Destination:Freedom Newsletter
Destination:Freedom
The Newsletter of the National Corridors Initiative, Inc.
Vol. 4 No. 30, July 28, 2003
Copyright © 2003, NCI, Inc.
President and CEO - Jim RePass
Publisher - James Furlong
Editor - Leo King

A weekly North American rail and transit update

 


David Laney
David Laney
Sylvia de Leon
Sylvia de Leon
J.R. Smith
J.R. Smith

(Photo sources: Texas Rail Advocates; PBS NewsHour; Meridian, Miss.)

 

Laney is new chairman

Amtrak’s Smith is not reappointed

By Leo King
Editor

The Bush Administration will not be reappointing Amtrak Board Chairman John Robert Smith to the Amtrak board of directors, D:F learned Friday from a reliable source. Meanwhile, its newest board member has been elected its new chairman.

According James P. RePass, National Corridors Initiative president, the decision was made Friday morning.

“Two appointments to replace Smith and board member Michael Dukakis are expected shortly,” said RePass.

“These replacements are likely to be a Democrat with international railroad experience, and a Republican loyalist,” said RePass.

Smith is the Republican mayor of Meridian, Miss., and is NCI’s board chairman. Dukakis is a former Democratic Presidential candidate and governor of Massachusetts. Terms for both men expired in June.

The senate must confirm all appointments to the Amtrak board.

The directors elected attorneys David M. Laney as its new chairman on Friday (July 25), and Sylvia de Leon as vice-chair.

President Bush appointed Laney, a Dallas resident, to the board last November.

Amtrak CEO David Gunn said the directors have “benefited greatly from David’s experience in the transportation and banking industries. I welcome his leadership as we all work together in the interest of the nation’s passenger rail system.”

Gunn also noted the board approved the railroad’s $1.812 billion budget that includes the capital projects “that are vital to bringing the railroad to a state of good repair.”

Laney’s experience in transportation includes serving as a member of the Texas Transportation Commission from 1995 to 2001, and was its chairman for five of those six years. In effect, he was CEO of the Texas DOT, a 14,000-employee state agency with an annual budget of $5 billion.

Earlier this year Laney joined the Dallas law firm of Jackson Walker, L.L.P. as partner. Prior to that he was a partner in the firm of Jenkins and Gilchrist, also in Dallas. A graduate of Stanford University, Laney received his law degree from the Southern Methodist Univ. Law School.

De Leon replaces Dukakis, and has served on the board since 1994.

A senior partner in the Washington, D.C. office of the law firm of Akin, Gump, Strauss, Hauer & Field, de Leon is a member of the firm’s management committee which oversees 11 worldwide offices and more than 900 lawyers.

She is one of the founders of Akin Gump’s nationally recognized public law and policy practice and heads the firm’s transportation practice, which includes rail, aviation, transit, highways and travel services.

She has also served on several Presidential commissions on the transportation and travel industries.

Eight people comprise the Amtrak board of directors. The other current members include USDOT Secretary Norman Mineta, CEO Gunn, Gov. Linwood Holton (R-Va.), and Amy M. Rosen.


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Turbo Train Awairs departure

For NCI: Kent Patterson

Northbound Empire Service train No. 257 from New York – the recently rebuilt Turbo – left the big city at 1:45 p.m. and arrived in Albany-Rennsselaer at 4:10 p.m. on April 26. New Yorkers were just beginning their weekend on this Friday afternoon. The rebuilt speedliner just arrived on time with a heavy load of passengers to the capital city’s new station. On the left is No. 262 preparing to leave at 4:15 p.m. The train originates there, and makes stops at Hudson, Rhinecliff, Poughkeepsie, Croton Harmon, Yonkers, and arrives New York City’s Penn Station at 6:40 p.m. Both trains make the same stops.

