futuremodal wrote: AG, You and your conspiracy theories - it is not apt for this forum.
AG,
You and your conspiracy theories - it is not apt for this forum.
Now if that is not the pot calling the kettle black, I do not know what is.
Bert
An "expensive model collector"
futuremodal wrote: If BNSF was truly a pro-capitialists company, they would welcome the DM&E competitors into the field so they could beat them on the market field of play, you know, provide better rates and services to the customers than DM&E. That is the heart and soul of capitalism. Then if DM&E does go belly up because they just can't compete with BNSF, BNSF probably gets first crack at operating over DM&E's new track.
If BNSF was truly a pro-capitialists company, they would welcome the DM&E competitors into the field so they could beat them on the market field of play, you know, provide better rates and services to the customers than DM&E. That is the heart and soul of capitalism. Then if DM&E does go belly up because they just can't compete with BNSF, BNSF probably gets first crack at operating over DM&E's new track.
Under this reasoning, most companys would be anti-capitialists. I am sure McDonalds would love it if Wendys was not around, United would be happy is Southwest had not been formed, and EMD would be gitty if GE still just made lightbulbs. To say BNSF is any different in that matter is nuts.
futuremodal wrote:AG, You and your conspiracy theories - it is not apt for this forum. All corporations have sensitive internal information that is not germaine to public scrutiny.
All corporations have sensitive internal information that is not germaine to public scrutiny.
Murphy Siding wrote: (Not a conspiracy theory-just a question. )
Thanks to Chris / CopCarSS for my avatar.
TheAntiGates wrote: solzrules wrote: And why would they need to make that information public? Does the bank make all of your financial information public so the talking heads can scrutinize it when you ask for a loan? And who would provide neutral oversight on the government? The courts? Democrats? The AntiGates? What business is it of theirs? I don't borrow money from the "public", and if I did I am sure every tidbit of the proceedings would be both part of the public record as well as "discoverable" by any entity having an acute interest.It is US taxpayer money being put on the line here. But, why not a compromise solution? why not an independant review committee, that way all the irrelevant skeletons in DM&E's closet can be kept confidential, with just relevant information pertaining to the ability to repay the loan made public?Might be interesting to see which politico's DM&E has made campaign contributions to, over tha past 5 years. Is there any reason why you think THAT information should be suppressed as well? ???
solzrules wrote: And why would they need to make that information public? Does the bank make all of your financial information public so the talking heads can scrutinize it when you ask for a loan? And who would provide neutral oversight on the government? The courts? Democrats? The AntiGates? What business is it of theirs?
And why would they need to make that information public? Does the bank make all of your financial information public so the talking heads can scrutinize it when you ask for a loan? And who would provide neutral oversight on the government? The courts? Democrats? The AntiGates? What business is it of theirs?
All corporations have sensitive internal information that is not germaine to public scrutiny. I'm sure BNSF and UP have some secrets they hope never get out, does that disqualify them for the federal money they have recieved in the past, are recieving now, and will recieve in the future?
If so, I'm sure AG will be the first to demand full public accounting of all such internal data from the Big Two western railroads. Because for AG to continue to rant about a DM&E conspiracy theory while ignoring the BNSF and UP conspiracies would make AG a big fat hypocrite, wouldn't it?
solzrules wrote:And why would they need to make that information public? Does the bank make all of your financial information public so the talking heads can scrutinize it when you ask for a loan? And who would provide neutral oversight on the government? The courts? Democrats? The AntiGates? What business is it of theirs?
TheAntiGates wrote: solzrules wrote: Theoretically they could do that, yes. Is that a good reason to deny the loan? I don't think so. No, I don't think I said that it was. But it DOES justify a certain degree of alarmism spawning from the secretive nature of the loan application.Again, if they are not doing anything wrong, have nothing to hide, then why all the secrecy? Theoretically, they could have influence with people inside the FRA who might be willing to rubberstamp the approval process in exchange for "intangible consideration", which is all the more justification for some form of neutral oversight.Your serve
solzrules wrote: Theoretically they could do that, yes. Is that a good reason to deny the loan? I don't think so.
