't help thinking about the potential for such a strategy to "pork barrel" if left to multiply without a very watchful eye on the big picture.

I live in Indiana which in the consolidation era has been called the most 'overbuilt' state in america, railroad wise. And to some extent that is probably true, since all the eastern roads needed to go through Indiana to have a terminus in Chicago.

Oddly enough, back in the preconsolidation era, many of those lines were put to use. Since that 'golden era', as your remaining big two in the east have gobbled up parallel and competing lines, "capacity" has been seen as expendable, and lines have been pulled up and sold for scrap value.

I think that in some of those instances where the lines have been pulled up, the real value obtained has been the removal of a line that a competitor will never be able to use against them, with the residual value if the scrap being an entirely secondary issue.

Am I completely off base in my view that if the post merger mega giants can see existing parallel lines as "surplus" to the extent that they pull up the spikes and cash in on the steal (pun intended), that they have no business coming back later whining about how the taxpayer owes them funding to add capacity to the lines remaining?

[chad thomas]

I don't think your off base at all. Your right the taxpayer should not have to pay for the railroads to replace capacity that was removed when times were not so good. But having parallel routes is not as efficient as having more capacity on a single route. Out west there are not that many situations as there are not that many parallel routes. Though there has been capacity removed on existing routes (singletracking, removing sidings). I think the railroads that are getting cloged up need to spend more on capacity improvements and if they need to raise there rates to do it that's what they should do. Dont try to get John Q Public to pay for it, Let the shippers pay for it. In my opinion it's as simple as that.[8D]

[MP173]

Anti:

I think it will interesting to see over the next few years what happens to some of these line that are still around, such as our very own ex PRR main thru Ft. Wayne.


Some of these regional carriers are building pretty good systems, which will still need to connect a few dots(which probably WONT be connected), but the value might be there as infrastructure left in place.

Note that CSX is now leasing lines rather than selling the lines. I wonder if that is not with a view to the future.

ed

[chad thomas]

On the other hand. I have no problem paying for improvements like the Alameda coridor where the public directly benifits from it. I think it's worth it to ease congestion on city streets and highways. One thing I think tax money should be spent on is grade seperations. With so many idiots getting hit by going around gates and ignoring warnings there should be more spent on driver education and law enforcement for crossing violations.

[DPD1]

The little people always have to pay for the corporate and government mistakes... Nothing new there unfortunately. As long as the "trickle down economics" theory is continually used by the government to justify such things, nothing will change. 'We can't let this company fail, because they provide jobs... And we can't let that company fail, because they provide jobs.' Never mind the simple fact that you can bail out businesses left and right, but if the common people have no money to spend, it won't make any difference. Henry Ford knew that, and paid his people very well when he started his business. Apparently that concept has been lost somewhere along the way by corporate America and the government.

Dave
-DPD Productions - Featuring the NEW TrainTenna LP Gain RR Scanner Antenna-
http://eje.railfan.net/dpdp/

[gabe]

(1) To my knowledge, Indiana—of which, I too am a resident—has never been called the most "overbuilt" State in the Union from a rail perspective. I think most people would agree that that State is unquestionably Iowa. I am sure I am off by a few 10ths of a mile, but there was once a time when you couldn't walk more that 12.7 miles in Iowa without hitting a rail line.

Throw in the fact that the Rock Island, Burlington, Milwaukee Road, the Wabash, the Illinois Central, The Great Western, and the Chicago Northwestern all served the East-West Route of the State, and this traffic was all essentially handled by one railroad west of Counsel Bluffs (UP), one starts to get the picture. Then throw in all the "Granger" secondaries and river competition, and I think it can fairly be said that the Iowa overgrowth literally dwarfs that of Indiana.

(2) In terms of public common tax fund investment, you raise a valid issue. However, I think there are three premises underlying your assertions that are not completely accurate.

First, in terms of affecting corporate decision making, common fund investment into industry rarely if ever is implemented to reward—or not implemented to punish—PAST actions of the industry. It is more pragmatic than that and is given to coerce the FUTURE conduct of that industry. Rail lines have a duty to their investors; I fail to see why they should be punished for abandoning a line to utilize that profit. If railroads were public servants, no one bothered to tell them or me.

