Short Line Investment?

[edblysard]

If I read the original few posting correctly, the big pay off are the two coal mines coming on line...and note that the coal is both power plant grade, and metallurgical grade, so at least one of the coal moves will be to interchange, not in captured service to the power plant.

Although LC stated this was all a hypothetical concept, it sure sounds like it is based on a existing road, and he has put quite a great deal of thought into it...as for risk, not much is risk free any more, and if this does pan out, the initial investors will make out fairly well in the next five to ten years.

If it was a real deal...I would seriously consider ponying up 20 grand and might even think about moving out of the swamp and switching railroads...rivers have backwaters too!

Ed

[MP173]

Boy, I have missed a great thread. My compliments to everyone on this for a really great discussion. I dont know too much about the mechanical aspects of railroading so I wont jump into that.

Here are my questions:

1. This is an interesting discussion, but a horrible investment. 1000 shares @ $10,000 = equitiy of $10,000,000. What exactly is that $10,000 going to get the shareholders? A railroad that generates $1,400,000 the first year and possibly $2,620,000 by year 5. An EBITA of $740,000 in year 5 would result in ROE of what, perhaps 4%. Right now I can get Treasuries with NO RISK yielding more than that.

2. What exactly would one purchase for $1.2 million? Just the rail line? No equipment with that? Where does the other $8.8 million go? I noticed there is an investment banker on the list of investors/board members. What kind of fees are involved with this?

3. I assume with the huge difference between purchase price of $1.2 million purchase price and the $10 million of equity there will be other purchases. I am very reluctant to invest without a track record of the money folks. Just what else are they looking to do? Likewise, with $10 million of money in the cookie jar, who is going to watch the cookie jar?

On a side note...SD38SD39...is the Evansville Western the old IC Mattoon to Evansville line?

ed

[edblysard]

Hey guys...
Take a step back for a second.
You are looking at a 32 mile short line that hauls woodchips and finished cardboard, a few inbound chemical tanks for both, and a twice weekly coal move.
It will run at restricted speed, GCOR rule 6.27, see below.

6.27 Movement at Restricted Speed
When a train or engine is required to move at restricted speed, movement must be made at a speed that allows stopping within half the range of vision short of:

Train
Engine
Railroad car
Men or equipment fouling the track
Stop signal
or
Derail or switch lined improperly
The crew must keep a lookout for broken rail and not exceed 20 MPH.
Comply with these requirements until the leading wheels reach a point where movement at restricted speed is no longer required.

Depending on the track condition, max speed will be 20mph, if it is all FRA exempt 10 mph max.

GCOR.
6.12 FRA Excepted Track
On a track designated as "FRA Excepted Track" the following will govern:

Maximum speed must not exceed 10 MPH.
No revenue passenger train will be operated.
No train will be operated that contains more than five cars placarded according to Hazardous Material Regulations.

Also keep in mind that this is a small group of people, everybody will have double duties...management will be a hands on thing, most of them will run some of the trains in-between their other duties, everyone will learn how to tighten joint bar bolts and lube switches.

It will not need a big accounting department, nor a web site, the GM and Super will double duty as sales reps and business recruiters...the computer, if it even has one, will use pre existing software that NS and CSX already use, for car tracking and routing/billing.
If not, most of us remember how to hand write a switch list and train sheet!

There is no signal system; it will work on RTC, (radio traffic control).

An SD50 is extreme for this.
Best bet would be if you could beg a pair of MP15DCs, a pair of GP38, and a pair of SD40-2s for the coal moves.
Depending on how the coal moves expand, it might use the class 1 power to serve the power plant and mines...if not, the SD40s will be in dedicated service there.
Two of them, because with a 80 car coal move, if one craps out, the other one can still pull the move.

The car department and mechanical department will be a small group of guys who will do double duty as welders and MOW in a pinch.

Don’t over blow this, your talking about a non union shop and T&E, where everybody has to do multiple tasks to make it work.

