November 2008

Visionaire, Inc. says it is consolidating its operations, warehousing, and assembly units into one larger facility, located in the Great Southwest Industrial District in Grand Prairie, Tex. The new location offers three times the available floor space and is designed to make better use of Lean Manufacturing principles. Visionaire manufactures air conditioning, heat, and pressurization systems for off-highway equipment cabs.

Frank Pechacek, president of the company, said in a statement, "This move will allow us continued growth in existing and other markets as we develop new and innovative products for the future."

The company's new postal address is: Visionaire, Inc., 1502 109th Street, Grand Prairie, TX 75050. Visionaire's telephone numbers will remain the same: 972-647-1056 (voice) and 972-606-1076 (fax). The company also remains accessible through its website, www.visionaire-inc.com.

November 20, 2008
STB: Good news for Coos Bay shippers

The Surface Transportation board issued a decision Thursday that Chairman Charles D. Nottingham said "marks a significant milestone" in the board's efforts to reopen the Coos Bay Line of the Central Oregon & Pacific (CORP). In that decision, the STB set a purchase price of $16,605,987 for the line. That's $2.9 million less than the Oregon International Port of Coos Bay--the STB's designated purchaser--had said it could afford to pay.

"The shippers along this corridor are now one step closer to the resumption of much-needed rail service," said Nottingham.

November 20, 2008
New York MTA fares and tolls may climb 23%

In a Final Proposed 2009 Budget released Thursday, the New York Metropolitan Transportation Authority blamed "plummeting tax revenues, higher fuel costs, and elevated debt service obligations" for a looming $1.2 billion deficit. At its Dec.17 meeting, the MTA board will consider proposals to close the budget gap through higher fares and tolls that would yield a 23% increase in revenues, plus service cuts and reduced administrative expenses.

"The budget presented today fulfills the MTA's responsibility to put forward a balanced budget for the coming year," said Elliot G. Sander, MTA's executive director and CEO. "While we attempted to identify the least harmful cuts possible, they will be painful and no one at MTA is eager to implement them. Even in a period of austerity, continued investment in the MTA's critical operating and capital needs must be a top priority for elected officials in Albany, New York City and Washington."

The MTA also presented a revised 2009-2012 capital plan. Absent "any gap-closing measures," the plan projects annual deficits rising to $2.972 billion in 2012.

November 20, 2008
U.S. carload traffic continues slumping

Carload freight was down 9.1% for the week of November 15 compared with the comparable week in 2007, the Association of American Railroads (AAR) reported Thursday. Volume declined 6.5% in the West and 12.8% in the East. Intermodal volume, fell 7.9% from the comparable period last year. The week's 32.8 billion ton-miles was off 7.9% from the year-ago level.

On Canadian railroads, weekly carload traffic was down 13.6% from last year, while intermodal volume fell 9.0%.

Kansas City Southern de Mexico (KCSM) reported carload traffic declined 15.9% during the week as compared to the 2007 counterpart, while its intermodal traffic also fell, down 5.6%.

Ferrocarril Mexicano (Ferromex) carload traffic rose 122.2% from the comparable 2007 week, while intermodal also gained, up 18.5%.

November 20, 2008
Seattle-area Eastside line seen costing $1 billion

A 42-mile BNSF rail route being purchased by the Port of Seattle could provide commuter rail to six area cities, but would cost at least $1 billion to implement, according to a report released Wednesday.

Port commissioners last year resisted King County Executive Ron Sims' proposal to pull up the tracks south of Woodinville, Wash., in favor of a biking and hiking trail; port officials cited the potential for renewed freight service and/or passenger rail opportunities along the route.

Sound Transit, the Puget Sound Regional Council (PSRC), and consultant Parsons Brinckerhoff presented the draft feasibility study ordered by the state legislature to an ad hoc regional committee.

Tom Jones, representing the Cascadia Center of Discovery Institute, said the cost would still be "quite literally a bargain." Said Jones, "This corridor can be developed for about one-third to one-half of the estimated $1.23 billion. ... Cascadia continues to believe that the corridor can be built for millions and (in) years, rather than billions and decades."

The draft report also noted building a biking and hiking trail beside the tracks north of Interstate 90 would be costly. Parsons Brinckerhoff estimated a cost of $245 million to $359 million.

November 20, 2008
BNSF picks Tideworks Technology for intermodal aid

BNSF has tapped Tideworks Technology, Inc., a provider of terminal management and planning software, for a pilot project at BNSF's Alliance Intermodal Facility in Fort Worth, Texas.

The pilot project will implement Tideworks' Spinnaker Planning Management System® and Traffic Control™ at the intermodal facility. Spinnaker is designed to interface with BNSF’s existing gate technologies and mainframe system. Tideworks says the advanced rail functionality will enable BNSF to track containers, trailers, chassis, rail cars, and other assets in a graphical, user-friendly environment.

BNSF will also deploy Traffic Control, an advanced module of the Spinnaker Planning Management System. Traffic Control provides flexible management tools, intuitive user interfaces and advanced system administration technologies to optimize operational efficiency and further increase ROI.

The project is to be in place by the third quarter of 2009.

"We selected Tideworks Technology for our pilot because of their terminal operating system experience in stacking operations and because they are easy to do business with,” said Paul Duncan, BNSF director, Hub and Facility Systems Support.

"Tideworks is excited and honored to be selected to participate in BNSF’s pilot program at its Alliance Intermodal Facility," said Michael Schwank, president of Tideworks.

November 19, 2008
Tuscon rearranging old and new streetcar facilities

In a cooperative effort to clear the way for restoration of a streetcar network in Tuscon, Ariz., the City Council is set to approve a site swap to lease Old Pueblo Trolley space at the Tuscon Transportation Department's maintenance facility, offering in exchange a city-owned property leased by the historic trolley group, at a price of $1 per year.

"It's a trade," Old Pueblo Trolley President Dick Guthrie said, adding that the move would not adversely affect trolley service because the OPT-owned barn is a half-block away.

Tuscon voters in May 2006 approved a measure to build a four-mile streetcar route connecting the University Medical Center, the University of Arizona, and downtown with the city's Rio Nuevo master plan area.

Guthrie has said Old Pueblo Trolley anticipates running heritage cars on weekends along portions of the four-mile route, with every other car being a modern streetcar.

November 19, 2008
UP forecasts earnings growth despite tough 2009

Union Pacific anticipates "low double-digit earnings growth" in 2009, despite bracing for volumes "flat to down 2%" during 2009, according to Chief Financial Officer Rob Knight, addressing the Citi Transportation Conference in New York Nov. 18. Knight said UP expects continued weakness in the first half of the year, but a "second-half strengthening" to follow.

Knight attributed UP's optimistic forecast in part to a "solid" pricing plan, volume-variable operations, and continued fuel economy improvements.

Touting rail's environmental friendliness as an economic tool in difficult times, Knight noted that rail handles more than 40% of the nation's freight tonnage while using just 8% of the nation's energy required for transportation.

November 19, 2008
Grade separation costs: Key to CN's acquiring EJ&E?

Consultants from HDR Inc. hired by the Surface Transportation Board said Tuesday they would recommend that Canadian National pay 15% of mitigation costs resulting from CN's planned acquisition of the Elgin, Joliet & Eastern Railway. Such action would increase CN's cost of acquisition, currently estimated at $300 million, and would force the Class I railroad to pay a larger share for grade separation than railroads traditionally have paid.

CN has said it's willing to cover roughly 5% of the cost, or roughly $40 million, of construction required for overpasses or underpasses. The railroad expects the rest to come from government sources, often a source for such mitigation in the past.

STB's consultants cited two Illinois crossings where significant traffic delays would prompt a need for overpasses: Ogden Avenue (U.S. Highway 34) in Aurora and Lincoln Highway (U.S. Highway 30) in Lynwood. The consultants said their recommended 15% figure for CN's contribution was derived from calculations that the Chicago region would see increasd vehicle delays at rail crossings should CN acquire the EJ&E. CN intends to use the EJ&E to avoid existing delays and congestion currently a staple in the Chicagoland area

HDR's recommendations will be included in a final environmental impact analysis, expected to be completed in a few weeks. CN has urged STB to make its decision before the end of the year.

November 18, 2008
New York MTA considers service cuts

New York's Metropolitan Transportation Authority, vocally resistant to cutting service despite sustained economic headwinds during much of 2008, may finally yield to the option, according to MTA Chief Executive Officer Elliot Sander.

Failing drastic action, MTA's projected operating budget deficit could be $1.2 billion in 2009, due in part to declining tax revenue, Sander said.

Moreover, subway fares would still rise amidst service reductions; one estimate predicts a $3.00 subway ride, up $1.00 from the current single-ride price, with similar scaling back of MetroCard benefits.

MTA reportedly is weighing the elimination of 1,500 jobs within New York City Transit, eliminating of bus and subway routes, including the W and Z subway service, and less off-peak and weekend service. MTA's Board of Directors will address the matter at a scheduled meeting Thursday.

At the American Public Transportation Association's 2008 Rail Conference in San Francisco last June, MTA officials acknowledged looming economic woes due to high fuel prices, tax revenue declines, and a weakening economy. But unlike many other transit systems attending the APTA conference, MTA at the time vowed to resist cutting service even if fares had to be raised.

November 18, 2008
Detroit seeks to combine two LRT plans into one

Two separate plans for light rail transit in Detroit seem likely to evolve into one cohesive effort, resolving ongoing political conflicts and streamlining efforts to secure funding for LRT along Woodward Avenue.

At present, private-sector interests are advancing the Regional Area Initial Link,a 3.4-mile curbside LRT line running from Hart Plaza to Grand Boulevard. A second plan, offered by Detroit Department of Transportation's “Detroit Transit Options for Growth” study, seeks an 8-mile LRT loop from downtown to the Michigan State Fairgrounds, to be funded by federal, state, and local sources.

"Next year will finally bring to a close the cloak-and-dagger activity regarding the Woodward project," said John Hertel, CEO of Detroit Regional Mass Transit.