Second, I am far from an expert in the industry. But, from what I read, the last thing railroads want right now is a sudden and overwhelming expansion of capacity. Part of the reason for the "railroad renaissance" (to quote NS) is that the reaching of capacity allows railroads to charge higher premiums and, in turn, get a better return on their investment. To quote CP, the new paradigm for capacity expansion seems to be the "just in time" approach. I am not sure this is something railroads want, much less are asking for.

Third, I am not sure the Railroads are asking for this money (even aside for the reasons suggested in my second contention). If railroads accept money from the public dole, it will come with strings attached—it always does. If the government gives the rail industry capital from the common fund to expand capacity, it will be more in the nature of a classic contractual agreement than that of "corporate welfare." i.e. in exchange for taking the public dole, railroads would agree to haul marginally profitable freight to give the highways some relief (or something to that effect).

I think you raised a good topic; I just don't agree with your conclusions (for whatever my opinion is worth).

Gabe

[ndbprr]

Car loadings are miniscule to what they were even in the 60's. There was/is much mainline overcapacity hence your abandonment in indiana. You can run trains on about a ten minute separation easily. You could probably do it with five minutes separation with the communications available to day and GPS. there aren't many places today you can see a train every ten minutes. In the 40's I am told the PRR Blue RIbbon Fleet of passenger trains came through Gary, Indiana at a rate that as soon as one train passed you could turn and see the headlight of the next one. This went on for about four hours.

[Anonymous]

Build more Track!
Allan.

[Anonymous]

QUOTE: Originally posted by MP173

Anti:

I think it will interesting to see over the next few years what happens to some of these line that are still around, such as our very own ex PRR main thru Ft. Wayne.



Note that CSX is now leasing lines rather than selling the lines. I wonder if that is not with a view to the future.

ed

The CSX strategy you mention caught my attention as well...good thought.

I see entities such as NS that has aquired "trans indiana" E-W main lines such as the Old Wabash (mostly gone now), the Nickle Plate (which, depending who you talk to is either one step from expanded use, or alternately, near mothballs) and the old NYC Lake shore route....

And I fully understand the business incentive to make the most out of the least, in chasing increased efficiency.

But, if after abandoning the old wabash, and if they did mothball the old Nickle plate, then the NS came for public funding to add "desperately needed capacity" to the choking on it's own traffic former NYC...I'd simply krappe, as a taxpayer....

Trouble is, I fear that the special interests in govt would pad the pockets of the stockholders , for a piece of the action.

[Anonymous]

QUOTE: Originally posted by gabe

.

(2) In terms of public common tax fund investment, you raise a valid issue. However, I think there are three premises underlying your assertions that are not completely accurate.

First, in terms of affecting corporate decision making, common fund investment into industry rarely if ever is implemented to reward—or not implemented to punish—PAST actions of the industry. It is more pragmatic than that and is given to coerce the FUTURE conduct of that industry. Rail lines have a duty to their investors; I fail to see why they should be punished for abandoning a line to utilize that profit. If railroads were public servants, no one bothered to tell them or me.


Gabe

Gabe, all of the arguments you offer are good ones.

As far as indiana being "most overbuilt",..well it's not a point wirth arguing over, you may in fact be right about Iowa....but I seem to recall someone here once admonishing my concerns over abandonments by saying Indiana was the most overbuilt and I was just going with their "expertise"... But since that point is really only secondary lets go with "one of the most overbuilt"...would that make you happier? doesn't bother me.

As far as whether the railroads are asking for it or not, I couldn't say for sure, but just from conveniant recalI, I think that Mark H thumped war drums in his columns a couple different times calling for such a public involvement to allieviate maxed out capacity, and I think it was either Don Phillips or Larry Kaufman who wrote similarly at least once.

Maybe they were just writing "rah! rah! rah!" style commentary to please the readership,...but when weighed in context with strategic abandonments,.. absolutely made my flesh crawl... Maybe I simply took them too seriously?

I copied a portion of your original reply above, the portion that I thought was especially well founded... And I won't argue any point, because each point you make is entirely valid..

I'm just of a cynical mind that that the taxpayer owes no bonus to a corporations stockholders, either.