 

Amtrak’s 32-year soap opera
budget battle continues in House

By Wes Vernon
Washington Bureau Chief

Amtrak President David Gunn will not blink. He warns that the House Appropriations Committee’s $900 million approval for Amtrak in Fiscal Year 2004 will force him to shut down the railroad. No kidding, either. He’s not playing a game of chicken. A shutdown would come just as Amtrak is losing two of the most experienced and knowledgeable members of the board of directors and gets a new chairman.

The committee action sets up the debate for what might be called a long hot fall season. The House appropriators told D:F on Friday the Transportation Appropriations bill won’t hit the House floor until Congress returns in September from its summer recess.

Those who remember when Gunn made shutdown noises last year have come to understand that when he says something, he means it.

The 32-year soap opera on Amtrak’s survival has been through a roller-coaster ride (again) these past few weeks. The authorizing committees of both the House and Senate have approved multiyear funding in the annual amount of $2 billion. The idea behind that record generosity was to give the nation’s rail passenger system some sort of road map. Ideally, that would mean Amtrak could plan for the long-term, knowing what it has to work with, thus avoiding the blind trapeze band-aid route.

The authorizing committees (House Transportation and Senate Commerce) have come to this conclusion and accordingly, exceeded Amtrak’s formal request of $1.812 billion.

However, it is in the appropriations committees that the moment of truth actually comes to fruition. The authorizers recommend. It is the appropriators who actually come up with “the scratch.”

The full Appropriations committee’s $900 million figure was upped from $580 million approved the previous week by its Transportation Subcommittee, but still falls far short of what Amtrak says is required to avoid shutting down America’s passenger trains.

After the subcommittee action, Gunn pointed out that “another year without an adequate capital budget means playing Russian roulette with our revenues and projections, and service assumptions with the operability of our Northeast corridor infrastructure and system trains, and most importantly, with the safety of our passengers. This constant state of crisis is not good for anyone.”

In fact $900 million “will quickly bring on the next crisis,” according to the Amtrak boss, “This railroad simply cannot continue to operate without a maintenance budget.”

In an attempt to reach a compromise, Rep. John W. Olver (D-Mass.), the committee’s ranking member, introduced a proposal to up the ante from $900 million to $1.4 billion. That idea was defeated on a voice vote.

Some people familiar with Amtrak’s problems believe that though Olver’s motion was well-intended, it would still prolong the misery of Amtrak trying to run a railroad with the metaphorical Scotch tape and bailing wire. Amtrak has borrowed all it can, going heavily into debt just to keep the trains running without endangering its passengers. These sources steadfastly maintain that when Gunn said $1.8 billion was rock bottom of what he needed, he meant it. His whole attitude since assuming the top job at Amtrak last year is “No more games,” they point out.

Olver, as it turned out, had to exert considerable effort just to get the figure up to $900 million, which matches the administration’s budget recommendation.

Then he tried to add another half billion, but it did not fly.

Olver said during the committee deliberations that an increase to $1.4 billion would begin to allow Amtrak to perform some of its deferred maintenance and deferred capital investment which is more than can be accomplished with the administration’s bottom line. The Massachusetts lawmaker believed that $1.4 billion might have had a better chance of passage than $1.8 billion – which would have been his own preference.

As for the $900 million, Gunn obviously regards this as another extension of playing games.

“For too long, this company deferred maintenance on its plant and equipment. The can has been kicked down the road so far, that we have simply run out of road. The work has to begin now,” he declared.

As an illustration of what he was talking about, Gunn cited a recent incident where “a span wire supporting the catenary broke and fell to the ground near the Hell Gate Bridge in New York. The wire in this area was installed before the Great Depression and this piece simply gave up the ghost. the effect of this one small incident totally disrupted service between Boston and New York for 24 hours.”

In the midst of this annual Amtrak “crisis,” its board chairman and vice-chairman are both making their exits.

The Bush administration will not be re-appointing Amtrak Board Chairman John Robert Smith, D:F learned Thursday and again Friday from another source.

National Corridors Initiative (NCI owns D:F) President Jim RePass said Friday that two appointments to replace Smith and Michael Dukakis are expected shortly. RePass says those replacements “are likely to be a Democrat with international railroad experience, and a Republican loyalist.”