Carmine Palombo, director of transportation planning for the Southeast Michigan Council of Governments, the region's metropolitan planning organization (MPO), said, "There's agreement that the two projects need to be combined into one project." He added, "It will still be daunting for the city to come up with $100 million, but $200 million is worse."

November 18, 2008
JMA Railroad Supply representing Parker domnick hunter

Carol Stream, Ill.-based JMA Railroad Supply Co. announced Tuesday that it has signed a long-term agreement to be the exclusive representative of Parker domnick hunter products to the American Class I, short line, regional, and industrial railroad industry. Parker domnick hunter, a division of Cleveland-based Parker-Hannifin Corp., manufactures a range of filtration products and air dryers for compressed air systems on board locomotives and rolling stock.

November 18, 2008
Railcomm adds Ed Reardon as technical sales engineer

RailComm, Inc. said Tuesday Ed Reardon has joined the company as a technical sales engineer. Reardon has more than 20 years experience in the railroad industry, working with Class I, regional, and short line operators. His experience with Guilford Rail System included serving as trainmaster and general manager East Transportation. Most recently, he was manager of Rail Traffic Control for Buckingham Branch Railroad, Staunton, Va.

November 17, 2008
Passenger rail projects proposed to Congress

Intercity passenger rail projects valued at $1.4 billion are ready to go under construction and put thousands of people to work if funding is provided by the Economic II stimulus package now under consideration, the States for Passenger Rail Coalition told Congress Monday.

Frank Busalacchi, secretary of the Wisconsin Department of Transportation and chair of the coalition, said "the rail projects are needed and ready to go." He pointed out that in addition to creating new jobs, the investment will provide sorely needed equipment for state-supported trains, at a time when 17% of Amtrak's locomotives and 15% of its passenger fleet are out of service.

November 17, 2008
Bob Pokorski joins Miner Enterprises

Geneva, Ill.-based Miner Enterprises says Bob Pokorski has joined the company as Director of Engineering. Pokorski will oversee Miner's effort to apply product and service innovation to customers' railcar business challenges.

"With 14 years of engineering experience, Bob's knowledge of railcar systems design and the railcar supply industry will greatly benefit our customers," said Kris Jurasek, Miner Enterprises president. "We look forward to the leadership Bob will provide as we continue to create new products and services that will increase railcar performance."

Pokorski most recently served as Vice President-Equipment for TTX Co.
He is a member of several professional associations.

November 17, 2008
Patriot Corridor: No threat to environment

An assessment by the Surface Transportation Board's Section of Environmental Analysis (SEA) finds that the proposed new Patriot Corridor between Albany, N. Y., and the greater Boston, Mass., area will produce "no serious adverse environmental effects." Therefore, no full Environmental Impact Statement will be necessary in the proceeding, said the STB in releasing the Environmental Assessment (EA) on Nov. 14.

Comments on the EA are due by Dec. 15. The document is available at www.stb.dot.gov by clicking on the "E-FILING" link.

Norfolk Southern and Pan Am Railways (PAR) announced on May 15 that they had agreed to form a new company, Pan Am Southern LLC, to which PAR would contribute trackage between Ayer, Mass., and Mechanicville, N.Y. , with NS transferring cash and property valued at $140 million. New automotive and intermodal terminals are to be constructed and track and signals upgraded. The line will continue to be maintained and operated by PAR's Springfield Terminal Railway.

November 17, 2008
CP ponders postponing link to Alberta oil sands

Pending anticipated demand, Canadian Pacific's capital program may postpone plans to build a line linking refineries near Alberta's oil sands, according to CEO Fred Green. "If there is a large customer or customers who are proceeding, then we will build and if not, we'll defer until such time as they do build," Green said.

At least three energy companies have indicated they paln to scale back plans in the near term to extract bitumen, a tar-like raw material for crude oil, in Alberta.

CP had planned to construct a 16-mile right-of-way, costing roughly C$100 million ($82 million) to carry oil byproducts. "The figure is still accurate, but the timing is different," Green said.

CP last week announced a capital investment plan worth between $645 million and $661 million for 2009.

November 17, 2008
FTA gives nod to Sound Transit University Link

The Federal Transit Administration has formally approved its intention to provide $813 million to Seattle's Sound Transit for construction of University Link, a 3.5- mile light rail extension, largely underground, from downtown Seattle to the University of Washington.

FTA's contribution is roughly 50% of the projected $1.6 billion cost. Sound Transit is funding the remainder and has the money on hand; funding for the project is not contingent upon passage of Proposition 1, which was approved by area voters Nov. 4.

University Link is scheduled to open in 2016.

November 17, 2008
Cincinnati readies bidding process for streetcar project

Cincinnati is inviting bids for its proposed $219 million streetcar project, with submissions due Dec. 18. City Architect Michael Moore expects the city will "short-list" potential streetcar vendors by Jan. 30. "We'd like to have somebody that we can start to negotiate with, talk to seriously about what they can provide," Moore said.

The city's bid documents ask bidders to state their "willingness to make a project contribution" and provide evidence of their "capacity to provide financing solutions" for a financing gap of "up to $91 million."

Cincinnati is pursuing a private-public partnership to advance phase one of the project, expected to cost $128 million. The first phase would provide service between Great American Ball Park and the Brewery District north of Findlay Market. Duke Energy already has committed $6.5 million as part of a negotiated settlement involving area energy rates.

In what's become nearly standard operating procedure for U.S. cities pursuing streetcar or light rail projects, Cincinnati City Manager Milton Dohoney is visiting Portland, Ore., to be briefed on streetcar issues and opportunities. "This region, sooner or later, will embrace the notion of a light rail system," Dohoney said, referring to the Cincinnati metropolitan area.

November 14, 2008
Michael Ward selected as Railway Age's Railroader of the Year

Railway Age magazine has selected CSX Chairman, President, and Chief Executive Officer Michael J. Ward as its 2009 Railroader of the Year.

“Michael Ward has led a remarkable turnaround at CSX,” said Railway Age Editor William C. Vantuono. “Through his leadership, he has brought a level of consistency and profitability to the railroad that many just a few short years ago doubted would ever occur. He is a strong defender of at least three fundamentals of running a good railroad: safety, capital investment, and growth. Despite a difficult proxy challenge, Ward and his management team remain focused on running the railroad and moving forward with strategic initiatives that will have long-term benefits—all part of the remarkable turnaround. This is why we have chosen Michael Ward as our 2009 Railroader of the Year.”

“This is important recognition for the efforts of all 34,000 CSX employees,” Ward said. “I am honored to be the recipient, but it is their efforts that have achieved new records in safety, service to our customers, and financial performance, despite a challenging economy.”

Michael Ward is Railway Age's 46th Railroader of the Year. Modern Railroads magazine founded the award, one of the most prestigious in the railroad industry, in 1964 as the “Man of the Year.” Railway Age acquired Modern Railroads in 1991 and has presented the award annually since then. Ward will be honored on March 17, 2009, at Chicago’s Union League Club. He is the first CSX recipient since 1984, when Hays T. Watkins was honored.

Railway Age will tell the story of Michael Ward and the turnaround he led at CSX with a cover story in the magazine’s January 2009 issue.

History of the Railroader of the Year award

There were 28 recipients under Modern Railroads:

1964: D. W. Brosnan, Southern Railway System
1965: Stuart T. Saunders, Pennsylvania Railroad Co.
1966: Stuart T. Saunders, Pennsylvania Railroad Co.
1967: Louis W. Menk, Northern Pacific Railway
1968: William B. Johnson, Illinois Central Railroad
1969: John W. Barriger, Missouri-Kansas-Texas Railroad
1970: John S. Reed, Atchison, Topeka & Santa Fe Railway
1971: Jervis Langdon, Jr., Penn Central Transportation Co.
1972: Charles Luna, United Transportation Union
1973: James B. Germany, Southern Pacific Transportation Co.
1974: L. Stanley Crane, Southern Railway System
1975: Frank E. Barnett, Union Pacific Railroad
1976: Dr. William J. Harris, Jr., Association of American Railroads
1977: Edward G. Jordan, Conrail
1978: Robert M. Brown, Union Pacific Railroad
1979: Theodore C. Lutz, Washington Metropolitan Area Transit Authority
1980: John G. German, Missouri Pacific Railroad Co.
1981: Lawrence Cena, Atchison, Topeka & Santa Fe Railway
1982: A. Paul Funkhouser, Family Lines Rail System
1983: L. Stanley Crane, Conrail
1984: Hays T. Watkins, CSX Corp.
1985: John L. Cann, Canadian National
1986: Raymond C. Burton, Jr., Trailer Train Co.
1987: Willis B. Kyle, Kyle Railways
1988: Darius W. Gaskins, Jr., Burlington Northern
1989: W. Graham Claytor, Jr., Amtrak
1990: Arnold B. McKinnon, Norfolk Southern
1991: Mike Walsh, Union Pacific Railroad

Railway Age has carried the tradition forward since 1992:

1992: William H. Dempsey, Association of American Railroads
1993: Raymond C. Burton, Jr., TTX Co.
1994: L. S. “Jake” Jacobson, Copper Basin Railway
1995: Edwin Moyers, Southern Pacific Transportation Co.
1996: Robert D. Krebs, AT&SF, and Gerald Grinstein, Burlington Northern
1997: Paul M. Tellier, Canadian National
1998: David R. Goode, Norfolk Southern
1999: Edward A. Burkhardt, Wisconsin Central Transportation Co.
2000: The Railroad Worker (award presented as “Railroader of the Century”)
2001: Michael R. Haverty, Kansas City Southern Railway
2002: E. Hunter Harrison, Canadian National/Illinois Central
2003: Richard K. Davidson, Union Pacific Railroad
2004: Robert J. Ritchie, Canadian Pacific Railway
2005: David R. Goode, Norfolk Southern
2006: Richard F. Timmons, American Short Line & Regional Railroad Association
2007: William E. Wimmer, Union Pacific Railroad
2008: Stephen C. Tobias, Norfolk Southern
2009: Michael J. Ward, CSX

November 14, 2008
WMATA, Belgian bank reach lease settlement

The Washington Metropolitan Area Transportation Authority and Belgian bank KBC reached a settlement Nov. 14 to end a long-term leasing deal, after nearly three days of talks in federal court. The parties agreed not to discuss particulars of the settlement.