If there are 2 railroads between city A and city B, both single track with various sidings along the way...and adequate capacity (through the wonders of competition) and then railroad #1 aquires #2, absorbs it's business then anti competitively pulls up the rail from #2 and sells it for scrap......only to go belleyaching to the gov't that they now need "relief" because they are strangled for capacity.....I think the gov't would be doing a disservice to the taxpayer by helping Railroad #1 double up it's original line to relieve the bottleneck that the railroad brought upon itself.

{key point: sure, railroad #1 can operate a dual track railroad with a greater efficiency via economy of scale, than it can operate 2 seperate single lines, but why should it be the responsibility of the taxpayer to FACILITATE that part of the merger for the railroads stockholders?}

Unfortunately, my cynic nature is such that i suspect that if such a scenario ever did arise, the best interest of the stockholders would prevail over the best interest of the taxpayer. And therein lies the source of my frustration

[Anonymous]

QUOTE: Originally posted by chad thomas

But having parallel routes is not as efficient as having more capacity on a single route.

(snip)

Dont try to get John Q Public to pay for it, Let the shippers pay for it. In my opinion it's as simple as that.[8D]

Chad,

On your first point, I can offer evidence of contradiction (keeping in mind that "efficiency" can have several definitions). Remember, a secure transportation corridor(s) between two points must have both (A)redundancy and (B)diserpersion. When you add capacity only to a single route, you do fulfill requirement (A) but not requirement (B). Say you triple track a single line. Okay, now you have the necessary redundancy to increase capacity. Now what happens if you have a derailment on one of those tracks? More likely than not, you take out all three lines. It gets worse if there is a major incident e.g. bridge out, washout, earthquake, etc.

It is inherently better to add capacity on parallel lines that are a certain distance away from the current line, far away enough not to be affected by the incident that closed the first line. You also get an added benefit of being able to cover more territory for potential carload and unit train shippers in those general corridors, e.g. a greater customer base.

In that vein it is much more "efficient" to add capacity to parallel routes rather than just adding track to a sole rail line.

On your second point, it is my belief that the user fee system applied to highway should also be applied to publicly funded/owned rail lines. The federal fuel tax should be extended to fuel puchased by railroads, and the funds from this tax should be used to add capacity where needed via public expenditure. Of course, for this to work with optimal fluidity, you need to add the access where it can get the most use from the most users, which means that a railroad's competitors should have as much right to use publicly funded rail additions as the primary railroad, otherwise we are engaged in nothing more than corporate welfare for the sake of monopolistic practitioneers.

[Anonymous]

QUOTE: Originally posted by futuremodal

it is my belief that the user fee system applied to highway should also be applied to publicly funded/owned rail lines. The federal fuel tax should be extended to fuel puchased by railroads, and the funds from this tax should be used to add capacity where needed via public expenditure. Of course, for this to work with optimal fluidity, you need to add the access where it can get the most use from the most users, which means that a railroad's competitors should have as much right to use publicly funded rail additions as the primary railroad, otherwise we are engaged in nothing more than corporate welfare for the sake of monopolistic practitioneers.

Well FM, I think that you have a very good perspective on that....Gov't subsidy wouldn't upset me with a viable system of recovery in place.

[jchnhtfd]

Hmm... Anti, you have some rather good points.

There are certainly instances where railroads have pulled up track, and where they now wi***hey hadn't. However, much of the track which was really abandoned (not sold to a short line, or to another major, or leased) probably really was redundant. There are capacity constraints -- a lot of them -- on today's rail network, but most of the really bad ones are either being worked on by the railroads themselves, even as we chat here, or are really knotty problems which will take the cooperative efforts of several railroads, plus several levels of government, to solve. The Union Pacific, Southern Pacific, and Santa Fe transcons are lovely examples of the first instance; Chicago is the obvious example for the second.

Should government money be involved? Fro projects in the first instance, I would incline to say no. Government money always means government control -- and as the railroads are private corporations (and yes, I do own stock in two of the Class Is, and used to do consulting for one of them) their responsibility, like any other private corporation, is to their stockholders. We've been around this one before on this forum. On the other hand, there are some projects -- like untangling Chicago -- which might well benefit from some sort of government entity, or quango, to fund them -- not so much for the rail infrastructure itself, but to facilitate the necessary new rights of way and changes to highways which wold be needed.

Do the Class Is need public money? I think not -- although I would be pleased to see them receive an even tax break with other modes of transportation. Just at the moment, their return on investment is adequate -- if only just -- to attract and keep enough capital.