Given that Amtrak in the Gunn era has reached a crossroads of sorts, it is believed senators will take a special hard look at White House appointees.

Other board vacancies are likely in store in the months ahead, and confirmation hearings could become an in-depth examination of the prospective board member’s basic philosophy as to Amtrak’s place in the nation’s transportation mix.

Meanwhile, protests against approval of the “shut-down” budget are pouring in to Washington.

Led by the U.S. Conference of Mayors, a coalition of 30 groups opposed not only the Amtrak cut, but other rail parts of the transportation appropriations bill, as well – mainly new starts for mass transit projects.

“The record is clear,” the letter argued, “New rail starts reduce congestion, improve the environment and spur development and economic growth. New rail transit projects have also helped drive the substantial growth in transit ridership over the past several years.”

Traffic congestion has become such a major headache in the Washington, D.C. area that the Federal National Mortgage Assn., two local banks and a regional smorgasbord of elected officials want to give preferential treatment to home buyers who purchase their houses close to public transportation.

Participants would benefit from a nearly $10,000 boost in the maximum allowable mortgage if their homes are a half-mile from a rail transit station and a quarter-mile from a bus stop. Further, they would have to agree that they would own no more than two cars.

As a sample of rail labor’s take on the House committee’s Amtrak slash, this comment from James “Broken Rail” Brunkenhoefer, legislative Director of the United Transportation Union (UTU): “As John Belushi once said, ‘It’s not over until we say it’s over.’”

Brunkenhoefer noted the Senate Appropriations Committee has yet to weigh in with its judgment on this. The entire House of Representatives has not registered its verdict on the House panel’s handiwork. It is relevant to bear in mind that 219 House members have gone on record as endorsing the Amtrak request for $1.8 billion. That is one more lawmaker than the required majority in the House.

Brunkenhoefer, a well respected lobbyist on Capitol Hill, urged UTU members to “continue making multiple telephone calls and sending multiple e-mail messages to their lawmakers.” The UTU point man in Washington added that David Gunn is counting on lawmakers “to honor the funding recommendations of both the House Transportation and Infrastructure Committee and the Senate Commerce Committee – both of which gave support to $1.8 billion in federal aid to Amtrak.”


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Mica says Amtrak to face three entities

A new Bush administration proposal for Amtrak’s future could end the government-subsidized railroad’s presence in intercity passenger rail travel, according to an Associated Press report on Sunday.

Officially, the legislation is intended to eliminate unprofitable long-distance routes and force states to give more financial support to intercity passenger rail.

Rep. John Mica (R-Fla.), a senior member of the House Transportation Subcommittee that deals with railroads and transportation infrastructure, was briefed on the Administration’s proposal last week.

“If properly implemented, this could be as dramatic as the establishment of the interstate highway system in the Eisenhower years,” Mica said.

In addition to encouraging private investors to build railroads, the bill would improve service and promote high-speed rail service between cities, Mica said. Congestion would be eased at airports, he said, because people would prefer to take fast trains for trips under 500 miles.

The plan would give states responsibility to form regional railroads that would hire Amtrak or other private companies to run the trains. The federal government would help pay for some of those operations, Mica said, although the goal would be to minimize subsidies.

The Boston-to-Washington line would be treated differently because it’s the only large segment of railroad that Amtrak owns. Under the plan, the Northeast Corridor would be broken into three entities: a compact between the federal and state government to lease and improve the railroad infrastructure; a company to operate the trains; and a company to maintain the tracks and equipment.

Amtrak at first would perform the latter two functions on the Northeast Corridor but eventually would have to compete with other companies.

Critics say such restructuring is necessary because Amtrak loses about $1 billion a year, thanks in part to reportedly money-losing long-distance lines like the Sunset Limited between Orlando and Los Angeles. They point to the railroad’s increased indebtedness over the past few years and the failure of Acela high-speed rail trains to reach the promised 150 mph, except in two short New England areas.