As for SD9s, I doubt you can find any left you would want…the only one I have seen in regular service is on the BNSF, still in BN green and black, it is a former Great Northern unit, and I doubt you would want to try and get parts for it.

The only reason it hasn’t been scrapped is because it is a shop favorite, along with a pristine pair of Santa Fe GP30s, which are shop queens at South Yard.
The Chief mechanical office just doesn’t have the heart to scrap them.

Ed

[Anonymous]

Just had another thought, in the start-up cost, I would suggest budgeting additional money:
1. IT Department for accounting, website, customer portal for tracking of shipments. In this case, then you would need an IT Manager added to the payroll as well as computer equipment hardware and software.
2.Marketing Manager to increase revenue stream.

Best regards,
Swafford

[Anonymous]

My number one question: To protect my investment, are these voting shares? If not, I would never invest in this type of venture!

Best regards,
Swafford

[Anonymous]

QUOTE: Originally posted by SD38SD39locomotives

because I've seen too many so-called "professional" operations fall apart in the past around this part of the country.

I need to quick rephrase my post. I meant operations as in businesses in general.

[Anonymous]

QUOTE: Originally posted by tormadel

I could see the arguements for lesser power, SD38's or something, but would they really be significantly cheaper? (I don't think there was such a thing as a C23-7 build, and it would probably have some problems like the C30's LC refers too). I'm thinking for the coal hauling we're talking about SD9's wouldn't cut the mustard, or Milwaukee rebuilt SD18s or ICG SD20s. Also a question of what kinds of deals can LC get on longer term leases? Could these lesser units I'm talking about do the trick on a 1 or 2 year lease untill the new traffic warrents the SD40's? Could it be that in those couple years down the road that SD40's won't be available at such a good price? (The SD50 mention pique's my interest, I like alittle variety and something alittle different).

It would sound like that next good question is that trackage rights to the powerplant even a possiblity? We don't want to be choked by the class 1 being tardy about picking up our loads or doing they're share on the unit train. Is the power plant on the main line or another spur? Is purchase of the spur the powerplants on an option? (Class 1 may be more open in negotiation if they would have to short haul themselves otherwise) This could also be effected by the traffic density the class 1 has on these related lines. I'm sure they wouldn't want a shortline mucking around already congested pathways. Are we connecting to NS & CSX mainlines or branches?

Heres one simple beauty about SD40s and shortline start up: If you get a good deal on 1 or 2 or 3 or how many involved. And if the per-axle weight of them is reasonable for the line being purchased. And you buy them, and then turns out ya got too much juice for the operation, then what was originally estimated/planned. Ya go the deturbo route. Now about this comment of SD9s not being able to cut the mustard? Examples are still ABOUND, of SD9s cutting the mustard to this very day.
And older SDs are pretty darn cheap these days, but the loco market is always a changing. Right now, serviceable SD40-2s can be had for deluxe pick up truck prices. But after watching ( and studying the past history of the diesel loco market for 15 years now ), there are no guarentees on the used loco market prices. The only guarentee, is that used locos ( especially and most practicaly EMDs ) can be rebuilt, upgraded, and modified. And last I knew, there were only roots blowers available for HP capacity of only up to 3000horses. But with a flood of SD50s on the market, and they are out there now indeed, deturbo'd SD50s could be more attractive and practicle to the shortlines, bantam shortlines, and regional roads.

[Anonymous]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by SD38SD39locomotives
I used to do cost sheets like this. I'd get all the est. expenses wrapped together for operating costs, and then double it. Yep, thats right, DOUBLE IT! That would then be the est. operating cost.

This approach is accurate probably more often than not. But, that's why pro forma operating numbers for any business need to be worked and worked.