[Anonymous]

I also think an even tax break is the way to go with protecting the RRs. One of the glories of this country is its huge capital markets send money to the most feasible companies and concerns, and government interfering with that process would simply send OUR money to what would indeed be pork barrels.

On the other hand, I don't consider a railroad to be in poor financial health because it's trying to slough off nonproductive lines. They're trying to save money by doing so, so I can't assume (most of the time, at least) that a railroad that is handed government money would use it to "save" the minor tributaries. Get careless with conglomerating ventures is more like it, because no one ever turns a subsidy down but the money means much less than that which is earned or invested at a market rate.

I'm a little less tighta***d about passenger trains. Passenger trains just don't make money. Yes, passenger trains in the USA were in steep decline in the Sixties because of government-sponsored superhighways and airports, but what REALLY drove passenger train service to the brink of extinction was when LBJ pulled the RPO's from the passenger trains in 1967 and gave them to the truckers. Delighted JImmy Hoffa and really p.o.'d Bobby Kennedy. Something about the enemy of my enemy being my friend?

I am not sure we need a barrel of big huge government projects to accompli***his, but there must be some way to get loans and/or loan guarantees to places that clearly would benefit from high-speed rail and by that I mean the citizens, not just the RR's or the government. Why on earth don't we have electrified lines to places like Milwaukee-Chicago, Chi-Detroit, San Diego-L.A., possibly Tampa-St. Pete?

[nanaimo73]

TheAntiGates,
What is your opinion on using tax dollars to maintain routes for passenger trains not needed by the railroads? BNSF does not need the former ATSF Amtrak route either through Topeka or over Raton. In Indiana the former NYC between Indianapolis and Cincinnati seems like a logical future high-speed route, but there is no through freight on it. North of Indianapolis about two-thirds of the former Monon is gone. The current Chicago to Cincinnati Cardinal route is a mess that has changed several times over the years.

[Anonymous]

QUOTE: Originally posted by nanaimo73

TheAntiGates,
What is your opinion on using tax dollars to maintain routes for passenger trains not needed by the railroads? BNSF does not need the former ATSF Amtrak route either through Topeka or over Raton. In Indiana the former NYC between Indianapolis and Cincinnati seems like a logical future high-speed route, but there is no through freight on it. North of Indianapolis about two-thirds of the former Monon is gone. The current Chicago to Cincinnati Cardinal route is a mess that has changed several times over the years.

MY GOSH! with all the pent up sentiment here by the many forum members over passenger rail, why don't you just ask me to stick my head in a barrel and let everyone take turns beating on it? [:D]

As far as the BNSF-Amtrak routing you mention. I am not an expert on the specifics of those routes. Are you by any chance talking about the routes BNSF provides as an "alternate" path to keep passenger trains out of their way on the freight transcon? If so, I'd say that BNSF has some grandfathered in obligations per the original Amtrak deal, that need to be honored in a means, manner, and method that makes sense for both parties.

As far as the HSR through indiana........well, the route you mention will probably get used IF HSR ever gets off the ground here. That concinnati-chicago route would make sense... BUt it is my inderstanding that AMTRAK likely woukd NOT be the operator..and that the only part of the current physical plant that would be reused would be the right of way... with a complete new roadbed, rails, infastructure, etc built and owned by a new entity to be created.

How do I feel about state level cost participation with that new HSR entity? I think that the HSR "pitch men" are some of the biggest shysters to come down the pike in a long time. And the main objectives are to let the taxpayer put them in business with minimal money of their own involved.

So, the taxpayer is getting conned with a lotus song.

Looking at the Indiana Dept of transportation website under their "High speed rail initiative" you will see that the line you mention is pretty much a lock.

However, the line proposed across indiana E-W is shown with 2 "possible alternate" routes... one that would bring passenger rail back to Ft Wayne, with the alternate to pass through South Bend. (as does the current Amtrak routes).

I doubt seriously that there is much sincere intent to build the line through FW, it is just a subterfuge designed to whip voter approval up to critical level, and (my bet) is that once voter approval finalizes at the poll, the "determination" will be made that the northern route is the superior choice,..just like they play the old nutshell game.