Supporters say Amtrak’s troubles stem from years of under-investment in tracks and equipment, and all passenger railroads require government subsidies.

“No intercity rail system has ever made money,” said Rep. John Olver, D-Mass., senior Democrat on the subcommittee that finances Amtrak.

The House Appropriations Committee voted Thursday to allot Amtrak $900 million. Amtrak says it needs double that just to maintain existing service this year.

Mica said such a shortfall would create a crisis and force Congress to restructure the railroad.

Amtrak’s supporters in the House say at least 219 House members, a majority, have signed a letter supporting the railroad’s $1.8 billion request.

A key question about the administration’s bill is how much it will be willing to spend on a restructured passenger rail system.


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Freson Station Historical Landmark

Fresno Local Register of Historic Resources

In 1896, an Atchison, Topeka & Santa Fe Ry. predecessor built this mission style depot in Fresno, Calif.

Fresno ATSF depot getting rebuilt

By Alan Kandel
Special to Destination:Freedom

Fresno, The Mission-Revival-style Atchison, Topeka & Santa Fe Ry. (ATSF) station located on the southeast corner of Santa Fe Avenue and Tulare Street, not long ago was the focus of a protracted debate.

At issue was whether or not to build a brand-spanking new station to serve arriving and departing Amtrak patrons or restore the existing depot to its former glory. A Santa Fe predecessor, the San Francisco & San Joaquin Valley Railroad (SF&SJV), built the structure.

Now, in an ambitious move, “Fresno is moving forward with its $6 million plans to restore the historic, yet dilapidated downtown Santa Fe train depot,” according to a July 8 Fresno Bee newspaper article.

Purchased the previous week from the Burlington Northern & Santa Fe Ry. by the city for $460,000 and $343,000, respectively, were the station and its adjoining freight office and the immediate surrounding vacant land.

Additionally, the railroad was paid “$225,000 to offset moving costs to a new facility in Calwa,” site of BNSF’s main Fresno-area freight yard.

The city’s parking fund will cover $568,000 of the $1,028,000 price tag. The other $460,000 came from state grants.

The city has also allocated $6 million for the restoration project. Much of the money comes from legislation written by former Sen. Jim Costa, which gave Fresno $4.9 million for the depot. The state Office of Historic Preservation gave an additional $100,000 and the California Pollution Control Financing Authority gave a $316,337 grant. Amtrak paid the rest.

The California DOT (Caltrans) states on its website, “The existing station is the former Santa Fe freight house.” It has been used as the city’s passenger depot since Amtrak’s San Joaquin service began in 1974, when there was only one round trip in the San Joaquin Valley. With six round trips daily now, the station is one of the busiest in the state. The depot occupies 2650 Tulare Street.

It was built by the SF&SJV, but the structure fell on hard times. Externally, the building began showing its age some time ago.

In addition to vegetation growing on the roof, boarded up windows and doors grace the west flank. A cobblestone platform promenade has seen much better days.

The Bee reported engineering studies reveal that the 25,000 square-foot, two-story structure “has deteriorated roof framing, reinforcement problems with the brick and concrete walls, seismic safety concerns and faulty wiring.”

Even with the exterior and all in its current state of disrepair, the station still inspires awe and tells a tale of more exuberant and illustrious times when passenger train travel was the order of the day.

Depot construction and renovation is slated to begin in October and conclude by August 2004.

City Project Manager Robb Wood said, “The city also wants to entice private enterprise to build restaurants, a museum or offices on the second floor.” He added, “The city plans to turn the vacant land on both sides of the tracks into landscaped parking.”

One interesting footnote to this soon-to-be-success story is that along with plans to restore the roof with its adorned Spanish-style terra cotta tiles, a multi-arched covered walkway structure and other various period architectural features, the city wants to replace a clock tower which was once part of the original structure but is currently missing.

Wood said, “Rumor has it the clock is still in the city. If the tower can’t be located, the city has plans to build and install a replica.”


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UP donates Poplar Bluff depot

A little more than two years ago it looked as though train service through Poplar Bluff, Mo., would be derailed and the Union Pacific depot would be demolished.

