Privatized toll roads, how about toll railroads?

[MP173]

Ok, I am NOT in complete agreement with Dave (futuremodal) and his concepts of open access railroading, but I do have an open mind.

Just got back from a quick trip to Muscatine Iowa and as always when I make the trip I think of the old Chicago Rock Island and Pacific main across Illinois that parallels I80. A sub thought is the ICE line that runs to Kansas City.

Here are my thoughts, for your discussion. Lets just say it is the year 2020 and do to micro and macro factors the rail lines are nearly plugged. The UP main to Chicago is running upwards of 100 trains daily, the BNSF transcon is well over 100 and the Mendota sub is catching quite a bit of spill off.

What is next? I think the old Rock Island main across Illinois would be a pretty valuable property. Although it is only single track and signals are removed, the tracks are still in place.

Look at the advantages it possesses:

1. Hooks up with NS, CSX, CN, and CP on the south side of Chicago and can avoid much of the Chicago congestion. CREATE looks as if it is dead in the water, so if some of that traffic can skim across the south side of Chicago rather than go thru the city or around it on the Harbor Belt, so much the better.

2. It appears a connection exists between Rock and EJE at Joliet and then from the EJE to the Transcon line. This would enable a bypass of Chicago for traffic to and from the BNSF. Of course EJE routing exists also.

3. Construction of a connection could no doubt be made at Wyanet for teh BNSF line for all of that coal to bypass Chicago.

4. Also, coal could run from the UP across Iowa and follow the same routing via the Rock to eastern connections.

5. A second route to Omaha for the UP for secondary trains plus a connection could be made with the Nelson line north of Buda, giving UP trains from Kansas City a straight shot across Illinois and mostly avoiding Chicago, or allowing trains access to and from the Rock Route to the CNW route via Buda and Nelson.

Also, consider the ICE from Quad Cities south to Kansas City for overflow traffic. The same routing could exist to Quad Cities and then south to Kansas City.

If I owned these lines (ICE and Rock) I would be thinking long term and what the KCS did with their Meridian line...joint venture with NS. Both of the lines might become valuable pieces of real estate, sooner than we think.

Comments please...valid points, or did I have too much time to think while passing the miles across Illinois?

ed

[MP173]

A minor correction...there is a connection at Joliet between Rock and BNSF, according to Terra Server, thus eliminating the need for the circular, yet interesting movement via the EJE.

ed

[Murphy Siding]

Interesting thought. 'Kinda follows the idea that if you give your customers what they need, they'd be willing to pay a fair price for it.

[TomDiehl]

But the BIG question is : "Where does the money come from for this new construction and reconstruction of old lines?"

[mudchicken]

Alameda Corridor in LA if you want an answer to the subject header. ever heard of CREATE?[}:)]

[Anonymous]

For the most part, the Class I's would oppose any such concept, for no other reason than the fact that it violates the Railroad Prime Directive - Do what ever it takes to minimize intramodal competition.

The Class I's would rather be in the position of maximizing pricing power, even if it means turning away future (read: logical) business. New capacity means a dilution of their current pricing power, the exception of course being federal aid for internal capacity expansion that helps to maintain the current "natural" monopoly character of NA railroads.

Any such concept therefore would have to occur independently of the current Class I oligarchy.

All in favor of a multimodal Interstate Transportation System, step right this way......

[TomDiehl]

I see "Conspiracy Theory Dave" is at it again. In a free enterprise system, if someone buys abandoned sections to rebuild, or builds new infrastructure for running trains, there ain't a thing the railroads can do about it.

The whole thing just goes back to the one simple fact: building or rebuilding railroads isn't cheap. Where are you going to find the rich sucker to pony up the money? Even though Barnum said there's one born every minute, there aren't very many rich ones.

And Uncle Sam is so far in debt, our great grandchildren wouldn't be able to afford it.

[MP173]

I think the Rock, and I will keep the discussion to the Rock at this time, because it seems to make the most sense to me, would be rebuilt in a similar way that the KCS line is by the joint effort with NS.

What happens when UP runs out of capacity? Where do the trains go? According to Dave, they turn the business away. No they dont. They figure out a way to grow, because if they dont...the competition does and that is when the sales numbers pale in comparison, the stock languishes, and the stock options dry up.