Yes, I get very cynical when they talk about spending public money on projects that benefit just a few in private industry....the story always gets spun into some flavor of "For the benefit of all"...but when in reality just a few have their fingers on the till box, I get very skeptical.

[Anonymous]

QUOTE: Originally posted by jchnhtfd

There are capacity constraints -- a lot of them -- on today's rail network, but most of the really bad ones are either being worked on by the railroads themselves, even as we chat here, or are really knotty problems which will take the cooperative efforts of several railroads, plus several levels of government, to solve. The Union Pacific, Southern Pacific, and Santa Fe transcons are lovely examples of the first instance; Chicago is the obvious example for the second.

Well, since you brought it up, the UP/SP/DRGW aggregation is one that comes to mind in context with this discussion.

UP, in deciding to mothball tennessee pass and de emphasize Moffatt, routing as much traffic as they can onto their more efficient to operate Overland and Golden state routes, theoretically reduces transcontinential bandwidth, does it not? And adds traffic that could cross the country via those routes onto the more congested alternates..

Which is certainly their perogative to do, economices are theirs, to have and to hold.

But, at the same time UP decided it wanted that railroad when it aquired it, didn't it? So, why not operate it? or sell it to someone who does want to operate it?

My theory is that they DON'T want to sell it because the competition would pull away business that would give them additional "capacity" in the form of business lost to the competition.

Which to me makes any appeal UP would make for public cost participation in solving their capacity problems on the golden state look flat out dishonest.

If they've made an economically motivated decision to route traffic via a prefered route, then it should be them to pay for any resulting consequences.

[nanaimo73]

It is going to cost billions for Union Pacific to double track the Sunset route from El Paso to Colton. I would guess 20% of the costs are going to Governments of all levels through numerous taxes. When the taxpayer benefits from a railroad construction project (as they will on this one) I don't think it would be unreasonable for the railroad to ask for help with financing up to the level of taxes they are paying.

[Junctionfan]

I always thought Illinois was pretty "built up" with rail particularly Chicago having 50 yards.

At any rate. Railroads might do better to ally on certain lines and allow for directional traffic. For example, between Buffalo and Cleveland, NS and CSX pretty much follow beside each other and are double tracked. If all the eastbound traffic of both railroads uses the CSX line and all the westbound traffic of both railroads uses the NS line, then you have effectively givin yourself (the railroad executives) a 4 track mainline with nominal costs (likely need switches to get to own territory/ customer switching).

I believe CN and CP do this in BC right now which works for them quite well. I know CN and CP wants to do this on their busy Toronto to Montreal lines due to the shear volume of traffic and the many VIA trains too.

There must be plenty of lines in the U.S where this would help eliviate the traffic conjestion without building more or rebuilding old lines.

[ValleyX]

NS is not double track between Buffalo and Cleveland.

[MP173]

It is great to have another "issue" to discuss. Thanks Anti Gates for getting this going.

A few points:

1. The NS line between Cleveland and Buffalo is single track, unless something has happened the past few years.
2. Anti Gates - I seriously doubt if the NS's NKP Chicago line is in danger of being "near mothballs." Current traffic levels are at 25 trains per day. If you havent, check out my discussion of this line on the "hot spots" forum. There is simply too much traffic to move to the NYC line and the Calumet Yard is pretty important. I am sure access could be made to Calumet from NYC, but it would simply snarl traffic in Hammond. Besides, NS has not been one to cut eliminate lines, particularly main or secondary lines.
3. My feeling is that public funds for private companies is not a good practice. Let each company attract and raise the capital needed for operations and investment. There is too much "politics" involved with who gets the money when the governments get involved.
4. What CP is doing in the western region is a great example of prudent investment. Ditto UP on the Sunset Route. They are spending their own money.
5. Regarding the Tennessee Pass, I dont see how UP could have done anything different. The line is 3%. It is amazing they operated the trains they did over the line (20+ per day). Correct me if I am wrong...but are the tracks still in place? If so, that is prudent action. Speaking of which...
6. Many years ago, David P. Morgan the editor of Trains called for a mothballing or "railbanking" of lines. Looking back, he was on the money. It no doubt would have been in our best interest if strategic lines had been left in place, without having to pay local taxes, but that did not occur.
7. If a company eliminates a line rather than sell to a competitior, so be it. In business, you want pricing leverage. When I compete against others, I want the absolute best advantage I can have....which usually means as few competitors as possible. When I am told I can quote on a project and find out there are 29 other bidders, like I recently did, I politely decline. Now, with that being said, a railroad that eliminates capacity should have absolutely no right to federal funds for increasing capacity....at least in MHO.