WMATA appeared in U.S. District Court Nov. 12 to object to KBC's demand for $43 million immediately, as a consequence of global economic turmoil. KBC said its long-term lease agreement with WMATA had fallen into a technical default.

"This is a win for the riders of our system and taxpayers of this region," said WMATA General Manager John Catoe Friday. "Taxpayers have been saved tens of millions of dollars, and Metro no longer faces the immediate threat of cuts to our capital budget and a downgrading of our credit rating."

November 14, 2008
Alex Kummant resigns from Amtrak

Amtrak President and Chief Executive Officer Alex Kummant resigned Nov. 14 after serving two years heading the National Railroad Passenger Corp., as Amtrak is formally known. Amtrak Chief Operating Officer William Crosbie will succeed Kummant on an interim basis, likely to last until President-elect Barack Obama assumes office on Jan. 20, 2009. Amtrak's board will select a new CEO.

Amtrak spokesman Cliff Black said that "differences in strategies, direction, and management philosophy" with the Amtrak board led to Kummant's departure.

A source close to the Amtrak board, who asked not to be identified, speculated that Kummant "was not hands-on. He didn't have a handle on finances or operations. His personality was often confrontational."

Kummant was named Amtrak president in September 2006, filling the top slot left vacant by the departure of David Gunn 10 months earlier.

"On behalf of the entire Board, I'd like to thank Alex for his leadership over the past two years," said board Chairwoman Donna McLean. "During the past two years, the company experienced exciting economic times, strong ridership and revenue growth, solid profit and loss performance, and the advancement of the Amtrak brand overall. He also successfully oversaw the completion of labor agreements with all of the unions representing Amtrak's employees. We are grateful to Alex for his contributions to the company."

November 14, 2008
Sale of Deux-Montagnes line still not finalized

Montreal's Agence Métropolitaine de Transport (AMT) has not completed its planned $45 million purchase of the Deux-Montagnes (Two-Mountains) line from Canadian National, six months after CN accepted the purchase offer.

Transport Quebec continues to analyze how the purchase can be financed, a spokesperson for Quebec Transport Minister Julie Boulet says. The spokesperson noted the deal was unlikely to be completed before provincial elections are held Dec. 8.

CN spokeswoman Julie Senécal says the Class I carrier has accepted AMT's offer, but refused further comment.

The 20-mile Deux-Montagnes line handles AMT commuter trains and some freight moves, and most the line was electrified during the 1990s. AMT at present pays CN about C$2.4 million per year to use the line, which moves 35,000 riders to and from Montreal each weekday.

November 13, 2008
Transit agencies letter seeks "troubled assets" aid

In a five-page letter sent Wednesday to Secretary of the Treasury Henry M. Paulson, the heads of 18 U.S. public transit agencies, on behalf of "state departments of transportation and public transportation agencies in 25 metropolitan areas in the District of Columbia and 17 states and across the nation," applied "for a guarantee of certain financial instruments under the insurance program for troubled assets authorized by the Emergency Economic Stabilization Act of 2008 (EESA)."

The letter cited a submittal from the American Public Transportation Association (APTA) in response to Treasury's request for comments concerning a troubled-assets program. "The financial instruments for which this application is made are Lease In/Lease Out and Sale In/Lease Out (LILO/SILO) transactions and similarly structured leveraged lease transactions in which a U.S. transit agency is the lessee.

"Typical transactions involved an investor purchasing assets (rail cars, buses, or facilities) from the transit agency funded by a combination of debt and equity investment," the letter said. "The vast majority of these transactions were entered into with the express approval of the Federal Transit Administration (FTA). Transactions involving locally-funded assets did not require FTA approval. Between 1995 and 2007 approximately $12 billion of FTA-approved transactions were completed."

The letter continued, "We request that the Department issue a huarantee of letters of credit, debt payment undertakings, surety, equity payment undertakings, and related undertakings of the private guarantors on all LILO/SILO transactions and similarly structured leveraged leases. Alternatively, the Treasury would issue an 'umbrella' guarantee that authorizes insurance coverage of private guarantor obligations in all LILO/SILO transactions and similarly structured leveraged leases. In either case, only those transactions in which a technical default of the private guarantor is triggered would actually receive a guarantee." [Editor's Note: Boldface emphasis per original copy.]

Agencies with ranking officers signing the letter included: Bi-State Development Agency (St. Louis); New Jersey Transit; Metrolink (California); Los Angeles County Metropolitan Transportation Authority; MARTA (Atlanta); WMATA (Washington, D.C.); Sacramento Regional Transportation District (California); Caltrain (California); Santa Clara Transportation Authority (California); Houston's Metropolitan Transportation Authority; BART (California); Chicagoland's Regional Transportation Authority; AC Transit (California); Portland, Ore.'s TriMet; Boston-based MBTA; New York's Metropolitan Transportation Authority; Philadelphia-based SEPTA; and the San Francisco Municipal Transportation Agency.

November 13, 2008
CP puts '09 capital spending at C$800 million-C$820 million

Canadian Pacific said Thursday that its current plans call for capital spending in the range of C$800 million to C$820 million in 2009, or roughly between $645 million and $661 million.

This plan includes basic renewal of track infrastructure and the locomotive fleet, the beginning of a multiyear intermodal terminal build at Regina, Sask., and pilot technology projects linked to CP's Railway of the Future program. It also includes $100 million for upgrading the infrastructure of a recent acquisition, the Dakota, Minnesota & Eastern.

But CP President and CEO Fred Green said the current economic climate would slow the railroad's efforts to expand into Wyoming's Powder River Basin coal fields. Economic uncertainty "adds to the list of preconditions that need to be satisfied before we can make a decision," Green said at CP's Investors Conference in Toronto.

Kathryn McQuade, executive vice president and chief financial officer, told conference attendees that the 2009 spending plan is "consistent with current economic conditions" and is paced to "meet the needs of our customers." The 2009 capex plan is $C200 million less than actual 2008 spending.

November 13, 2008
U.S. freight traffic logs another weekly decline

Freight traffic on U.S. railroads declined for the week ended Nov. measured against the comparable week one year ago, the Association of American Railroads (AAR) said. U.S. carload freight slipped 8.4% from last year. Volume of 33.5 billion ton-miles fell 7.2% from the year-ago period.

U.S. intermodal volume fell 6.3% from last year; container volume declined 4.9% and trailer traffic slumped by 11.2%.

Canadian carload traffic for the week fell 10.3% percent from last year, while intermodal volume declined 8.4%. But Canadian intermodal traffic rose 3.2% from the year-ago period.

Kansas City Southern de Mexico (KCSM) reported a 14.1% drop in caroload traffic, while intermodal traffic rose 7.6% from the year-ago period. Ferrocarril Mexicano (Ferromex) carload traffic increased 11.5% for the week ended Nov. 8 vs. one year ago, while its intermodal traffic fell 2.0%.

November 13, 2008
Questions mount on trans-Hudson rail tunnel costs

New Jersey legislative angst is mounting over the growing cost of New Jersey Transit's proposed $8.7 billion trans-Hudson River rail tunnel, even as NJT Executive Director Rich Sarles declared Wednesday that "the project is ready to go."

The proposal, currently dubbed Access to the Region's Core Mass Transit Tunnel, received approval Monday from the metropolitan planning organization (MPO) involved, the North Jersey Transportation Planning Authority (NJTPA). And on Wednesday NJT hired three New Jersey law firms for "early preparatory work" for potential land acquisition.

But state legislators, backed by at least one daily newspaper, have called into question the project's escalating cost, as well as the project's overall utility and relationship with current Northeast Corridor rail operations across the Hudson River, and the lack of participation by New York State, which critics argue should also be contributing some funds.

In an editorial Wednesday, the Asbury Park Press stated, "State taxpayers, who Gov. [Jon] Corzine has committed to picking up 20% of the tab for the tunnel through toll hikes on the New Jersey Turnpike and Garden State Parkway starting next month, should not have to contribute another cent for the project. That burden should fall on New York state, which has yet to pony up anything. The Port Authority of New York and New Jersey and the federal government each are contributing 40% of the project's cost. It's time to devise a more equitable funding scheme."

The newspaper noted criticism of the project is bipartisan, with Republican State Sen. Jennifer Beck in insisting that New York contribute to the project, while Democratic Assemblyman John Wisniewski, chairman of the Assembly's transportation committee, asking NJTPA to postpone a vote on $1 billion in increased costs, up 14% from the previous estimate, for the project until late January. Other critics include the National Association of Railroad Passengers.

November 13, 2008
BART light rail link to Oakland Airport scuttled

BART's $386 million plan to link its rail network to Oakland International Airport with a 3.2-mile light rail link has stalled, due in part to the inability to attract private partners to help fund the project. The light rail line would have connected with BART at its Coliseum station.

Three consortia initially expressed interest in the project, but two dropped out during the year, and BART officials say the remaining joint venture team, which included Bombardier Transportation and Merrill Lynch & Co., also have ended discussions.

"The economy had a big effect," said BART Board President Gail Murray. "We needed a partnership to make this work. But it just didn't pencil out for them." Murray said BART would consider other, less expensive alternatives to provide a transit link to the airport.

BART had secured $256 million for the prooject from various local sources, while the Federal Transit Administration pledged $25 million. That left the project requiring $130 million, which was to come from the private sector.

At present AirBART shuttle buses provide such service, with travel times ranging from 12 to 60 minutes. Nevertheless, some within BART are suggesting the agency revisit the concept of Bus Rapid Transit as a possible alternative.

November 12, 2008
NJ Transit launches online news feed

New Jersey Transit Corp. Wednesday said it was offering current train, bus, and light rail information to its customers trough Really Simple Syndication (RSS) feeds. NJT, partnering with New York-based WCBS News Radio 880, will use RSS to distribute content to other websites and individual users.