The Rock line is a perfect example of what WILL happen eventually. The basic infrastructure is in place and investment will be made when it makes sense.

The Rock line will be the perfect toll railroad to handle the coal trains from PR. Look at a map of Chicago and it makes perfect sense.

Now the question will be...UP or BNSF? Take a look at another topic on this forum about the CN's St. Louis line being sold and how BNSF took it out from under UP. I dont know how accurate the story is, but if it is, there appears to be a situation of a company making a long term strategic move at purchasing capacity.

Rates of return are improving. When that happens, capital becomes available from private sources. Take a look at CREATE...this issue of Trains all but admits that it is dead on arrival, government $$$ will not be available.

ed

[jimrice4449]

If UP finds the ex-CNW double track insuficient to its needs all the planners need to do is check out BNSF between Cicero and Aurora. Three tracks carry more traffic than two! All Uncle Pete needs to do is add track. Oh, but wait. They're already doing that aren't they?

[greyhounds]

Despite what FM Dave says, there is absolutely nothing to keep a railroad from selling its excess capacity to another railroad that needs that capacity.

It happens all the time. Just look at the recently reported CN/BNSF deal involving BNSF trackage rights over the CN from Centrailia, IL to Memphis. The CN has capacity, the BNSF wanted it, and they worked out a mutually benificial deal.

The CN also buys capacity where IT needs it, as in routing trains over the EJ&E.

The UP uses the Iowa Interstate (ex CRI&P) on an as needed basis. If and when they determine it's in their own best interest to make a long term deal, they'll work it out with the IAIS. Funding for needed, viable, economic improvements can be arranged. That's what banks are for.

Let the market work. It isn't perfect, like Democracy; but like Democracy, it's so much better than any alternative.

[PNWRMNM]

MP 173

I think it can be done and will be if it is marketed right. The question is one of cost of the tolls, the cost of upgrading, and the cost of upgrading the competing route. This is a case where a RRIF loan could be used to upgrade the line, with the loan secured by toll revenues.

One thing that will work against it, I think, is that in most cases relatively small marginal investments in the competing line will solve local problems as they arise. It is an interesting investment and marketing problem.

Mac

[MP173]

Mac:

YOu have a great point, but I think at some point capacity is reached. Take for example the UP situation in Chicago. Chicago is the funnel. Everything slows down there as it has to pass from one end of the metropolitan area to the other. To get thru that area is a problem. Lots of problems actually. You have commuter trains which run on tight schedules. There goes capacity at various times during the day. Also you have restricted speeds and junctions/crossings with other rail lines.

Mac, I dont have to try to explain it to you, you are a railroader and know all the possibilities that can arise in operating a train. Now, compound it with a metropolitan area that has 5 to 10 million people in it.

Looking at the Rock (IAIS) line and it makes sense to bypass 20 plus miles of that congestion by skimming across the southern side of the metropolitan area.

JimRice you comment on adding a third track, which is a very valid point, except when most of the infrastructure such as bridges, ROW, etc are set up for 2 tracks.

My point is that at some time in the future the ROCK (IAIS) will be a very valuable piece of railroad property, perhaps even ICE. A toll system probably wont occur, as no doubt UP will eventually purchase the line, but what if RailToll did exist? It could help reduce the congestion thru Chicago of not only UP but BNSF's coal and other traffic.

ed

[PNWRMNM]

MP

IAIS can market any of its line segments to anybody right now. I do not know Chicago geography and operations well enough to have an informed opinion but avoiding central Chicago should have value. The question is for which carriers and what traffic, carload or intermodal.

Mac

[SALfan]

I have a somewhat related question. My knowledge of Chicago-area geography is very limited, but from what I think I know, EJ&E could pretty easily serve as an "Outer Belt" route for interchange to bypass at least most of the Chicago congestion. Did EJ&E ever market itself that way, and if not why not? Thanks.

[CSSHEGEWISCH]

Although the IAIS looks good on paper, remember that its connections with Eastern roads are not all that great. Keep in mind the long back-up move involved in its connection with the IHB at Blue Island. Connecting with CSX at Barr would be similar.