Theoretically they could do that, yes. Is that a good reason to deny the loan? I don't think so.
Banks are in the business of lending money. They charge interest on the loans. The greater the risk, the higher the interest rate. Banks accept secondary positions on loans all the time. Their risk is thus a bit greater than it would be if they had "first dibs" and so their interest rate is higher.
If you have a mortgage on your house and then you take out an equity loan or a second mortgage, and then you default and stop paying both lenders, the holder of the first mortgage gets the house first and the other lender has to hope there is some money left in it after the first guy is paid off.
If you have a mortgage on your house, and you take out a bank loan for your car, the two lenders each have their own collateral if you stop paying your debts. One gets the house and one gets the car. The house lender seldom gets the car and the car lender seldom gets the house.
Banks have been lending money to railroads since the beginning of time, especially for the rolling stock. At one point in history it was by a form of document called a Trust Agreement and you could see a plaque on the side of the New York Central locomotive that said the bank owned the loco pursuant to the Trust Agreement dated such and such - or whatever the terms called for.
Banks are not likely to lend money for locomotives and cars if the rail and roadbed are in really bad shape and especially if the track isn't even there yet. Thus the DM&E needs the FRA loan to build new track and upgrade old before the banks will lend money for rolling stock, or anything else.
Banks don't make any money if they don't take a few risks and make loans - some of which are likely to not get paid, which is why they have funds set aside to cover those possible bad loans.
DM&E's website refers to the FRA loan as a loan. http://www.dmerail.com/News/Myths%20and%20Facts.pdf. It does so several times. I urge everyone to go to that site and read it.
TheAntiGates wrote:I'm probably too cynical, but to me it looks like the folks behind the entire ordeal have everything to gain if the whole deal works out, and almost nothing to lose, if it doesn't (the insulation of corporate entities, etc.Makes me wonder if the head honcho's of DM&E would be enthusiastic about signing personal guarantees on the loan, in the even the corporation defaulted?Not that their personal resources could hope to cover the risk, but just to see if their enthusiasm remained, if their own necks were on the block.Theoretically they COULD make a handsome profit for 5 years, and then step away and leave the taxpayer holding the bag. And there wouldn't be a thing you could do about it.
Theoretically they could do that, yes. Is that a good reason to deny the loan? I don't think so. Anyone who takes out a loan could burn the money for fun and then just declare bankruptcy - really it isn't that bad, right? That's why the banks scrutinize everything so closely to estimate risk, and I am sure that the FRA is doing this right now in the DME matter.
TheAntiGates wrote: Murphy Siding wrote: Should this whole thing somehow not work out, Uncle Sam has first dibbs on any money to recoup the $2.5B. That would leave the other investors of the $3.5B with.....whatever is left? Most of the rest of your post I agree with, but with respect to the above I have another feeling entirely.If the Gov'ts loan for $2.5B goes for track work, and the private investor's $3.5B goes for Locomotives and rolling stock, (just trying to keep the conversation simple) then I think that the respective transactions would be seperate. DM&E would likely create another entity to shield the loco and rolling stock loan from the physical plant indebtedness. even if it was that entity that leased the locos and rolling stock to the DM&E.The loco's and rolling stock would be pledged as collateral on their seperate loan, and the land, track, and infastructure pledged on the other. Meaning of course, if the entire operation does go belly up, with deferred maintenance always being the refuge of a failing railroad, what the taxpayers will gain through receivership is a worn out plant that couldn't even support itself when it was in goodshape.
Murphy Siding wrote: Should this whole thing somehow not work out, Uncle Sam has first dibbs on any money to recoup the $2.5B. That would leave the other investors of the $3.5B with.....whatever is left?
I agree with you are saying. It's never been quite clear (to me at least), if the $2.5B covers just the tracks and ROW (?) However, the thought of a DM&E Central is not good.