"This gives our customers more flexibility in how they receive essential travel information from us, including continuously updated service information about train, bus, and light rail trips, said NJT Executive Director Rich Sarles. "We thank WCBS-880 for sharing our commitment to using new technology to provide commuters with the information that they need."

Through RSS feeds, media websites can display updated NJ Transit travel information directly, while NJT customers can add feeds to their personal homepages. The feeds include information from My Transit, NJT's personalized system for alerting customers of service alterations or disruptions via cell phone, pager, or email.

November 12, 2008
Group questions NS proposed rail yard move

An environmental group is challenging plans by Norfolk Southern to relocate a portion of a rail yard near Lancaster, Pa., near Franklin & Marshall College. The college, which plans to expand its campus, supports the proposal.

The group, The Rail Road Action and Advisory Committee, has filed a notice of appeal to the state Environmental Hearing Board contesting the Pennsylvania Department of Environmental Protection's decision approving plans to proceed.

Franklin & Marshall Vice President for External Affairs Keith Orris, responding to the action, said, "The bottom line to note is that DEP has closely reviewed our application and our PIP and has approved it." He added, "We look forward to vigorously defending TRRAAC's appeal."

But a lawyer for the environmental group says public input was not solicited, prompting the group to file an appeal.

November 12, 2008
Arrests follow attacks on French rail network

French anti-terrorist police have arrested at least eight people, believed to be anarchists, charging them with attacking the nation's rail network on Nov. 8.

The actions taken by the Anarcho-autonomous Movement occurred at numerous loactions throughout the country. Police initially detained 20 suspects, reducing the number later to 10, in Paris, Tarnac, and Rouen. .

Police said saboteurs threw concrete bars across catenary at two places along a high speed rail route north of Paris, forcing the rerouting of Eurostar services to London, Thalys trains to Brussels, and TGV service to Lille. Some trains were delayed by three hours. Le Monde reported five similar incidents had occurred since Oct. 26.

In a statement, SNCF, the state-owned railway, said, "It's a great burden lifted for the company and for travelers." SNCF also praised the anti-terror police force, Alliot-Marie, for its investigation.

November 12, 2008
Staten Island intermodal center shows gains

Intermodal rail service to and from the New York Container Terminal on Staten Island has "exceeded all expectations," according to backers including the New York City Economic Development Corp., the Port Authority of New York & New Jersey, and CSX.

The Staten Island Railroad began operating in the terminal facility last year, in conjunction with CSX, which initially moved container traffic across the Arthur Kill Bridge into New Jersey for consolidation into larger trains. CSX says it can now can offer dedicated intermodal service five days a week westbound and four days a week inbound, due to increased demand. Service is offered daily to Chicago, Columbus, Ohio, and Detroit, and on alternate days to Cleveland, East St. Louis, Ill., Kansas City, Mo., and Worcester, Mass.

The container terminal, which was rehabilitated in 2007, is one of the few direct rail links to any of New York City's five boroughs, and terminal volume increases there are counter to the decades-long decline of port activity within New York's portion of the Port of New York and New Jersey.

"CSX's intermodal rail service to the New York Container Terminal has been great news for the entire region," said Rep. Jerrold Nadler, D.-N.Y. "By connecting Staten Island's container port to the national rail network, Staten Island residents and workers--as well as residents throughout New York City--are now enjoying the benefit of 45,000 fewer truck trips on their streets each year. That means 45,000 fewer truck trips clogging local streets and bridges, and 45,000 fewer truck trips emitting carbon dioxide into the air."

Port Authority Executive Director Chris Ward said, "The rapid growth of this rail service is clear evidence that our $600 million investment in on-dock rail is paying dividends now."

Said CSX Assistant Vice President, Terminal Operations and Design Wilby Whitt, "We are working to align with the port's vision by investing in rail infrastructure and expanded capacity for the safe, efficient and environmentally friendly movement of goods. Together, our cooperative efforts will help realize the enormous potential of the port and the economic benefits it brings to the region and nation."

The Staten Island Railroad was reactivated in 2007 following a $75 million dollar rehabilitation funded by NYCEDC and the Port Authority.

November 11, 2008
MTA taps Alstom, Kawasaki for latest car order option

Notwithstanding ongoing budget woes, New York's Metropolitan Transportation Authority has exercised an option for 382 additional R160 subway cars, awarded to both Alstom and Kawasaki Rail Car Inc. in 2002. Alstom will produce 242 cars at a cost of roughly $491 million; Kawasaki will provide 140 cars for about $293 million.

The stainless steel cars will be delivered between 2009-2010 and will feature Alstom's AC propulsion systems and Alstom's passenger information signage systems. The vehicles are lighter, quieter and more comfortable than previous generations of trains, with modern air suspension replacing mechanical springs. Alstom said it will also supply propulsion systems for half of the Kawasaki share of cars (140) in this second option.

Body shells for Alstom's order will be manufactured in the company's Lapa facilities located in Sao Paulo, Brazil. The cars will be assembled and tested at Alstom’s Rolling Stock Center of Excellence in Hornell, N.Y.

The R160s are destined for the subway's "letter" lines, including the J, Z, L, M, N, and Q lines.

MTA still may exercise an additional option for another 238 R160 cars in the future.

November 11, 2008
CN presses STB for fast EJ&E decision

A U.S. Circuit Court of Appeals has rejected a CN plea for an order compelling the Surface Transportation Board to quickly issue a decision on the merits of CN's application to acquire the principal lines of the Elgin, Joliet & Eastern, leading CN to appeal directly to the STB on Nov. 11 to "do the right thing."

"While CN is disappointed with the court's decision," said CN President & CEO E. Hunter Harrison, "we see no reason why the STB cannot rule on the transaction quickly to permit it to close by year-end." CN has said that financing of the transaction is in jeopardy if a decision is not rendered by Dec. 31.

The STB, meanwhile, is still considering the environmental impact of the proposed acquisition, which has raised strong protests in some on-line communities that would see more railroad traffic if CN, as planned, diverts many of its trains around rather than through Chicago.

"It is now up to the STB to do the right thing, to preserve an important transaction with broad transportation and other public benefits for the Chicago region and the nation. The board should render a positive decision in the early part of its previously announced December 2008-February 2009 timetable for a final ruling," said Hunter. "The U.S. Department of Transportation, the National Industrial Transportation League, and the other stakeholders have called for an expeditious STB ruling to keep the transaction on track.

"If such an approach isn’t possible," Hunter added, "the STB should revisit and adopt our previously offered 'conditioned approval' approach, in which the board would issue a decision only on the transportation merits of CN's application at this time, while allowing the agency's environmental review to continue to completion. That approach would allow the transaction to close by year-end 2008, with CN respecting any STB order to maintain an 'environmental status quo' under which it wouldn’t shrift any trains to the EJ&E until the STB completed its environmental review."

November 11, 2008
Wi-Tronix announces fuel efficiency monitor

Bolingbrook, Ill.-based Wi-Tronix, LLC Tuesday announced its Fuel Efficiency Monitor (FEM) System designed to monitor the performance of a locomotive, scientifically calculating the unit's brake-specific fuel consumption and communicating real-time information to maximize efficiency.

The system collects data from several sensors and the locomotive event recorder. Fuel flow meters are placed in the engine's fuel supply and return lines to provide instantaneous fuel consumption data. The locomotive's event recorder provides the relevant engine operational data including throttle notch, speed, engine state, reverser
position and traction motor current. Additional sensors provide fuel level and ambient temperature.

The Wi-Tronix Wireless Processing Unit (WI-PU) receives sensor data every second through the event recorder.This process provides throttle notch, speed, engine output, reverser position, and other engine operational data. After accounting for parasitic loads, the system calculates locomotive horsepower output. The fuel flow meters measure
flow rates in the fuel supply and return lines. This information is communicated back to the Wi-PU, which calculates the difference in the supply and return flow rates as the fuel burned in the engine.

The company says the FEM system not only monitors fuel consumption, but links it to engine performance and operator actions as well.
IT includes GPS and offers onboard alerts that will trigger to help zero in on specific data points. All data is wirelessly transmitted and stored in a back office for immediate use or later analysis.

November 11, 2008
MTA CFO defends use of variable-rate bonds

New York's Metropolitan Transportation Authority "did what was prudent for any government issuer of its size" when entering the bond market during the past few years, Chief Financial Officer Gary J. Dellaverson said Tuesday in a letter to The New York Times.

Dellaverson's letter challenged an article the newspaper published Nov. 2 that stated, "Officials were told that just as home buyers had embraced adjustable-rate loans, New York could save money by borrowing at lower interest rates that changed every day."

Like other entities nationwide, including other rail transit systems, "Interest rates fro New York's subways are skyrocketing and contributing to budget woes that have transportation officials considering higher fares and delaying long-planned track repairs. MTA on Monday acknowledged a $1.2 billion budget deficit in 2009, $300 million more than it had projected in July.

But Dellaverson argued that MTA"s approach was hardly new or subject to being "wooed by bankers," saying MTA "has used these bonds to diversity its traditional fixed-rate debt since the 1980s. This mix provides the most cost-effective financing for the MTA's capital program of more than $23 billion, with variable rate bonds saving the agency nearly $44 million just this year alone."

MTA did business with Dublin-based Depfa Bank plc, owned by German mortgage company Hypo Real Estate and now receiving financial aid from the German government. But Dellaverson asserted, "The MTA currently uses 14 major domestic and international banks in its variable rate portfolio, of which Depfa is but one."

November 10, 2008
MTA 2009 projected budget shortfall now $1.2 billion

New York's Metropolitan Transportation Authority Monday acknowledged a likely $1.2 billion budget deficit in 2009, $300 million (33%) more than it had projected in July. New fare and toll increases, or service reductions, or a combination of the two measures seems likely, unless unexpected revenue sources are found, officials warn.

At a meeting of the MTA's finance committee CEO Elliot G. Sander said the deficit was caused by the collapse of revenue from real estate and corporate taxes, until recently a strong source of revenue. "The word draconian is not inappropriate,"” Mr. Sander said at a news conference, referring to actions required to address the situation.