Last week, the Union Pacific Railroad turned over the keys to the depot to Dennis Glaze, chairman of the Committee to Save and Restore the Historic Poplar Bluff Depot, after donating the building and the historic steps that lead to Main Street to the committee.

Amtrak's Texas Eagle still stops at the station.

During spring 2001, the community’s city council held the station in disdain and agreed not to pursue ownership of the depot. The city and Community Development Corp. had been in negotiations with the railroad for the building, but they bogged down over the cost of a lease agreement for the parking lot.

The city also was talking with Amtrak who was considering bypassing Poplar Bluff because of the condition of the waiting area Amtrak uses at the depot, which at the time was maintained by UP. Passengers had expressed concern for their safety because of the transients hanging around inside and around the building, and the condition of the waiting area was deplorable.

Around the time UP moved to Dexter and left the old depot unoccupied, Glaze, a former railroad employee and Dennis Graves, a local teacher and frequent train passenger, teamed up with Amtrak and began cleaning up the waiting room at their own expense, making it safe for passengers who board and disembark the trains in the early hours of the morning.

They enlisted the help of Steve Ray, a special agent for UP, who worked with the city police in clearing out the homeless and transients who made a flophouse of the depot.

The city street department helped by keeping grass mowed.

Soon, street lights lit the station, and Amtrak, acknowledging the effort, contributed supplies and other support and pledged to keep Poplar Bluff as a stop for the Eagle.


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Oklahoma eyes high-speed trains

A high-speed train connecting Tulsa to Oklahoma City would be efficient, popular and expensive, experts at the state Capitol said July 16.

“This is just one option being considered for meeting projected transportation needs in the future,” Senate Transportation Committee Chairman Keith Leftwich said, but added, “If we don’t begin addressing these critical transportation needs now, we will be facing serious gridlock on our main roadways that will impede economic development and work productivity.”

University of Oklahoma professor Richard S. Marshment, who conducted a study on a possible high-speed system, said the federal government would pay 80 percent of the cost of the rail system, according to a report in the Tulsa World newspaper.

Marshment put the cost of the train at $900 million.

The Oklahoma Transportation Authority, which runs the state’s turnpikes, could float the bonds for the rail system, he said, adding that turnpike users could make the payments on the bonds.

“I would say that the project would benefit users of the Tulsa- Oklahoma City corridor whether they’re on the train or on the turnpike,” Marshment said.

Leftwich (D), said he was not against Marshment’s cross-pledging idea.

“I think cross-pledging makes more sense for a rail system that will be used than another turnpike that might not be,” he said.

Marshment said train passengers would pay a one-way fare of at least $28 to cover the operating cost of the system.

Construction would take nine years and would employ an average of 2,059 workers and generate $485 million in earnings, according to Marshment’s study.

Gary Ridley, director of the Oklahoma DOT, said passenger ridership on Oklahoma’s highway systems for the next 20 years is expected to increase by 30 percent to 40 percent, with truck travel increasing 67 percent.

Marshment’s study said a 150-mph system could attract about 1,000 people a day, depending on whether the train goes from downtown to downtown or airport to airport.

The study concludes that the prospects for the Tulsa-Oklahoma City corridor rail line would depend on connections to the north or south.

The Oklahoma City-Tulsa corridor is not as strong as an Oklahoma City-Dallas-Fort Worth corridor, Marshment said.

Leftwich said reliable, convenient mass transit must be available for train riders to reach their destinations in Oklahoma City and Tulsa.

Marshment said all other states are further along that Oklahoma in developing a high-speed rail system. He suggested that the state begin reserving rights-of-way for the rail line, even though the system won’t be built for years.

The study estimated that a daily high of 4,500 passengers would be on the high-speed train if it were running in 2010.

Ironically, the consideration of increased train service comes at a time when the state’s most powerful voice in transportation funding is trying to choke off federal funding for rail service.