Best regards, Michael Sol

Hi Mike,
I couldn't agree with you more. The numbers always have to be being worked and worked. It's a never ending job and a necessity. Plain and simple. The scheme of kicking the op. costs by double, just gives a nice blanket to be able work those numbers without even giving the chance for everything falling apart out of the gates. I don't care how talented a controller / accounting team is. I want the security blanket. For one thing, because I've seen too many so-called "professional" operations fall apart in the past around this part of the country. Including a company my dad worked for. Look no further then Enron of all things, to put a face on the phrase -so-called professional operation-. Now I'm more conservative then liberal, when it comes to talking about money, but my view is this: if you don't have the costs liberally covered with some slack to go along with them, might as well not bother with even going into business then. Thats just my way of doing things business wise. And it's worked for me too in real life. And I had to learn this the hard way, so it's beaten into me now, which I consider a good thing. The phrase 'if it ain't broken, don't fix it' does actually have some meaning to it. And this way of doing things for me ain't broken, so I'm not going to try and fix it. God's Peace

[MichaelSol]

QUOTE: Originally posted by SD38SD39locomotives
I used to do cost sheets like this. I'd get all the est. expenses wrapped together for operating costs, and then double it. Yep, thats right, DOUBLE IT! That would then be the est. operating cost.

This approach is accurate probably more often than not. But, that's why pro forma operating numbers for any business need to be worked and worked.

Best regards, Michael Sol

[tormadel]

I doubt the boardmember(s) are going to work 50hrs a week for$5000 a year. But I would not worry about the others. Getting this company up and started, then keeping it alive will take alot of work. Given these officers back grounds I do not think it's likely that they would shirk they're responsabilites. There is no room in the budget for assistants or the office toady, so it seems set out to me that the whole staff is dedicated to rolling up they're sleeves and doing it all.

[jeaton]

Looking at the comments Michael and LC have made on staffing, I'd like to add a couple things.

I am inclined to go with the idea that 5 managers (6 with the board member) might be taking too large a slice out of the revenue stream. I think that the organization might do without a Controller and function OK with an administrative/accounting clerk backed up by a CPA on retainer. However, if everyone on the management team is willing and able to perform everything from the most menial tasks on up, then I think the staffing can be justified. And when I speak of "most" menial tasks, I am thinking of things such as cleaning locomotive windshields, sweeping the office floors and hauling out the waste. Of course, a manager would set priorties for tasks from most important to least important, but if the five are not putting in about 250 hours on a slow week, staffing would need to be reviewed.

Fun thread, though.

[tormadel]

Well, I can see what Micheal is saying basically in the early years if revenue needs time to come up perhaps be more stingy with how much you spend on locomotive leases. But, on the other hand, if you short yourself too much power and have any problems you're service could suffer, and good service is the golden rule for survival here. We need to give our customers every reason to believe that we are the best choice for every<logical> shipping need. I can believe LC when he says good deals can be had on SD40's these days, alot of them floating around now. I could see the arguements for lesser power, SD38's or something, but would they really be significantly cheaper? (I don't think there was such a thing as a C23-7 build, and it would probably have some problems like the C30's LC refers too). I'm thinking for the coal hauling we're talking about SD9's wouldn't cut the mustard, or Milwaukee rebuilt SD18s or ICG SD20s. Also a question of what kinds of deals can LC get on longer term leases? Could these lesser units I'm talking about do the trick on a 1 or 2 year lease untill the new traffic warrents the SD40's? Could it be that in those couple years down the road that SD40's won't be available at such a good price? (The SD50 mention pique's my interest, I like alittle variety and something alittle different).

It would sound like that next good question is that trackage rights to the powerplant even a possiblity? We don't want to be choked by the class 1 being tardy about picking up our loads or doing they're share on the unit train. Is the power plant on the main line or another spur? Is purchase of the spur the powerplants on an option? (Class 1 may be more open in negotiation if they would have to short haul themselves otherwise) This could also be effected by the traffic density the class 1 has on these related lines. I'm sure they wouldn't want a shortline mucking around already congested pathways. Are we connecting to NS & CSX mainlines or branches?