MTA has posted a PowerPoint presentation of the situation, first presented at the meeting, on its website; under "Features," select "Special Finance Committee Presentation" to access the presentation.

Real estate transaction taxes provided the authority with more than $1.4 billion in 2006 and nearly $1.6 billion in 2007. But MTA this year anticipates collecting just $995 million in such taxes, $50 million less than had been projected in July, and just $895 million in 2009, falling even further to $877 million in 2010.

The authority is required to pass a balanced budget in December for the fiscal year that starts on Jan. 1. A final decision on the fare and toll increases, and service cuts, will most likely not be reached until after a state commission on MTA finances, appointed by Gov. David A. Paterson and led by a former authority chairman Richard Ravitch, delivers its report on Dec. 5.

Sander attributed MTA's financial condition to borrowing for capital projects that occurred in the early part of this decade. "The 2000-2004 capital program was essentially put on a credit card," he said, and such borrowing is "the largest contributor" to the current operating deficit.

November 10, 2008
STB sets public meeting on EJ&E's environmental statement

The Surface Transportation Board will hold a public meeting November 18 at its Washington, D.C. headquarters, concerning the Environmental Impact Statement (EIS) now being prepared for Canadian National's proposed acquisition of the Elgin, Joliet, and Eastern Railway Co.

STB board members present at the meeting will be briefed by, and will discuss the EIS with, staff of the agency's Section of Environmental Analysis (SEA); the public is welcomed to observe the procedure, though the meeting will not solicit public comment. The public meeting will begin at 10:00 a.m. in the STB's Hearing Room, 1st floor, Patriots Plaza, 395 E Street, S.W., Washington, D.C.

CN filed its application for acquisition on Oct. 30, 2007, which generated opposition from several communities in the Chicagoland area, citing various potential negative impacts, including environmental concerns. On Nov. 26, 2007, STB announced that the SEA would prepare an EIS assessing the potential environmental impacts that could result from the proposed acquisition. The Draft EIS was issued to the public on July 25; public comments on the DEIS were due by September 30. SEA currently is preparing the Final EIS in response to comments received.

November 10, 2008
Short line taps RailComm DOC system

Marquette, Mich.-based Lake Superior & Ishpeming Railroad (LS&I) is incorporating RailComm Inc.'s Track Warrant Control functionality into its existing Domain Operations Controller System (DOC®).

During the past two years, LS&I, which serves points on Michigan's upper peninsula, has dispatched trains within CTC territory by utilizing RailComm's system and, with the addition of the Track Warrant Control module, LS&I can now seamlessly dispatch both its CTC and its dark territory from the same control desk.

Railcomm says its DOC® software-based control system is an advanced command, control, communications, and information (C3i) server-based platform that supports a wide variety of integrated solutions for indication, control, access, and distribution of operational data. The DOC® system allows adding workstations and/or field control nodes without interrupting operation of the current system. The system additions also include Electronic Train Sheets, which are maintained for a three-year period, in accordance with FRA regulations.

November 10, 2008
Timken lands contract with Brazilian mining concern

The Timken Company said Monday it was awarded a contract from Brazilian metals and mining company, Companhia Vale do Rio Doce (Vale), for 600 Timken® AP-2™ rail-car bearings, to be used on Vale's Class K freight cars to transport iron ore from Vale' numerous mine sites in South America for export to China.

Timken says its bearings are designed to reduce wear by offering a compact design that runs at lower operating temperatures and lower torque than traditional rail-car bearing assemblies.

Rio de Janeiro-based Vale claims the title of No. 2 diversified mining company in the world in terms of market value and a global leader in the production and export of iron ore. Vale owns and operates more than 5,000 miles of track.

November 10, 2008
Siemens to hire 200 for California LRT plant

Siemens Transportation Systems, implementing a $26 million expansion of its Sacramento, Calif.-based light rail manufacturing facility, says it plans to hire 200 additional employees early in 2009.

Siemens credits both the spike in gas prices earlier this year and the housing crunch in California for the move. The former spurred increased demand for light rail vehicles in the United States and Canada, while the latter allowed Siemens to purchase a 10-acre site, close to the company's existing 13-acre facility.

November 10, 2008
Zachry Holdings acquires Southerland Associates

San Antonio-based Zachry Holdings Inc., a family-owned and privately held industrial engineering, construction, and services organization, has completed acquisition of Southerland Associates Inc., an engineering, construction and fabrication services company based in Charlotte, N.C.

"The purchase of Southerland Associates Inc. gives Zachry a permanent presence in the southeastern United States" said CEO John Zachry. "All of our business groups--Engineering, Industrial Services, Construction , and Nuclear--will benefit from this investment. Additionally, it will allow us to move forward with the development of a regional employment center and craft training center, which will be located on the Charlotte campus at 255 E. Hebron St."

Bill Southerland, Southerland Associates Inc. president, said, "We have always believed that we are known by the companies we keep, and are honored to be a part of Zachry, an industry-leading organization that will provide more opportunity and experiences for our nearly 100 employees." He added, "We are very excited about what this acquisition means to our company and to Charlotte."

Zachry will begin accepting in-person applications for employment by mid-month; prospective employees can apply before that at www.zhi.com.

November 10, 2008
Congresswoman urges restored Sunset Limited segment

Various rail advocates and Rep. Corrine Brown, D.-Fla., are urging Amtrak to restore service between New Orleans and Sanford, Fla., via its Sunset Limited. Amtrak's long-distance train had served the route until it was discontinued following Hurricane Katrina's destruction in late August 2005.

But the five-year authorization language passed in early October includes a directive for Amtrak to draw up plans for reinstating the service, which currently operates between New Orleans and Los Angeles on a tri-weekly schedule.

"Congress is, of course, one of our biggest constituents," said Amtrak spokesman Cliff Black. "They provide considerable funding; therefore, they have considerable oversight," he added, noting Amtrak would comply with the directive to come up with a plan for service restoration by next July.

Amtrak had considered discontinuing the segment prior to Hurricane Katrina's impact. CSX owns the route, and repaired track damage by spring 2006. And at a congressional hearing last week, Amtrak President Alex Kummant, addressing Rep. Brown, acknowledged, "I don't really see any way to bring that service back at this point," adding, "We have no budget for it."

But at an earlier meeting Oct. 10 hosted by the Southern Rapid Rail Transit Commission in Meridian, Miss., Kummant noted, "We have not given notice of cessation [of the segment] because we are committed to providing service."

Rep. Brown is backed by groups such as the National Association of Railroad Passengers, which argues that the missing segment is a major gap in the national passenger network, and that restoring the segment would actually improve Amtrak's bottom line.

November 7, 2008
Short lines give Congress ready-to-go list

The American Short Line and Regional Railroad Association has informed Congress that 120 of its member roads have projects valued at $500 million ready to go under construction as soon as federal economic stimulus funding is made available.

Lobbyist Keith Hartwell told the House Transportation and Infrastructure Committee projects ranging from bridge replacements to track improvements could start as soon as materials are purchased and labor is contracted.

In a letter to Congress Friday, the U.S. Chamber of Commence stressed the importance of funding ready-to-go projects.

"To ensure that infrastructure investment meets the ultimate objective of stimulating job creation and economic growth, it is of the utmost importance to ensure that funding is provided in such a way that it is targeted for near-term projects and can be spent quickly," said Bruce Josten, the Chamber’s executive vice president for government affairs.

November 7, 2008
Operating departments take biggest worker cuts

Class I railroad employment continued to dip in September, with operating departments taking the hardest hits. The biggest single employee category--transportation (train and engine)--dropped to 66,055, down 4.59% from September 2007. Transportation (other than train and engine) declined to 6,601, down 5.19%.

Total l Class I employment in September dropped 2.27% to 162,303 compared with September 2007. There was an increase of 0.9% in maintenance of way and structures employment, to 35,906. In other groups, professional and administrative employment was down 1.9% to 13,520; executives, officials and staff assistants, off 0.79% to 10,077; and maintenance of equipment and stores, down 0.69% to 30,144.

November 7, 2008
Freight traffic declines for week, month of October

U.S. rail freight traffic declined during the week ended Nov. 1 compared with the comparable week one year ago, the Association of American Railroads reported. Cumulative traffic for October also showed declines vs. the comparable 2007 month.

For the week, U.S. freight carloads declined 5.4%, and total volume of 34.0 billion ton-miles was down 4.5%. Intermodal volume fell 4.9%.

Canadian railroads during the week saw carload volume decline 9.3%; intermodal fell 4.7%.

In Mexico, Kansas City Southern de Mexico carload freight declined 15.9% vs. the year-ago week, while intermodal gained 28.2%. Ferrocarril Mexicano S.A. de C.V. carload freight for the week fell 32.7%, and its intermodal traffic dropped 33.6%, vs. year-ago levels in the comparable week.

For October, U.S. carloads declined 2.8% from a year ago, while intermodal slipped 2.9%. Canadian rail carload traffic was down 7.6% in October vs. one year ago; Canadian intermodal traffic fell 1.2% for the month.

Carloads carried on Kansas City Southern de Mexico plummeted 11.1% during October, while intermodal rose 14.4% for the month vs. October 2007.

November 7, 2008
Trans-Hudson Tunnel target date slips, cost climbs

Costs for a new two-track rail tunnel under the Hudson River continue to climb, New Jersey Transit officials have acknowledged, as the "Access to the Region's Core Mass Transit Tunnel" project now is estimated to cost $8.7 billion. The latest estimated cost is 14% higher than recently anticipated, attributed to inflation.

In addition, NJT pushed back the target date for completing the project by one year, to 2017. NJT seeks to add two tracks for its trains to access Manhattan, diverging from current Northeast Corridor operations in the New Jersey Meadowlands and accessing a new underground terminus north of Penn Station in New York.

The North Jersey Transportation Planning Authority, the metropolitan planning organization for northern New Jersey, may vote to amend its Regional Transportation Plan Nov. 10 to include the new cost estimate for the project.