ed

[Anonymous]

I'm with Ed on this one, especially his points three thru six.

allen

[Anonymous]

QUOTE: Originally posted by nanaimo73

It is going to cost billions for Union Pacific to double track the Sunset route from El Paso to Colton. I would guess 20% of the costs are going to Governments of all levels through numerous taxes. When the taxpayer benefits from a railroad construction project (as they will on this one) I don't think it would be unreasonable for the railroad to ask for help with financing up to the level of taxes they are paying.

Well hey, I always enjoy trading posts with you, and you are a very knowledgable source, that is much appreciated, so I'm not offering the following to seem combative, or ornery or anything, just that we are getting to the crux of my lament.

What kinds of tangible benefits to the taxpayer are we talking about? because from the formula you provide, for every billion UP spends, we've got the taxpayer contributing $200 million...and as senator Everett Dirkson used to say, you spend a million here, a million there,..etc..and pretty soon you are talking serious money.

I can see beaucoup benefit to the UP stockholder in terms of reduced fuel cost, reduced manhours, and reduced track maintenance cost from closing down the colorado transcon, and diverting the traffic to other lines. Those numbers would likely add up pretty quick. But would the payback to the taxpayer be near as robust? or would they be less tangible benefits such as less time spent waiting for passing trains at grade crossings?

$200 mill to save a few seconds at grade crossings COULD be a very steep price.. Especially if the delays in the first place are constructs of conveniance the railroad may have had a hand in creating.

[nanaimo73]

Whoa !
I have no idea how much of a benefit the taxpayer will recieve from double tracking the Sunset. I was not trying to imply it will be 20% of the cost of this project.
What I am thinking is that a project which benefits the public should go ahead if a company wants to pay for it. There should be some kind of revenue-neutral status for projects like this where the company is reimbursed for the tax dollars collected by governments. I think this would allow more projects to go ahead. The public would still gain even without collecting the taxes, and railroads could do more of the projects they need to do. Don't both sides win ?

[Anonymous]

QUOTE: Originally posted by MP173


2. Anti Gates - I seriously doubt if the NS's NKP Chicago line is in danger of being "near mothballs." Current traffic levels are at 25 trains per day. If you havent, check out my discussion of this line on the "hot spots" forum. There is simply too much traffic to move to the NYC line and the Calumet Yard is pretty important. I am sure access could be made to Calumet from NYC, but it would simply snarl traffic in Hammond.

5. Regarding the Tennessee Pass, I dont see how UP could have done anything different. The line is 3%. It is amazing they operated the trains they did over the line (20+ per day). Correct me if I am wrong...but are the tracks still in place? .


7. Now, with that being said, a railroad that eliminates capacity should have absolutely no right to federal funds for increasing capacity....at least in MHO.

ed

#2. I would hope that abandonment of NKP would be prohibitive as well but the traffic level is a shell of what it once was, you can spend hours by that track here in ft wayne and never see a train. And while I can't verify the authoritativeness of the source, I've been 'speculated' that the reason is because the NYC has become the prefered route for loads originating very far to the east.

#5. It was when I went through in june 2003 .

if you read this http://www.trains.com/Content/Dynamic/Articles/000/000/004/264pvuya.asp It is suggested that UP might find Moffat expendable too.

And you know, I realize there are grade and other issues to be factored. but it's just hard for me to take seriously any crybabying about slim capacity on their transcons, when they are avidly looking to close off alternate capacity.

It just gives the claims of them being imperiled by the traffic burden a phoney aura about it.

#7 exactly

[Junctionfan]

QUOTE: Originally posted by ValleyX

NS is not double track between Buffalo and Cleveland.

Oops; O.k triple track mainline.[:I] I believe it is double in some places though-I think near Erie, PA it is.

