Cost of locomotive

[Anonymous]

How much does a new SD-70mac or one like it go for these days and if anyone knows how much did a GE U30-C go for in the early years? I was just a little curious as to what the railroads are and were spending. [?]

[ndbprr]

Due to tax law and general bookkeeping requirements most railroads do not buy their engines. They lease them from companies that own them. I have an MBA and the logic is way beyond my understanding but there is a financial advantage to operating in this manner. So a railroad may have 100 million dollars in lease payments per year rather than a capital expenditure of 100 million dollars. As the engines get bigger the expenditure stays the same so figure they are willing to spend so many dollars per horsepower rented. The leases typically last fifteen years at which time both companies have to start anew lease since the engine is fully depreciated. It will be interesting to see how many of these monsters wind up in the scrap yards at the end of their leases since shortline and class 2's have very little usage for them. To get to your original question probably more than a million dollars per engine out the door in the paint of your choice subject to gadgets and doodads specific to your railroad.

[samfp1943]

QUOTE: Originally posted by ndbprr

Due to tax law and general bookkeeping requirements most railroads do not buy their engines. They lease them from companies that own them. I have an MBA and the logic is way beyond my understanding but there is a financial advantage to operating in this manner. So a railroad may have 100 million dollars in lease payments per year rather than a capital expenditure of 100 million dollars. As the engines get bigger the expenditure stays the same so figure they are willing to spend so many dollars per horsepower rented. The leases typically last fifteen years at which time both companies have to start anew lease since the engine is fully depreciated. It will be interesting to see how many of these monsters wind up in the scrap yards at the end of their leases since shortline and class 2's have very little usage for them. To get to your original question probably more than a million dollars per engine out the door in the paint of your choice subject to gadgets and doodads specific to your railroad.

Just a little dip in the convoluted sea of tax law, not only do a lot of corporations do leasing deals on their equipment, they fund[ and/or control] the subsidiaries that do the leasing. It is mostly about taxes and insurance liabilities. The layering provided by the introduction of a second party in such deals protect the major player against the eventuality of a "legal situation" that might arise in the case of an accident. Not to mention the advantages of the tax write-offs for expenses of operation of said equipment.
Off topic: In some cases, large corporations that are 'self-insured' hire another firm to administer their liability, thus ducking some exposure to the risks of malactions by their officers, employees or equipment, thus some expenses can be charged of as operational expenses for doing business .

[traintownofcowee]

Railroads must be one the most richest companies in the world.
Prices of locomotives, rolling stock, track, stations, buildings, m.o.w. equipment, equal a lot of cash!
Owning a railroad isn't easy.
Makes ya wonder how they did it then, and what if we can do it know?
You should play Railroad Tycoon 3 to see what its like!

[:)][8D][:D][^][?][:O][8)][|)][:P][;)][alien][X-)][%-)][(-D][swg][{(-_-)}]

[Anonymous]

I THINK A NEW SD70MAC COST ABOUT 2.2 MILLON

[zardoz]

It also depends on the options selected.


DVD player costs about $300 due to anti-vibration housing
Wide-screen tv costs about $2000, for the same reasons
Leather recliners are included if you get both the dvd and tv
On-Star is not available on anything except a GM product
Airbags and anti-lock brakes are not available
Convertible top costs over $10,000 (not available in Canada)
Glasspak exhaust system not available in California

[doghouse]

Zardoz, how much for a candy apple red paint and a set of twice pipes?

[germanium]

Originally posted by ndbprr

Due to tax law and general bookkeeping requirements most railroads do not buy their engines. They lease them from companies that own them. I have an MBA and the logic is way beyond my understanding but there is a financial advantage to operating in this manner.

I'm missing your point here - Can you enlighten me ? I would have thought (probably mistakenly) that leasing rather than buying outright would avoid an uneven bottom line over the course of the lease ??

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