Critics of the plan continue to question its utility. The National Association of Railroad Passengers Nov. 6 repeated its concern over the project, "which is currently proposed as a dead-end tunnel terminating in a deep-cavern station at 34th Street, without the formerly planned track connection to New York Penn Station."

NARP President Ross Capon said, "It is unthinkable to allow this $8 billion, New Jersey Transit project to proceed in a manner that leaves Penn Station with the same, tenuous links to New Jersey and all points west and south as currently exist, and makes more difficult any attempt far into the future to remedy the situation."

Capon also questioned why "so much secrecy has shrouded the 2003 report which ought to reveal the practicality of extending tracks to Grand Central (and thus whether creating a new NJT terminal near Penn Station is really an appropriate use of scarce resources)."

November 7, 2008
Denver RTD to buy UP properties

Denver's Regional Transit District has reached agreement with Union Pacific to acquire property for three FasTrack transit routes, part of the region's light rail expansion.

RTD will pay UP $185 million for its revised deal, which involves less land acquisition and less relocation of UP facilities. Earlier negotiations between RTD and UP involved property valued by UP at $700 million. The current deal remains subject to final legal negotiations and approval by RTD and UP. boards of both entities.

RTD will acquire parcels along the East Corridor to Denver International Airport, moving UP's main line parallel to Smith Road to the north and constructing its own two-track operation to the airport. RTD also is acquiring property for the North Metro Corridor to Commerce City and Thornton, and for the Gold Line to Arvada and Wheat Ridge.

UP will maintain operating rights within the first mile of Denver Union Station and for the first eight miles of the North Metro Corridor, on which it still serves a freight customer once a week. That train will run at night when RTD trains won't operate, under temporal separation rules mandated by the Federal Railroad Administration for track shared by freight and light rail vehicles.

RTD also agreed to spend $25 million moving UP tracks, including relocation of the entry into the Burnham Yard along Osage Street south of 13th Avenue.

Said RTD General Manager Cal Marsella, "It's hard to say if there will be savings, but we think this was a fairly negotiated deal and that we've arrived at an acceptable figure." He added, "This is a huge step forward for the FasTracks program that will serve the entire Denver metro area. We thank the Union Pacific Railroad for their hard work throughout this process."

Dennis Duffy, UP's executive vice president for operations, said the deal allowed RTD "to move forward with FasTracks and also enabled us to continue to serve our customers and maintain capacity for future growth."

November 6, 2008
BNSF opens Cajon Pass third track

BNSF Railway announced Thursday that it has completed construction of a third main track through Cajon Pass in Southern California. BNSF ran its first train on Monday over the third and final segment of the $90 million triple-tracking project, which adds almost 16 miles of third main to the railroad's route into the Los Angeles basin.

Between 75 and 100 freight and passenger trains operate over this route daily. BNSF noted that it worked with at least 17 public agencies, six utility companies, and the community on issues ranging from protection of the environment to improved grade crossing and drainage structures and preservation of cultural and historical resources.

During the last four years, work crews moved more than one million tons of earth, installed more than 42,000 concrete ties, and laid more than 33 miles of rail. This is the first additional main track through Cajon Pass since the second was built in 1913.

November 6, 2008
Feinstein: Federal funding could aid California HSR

At a post-election press briefing Wednesday, U.S. Sen. Dianne Feinstein (D.-Calif.) praised voters for passing Proposition 1A, authorizing $9.95 billion in state seed money for a $44 billion, 700-mile high speed rail network operating at speeds of up to 220 mph. And while supporters of the plan continue to plan to seek potential private capital for the system, Feinstein suggested that federal financing may also play a role.

"There is legislation that will set up 11 regional systems in the U.S.
for high-speed rail, and we will qualify as one of them," Feinstein said. "I think we've now got our ducks in order to be No. 1 on that list, and as an appropriater, that will be a job of mine."

Quentin Kopp, chairman of the California High Speed Rail Authority, said he hopes a federal contribution might total $10 billion, with remaining funds to come from the private sector. Kopp said Wednesday that private-sector investment interest is substantial, with six companies contemplating investment and others interested to various degrees on possible designing, building, operating, and/or maintaining any system.

A state legislative source told Railway Age Proposition 1A "could have easily failed because voters tend to turn down general obligation bond measures when economic times turn tough," noting California voters rejected a comparable measure in the mid-1990s.

Said the source, "The key elements in its success are probably: no organized opposition; just enough of a 'pro' campaign; the measure being first [often of many] on the ballot; and a big Obama turnout ... not necessarily in that order."

California voters approved Proposition 1A in 20 counties and rejected it in 38. Somewhat surprisingly, a majority of voters in Sacramento County, which includes the namesake state capital which is one of the termini for the proposed system, opposed the measure.

November 6, 2008
Greenbrier fourth-quarter profit falls 44%, but beats Street

Lake Oswego, Ore.-based Greenbrier Cos. said Thursday its fourth-quarter profit dropped 44.3%, hurt by a fall in the number of new railcars delivered.

For the quarter ended Aug. 31, net income fell to $7.4 million, or 45 cents per share, from $13.2 million, or 82 cents per share, in the comparable 2007 quarter. But Wall Street analysts had expected a profit of 39 cents per share. Revenue rose 3.2% to $362 million from $350.6 million in the fourth quarter of 2007. Analysts had predicted revenue of $324.9 million. Sales rose 3% to $362 million.

Greenbrier stock mid-morning Thursday traded at $8.85, up 83 cents.

Greenbrier said deliveries of new railcars fell to 1,800 units vs. 2,400 delivered during last year's fourth quarter. The company previously had warned that rising raw material prices meant it faced a potential loss on about 1,000 railcars ordered but not yet delivered.
The company said Thursday 300 of those orders had been canceled, and it recorded a loss contingency of $3.9 million on the other 700 cars during the quarter.

Greenbrier President and CEO William A. Furman said the company expects pressure to remain on the demand for new railcars, but the segment "produces attractive returns during the growth phase of the economic cycle. The economy will eventually recover and we believe demand for new freight cars will return to more normalized levels."

November 6, 2008
Sound Transit gets nod for more rail

Seattle-area voters Tuesday approved plans for more commuter rail and light rail expansion. More than 58% of voters in the urban areas of King, Pierce and Snohomish counties Tuesday approved the expansion measure, Proposition 1, authorizing an additional 0.5% sales tax increment for 15 years.

Proposition 1, expected to generate $22.8 billion, would be used to add 34 miles of light rail, including to Bellevue, Lynnwood and Federal Way, Wash. Sounder rail service would add four round trips between Seattle and Pierce County, while bus services also would be added.

In 2007, voters rejected a 20-year, $17.8 billion transportation proposal that included rail and road projects for the area. Voters in 1996 approved a first phase of Sound Transit, including a light rail line from downtown Seattle to Seattle-Tacoma International Airport, set to open late next year.

On Election Day, a Sound Transit spokesman told Railway Age "we're going to be busy" regardless of the outcome on Proposition 1, but that if the measure passed the agency would of course be busier still throughout the week.

November 6, 2008
BART extension to San Jose still undecided

A longstanding plan to extend Bay Area Rapid Transit (BART) 16 miles south through Santa Clara County, Calif., appeared unresolved early Thursday despite earlier reports that the measure had failed to reach the required 66.67% supermajority need for passage.

Early reports had the measure garnering 66.27% of the vote, short of a supermajority. But Santa Clara County elections officials said 164,000 absentee and provisional ballots have not been counted, and election officials won't certify the results until Dec. 2.

The measure would enact a 1/8-cent sales tax to add stations in Milpitas, San Jose, and Santa Clara, connecting BART with Caltrain from Gilroy to San Francisco. Cost of the project is estimated at $6.1 billion.

November 6, 2008
SMART train gets voter backing

Voters in California's Marin and Sonoma counties north of San Francisco approved plans for a 70-mile rail service, dubbed Sonoma Marin Area Rail Transit (SMART). Measure Q, authorizing a 1/4-cent sales tax for the service, was approved by a supermajority of 69.5% of those voting.

A SMART spokesman says that decisions now will be made on the type of rail equipment to be used; diesel multiple-unit (DMU) gear and diesel light rail transit (DLRT) options have been discussed, but no final decision has yet been made.

Groundbreaking for the project, running from Cloverdale, Calif., to Larkspur Ferry Terminal, located on San Pablo Bay north of San Francisco, could occur within two years. Fourteen stops are planned including at Santa Rosa, Novato, and San Rafael. A bicycle and pedestrian trail will connect all of the stations.

A similar effort in 2006 to establish rail service, led by the Sonoma-Marin Area Rail Transit District, failed to garner the required supermajority (66.7%) of votes; the 2006 effort was approved by just 65.3% of those voting. In both instances, support for the projects was stronger is Sonoma County.

"Given our current economic concerns, this is a clear sign that the voters understand the value of green transportation infrastructure," said Lillian Hames, SMART general manager, in a statement. "They understood that now is the time to design and construct transportation infrastructure that reduces greenhouse gases, maximizes sound land use and improves the quality of life for the North Bay."

November 6, 2008
New Mexico counties back tax for rail transit

Voters in seven New Mexico counties Tuesday approved a 1/8-cent gross receipts tax to help fund RailRunner rail service, as well companion bus service. Roughly 55% of those who voted favored the measure.

Within the four-county North Central Regional Transit District, majorities of voters Santa Fe, Los Alamos, Rio Ariba, and Taos counties supported the measure.

The transit tax would cost consumers about 12 cents on every $100 spent on most goods and services.

RailRunner service is scheduled to begin serving the city of Santa Fe in December. Existing rail service roughly paralleling Interstate 25 from Belen through the state capital, Albuquerque, and north to Bernalillo, will be extended 11.7 miles to Santa Fe.

November 5, 2008
Washington Metro eyes huge railcar order

Washington Metropolitan Area Transportation Authority officials could decide Wednesday to order 648 subway cars, and overhaul 100 existing cars, to meet current and future ridership needs. The $2 billion order is on WMATA's agenda for consideration; if approved, the bidding process could begin next month.