[tormadel]

I'm not sure the answer there Micheal. But, I can't remember the last time I saw just a switch engine doing anything but jockying around a yard. Wisconsin Central runs around the valley here working paper mills and everything else with either a GP40, a pair of GP38's or a pair of GP40s. I've seen 2 '38s heading back to the yard with 12 cars, why that much for so little? I have no idea. Maybe they had alot more when they headed out. But also I believe in the mid 70's there you were still having a majority of 70ton cars, not the 100 and now 125 ton thugs you see today. Just my 2 cents.

[tormadel]

QUOTE: Originally posted by edblysard

QUOTE: Originally posted by Limitedclear


32 miles. 115# and 112# with some 100# in sidings. Jointed. 2 miles of 115# CWR.
timber ties. 6 bridges all steel. Ruling grade 0.7%. Max curvature 10 degrees. Runs along river. Interchange: NS and CSX. Paper barriers possible.

Employees: 4 T&E; 3 MOW. To be adjusted as required by growth.

Equipment:

Locomotives: 2 4 axle units(2000hp) and 4 six axle units (3,000+hp)

MOW: Hirail inspection truck, Hirail Boom truck, backhoe, tamper, regulator others as deemed necessary.

Andrew, note the rail numbers, 115#, 112# and 100# jointed in some sidings...
As long as you run at restricted speed, its a good track base...would have to see how it was maintained, but thats what mudchickens do!

Hehe, hell yeah [:)]

[MichaelSol]

I remain puzzled over the six engine, high horsepower requirement for a $1.2 million revenue railroad.

Here's why. Where I grew up, the Milwaukee had one switch engine, a little SW1200, # 627. It ran just about every day for the 20 years that I knew it.

Through that little switch engine's eyes, it "operated" a railroad just about 50 miles in length. It did a Missoula patrol every weekday and a Blackfoot run on Saturdays.

Every morning, after it had breakfast it went six miles east from the Missoula depot to the Anaconda Company's Bonner (AFP) mill. There, it dropped empties and picked up lumber and woodchips. It hauled these back to Missoula where it set off the lumber and proceeded west to the Intermountain Lumber mill where it picked up both woodchips and lumber. Sometimes there were chemical cars waiting there for Stone Container as well, from the previous evening's freights. The sidings at the Intermountain Mill (actually part of the Missoula Yard) were also the "Traffic Gateway" to the BN resulting from the BN merger conditions, and BN cars would be spotted off the BN's Bitterroot branch at that location, waiting for Milwaukee pickup, or delivered there by Milwaukee for BN pickup.

Chip cars spotted from the previous evening's DFW from the Deer Lodge LP Mill would also be at this siding, ready to be taken to Stone Container.

After pickup of those carloads, #627 backed up about half a mile and put the Intermountain Lumber Co. cars with the AFP lumber cars, then proceeded west again with the AFP and Intermountain woodchip cars fifteen miles out to Schilling, the Stone Container pulp mill yard. There, it dropped off the woodchips, and went around to the other side of the mill and gathered the finished product cars. It hauled these back east to Missoula in the afternoon. The Stone Container cars would be blocked in whatever order with the lumber cars, along with chemical empties from Stone, and placed for pickup by the evening west or eastbound mainline freights.

On Saturdays, it took the morning off and went up the Blackfoot branch, an extraordinarily scenic and easy trip of about 35 miles, to pick up lumber, woodchips, and in former days sometimes sheep, cows or hay. Sometimes an Elk or a Deer was known to ride the caboose back down to Missoula.

It did all this at a blistering 10-12 mph. Sometimes they got excited and would go 15.

Now, that single switch engine was the heart of a $7 million operation in the early 1970s. That's $26,219,269 in 2005 dollars.

That little 1200 hp switch engine earned its keep. Including empties, it was handling anywhere from 30-50 cars a day on a 50 mile long railroad. It finally wore out and was replaced by a MP15AC.