EJ&E did market itself as the Chicago Outer Belt, but since it is outside the Chicago Switching District, it would have to be specified in any routing instructions by the shipper. Needless to say, bridge line traffic was minimal since such routing instructions would involve a short-haul for the other roads who would prefer to interchange within the Chicago Switching District, directly or by BRC or IHB.

[MP173]

Paul:

My lack of knowledge of the junctions at Blue Island and Barr has jumped up and bit me!

Alright, how about IAIS to Joliet and then on the EJE? It doesnt appear that there is a junction in the SW quadrant of the EJE/IAIS crossing, but it seems like it is a junk yard there. Perhaps a purchase of the property would allow a junction.

ed

[Anonymous]

i haven't seen mention of it here yet, but IAIS doesn't own the ENTIRE ex-Rock. it's IAIS from CB to Bureau Jct. in Illinois, CSX from there onto joliet and down to henry, IL and metra from joliet on in to chi-town with both CSX and IAIS having trackage rights over metra.

i can't imagine a railroad turning down outside investment in it's line but what happens if say CSX isn't pleased with your plan and doesn't want anything like that?

dumb question...done. lol

[Anonymous]

I see Tom "I misquote 'em as I see 'em" Diehl is at it again........

QUOTE: Originally posted by TomDiehl

I see "Conspiracy Theory Dave" is at it again. In a free enterprise system, if someone buys abandoned sections to rebuild, or builds new infrastructure for running trains, there ain't a thing the railroads can do about it.

Yes, there is. They can (and most absolutely would) lobby against such intrusions into their respective territories. They would throw frivolous lawsuit after frivolous lawsuit against the "new" guy. They would claim first rights against any cross-overs, underpasses, overpasses, and any interconnections.

How do we know this? Read your railroad history books once in a while, as all of the statements above occured with regularity back in the boom days. So why would anyone who claims pertinent railroad knowledge state otherwise?

QUOTE: The whole thing just goes back to the one simple fact: building or rebuilding railroads isn't cheap. Where are you going to find the rich sucker to pony up the money? Even though Barnum said there's one born every minute, there aren't very many rich ones.

Actually, there's several born every second of every day, and there called American taxpayers. Most railroads received government aid back in the day, and some still are still. There's no reason to expect a new player to try to go it alone without government backing. In fact, to hear established railroad spokespeople speak in terms of an expectation of private investment paying for new railroad construction is down right hypocritical.

QUOTE:
And Uncle Sam is so far in debt, our great grandchildren wouldn't be able to afford it.

Debt is irrespective of economic investment. There is no real debt ceiling for the feds, most federal debt is due to wasteful spending which could be culled, and the feds will always have easy access to a tax base.

And, as has been mentioned many times before, the feds could come up with incentives that do not take one penny from the Federal Treasury. Therefore, federal debt does not have to have any impact over federal incentives for new non-Class I mainline railroad construction.

[Anonymous]

ed,

Let me throw this out at you: Is it necessarily the best move to simply rebuild an ex-railroad grade, or would it make more sense to utilize that old grade for a grander purpose?

In my extremist right wing conspiracy view of things, I do not believe it is necessarily optimal to build a toll railroad concept as an adjunct of the 4'81/2" / 39 ton per axle / knuckle coupler / air brake / speed constrained railroad system we have now. If our nation was to embark on such a project with similarities to the Interstate Highway System, why not make it a (inclusive of but not limited to or dependent upon):

1. Wide gauge?
2. HSR?
3. 25 to 33 ton per axle?
4. ECP required?
5. Bi-modal based?
6. other????

If any or all of the above are included, do old railroad ROW's make the best ROW's for an Interstate Rail System? Your Middle American ex-RR ROW's might be straight as an arrow, but out West some parts of that Milwaukee ROW simply would not fit into a modernized vision of a toll railway. And if governments are the lead entities for constructing new toll railways, they might be better off using the ol' eminent domain high speed highway ROW's with wide sweeping curves and no cross traffic rather than curving ground level ex-RR grades.