As chairman of the House Transportation and Treasury Appropriations Subcommittee, U.S. Rep. Ernest Istook (R-Okla.), has led efforts to cut significantly the amount of money Amtrak gets. Istook hopes to redirect the money to highway funding.

Officials have warned that Amtrak cannot survive with the funding provided by Istook’s bill, and he is expected to have a harder time when the full committee considers it.

Istook’s plan would increase federal highway funding to Oklahoma and end the state’s long-running complaint that Oklahoma drivers pay more in federal fuel taxes than comes back to the state in transportation funding.


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Ohio considers Lima for fast trains

A state agency will study the possibility of adding a route through Lima to Ohio’s proposed network of high-speed passenger rail lines.

James Seney, executive director of the Ohio Rail Development Commission, said the study was inspired, in part, by letters of support from mayors of the five biggest cities along the proposed route: Pittsburgh, Columbus, Lima, Chicago, and Fort Wayne, Ind., the Toledo Blade reported July 25.

“Columbus needs a direct line to Chicago," Seney said, a former mayor of Sylvania, Ohio.

Lima Mayor David Berger said a route through his city makes sense because Indiana favors running a proposed Toledo-Chicago corridor through Fort Wayne.

Lima last had passenger trains in 1990, when a Conrail decision to downgrade the old Pennsylvania Railroad main line through the city prompted Amtrak to move its Broadway Limited and Capitol Limited trains through Fostoria and Toledo, respectively.

The high-speed rail feasibility study is expected to cost $250,000 to $300,000, and be completed in about a year, Seney said. Between Lima and Columbus, the study corridor will include Ada, Dunkirk, Kenton, and Marysville, he said.

If the study finds the corridor is realistic, an economic-impact analysis will be conducted, after which a decision will be made about adding the corridor to Ohio’s high-speed rail map, Seney said.

The rail commission has proposed a network of passenger rail line routes radiating from Cleveland, with Toledo as a secondary hub.

Actual route development will depend on substantial federal funding. Berger said all the proposed corridors assume 80 percent federal funding for construction and equipment.


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Hiawatha sets best June on-time record

Amtrak’s Hiawatha trains recorded the best on-time performance in June with 11 late trains out of 409 operations for the month. The trains run 86 miles between Chicago and Milwaukee, The worst performer was the Sunset Limited, which runs every other day. Of 26 operations, none were on time. The train runs 2,764 miles between Los Angeles to Tampa.

The carrier’s Acela Express trains operating between Boston, New York City and Washington, D.C. recorded a 68.9 percent on-time rate.

 Total
trains
Late
trains
On-time
percentage
Hiawatha4091197.3%
Pacific Surfliner 6956191.2%
Clocker/Keystone5925490.9%
Empire Builder1201785.8%
Metroliner3035781.2%
Downeaster2404979.6%
Regional1,52033578.0%
Pennsylvanian601476.7%
Empire68417574.4%
Acela Express61519168.9%
Capitols67522466.8%
Cascades33011066.7%
Michigan30010465.3%
Heartland Flyer602165.0%
Three Rivers602165.0%
San Joaquins36015556.9%
City of New Orleans602853.3%
Piedmont602853.3%
Southwest Chief602853.3%
Kentucky Cardinal592852.5%
Crescent602951.7%
Illinois, Missouri30014950.3%
AutoTrain603148.3%
Silver Service1809646.7%
Lake Shore Ltd.1207041.7%
Coast Starlight604328.3%
Carolinian604426.7%
Capitol Ltd604820.0%
Texas Eagle605016.7%
Cardinal262215.4%
California Zephyr60583.3%
Sunset Limited26260.0%
Source: Amtrak


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LEGAL LINES...  Legal lines...

Boxer amendments get nod

By Alan Kandel
Special to Destination:Freedom

Two amendments aimed at making the U.S. railway network safer got unanimous approval July 17 from the Senate Committee on Commerce, Science and Transportation.

Sen. Barbara Boxer (D-Calif.) introduced both measures.