While on the one hand that $26 million spoke to both the value of Milwaukee freight on its Transcon and of course the long haul revenues of that freight, I am still not clear why a single 1200 hp switch engine would be able to haul nearly three times the carloads on a longer line, whereas 6,000 hp would be necessary to haul substantially fewer cars on a shorter line.

The difference is an operating cost of about $300,000 per year, and so the question goes to a signficant cost factor.

Best regards, Michael Sol

[Anonymous]

An interesting thread.

If I were a potential investor the most important variable for me would be the ability to develop other customers along the line. The cardboard plant, as it was already pointed out, seems too "iffy" for me. The plant could close, depriving the short line of almost half its revenue. But if there was suitable land along the right of way which could be developed into an industrial park of some sort then there may be an additional source of revenue.

In my area short lines have to be creative and aggressive when it comes to potential sources of revenue. Purchasing, rebuilding and then leasing motive power is something one short line in my area does to increase its revenues. Other short lines have gotten involved in hauling construction waste from transfer stations they build and operate themselves. Team tracks are also used.

[edblysard]

QUOTE: Originally posted by Limitedclear


32 miles. 115# and 112# with some 100# in sidings. Jointed. 2 miles of 115# CWR.
timber ties. 6 bridges all steel. Ruling grade 0.7%. Max curvature 10 degrees. Runs along river. Interchange: NS and CSX. Paper barriers possible.

Employees: 4 T&E; 3 MOW. To be adjusted as required by growth.

Equipment:

Locomotives: 2 4 axle units(2000hp) and 4 six axle units (3,000+hp)

MOW: Hirail inspection truck, Hirail Boom truck, backhoe, tamper, regulator others as deemed necessary.

Andrew, note the rail numbers, 115#, 112# and 100# jointed in some sidings...
As long as you run at restricted speed, its a good track base...would have to see how it was maintained, but thats what mudchickens do!

[Junctionfan]

Well.........depending on what kind of tonnage a train from those mines are, I have to ask if it would better to use 115lb rail. I just don't see a bunch of loaded quad or bethgon hoppers staying on track with under 115lb rail.

[tormadel]

QUOTE: Originally posted by Limitedclear

Be offline for a day or so, keep the faith...

LC

Ok LC, have a good one. Hope to hear from you again soon

[Anonymous]

Be offline for a day or so, keep the faith...

LC

[tormadel]

Opps appearently I was tired when I posted earlier. My mistake, a roots blown would be a SD58 <blush> and I would have to guess that horsepower at like 2600-2700(& 16 cylinders). The SD59 would have a turbocharger but only the 12 cylinders.

[tormadel]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by tormadel

QUOTE: Originally posted by mudchicken

Hydraulic or Air tools / I-R Compressor or Hydraulic Power Unit? (Off the truck please) - Oh man have I seen the falacy of just two men, a truck and a backhoe....The small tool availability issue gets scary, especially with those who don't take care of the equipment.

Surfacing Gang every 30 Mos? (rent/subcontract?) Availability of TSR or TKO machine? How fast does it fall apart?

Qualified Welder or are we parts changers & cannibals? (Kills your supply materials budget)

Speed? (You guys with the mirriors always wanna go faster)...Track class 1 0r 2?

I would push for at least class 2 track. Not only to go alittle faster but for the increased safety and reduced chances of pesky derailments and such. I'm a believer in keeping the physical plant in the best shape that is economically practical. I know my father in law is a qualifed welder with 30yrs experiance who's looking for a new job but dunno if he'd want that kind of relocation <smile>. (alot of welders in my wife's side of the family actually)

And I should say this thread gets my excitement up just talking about it.

WHOA there junior...

Why do we need higher speeds???