[PNWRMNM]

MP

I think Farmer 03 found the biggest stopper, METRA. The last thing they want is more freight trains and if they own the last mile IAIS has nothing to sell. If CSX has rights on METRA, and if CSX wants to fix up the Eastern End for its own reasons you still could have something. If it was easy it would have been done by now.

Mac

[samfp1943]

Another thought, the BNSF "rationalized" their line across Southeast Kansas between Carthage, Mo and Wichita, Ks several years back [ the former Frisco right of way]. This woud have given them a good cut off to avoid the Kansas City traffic, and put the traffic back on the Transcon at Wichita, and shortening the East-West travel miles for freight out of the Southeast. I think the line rationalizations that have been done over the last twenty years will come back to haunt the railroads as their capacity runs short.

[MP173]

farmer and Mac:

Yeah, you guys win. Although...with CSX's current attitude of selling off lines, I wouldnt be surprized if someday the line from Joliet west to Bureau Jct is put up for sale. Farmer, what is the traffic level out there on that line? Is there chemical traffic, or is that on the EJE branch? I know there is some aggregate or stone traffic out there, but I am not really sure of what the traffic base is.

When you look at the line, it just doesnt fit into the overall picture. My guess is the "For Sale" sign will be put in place someday.

Regarding METRA...that is the real trump card. From Joliet eastward to Chicago, that is a pretty good piece of commuter railroad, other than at 47th Street. I cannot see Metra allowing any kind of volume being put on the line.

That makes me go back to the trusty Illinois DOT map. How about this...IAIS to Ottawa, Il, then south on the IR to Streator to the NS line thru Kankakee and into Indiana?

Yes, I know there is no direct transfer from IAIS to IR on the southwest quadrant, but Terra Server shows there once was...simply buy the land back and rehab the line to Streator.

The NS is in great shape, other than lack of signals and would need sidings. No doubt there are issues with this routing also, but I am looking medium long term (Dave, I will respond to your comments regarding the long long term) and the real problems which will exist in Chicago within the next 10 years, if not sooner.

ed

[MP173]

Dave:

As always, you have interesting things to discuss. Your vision on this is more macro, while mine is micro. I am addressing the Chicago issue, which I believe will become pretty big, pretty soon.

My problem with discussing your points is that I dont know or understand half of what you are advocating...such as HSR, 25 to 33 ton per axle, ECP, and Bi Modal.

Cant even discuss those issues with you, as I dont know what they are. I am just a little under educated or under informed. Sorry.

ed

[Anonymous]

ohh...where to start. i'm not really sure why CSX (on some maps it's shown as B&O)owns the line to west to Bureau, but it seems to me they do some pretty good business on it. i believe the bulk of the traffic is in the form of silica sand from U.S. Silica in ottawa. there is a yard there with a handful of engines from GP15's to -9's usually and the last i remember there's a daily train (at night) to and fro chicago, loads up empties back. there are various other industries on the way east, a GE plastic plant in marseilles etc.

i live east of Bureau a few miles and i usually hear the nightly IAIS train heading west, although lately i've been hearing more than one at night. i've heard from a couple people that the iowa interstate portion of the ex-RI is in much better shape with a sizable portion in continous rail. if i remember right they received millions of dollars via the feds to do work to the line last year.

the Illinois Railnet line (ex-BNSF) from montgomery, IL to streator is fairly***ty from ottawa south. i'm going to guess the BIG red flag in that is the bridge over the IL river, a rickety old lift bridge which i read was possibly the reason BNSF sold the line. its old, narrow, low clearance for trains, on a slight bend in the river, coast guard wants it removed.

ideally...to avoid metra (and chicago altogether) or the Illinois Railnet and still get east...IAIS to depue, IL and if the bridge over the river hadn't been rammed by a barge and burned years ago, i'd hang a right over the river and onto the NS in hennepin, IL and onto Indiana. but that would make for an awful busy crossing in streator, although another rochelle for those of us who like to watch.

if i wanted a pretty neat railroad i'd do it that way. the traffic that could avoid chicago to points east i'd send across the river at Depue, IL and east on NS and have my racetrack on into chicago for the rest.

at any rate, i will agree with you ed, the ex-RI today looks like a nice piece of under-utilized railway that might come in handy in the near future.