The first amendment specifically “addresses the problem of runaway trains by requiring the USDOT to write regulations to ensure that local police and fire officials are notified immediately should there be a runaway train in their community,” according to a Commerce Committee press release.

The regulations must be written within 120 days, according to the press release. The intent is to diminish danger of runaway trains.

The second measure addresses the issue of “severely delayed traffic at grade crossings” and “directs the Secretary of Transportation, in consultation with state and local government officials, to conduct a study of the impact of blocked highway-rail crossings on the ability of emergency responders to perform public safety and security duties. The Secretary would then report findings and recommendations to the Commerce Committee.”

Boxer said the first piece of legislation came about as a direct result of the June Montclair-to-Commerce, Calif., and runaway train incident.

Boxer explained, “Last month, a terrible accident involving a runaway train crashing into a neighborhood in Commerce alerted me to the need for this legislation. We were fortunate that no one was killed as a result of that accident, and even more so because first responders were never notified of the runaway train.”

She said the DOT “needs to have a plan in place for working with local emergency agencies on the problem of runaway trains, and this legislation will get us moving on the right path.”

In regards to grade crossing caused traffic delays, the Senator said, “In Riverside, from January 2001 to January 2003, trains delayed ambulance and fire protection 88 times. This translates into more people possibly dying from health emergencies such as heart attacks and strokes, as well as deadly fires. This study will help us determine the impact of grade crossings in emergency situations, and give us the foundation for future development of protocol for those situations.”


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DOT withdraws ‘unnecessary rulemakings’

The USDOT said last week it has withdrawn or terminated 53 rulemaking actions “for which no further regulatory action is planned.”

The actions affected all transportation modes.

The affected listings were reported in 43878 Federal Register, Vol. 68, No. 142 of July 24 notices.

The Register stated, “These actions are part of a Secretarial initiative to move forward with decisions on long-pending regulatory proposals, either bringing them to completion or eliminating them from DOT’s Regulatory Agenda if no further regulatory action is presently contemplated.

Both significant and insignificant rulemaking actions of various modal administrations within DOT and the Office of the Secretary were included.

Several proposed rules would have affected railroads, including FRA–2130-AA60 – Local rail freight assistance (55 FR 49648, 11/30/03). No reason was given for dropping it.

Also, FRA–2130-AB27, Crane safety standards, because it is “under review by the Rail Safety Advisory Committee.”

FRA– 2130-AB30, Annual adjustment of monetary threshold for reporting rail equipment accidents or incidents. USDOT said the proposed rule was already issued under 2130-AB57.

FRA– 2130-AB35, Revision to railroad safety enforcement procedures. DOT blamed “limited resources,” which they also said was the case in FRA–2130–AB36, Rules of practice.

FRA– 2130-AB46, Minimum standards for temperature in the locomotive cab was deleted because it was “not cost effective.”


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COMMUTER LINES...  Commuter lines...

New Tappan Zee bridge – with tracks?

The AP reported last week a new Tappan Zee Bridge spanning the Hudson River in New York, 50 feet wider than the current one, could carry eight lanes of traffic, a commuter rail line and a light rail line – while still having regulation highway shoulders and a path for walkers, bicyclists and even anglers, officials said July 22. Or – the bridge could vanish, with traffic and trains going into a tunnel under the river and drivers paying extra for the privilege of using a bus lane... or nothing could happen at all, with the 48-year-old bridge remaining as it is.

The New York State Thruway Authority and Metro-North Railroad presented 15 “scenarios” after winnowing through 150 proposals put forward over the past year by experts and citizens. The goal is to reduce congestion along the New York stretch of Interstate 287 from Rye, in Westchester County, to Suffern, in Rockland County, which includes the Tappan Zee.

The various solutions are to be narrowed still further by next April, when perhaps three comprehensive proposals, plus the leave-it-alone alternative and one that calls for just rehabilitating the existing bridge, will enter the environmental impact stage.

A final choice on what scenario to propose is scheduled for the end of 2005.

Though doing nothing is the cheapest choice, officials said they were not yet at the stage of figuring out the cost of the various proposals.