The order, dubbed the 7000-series cars by WMATA, would both replace 300 cars from Rohr Industries, in service since Metro opened in 1976, and expand Metro's fleet. The order is also prompted in part by plans to extend Metro service to Dulles International Airport, anticipated to begin in 2013, which would require at least 128 cars. The estimated $385 million price tag for the Dulles rail cars is being paid for outside of WMATA's budget.

The 748-rail car program is only one of the major items on WMATA's $11 billion list of capital projects that it seeks during the next decade to maintain, expand, and improve train, bus, and paratransit service.

A WMATA spokesperson says the new rail cars, costing $2.76 million each, will have improved features, including high-tech monitors inside the cars, to display news and station information, as well as more ergonomically designed seats. The cars also would be outfitted with the latest diagnostic technology so train operators and mechanics could troubleshoot problems more quickly.

Some are concerned that the new fleet, replete with such improvements, would be incompatible with the existing fleet, in essence creating two car fleets within the system and negating some economies of scale.

November 5, 2008
California Proposition 1A for HSR is approved

With more than 95% of the vote tallied Wednesday, California Proposition 1A, providing $9.95 billion in state seed money meant to leverage a statewide high speed rail system, seemed assured of passage, with 52.2% of voters approving the measure.

Voting was split mostly along geographical lines, with voters within counties included in the proposed 700-mile system giving approval. The HSR system, estimated by proponents to cost at least $40 billion, would stretch from San Diego through Los Angeles to termini in San Francisco and Sacramento, the state capital. Opponents of the plan claim the project would cost a minimum of $65 billion, while failing to affect the state's transportation needs in any meaningful way.

"We couldn't be more thrilled with voters' approval of Prop 1A," said Emily Rusch, transportation advocate for the California Public Interest Research Group, in a statement. "With this vote, Californians decided to reduce our oil dependence, to build alternatives to traffic and long airport lines, and to help solve global warming. Californians were also voting to boost the economy."

Trains at speeds of 220 mph would link Los Angeles and San Francisco with travel times of 2 1/2 hours under the plan.

November 5, 2008
Railroads congratulate Obama as infrastructure rebuilder

The freight railroad industry, through the Association of American Railroads, issued a statement Tuesday night congratulating Sen. Barack Obama on his election as the next president of the U.S.

"Throughout the campaign," said the statement, "President-elect Obama has emphasized the importance of rebuilding our nation's infrastructure so that it can support the economic growth of our nation while creating more American jobs. America's freight railroads find this a worthy goal to ensure that America’s economic potential is reached."

November 5, 2008
Los Angeles approves measure for transit

Los Angeles County voters Tuesday approved Measure R, authorizing a half-cent sales tax to fund rail and road projects, including several light rail extensions. More than 67% of those voting on the measure gave approval, expected to generate up to $40 billion; the measure nonetheless passed by a narrow margin, since it required a two-thirds supermajority of voters.

Rail projects seen benefitting from the measure include the Expo Line from Culver City to Santa Monica, an extension of the Gold Line from
Pasadena to Azusa, and installation of light rail or a busway along
Crenshaw Boulevard in South Los Angeles

The Measure also solidifies funding for the "Subway to the Sea" Purple Line subway route extension, most likely from Wilshire Center along Wilshire Boulevard to Santa Monica, an option supported by Los Angeles Mayor Antonio Villaraigosa.

November 5, 2008
UP picks Trainyard Tech for North Platte upgrade

Trainyard Tech is replacing the vintage human-machine interface at Union Pacific's North Platte East Hump Yard with new workstations and keyboards running on the the company's CLASSMASTER™ technology.

CLASSMASTER™, says Trainyard Tech, “is the first to apply standard industrial automation technology to the railway industry. It is built using commercial off-the-shelf products running on the Microsoft Windows XP platform. This move away from proprietary components allows for flexibility and ease of installation and maintenance. Wonderware InTouch provides an easy-to-use, intuitive HMI interface.” Features include auto calibration; easily readable loggers; graphic playback; realtime hump list display; eBlock™ electronic track blocking; automatic report generation; NX route control, AEI Integration; PCS system and I/O redundancy; hot standy operation; wireless maintenance PC tablet; remote diagnostics and maintenance; and locomotive speed control.

Among recent installations of CLASSMASTER™ are Norfolk Southern’s Brosnan, Lambert’s Point Barney and Empty, Elkhart, and Buckeye yards.

November 5, 2008
West Sacramento approves streetcar plan

Voters in West Sacramento, Calif., Tuesday approved a quarter-cent sales tax to provide for flood protection and a 2.5-mile streetcar line linking City Hall with Sacramento's convention center.

Approval was seen as a victory for Mayor Christopher Cabaldon, who was re-elected. "We're one of the few places in the state that passed a local tax and it's to support the trolley system and flood protection and I think it's a strong statement about how optimistic and hopeful and energized people in West Sacramento are," Cabaldon said.

The $69 million project would most likely be run by Sacramento's Regional Transit District, with both cities sharing operating costs of $3.55 million per year. The sales tax is expected to generate $1 million in revenue per year; other sources would could include parking taxes or special property taxes for businesses seen benefitting by the streetcar operation.

Sacramento still has to approve its share of project's operating costs. Low-floor streetcars similar to those used in Portland, Ore., and Tacoma, Wash., are envisioned for the service; Portland planning officials have advised West Sacramento on the plan.

November 5, 2008
St. Louis Metrolink faces cutbacks as sales tax bid fails

A proposal to increased St. Louis County's transit sales tax by a half cent was rejected by voters Tuesday, eliminating a revenue source anticipated to cover a $45 million transit budget shortfall in the next fiscal year beginning July 1. The result could mean service cutbacks on Metro light rail and bus services.

Metro President Robert Baer said MetroLink light rail, bus, and paratransit customers throughout the system would be affected. "It is going to be painful," he said. "It's not the end of the world. There will be a Metro. It's going to shrink obviously. We're going to make the best of a bad situation."

Prior to Election Day, Metro had warned of significant cuts, and potential fare increases, without new funding. Threatened cuts to MetroLink include eliminating service after 8 p.m., and eliminating extra trains now offered for professional sporting events.

November 5, 2008
Kansas City rejects latest light rail proposal

Spurred by economic concerns and by some local confusion and debate over proposed service, Kansas City voters Tuesday rejected an $815 million light rail plan by a 56%-to-44% margin. The plan sought a three-eighths-cent sales tax to fund a 14-mile starter line.

Kansas City voters previously had approved LRT for the metropolitan area, and the city council had thrown out a first plan and offered a revised version, supported by the Civic Council of Greater Kansas City and the Greater Kansas City Chamber of Commerce.

Opponents pointed to the plan's uncertain status for federal funding and the lack of consensus among supporters as to rail's actual route.

November 5, 2008
Honolulu voters approve rail transit plan

By a 51%-to-46% margin, voters on the Hawaiian island of Oahu have approved a plan to advance a $4.28 billion rail transit project serving metropolitan Honolulu. Construction would begin in late 2009.

Honolulu Mayor Mufi Hannemann campaigned for the project, often described as light rail by island advocates but defined by other industry observers as more akin to Vancouver's Skytrain.

State funding for the proposal will come from a 0.5 percentage point increase in the general excise tax. Opponents of the plan object to the project's cost, its aesthetics (particularly for elevated sections), and concerns over noise. They succeeded in prompting the City Council to place a referendum on the ballot for voters to decide on the matter.

In lauding the vote, Mayor Hannemann said, "All I ask (is) for those who still may disagree with it is let's find ways in which you can support this effort. ... The feeling has been that the people decide and the people have spoken." But opponents vowed to continue efforts to defeat the plan.

November 4, 2008
Independent study: Rail profits not excessive

An independent study of "the competitive state of the railroad freight industry" suggests that profits earned by the railroads since passage of the Staggers Act of 1980 have not been excessive. Market power is not necessarily market abuse, the study found.

The study was performed for the Surface Transportation Board by a team assembled by Christiansen Associates. STB asked the team consider "the range of actions available to address problems associated with the potential abuse of market power." The STB has scheduled a public meeting on the report for Nov. 6.

Focusing on the years 1987 to 2006, the study listed its key findings in a 60-page executive summary released by the STB on Nov. 3. They included the following:

--"Class I railroad rates rose substantially above short-term marginal costs in 2006."

--"Economies of density and fixed costs require railroad pricing above short-term marginal cost to achieve revenue sufficiency."

--"For most years in the period of our study, the Class I railroad industry does not appear to be earning above normal profit."

--"The increase in railroad rates experienced in recent years is the result of declining productivity growth and increased costs rather than the increased exercise of market power."

--"Railroads use differential pricing to recover their total costs."

--"Different commodity groups face different markups of railroad rates over marginal costs."

--"Within commodity groups, shippers with no or very limited transportation options tend to pay higher rates than shippers with the same shipment characteristics won enjoy more o r better transportation alternatives."

--"The ratio of revenue to variable cost is weakly correlated with market structure factors that affect shipper ‘captivity’ and is not a reliable indicator of market dominance."

--"Current market circumstances imply that providing significant rate relief to certain groups of sippers will likely result in rate increases for other shippers or threaten railroad financial viability."

--"Incremental policies such as reciprocal switching and terminal agreements have a greater likelihood of resolving sippers concerns via competitive response, and have a lower risk of leading g to adverse changes in industry cost, structure and operations."

STB ordered the independent study at the suggestion of the General Accountability Office, after a GAO study in 2006 raised the question of whether rising railroad rates reflected economic market forces or possible abuse of market power.

The independent study did not offer final answers to that question, but it did say: "By definition, the setting of a price above marginal cost is what economists consider to be an exercise of market power, but exercise does not imply abuse. To address the question of whether there has been an 'abuse of market power' would require judgments as to the fairness of the distribution of value between the railroads and the shippers, and on the distribution of the overhead cost collection on the shippers."

The study may be accessed on the STB website, or via the Christensen website at www.lrca.com.