[TomDiehl]

QUOTE: Originally posted by futuremodal

I see Tom "I misquote 'em as I see 'em" Diehl is at it again........

QUOTE: Originally posted by TomDiehl

I see "Conspiracy Theory Dave" is at it again. In a free enterprise system, if someone buys abandoned sections to rebuild, or builds new infrastructure for running trains, there ain't a thing the railroads can do about it.

Yes, there is. They can (and most absolutely would) lobby against such intrusions into their respective territories. They would throw frivolous lawsuit after frivolous lawsuit against the "new" guy. They would claim first rights against any cross-overs, underpasses, overpasses, and any interconnections.

How do we know this? Read your railroad history books once in a while, as all of the statements above occured with regularity back in the boom days. So why would anyone who claims pertinent railroad knowledge state otherwise?

QUOTE: The whole thing just goes back to the one simple fact: building or rebuilding railroads isn't cheap. Where are you going to find the rich sucker to pony up the money? Even though Barnum said there's one born every minute, there aren't very many rich ones.

Actually, there's several born every second of every day, and there called American taxpayers. Most railroads received government aid back in the day, and some still are still. There's no reason to expect a new player to try to go it alone without government backing. In fact, to hear established railroad spokespeople speak in terms of an expectation of private investment paying for new railroad construction is down right hypocritical.

QUOTE:
And Uncle Sam is so far in debt, our great grandchildren wouldn't be able to afford it.

Debt is irrespective of economic investment. There is no real debt ceiling for the feds, most federal debt is due to wasteful spending which could be culled, and the feds will always have easy access to a tax base.

And, as has been mentioned many times before, the feds could come up with incentives that do not take one penny from the Federal Treasury. Therefore, federal debt does not have to have any impact over federal incentives for new non-Class I mainline railroad construction.

And I see Dave "juvenile name calling" futuremodal is also at it again. Even you couldn't find a misquote in this one.

First, if they bought a line to rebuild, they'd have to buy it from a railroad. If the railroad didn't want it operated by someone else, why sell it at all? They wouldn't. Look at the former DL&W Lackawanna Cutoff through north Jersey. Conrail didn't want to have it reopened by another operator and compete with the old NYC Water Level Route for the Binghamton to New York City traffic, so they tore it out. No sale, no competition. They stopped it BEFORE another operator could buy and rebuilt it.

Lobbying and frivolous lawsuits cost money for the originator of the lawsuit or lobbying. There can't be a large public support for the new line, or the politicos being lobbyed will need some REAL payoff to bury the new line.

And I hate to try to bring you into the 21st century, but the big boom days of the railroads was over a long time ago.

And those "Sucker American Taxpayers" aren't going to put up with a big investment in a rail line where one already exists. Especially after enduring the cuts in Medicare, Drug Programs, and Social Security, to name a few. And hearing "established railroad spokespeople speak in terms of an expectation of private investment paying for new railroad construction" is the main thing keeping the railroads from expanding capacity any faster. The railroad profits are paying the bill for the upgrades.

And with this administration, we've all noticed that they have no idea what a debt ceiling is. But some of them are starting to get the idea, and the cutbacks are coming. Some have already started. New programs that cost big bucks aren't even making it to the floor in DC.

Yes, we've noticed that you mentioned "incentives" before. Every time you've left out one important point: what supposed "incentives" could the government offer private investors to put up the money to finance this building or rebuilding? And how much more will it cost the railroads? As MichaelSol pointed out in another thread, borrowing money costs more money due to the interest. Would this be an "incentive" to the investors? Why would the railroad go for it?

You've made so many statements that leave nothing but questions.

[Anonymous]

Tom statements:

QUOTE: First, if they bought a line to rebuild, they'd have to buy it from a railroad.

Sure, if a railroad still owned an abandoned ROW, but most have also given up on the property as well as the line.

What they would do is to do what the original railroad did, basically having the governmetn issue an eminent domain decree, then buy up the ROW from the "reverted" property owners, even if one of those "reverts" is the real estate arm of the original railroad company.

QUOTE: Lobbying and frivolous lawsuits cost money for the originator of the lawsuit or lobbying. There can't be a large public support for the new line, or the politicos being lobbyed will need some REAL payoff to bury the new line

The Class I's have deeper pockets than most venture capitalists for such actions. Just show a display of legal resistance, and investors will drift elsewhere.