Murphy Siding wrote: (Dave- I can't honestly tell from your post, if you're being serious or humorous with your **Oh yeah?? So's your mother !!** type post, or, are you trying to have an honest discussion?)
(Dave- I can't honestly tell from your post, if you're being serious or humorous with your **Oh yeah?? So's your mother !!** type post, or, are you trying to have an honest discussion?)
Let me state for the record that I have NEVER EVER said anything degrading about someone's mother........
......, frankly because I assume some of these ilks were spawned sans an actual mother.
nanaimo73 wrote: futuremodal wrote: ...but at least BNSF is honest enough to publicly oppose the project (which only puts them further into the pit of anti-American/anti-Capitalist excess.) BNSF hauls Chinese imports to put money in the pockets of their shareholders. That makes them pro-capitalist. Anti-capitalist would be wanting to nationalize the US rail system, even if it is to lease it out to open access operators.
futuremodal wrote: ...but at least BNSF is honest enough to publicly oppose the project (which only puts them further into the pit of anti-American/anti-Capitalist excess.)
...but at least BNSF is honest enough to publicly oppose the project (which only puts them further into the pit of anti-American/anti-Capitalist excess.)
BNSF hauls Chinese imports to put money in the pockets of their shareholders. That makes them pro-capitalist. Anti-capitalist would be wanting to nationalize the US rail system, even if it is to lease it out to open access operators.
There's really not much difference between a nationalized rail system and a privately integrated, permanently franchised rail system. It's like the metaphorical difference between communism and facism - the former is government controlled, the latter is government sanctioned, but either way the peons get screwed in the end.
More to the point, it is expressly anti-capitalist to try and use non market forces to shut down a potential competitor. If BNSF was truly a pro-capitialists company, they would welcome the DM&E competitors into the field so they could beat them on the market field of play, you know, provide better rates and services to the customers than DM&E. That is the heart and soul of capitalism. Then if DM&E does go belly up because they just can't compete with BNSF, BNSF probably gets first crack at operating over DM&E's new track.
Your last sentence doesn't make sense - are you saying that an increase in the number of rail service providers is anti-capitalist?
Just a couple of things I found poking around on DME's website:
DME says the total cost of the project is 6 billion. Refer to the bottom of page 3 of the .pdf file link here:
http://www.dmerail.com/PRB/DME%20Rail%20Upgrade%20Background.pdf
They also make the claim that in the 30 year history of the FRA loan program there has never been an instance of a loss to the taxpayers. One could assume that if the total project cost is 6 billion and the FRA loan application is for 2.5 billion then the private sector must be providing the remaining 3.5 billion.
From the STB descision in 1998 p. 849:
"...278 miles of new lines envisioned for the project is 532 million."
"The rebuilding and upgrading portion of the project .............would cost approximately 876 million."
STB 1998 p. 898
"DME explains that it's plan assumes the use of a 'Communication Based Train Control' (CBTC) system to manage its train operations. However, DME notes that it would also be able to operate efficiently with a standardized Centralized Traffic Control (CTC) system and bases its operating and investment cost projections on this type of signal system."
Nowhere in the STB descision did I see any mention of a proposed barge terminal at Winona. There is a proposed connection with the Union Pacific, Canadian Pacific, and the I & M ( I think DME wound up buying the I&M, didn't they?) at Winona, however.
So why the big difference in the numbers presented in the STB descision and the numbers being tossed around now? Keep in mind if you add together all the numbers from the STB proposal it doesn't come anywhere near 6 billion. I would postulate the following:
The numbers given by the DME to the STB in 1998 did not inlcude any additional construction required by the subsequent enviromental impact studies. Both the numbers for new construction and the upgrade of the existing line have also increased due to labor and material increases since the time of the original proposal.