[BaltACD]

If Tax money is to be used to enhance railroad capacity, the area in which it needs to be expended is in the major metropolitan areas, which for the most part are severe oprational bottlenecks as the success of the railroads caused the towns to grow and thus encircle and limit where the railroads could put thier alignments and facilities. The alignments and facilities that were laid out in the 19th Century for the construction capabilities of that era have created severe operational handicaps that can only be solved with governmental assistance, governmental assistance that would benefit both the railroads and the communities they serve.

Relatively speaking the railroads have the financial wherewithall to expand capacity on their inter-city routes to the levels necessary for traffic that exists. Whether rail leadership has the vision and foresight to build line capacity for the future is another question entirely. However, once line of road capacity is enhanced the problem of Terminal Capacity in Metropolitan areas still exists and thus becomes the overall limiting factor on total rail capactiy.

[Anonymous]

You make a very good point about central-city congestion. Here in Chicago we're seeing something of a "flight to the exurbs" with installations like Rochelle's Global III, which is fifty-some miles west of Aurora, and about 80 from downtown Chicago.

Chicago has some excellent medium-sized yards that aren't as central to the city's economy as they used to be. But the congestion of getting around our belts (or even as far out as the Fox River Valley, the extent of urbanization until recently) means that a good deal more money will have to be spent.

Alas, it isn't "sexy" but it will have to be done! [bow]

Allen

[Anonymous]

QUOTE: Originally posted by MP173


7. If a company eliminates a line rather than sell to a competitior, so be it. In business, you want pricing leverage. When I compete against others, I want the absolute best advantage I can have....which usually means as few competitors as possible. When I am told I can quote on a project and find out there are 29 other bidders, like I recently did, I politely decline. Now, with that being said, a railroad that eliminates capacity should have absolutely no right to federal funds for increasing capacity....at least in MHO.

ed

Ed,

You've hit the nail right on the head as to why railroad transporters SHOULD NEVER BE ALLOWED TO OWN THEIR ROW! Destruction of infrastructure has major negative impacts on the economy, even if the destroyer "gains" temporary benefits from ostensibly eliminating competition. This is why businesses that engage in monopolistic practices (and the elimination of potential competition is one of those practices) end up creating an economy that runs counter to Adam Smith's tried and true vision of enlightened self interest. When businesses operate in a competitive marketplace, their actions of self interest end up buttessing the economy. When businesses operate in a monopolistic marketplace, their actions of self interest end up degading the economy.

I would also argue the point you made about wanting to compete against few if any competitors. The whole point of competition is to bring out the best in the participants, so when you have a situation where you have eliminated your competition, you no longer will bring out your best efforts, and your product or service will suffer as a result. Why do you think the economies of the former Soviet bloc were so pathetic? They no longer had incentive to improve. Without competition, the marketplace is worthless, in that it's affect upon society will no longer provide any discernable benefits.

If you really want pricing leverage, try doing a better job of satisfying your customers. Monopolistic pricing leverage is short lived, as it invarably results in a product or service which no longer engenders societal benefits. A satisfied customer will pay more for your product or service, and the resulting increase in income will do more to pad your wallet than the false sense of security you get from non competitive price gouging.

[Anonymous]

QUOTE: Originally posted by nanaimo73

Whoa !
I have no idea how much of a benefit the taxpayer will recieve from double tracking the Sunset. I was not trying to imply it will be 20% of the cost of this project.
What I am thinking is that a project which benefits the public should go ahead if a company wants to pay for it. There should be some kind of revenue-neutral status for projects like this where the company is reimbursed for the tax dollars collected by governments. I think this would allow more projects to go ahead. The public would still gain even without collecting the taxes, and railroads could do more of the projects they need to do. Don't both sides win ?

Well governments depend upon tax revenues collected, and when you suggested that the railroads perhaps should be "tax-credited" for the portion of the expansion that would be taxes paid (that's what I thought you were saying anyway)..and that you estimated those taxes would be 20% of the job costing billions and billions......It just forced me to ponder that 20% of a billion was 200 million.. and that by the govt crediting the RR that amount, they would have to make it up at someone elses expense.

As far as "both sides winning"....as you say,....well yes that is certainly possible. The Alameda corridor being one good example.

The reservation I have is that in most instances it is the politicians who decide what "slice if the pie" is adequate payback to the taxpayer.

And the potential for pork barrel politics, or even vested economic interests, seems like an especial peril to me.

heh, I only say that because my trust of politicians is only about half the level i have for greedy railroad CEO's...