November 4, 2008
Phoenix ponders transit options for West Valley

Light rail transit or Bus Rapid Transit? Public meetings during the next two weeks will seek to determine how residents of Phoenix's West Valley area think public transit should be delivered. The Interstate 10 West Transit Corridor Project is being advanced even as the Arizona capital readies its launch of its initial 20-mile light rail line by year's end.

Two meetings are scheduled for Nov. 6 and Nov. 13, to solicit input on plants to use a 50-foot median of I-10 West between I-17 and 83rd Avenue for the service. Several routes east of I-17 are still being evaluated for their connection to the State Capitol and downtown Phoenix.

November 4, 2008
Freight car market headed for a slump

Freight car deliveries should total just under 58,000 units this year, but an economy in recession will dampen demand for capital equipment, including freight cars, and will drive deliveries down to below 40,000 annual units by 2010, according to the latest report from Economic Planning Associates. The freight car market is not expected to start rebounding until 2011, EPA said.

So far this year, the freight car market has performed well, some of it attributable to large backlogs. But those backlogs won’t last very long. Said EPA: “Given the dismal economic and financial environments, demand for railcars held up surprisingly well in the third quarter. Led by orders for coal and grain service cars as well as tank cars, total orders in the third quarter amounted to 7,696 units. And, with assemblies accelerating to 16,445 cars and intermodal platforms, backlogs eased from 61,600 at the beginning of the third quarter to 52,200 cars as of Sept. 30. This level of backlogs still represents 3.2 quarters of production even at the accelerated pace of the last quarter. At the same time, we continue to be impressed by the lack of significant cancellations of existing orders. By our calculations, only 670 cars, or 1.1% of the beginning third-quarter backlogs, were cancelled. Existing backlogs have held up because they are concentrated in grain, coal, ethanol, and DDG cars, all of which carry commodities that are less cyclically sensitive than most other commodities hauled by rail.”

Due to an acceleration in third-quarter assemblies, EPA expects 57,900 deliveries this year. Next year, however, economic conditions will not support much demand for cars other than coal, grain, DDG, and tank cars. “Based on beginning year backlogs and moderate demand for these cars, we look for deliveries of 41,000 cars in 2009, followed by a further easing to 39,000 in 2010. We expect minimal, if any, interest in box cars, centerbeams, bulkhead flats, autoracks, and intermodal equipment.”

After 2010, the market is expected to recover. “Assuming that the measures undertaken by the Treasury Department, the Federal Reserve, and the central banks of a number of major foreign economies will eventually correct current liquidity dislocations and the high costs of capital, we expect a cyclical revival in railcar demand beginning in 2011,” EPA said. Deliveries are expected to increase to 45,000 units in 2011, followed by 52,800 in 2012 and 57,500 in 2013.

November 4, 2008
NRC urges action on legislative aid for short lines

The National Railroad Construction & Maintenance Association (NRC) Tuesday urged its contractor, supplier, and associate members, as well as Class II and Class III short line and regional railroad officials, to identify needed short line or regional rail projects by Nov. 6 for possible federal aid.

NRC president Chuck Baker, in an email message to the Railway Engineering-Maintenance Suppliers Association (REMSA), said, "There is a possibility of getting some additional funding (possibly in the $50[million]-$100 million range) for small railroad infrastructure in a potential second economic stimulus package, which could be passed through Congress later this month in a lame duck session."

Noting that "NRC is supporting all requests for rail infrastructure funding as part of the stimulus," Baker adds, "If you have short line railroad customers who have potential infrastructure projects that fit the criteria (can be undertaken with 120 days and would not happen without new federal money), please get in touch with them immediately and have either them or you respond to this email" by Nov. 6 with the name of the railroad, location of the project, estimated cost, description, and whether contractors need be hired.

"I know that is short notice, but this shouldn’t take you more than 10 minutes or so (estimates on cost can obviously be pretty rough) and it could be very well worth it," Baker's appeal concluded.

November 3, 2008
Crossing deaths drop 25% in eight months

Fatalities at highway-rail grade crossings continue to decline at a rate rarely experienced since record-keeping began. New data posted on the Federal Railroad Administration's website Monday show that railroads reported 193 crossing deaths in this year's first eight months, down 25.2% from the 258 fatalities reported in the same period last year. Trespassing deaths were down 4.6% to 330, the first decline in several months. There were 17 employee fatalities, compared with 10 last year.

The FRA reported also showed that total accidents and incidents in the January-August 2008 period dropped 20.0% to 8,225; train accidents were down 17.9% to 1,652; collisions dropped 6.3% to 135; derailments were down 18.5% to 1,202; and yard accidents declined 14.0% to 898.
Track causes were blamed for 559 accidents, down 21.6%; human factors for 572, down 23.9%; equipment causes for 230, down 7.3%; and signal causes for 33, up 3.1%.

November 3, 2008
Genesee & Wyoming third-quarter earnings beat Street

Genesee & Wyoming Inc. Monday reported third-quarter net income of $21.2 million, or 58 cents a share, up 31% from net income of $16.2 million in the third quarter of 2007. The company notched revenue of $159.4 million, up 22% from $131.2 million in the the year-ago period.

Earnings were boosted by acquisitions, from gains of 2 cents a share from sales of assets, and a net tax benefit of 1 cent a share. Excluding items, the company earned 54 cents a share, beating Wall Street consensus expectations of 46 cents per share.

The company said its two recent acquisitions, the Ohio Central Railroad and the Georgia Southwestern, will be integrated into the parent company's operations in the fourth quarter.

"Our third-quarter operating income was the best in GWI's history and as we enter a period of economic uncertainty worldwide, GWI is doing so from a position of relative strength," said GWI CEO Jack Hellmann. "In our regions that have more exposure to the current economic downturn such as Oregon and Canada, management has been doing an excellent job of managing costs. In addition, several major new customers have continued to ramp up shipments, and our recent acquisitions are performing well."

But the company cautioned that it foresees fourth-quarter revenue falling below market expectations, noting that commodities such as lumber and forest products, along with pulp and paper, could be adversely affected.

November 3, 2008
New York MTA delays West Side rail yards development

New York's Metropolitan Transportation Authority will delay signing a contract with Related Companies to advance $15 billion worth of commercial development atop its West Side rail yards in Manhattan. MTA and Related have agreed to postpone the contract signing by 90 days, citing the MTA's sluggishness in producing required paperwork.

"We have together agreed on an extension of the designation period," said Gary Dellaverson, MTA's chief financial officer. "Our expectation was that the documents would have been turned a month and a half ago. Dellaverson added, "This is my fault--the fault of the MTA. This is not a product of either Related or Goldman [Sachs] or their lawyers." (Goldman Sachs is a joint-venture partner of Related Companies on the project.)

Last May MTA selected Related to develop the 26-acre West Side site. MTA attributes the current delay in part to the crisis in the credit markets. Dellaverson said he is confident that the financial crisis will not cause Related to back out of the agreement.

November 3, 2008
CN acquires several Quebec Railway assets

Canadian National said Monday it is acquiring rail and ferry operations from Quebec Railway Corp. for C$49.8 million ($41.7 million). The deal affects about 214 employees of Quebec Railway.

CN will assume control of three railway operations--Chemin de fer de la Matapedia et du Golfe, New Brunswick East Coast Railway, and Ottawa Central Railway--totaling about 540 track miles. CN also is purchasing rail/freight ferry firm Compagnie de gestion de Matane Inc. (COGEMA).

The Class I railroad said it plans to invest capital during the next three years to upgrade the rail lines and will replace the existing locomotive fleet with more modern motive power. The company does not plan any changes to freight, VIA Rail passenger rail service, or employment levels.

CN sold the rail lines to Quebec Railway in the late 1990s and has held a minority equity interest in the ferry operation since its startup in 1975.

"The operations we're buying are important to CN because QRC is our second-largest short-line partner, serving important customers at origin and directly feeding our main-line network," CN President and CEO Hunter Harrison said in a release. "QRC has done a great job with these rail properties, and we believe can improve on that in future."

Quebec Railway Chairman Pierre Martin said, "With our close partnership over the years, CN was the logical purchaser of these properties after QRC decided to dispose of key assets." He added, "We believe CN will build on our sustained customer focus to deliver even better service in future."

Quebec Railway will keep its Sydney Coal Railway Inc. subsidiary in Sydney, N.S., and its Chemin de fer de Charlevoix Inc. unit, running east of Quebec City to Clermont, Que.

November 3, 2008
Portec earnings up in third quarter, nine months

Pittsburgh-based Portec Rail Products, Inc. Monday reported unaudited net income of $2.5 million, or 26 cents per share, for the third quarter, up 33% from its third-quarter net income of $1.9 million or 20 cents per share a year ago. Net sales for the third quarter totaled $29.6 million, a 6% increase over third quarter 2007 net sales of $28.0 million.

Net income for the nine months ended September 30 was $6.3 million, or $0.65 per share, up 26% over net income of $4.99 million or $0.52 per share for the nine months ended Sept. 30, 2007. Net sales for the nine months ended September 30, 2008 were $84.7 million, compared to $84.6 million for the nine months ended September 30, 2007.

Richard J. Jarosinski, Portec president and CEO, said, "We are very pleased with our third quarter and year to date results. We were able to achieve both top and bottom line growth during a period of unprecedented economic uncertainty. Our third quarter results were significantly and positively affected by our track component and friction management product groups. The track component group, primarily consisting of joint bar products, rail anchors and spikes, had significant customer demand as well as a favorable product mix which contributed to our gross profit this quarter.

"In addition, capital improvements to the bonded joint line at our Huntington, West Virginia manufacturing facility have increased our productivity and we are beginning to see the benefits of a lower cost structure for these products," Jarosinski said.

"Our capital investments have resulted in a more cost-competitive facility, which we believe has allowed us to recently secure some strategic multi-year contracts for this facility," Jarosinski continued. "Our friction management product group also had significant sales growth this quarter, largely reflecting customer contractual requirements from our Total Friction Management(TM) product offering in North America, which includes top of rail friction control and gage face lubrication applications. Our sales growth in this facet of our business significantly contributed to our gross profit this quarter."