Nowhere did I find in the STB document any discussion about additional equipment purchases, although early in the text the DME did say it intended to run 135 car unit coal trains. These would be powered by 6000hp locos disbursed throughout the train. (This is close to the STB phrasing). Again, the antiquated ex-Milwaukee Road SD 40-2's from the 70's would not be capable of power this kind of tonnage, so I think we could assume that it is in the works for the DME to be buying some new power.
DME would also need to purchase or lease the cars to supply enough trains to haul the anticipated 60 million tons in the first full year of operations. DME anticipates that for every year after the first year they will haul an additional 10 million tons of coal, enventually reaching 100 million tons annually. I don't know how many set of 135 car coal trains this would require, but I think you can start to see why the cost submitted to the STB is much lower than the total project cost.
All of the info I am getting here is off of the STB's website. If you are REALLY bored (I am on a paid leave this week, I don't actually make a point of reading all of this stuff on a regular basis) you can check it out for yourself. WARNING! The .pdf file from the STB is quite large so if you are on the dial-up connection you may want to make a pot of coffee before double-clicking......
Enjoy!
http://www.stb.dot.gov/boundvolumes3.nsf/b466c97893ec3be08525680b006041bd/2717ec778886367785256b61007fc6a4/$FILE/Volume3-37.pdf
nanaimo73 wrote: Solzrules- Have you seen any breakdown for the $6+ billion, how much for the new line, rebuiding the old line, locomotives, cars, shops, the Winona barge terminal, ect ?
Solzrules-
Have you seen any breakdown for the $6+ billion, how much for the new line, rebuiding the old line, locomotives, cars, shops, the Winona barge terminal, ect ?
Is the Winona barge terminal part of the project?
Murphy Siding wrote: solzrules wrote: The 2 billion/ 4 billion dollar loan amounts is no secret. That has been described in press releases by the DME (refer to the DME's website and check the past history of press releases, or check out GOTRAC's website. If you are real glutton for punishment you can read the press releases from the Mayo clinic - they talk about it, too). The total project will cost 6-7 billion dollars. That has been public information ever since I started following this affair. The total cost of the project doesn't apply to this thread because the DME is only seeking to obtain 2.5 billion from the feds. The rest of the project will be funded from private investors - certainly no one would expect them to be 'outed' for discussion by the talking heads. Ok. I'll buy that the information is out there, if you look for it. Too bad they can't promote mopre of a positive image in the home town of their corporate headquarters. As you understand the situation, is the $2.5B a loan directly from the Government,as several anti-DM&E groups are portraying it, or just a Government guarantee, of loans from an outside party?
solzrules wrote: The 2 billion/ 4 billion dollar loan amounts is no secret. That has been described in press releases by the DME (refer to the DME's website and check the past history of press releases, or check out GOTRAC's website. If you are real glutton for punishment you can read the press releases from the Mayo clinic - they talk about it, too). The total project will cost 6-7 billion dollars. That has been public information ever since I started following this affair. The total cost of the project doesn't apply to this thread because the DME is only seeking to obtain 2.5 billion from the feds. The rest of the project will be funded from private investors - certainly no one would expect them to be 'outed' for discussion by the talking heads.
The 2 billion/ 4 billion dollar loan amounts is no secret. That has been described in press releases by the DME (refer to the DME's website and check the past history of press releases, or check out GOTRAC's website. If you are real glutton for punishment you can read the press releases from the Mayo clinic - they talk about it, too). The total project will cost 6-7 billion dollars. That has been public information ever since I started following this affair. The total cost of the project doesn't apply to this thread because the DME is only seeking to obtain 2.5 billion from the feds. The rest of the project will be funded from private investors - certainly no one would expect them to be 'outed' for discussion by the talking heads.
Ok. I'll buy that the information is out there, if you look for it. Too bad they can't promote mopre of a positive image in the home town of their corporate headquarters.
As you understand the situation, is the $2.5B a loan directly from the Government,as several anti-DM&E groups are portraying it, or just a Government guarantee, of loans from an outside party?