QUOTE: And I hate to try to bring you into the 21st century, but the big boom days of the railroads was over a long time ago.

And here all this time we thought "today's railroads" were the hot item on Wall Street. So which is it, then or now?

QUOTE: And those "Sucker American Taxpayers" aren't going to put up with a big investment in a rail line where one already exists. Especially after enduring the cuts in Medicare, Drug Programs, and Social Security, to name a few. And hearing "established railroad spokespeople speak in terms of an expectation of private investment paying for new railroad construction" is the main thing keeping the railroads from expanding capacity any faster. The railroad profits are paying the bill for the upgrades.

The American taxpayers don't have a direct say in expenditures, only an indirect say via their elected representatives. That's why organized lobbying beats one man one vote hands down.

And there are no "cuts" in your social welfare programs as you state, rather a reduction in the trending rate of increases.

And railroad profits are not being reinvested in those areas where those profits originated for the most part, otherwise all of Montana would have been triple tracked by now.

QUOTE: Yes, we've noticed that you mentioned "incentives" before. Every time you've left out one important point: what supposed "incentives" could the government offer private investors to put up the money to finance this building or rebuilding? And how much more will it cost the railroads?

Gee, didn't you read the DM&E press releases regarding the 2.5 billion loan guarantee? Ever heard of land grants? Maintenance tax credits? Transportation user fees? That last one would be apt, start taxing the fuel railroads use and create a trust fund for new open access railroads!

QUOTE: You've made so many statements that leave nothing but questions

Well, you can see that it walks like a duck, etc, yet in your mind you have no idea what it could possibly be, because unless the duck actually walked up to you, grabbed you by the collar, looked you square in the eye, and yelled right into your face "I AM A DUCK!" you still couldn't fathom that the duck was actually a duck. And even after all that, there would be this nagging little voice in your head saying "Was that really a duck, or was the 'duck' lying to me about what it really is?"

Trying to explain things to Tom is like...............

[MP173]

farmer:

I think you are probably correct regarding DePue eastward. AFter I posted, I went for a run and it dawned on me that route was a viable route back in the 60's for NYC - Rock trains.

I think a bridge could be built considerably cheaper than a lot of the other stuff I have proposed.

That's it, solution to all of Chicago's problems (not really). Now, if the line from Schneider, In eastward (actually Wheatfield) to South Bend hadnt been torn up, there would be a great bypass.

What if...can be played all day, which is kinda fun, but doesnt really accomplish anything.

Next time I go to Iowa, I will have to snoop around Bureau Jct and the area around Ottawa.

ed

[TomDiehl]

QUOTE: Originally posted by futuremodal

Tom statements:

QUOTE: First, if they bought a line to rebuild, they'd have to buy it from a railroad.

Sure, if a railroad still owned an abandoned ROW, but most have also given up on the property as well as the line.

What they would do is to do what the original railroad did, basically having the governmetn issue an eminent domain decree, then buy up the ROW from the "reverted" property owners, even if one of those "reverts" is the real estate arm of the original railroad company.

If you're buying what used to be an old railroad right of way that has reverted to the adjoining property owners, it's been stripped of rails and ties, most likely bridges (liability issues), and owned by many property owners. Hardly would qualify as an existing right of way when you need to build it from scratch.

Eminent domain provisions would be a really bad idea at this time, if you listen to the news at all. Most states are reviewing their provisions and have imposed a moritorium on new applications of it due to the city in New England that condemned property for a developer.

[TomDiehl]

QUOTE: Originally posted by futuremodal

QUOTE: And I hate to try to bring you into the 21st century, but the big boom days of the railroads was over a long time ago.

And here all this time we thought "today's railroads" were the hot item on Wall Street. So which is it, then or now?

And exactly how many railroads are on the Fortune 500 list in this country?

[TomDiehl]

QUOTE: Originally posted by futuremodal

And there are no "cuts" in your social welfare programs as you state, rather a reduction in the trending rate of increases.

Obviously, you're really out of touch with reality on this one. I guess they don't publish newspapers or have TV news programs in the PNW.