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Additional Cost Of A T4 Locomotive

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Additional Cost Of A T4 Locomotive
Posted by caldreamer on Tuesday, September 4, 2018 8:11 AM

Does anyone know what the additional cost is between a T3 and a T4 locomotive?  With President Trump cutting emmisions rules I was wondering if it wouldbe worth it for the railroads to go back to T3 locomotives.  Just want to figure out how much they would save per unit.

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Posted by BaltACD on Tuesday, September 4, 2018 11:19 AM

Going forward, the locomotive manufacturers will recoup their R&D investments in taming the T4 requirements when selling T3 locomotives.  Don't look for any savings going forward.

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Posted by Overmod on Tuesday, September 4, 2018 12:12 PM

Suspect most of the 'savings' are in ongoing operations and maintenance savings, more than first cost or functional fair-market resale value.

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Posted by caldreamer on Tuesday, September 4, 2018 1:39 PM

Actually I wa looking for additional inital cost of a T4 Vs a T3 locomotive.  I know the T4's cost more due to the additional equipment required to meet the T4 air quality standards.

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Posted by BaltACD on Tuesday, September 4, 2018 1:53 PM

caldreamer
Actually I wa looking for additional inital cost of a T4 Vs a T3 locomotive.  I know the T4's cost more due to the additional equipment required to meet the T4 air quality standards.

And seeing how Big Pharma prices their products - do you doubt Big Loco won't emulate to the extent they can get away with.  Yes I am cynical when anything deals with $$$$$$$$$.

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Posted by ns145 on Tuesday, September 4, 2018 2:37 PM

caldreamer

Actually I wa looking for additional inital cost of a T4 Vs a T3 locomotive.  I know the T4's cost more due to the additional equipment required to meet the T4 air quality standards.

 

Based on some of the Surface Transportation Board R-1 report data that I have examined (schedule 710S), a rough price differential is between $550,000 and $600,000 per locomotive.  For example, NS purchased 65 Tier 3 locomotives in 2014 for $2.22 million per unit, while in 2016 NS purchased 47 Tier 4 and 3 Tier 4 Credit locos for $2.78 million per unit.  This works out to approximately a 25% premium in initial purchase price.        

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Posted by Shadow the Cats owner on Wednesday, September 5, 2018 1:46 PM

Then your forgetting the extra costs that are going to kick in.  Remember we have had the same equipment that Diesel Locomotives just now got hit with for over 10 years now.   The railroads are going to see things like Maintance costs jump 30-50% on the T4 engines then there is the higher SPC fuel consumption that they never tell you about figure about 20% there.  Then you have MTBF or Mean Time Between Failures drop.  Trust me the railroads are not going to be happy about what was forced down their throats for long and luckily for them they have the power to force the Government to change the regulations.  Just look how fast Congress granted them an extra 3 years on PTC.  When these engines start making themselves into very large anchors and they will mark my words the CEO's of the Railroads will be screaming at Congress demanding change.

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Posted by caldreamer on Wednesday, September 5, 2018 6:27 PM

That is all very true, BUT that is NOT what my question was.  I asked if I purchased a  NEW T3  and a T4 locomotive from GE or Progress Rail, what is the diffenence in price?  How much more is a T4 from them VS a T3?  i  do not care about costs after the purchase jut the inital costs from the manufacturer.

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Posted by Shadow the Cats owner on Thursday, September 6, 2018 7:01 AM

Cal those costs are also considered by every single Class 1 Railroad out there when they are considering any major purchase.  Just how much will it cost them to fix whenever they go boom.

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Posted by CSSHEGEWISCH on Thursday, September 6, 2018 7:07 AM

I doubt that Tier 4 is going to be repealed anytime soon.  It would require a major rewrite of the National Environmental Policy Act and I don't think that any Member of Congress will want to look like he/she is in favor of dirty air and water.

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Posted by YoHo1975 on Tuesday, September 11, 2018 11:12 AM

caldreamer

That is all very true, BUT that is NOT what my question was.  I asked if I purchased a  NEW T3  and a T4 locomotive from GE or Progress Rail, what is the diffenence in price?  How much more is a T4 from them VS a T3?  i  do not care about costs after the purchase jut the inital costs from the manufacturer.

 

 

I do not have the answer to your question, but I have a snarky response.

Since you cannot buy a T3 unit without also having a T4 unit produced, the T3 price is whatever it would normally cost, plus the entire cost of the T4 you need to sell in order to make it. :D

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Posted by M636C on Wednesday, September 12, 2018 12:06 AM

"Since you cannot buy a T3 unit without also having a T4 unit produced, the T3 price is whatever it would normally cost, plus the entire cost of the T4 you need to sell in order to make it"

This isn't completely correct.

I believe NS were able to but Tier 4 credit units because of the overall reduction in emissions from the upgrading of their existing fleet.

Equally, CN or CP could buy Tier 3 units for use in Canada only, where the Tier 4 regulations don't apply. Rio Tinto and Roy Hill in Australia are currently buying ES44ACi units which meet Tier 3 since the Tier 4 regulations don't apply in Australia either: BHP continued to buy Tier 3 710 engine SD70ACe units after Tier 4 was introduced in the USA. I'm sure customers in Brazil and Kazakhstan can buy Tier 3 units at any time.

I think the post earlier indicating a cost penalty of around $500 000 is a bit high but I'd think around $250 000 to $300 000 is a reasonable estimate.

But basically, since Tier 3 units continue to be built for use outside the USA, their actual cost must be able to be determined.

Peter

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Posted by caldreamer on Wednesday, September 12, 2018 8:28 AM

I ws asking about here in the U.S. You are correct T4 credit units (T3 regulation compliant) are still being built for use in the US.  Your estimate of $250,000 to $300,000 sounds like a reasonable estimate.

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