We don't. This is a common misconception outside the short line world. 10mph is just fine. I'd like to have better track but have you ever seen the difference between a 10 mph derailment and a 25 mph derailment?! The cost is at least triple to go along with the ugliness. Keep in mind that the 10 mph derailment is already gonna cost you $50,000 to $100,000 or more depending upon any number of factors. So, the 25 mph $150,000 to $300,000+ derailment expense will really put a damper on that balance sheet fast... I'd probably keep the track excepted too, even though maintained better as it tones down the FRA issues considerably.

LC

Ok, granted I don't know all the facts about this line but I was making some assumptions. But, I was equating this to the Wisconsin & Southerns class 1 track. It's from crappy ballast and really old 80-90lb rail. So they have been haveing all kinds of problems with like 3 times more derailments, snapped rail etc etc. And they've managed to get the state to sign a bill for $6million a year for 10 years to upgrade all of they're 640miles to brand new rail and class 2 specs. So that is where my thinking was coming from. Your right the faster you are going the worse an accident is, but I was just thinking of reducing the likelyhood of accidents, my bad. Because I had been given the impression that class 1 track was the swirling in the toilet bowl kinda line, sorry.

[Anonymous]

Thanks for the input guys , but I don't contract all of my MOW out. That is a quick way to par far TOO MUCH for too little. Contractors have profit margins. I can't afford them unless there is a significant value add. That is one of the reasons we have a great management team for this project. Our track people manage projects including contractors when required. The contractors are used for specific tasks for which they are well qualified and capable of doing the job more quickly, conveniently and with less cost than our employees.

Also, you don't need a "Certified" bridge engineer to inspect a bridge. A B&B foreman is fine. We certainly don't need a bridge contractor to do that. That is just one way of opening your wallet. If I need more than replacement of existing compenents I of course use a state licensed Professional Engineer specializing in structures.

LC

[Junctionfan]

Ya-with only 2 trains a day, I would also have to say that it would be better to contract our MOW work.

If there is going to be some mining haulage in the future, you might want to make sure the tracks are strong enough to take the load or you might run into what CONRAIL did with their wide-body locomotives.

[MichaelSol]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by MichaelSol

I did not take into account business (equipment) and property taxes. No idea what they would be on railroad property in that neck of the woods.

Best regards, Michael Sol

Based upon similar properties my best guess on property taxes is $50,000 or less. That would be the number for the entire ad valorem tax including equipment.
LC

Well, that's reasonable.

I guess if I had a concern on the revenue side of things, it would be the high reliance of the line on the cardboard and woodchip traffic.

I've followed the industry since 1957, when one of the largest Kraft process mills in the world was built, literally next door. I've known every General Manager since 1957, beginnng with Roy Countryman, and including the current manager, Bob Boschee, with whom I spend a couple or three hours a week on a regular basis discussing business issues. They have about a $30 million a year transportation budget. Big operation, originally located on the Milwaukee mainline by Milwaukee's industrial department, served off of a short spur by NP.

The industry is so competitve, that many plants have been shut down in recent years. A new plant is so cost-effective compared to an older facility, and the margins so tight, older facilities have to work hard to make a profit. At the same time, the lumber industry has been on such a rollercoaster due to the Canadian timber tariff brouhaha, sources of chips have ranged from near to very far, naturally affecting overall costs of operation quite dramatically. Makes a big difference to the cardboard plant if it can buy waste chips, or has to make or purchase "custom" chips.

The pulp industry constantly oscillates between lean and plenty, that is, shortage and overcapacity. During the overcapacity periods -- which occur about every 5-7 years -- the industry generally loses two or three North American plants. These tend to be older and smaller plants. Compared to the Smurfitt-Stone operation that I am familiar with, the cardboard operation you are looking at appears to be quite small.