Murph - The way I understand it the loan is from the government (so in other words the taxpayer). Because of this, I think the concern about the ability of the DME to pay it back is well founded. I also read somewhere that (and not being a finacial genius I have no idea why) the government loan will prevent the DME from being subject to excessive speculative interest rates from the private sector. I suppose if private investors see that project is going to move forward then there will be more of a financially rational interest in the project.
Murphy Siding wrote: I noticed that AG isn't saying he agrees with Frank Wilner, only offering some links to others opinions.
I noticed that AG isn't saying he agrees with Frank Wilner, only offering some links to others opinions.
futuremodal wrote:You and Frankyboy need to do your research first before making such false claims. Let's set the record straight once and for all - The US rail industry has been and continues to be heavily subsidized.
You and Frankyboy need to do your research first before making such false claims.
Let's set the record straight once and for all - The US rail industry has been and continues to be heavily subsidized.
Oh golly gee willickers, does that mean you don't approve? I must be doing something right.
As for your setting the record on subsidy straight once and for all... Gee thanks, however since this is the largest such instance of ALL TIME, a thorough and sifting scrutiny seems more than merited..
futuremodal wrote: TheAntiGates wrote: I notice that some critics are faulting DM&E for trying to become an island of socialism in a sea of railroad capitalism, ( scan down to comment by Frank Wilner, former chief of staff to the vice chairman of the U.S. Surface Transportation Board) suggesting that taxpayer monies will actually be loaned creating an unfair subsidy not enjoyed by DM&E's competitors. Anyone who works for or used to work for the STB is probably heavily vested in the interests of the Big Six railroads. UP and BNSF opposed competition. UP feigns disinterest, but at least BNSF is honest enough to publicly oppose the project (which only puts them further into the pit of anti-American/anti-Capitalist excess.) As for "an unfair subsidy not enjoyed by DM&E's competitors"..... "DM&E receives no special treatment or consideration. Dozens of railroads have pending loan applications and dozens more have received FRA loans over the past 30 years. In fact, parts of the Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) coal hauling lines were built with FRA loans like the one that DM&E has applied for. In today’s dollars, the FRA loan for the UP line alone was $1.5 billion. " http://www.gotrac.org/index.cfm?page=267 You and Frankyboy need to do your research first before making such false claims. Let's set the record straight once and for all - The US rail industry has been and continues to be heavily subsidized.
TheAntiGates wrote: I notice that some critics are faulting DM&E for trying to become an island of socialism in a sea of railroad capitalism, ( scan down to comment by Frank Wilner, former chief of staff to the vice chairman of the U.S. Surface Transportation Board) suggesting that taxpayer monies will actually be loaned creating an unfair subsidy not enjoyed by DM&E's competitors.
I notice that some critics are faulting DM&E for trying to become an island of socialism in a sea of railroad capitalism, ( scan down to comment by Frank Wilner, former chief of staff to the vice chairman of the U.S. Surface Transportation Board) suggesting that taxpayer monies will actually be loaned creating an unfair subsidy not enjoyed by DM&E's competitors.
Anyone who works for or used to work for the STB is probably heavily vested in the interests of the Big Six railroads. UP and BNSF opposed competition. UP feigns disinterest, but at least BNSF is honest enough to publicly oppose the project (which only puts them further into the pit of anti-American/anti-Capitalist excess.)
As for "an unfair subsidy not enjoyed by DM&E's competitors".....
"DM&E receives no special treatment or consideration. Dozens of railroads have pending loan applications and dozens more have received FRA loans over the past 30 years. In fact, parts of the Burlington Northern Santa Fe (BNSF) and Union Pacific (UP) coal hauling lines were built with FRA loans like the one that DM&E has applied for. In today’s dollars, the FRA loan for the UP line alone was $1.5 billion. "
http://www.gotrac.org/index.cfm?page=267
Can you tell me if the DM&E loan is to be a loan directly from the Federal Government, or a guarantee of loans from third parties?
Murphy,
As I understand it the application to the FRA is for RRIF money. That is a direct loan from the US Government.
Mac
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