Bob reports that since Milwaukee left, most of the Smurfitt-Stone plant's transportation needs have shifted to truck. "BNSF's service has deteriorated to just awful; we try and use them as little as possible." He reports that MRL, which provides the service link to BNSF, does a good job, but once the traffic in on BNSF, "we just don't get service and with our margins as tight as they are, we can't afford to use the rail system if we can avoid it." Naturally, this sounds a little bit like the hypothetical Appalachian railroad -- dependent on someone else to actually provide most of the service, and being at their mercy.

Now, with regard to the overall proposition. If I were investing in something like this, on technical matters I happen to be a believer in expert, third party opinions -- consultants. I would probably hire someone with some time and expertise, such as Bill Brodsky or Alex Huff, to go look over the railroad and offer his opinion. Probably cost about $10,000 or so.

I would also hire someone like Bob Boschee to fly out and look over the pulp and chip operations to see if he thinks they will even be there in three years. I think I could get Bob to do that for about $10,000. If I wanted fancy reports and numbers, I could double those estimates. But, these would be gentlemen whose opinions I would accept without a written report.

I don't know anything about coal mining as an industry, but I do advise the owner of a coal mine, truck serviced, somewhere down there in West Virginia. He doesn't know anything about coal mining either, but he does seem to trust their current manager who appears to have done a good job with a combination facility. I would probably see what a visit for that purpose would cost as well.

So, from an investor's perspective, there's about a $20,000-$30,000 investment to see if it's feasible -- due diligence -- and that's before actually making any investment. To justify that, a person would have to be willing to purchase at least $300,000 of shares expecting a 25% return in order to justify the entire "cost" of the investment, and to be able to generate at least a 10% return over a safe investment in order to justify the risk. I am not looking at a spreadsheet, just ballparking some percentages.

As I mentioned on another thread, the railroad isn't the important factor in the decision -- the "lay of the land" from a revenue perspective is. I would need to know all about that cardboard plant and the chip or lumber mill. How old are they? Where's the industry going? Are those plants currently profitable? What are their earning and operating histories? Do they pay their bills on time? Do they have expansion plans or are they being "harvested"? How do their managements size up? Young and aggressive, or about to retire? Am I believer in their businesses? Can I help them succeed? Will I be a part of their success or a victim of their failure? Same questions for the coal operations.

I can walk the railroad and get a pretty good idea of what the railroad is like, what it needs, and ballpark some costs. I can price some engines. I can generate a capital budget and an operating budget.

Ironically, that tells me almost nothing about what I really need to know.

Best regards, Michael Sol

[mudchicken]

Tormadel: I kinda dropped a hint (LC caught it)...The operating types that go fast just because they can are a threat to the future viability of the line. What I asked LC about was what speed was going to do to the biggest asset you have here (track structure).

That shiny locomotive is worthless junk if the track is not there to generate income. Paperpushers and pure operating types get themselves in a hole quick on new startups frequently by ignoring the track structure and NOT having a good trained trackman around. The question was posed to see how much we could maximize the utility with.

LC: Would concur on the use of air tools like MT-4s, a pavement breaker and one inch Impact Wrenches along with a gas saw and gas bolthole machine. Local mechanics can usually fix them easier. (although air impacts usually fail early due to JoeBob not understanding how to take care of it...the joys of Marvel Mystery Oil!) .....We have yellow stickers around here that say in one inch letters: Take care of this equipment. If it doesn't work - neither do you!" [tup][tup][tup]

[Anonymous]

QUOTE: Originally posted by Limitedclear
[

WHOA there junior...

Why do we need higher speeds???

We don't. This is a common misconception outside the short line world. 10mph is just fine. I'd like to have better track but have you ever seen the difference between a 10 mph derailment and a 25 mph derailment?! The cost is at least triple to go along with the ugliness. Keep in mind that the 10 mph derailment is already gonna cost you $50,000 to $100,000 or more depending upon any number of factors. So, the 25 mph $150,000 to $300,000+ derailment expense will really put a damper on that balance sheet fast... I'd probably keep the track excepted too, even though maintained better as it tones down the FRA issues considerably.

LC