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Chicago Brown Line funding delayed

The Chicago Transit Authority (CTA) has hit a bump on Capitol Hill in its efforts to secure funding for the pending reconstruction of its Brown Line elevated railway, according to Crain’s Chicago Business News.

The House Subcommittee on Transportation voted not to provide $45 million the Chicago Transit Authority wants to begin construction on the $530-million project, because the agency lacks a formal pact, known as a full funding grant agreement, with the Federal Transit Authority (FTA).

An FTA spokesman says the agreement is expected and should be completed by August — in time for funding to be revived by the full House Appropriations Committee or in a Senate-House conference committee. Construction is scheduled to begin around Labor Day, and the CTA says it will use other funds to start the work, if need be.


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Sound Transit may get $15 million

Sound Transit in Washington State should be getting $15 million in its 2004 transportation appropriations bill to start light rail construction later this year.

Board Chairman Ron Sims said, “The residents of the Puget Sound region should be grateful to Rep. Ernest Istook (R-Okla.) for supporting funding in 2004 for building light rail.” Sims is also King County Executive. Sims said nothing about Istook’s plan to derail Amtrak.

He credited Rep. Norm Dicks for “putting federal funds to work for Puget Sound taxpayers.”

Earlier, the House Transportation Appropriations Subcommittee, chaired by Istook, had adopted a spending plan that did not include a specific funding amount for Link, instead requiring Sound Transit to compete with other projects for 2004 funding. The measure was amended by the full Appropriations Committee Thursday to include funding allocations for individual projects around the country, Sound Transit among them.


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Houston Metro adds 9 route miles

Houston’s Metro light rail line is adding nine route miles to its system plan to serve heavily minority communities on the south side, but the key question of what to do about the road project funds it gives away to member municipalities remains under heated discussion and might not be resolved until August.

Board members, who were scheduled to meet Friday to receive the final 2025 mass-transit plan from the staff and a consultant, are considering a compromise that would preserve half of the road project fund beyond its 2009 expiration date.

The Houston Chronicle reported on July 23 that would mean voters in November would decide whether to issue bonds for only the first half of the transit expansion plan, said Metropolitan Transit Authority Chairman Arthur Schechter.

“I would anticipate the entire plan will be submitted. We will then also take to the voters a bonding election that will be focused on the next phase of development,” Schechter said.

With the added nine miles of light rail, the price tag for the plan increases to $5 billion.

Shirley DeLibero, Metro president and CEO told the group a five-mile branch of the Hobby Airport line would extend from the Southeast Transit Center due south into the heavily black Sunnyside neighborhood.

“This additional line will branch off the southeast line down Cullen Boulevard to Airport Boulevard to serve the Sunnyside community,” she said. “This will have a positive effect for people in all these communities.”

Metro got good news from its accountants last month: The second draft plan, with 55 miles of light rail, had several hundred million dollars left over for final additions. The nine miles Metro is adding brings the plan to 64 miles of light rail, DeLibero said, plus an eight-mile commuter rail to Missouri City and dozens of new buses and Park & Ride lots.

Schechter said Metro also will include a commuter rail line along the U.S. 290 corridor that Harris County is studying but will not commit any funding to it.

Board member Carol Lewis said she hasn’t reached a decision on what to do about the road money and didn’t want to speak for where other board members stand.

“We’ll settle it coming up,” she said. “That’s the big item on the table.” Schechter said the board will approve the final transit plan July 31, but he wasn’t sure if a decision will be made at that meeting on how much of the plan to finance this year. That decision, he said, might be pushed back to August, when the board is scheduled to approve ballot language and officially set the November referendum.


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Eight miles for Orange County

Rail line fragment remains in plan

Orange County, California’s controversial CenterLine light-rail project was rescued again by transportation leaders one week ago today, who voted in favor of pursuing an eight-mile line – a fraction of the original plan to lay rail from one end of the county to the other.

The Los Angeles Times reported on July 22 the Orange County Transportation Authority’s 9-2 vote calls for a route that would wind from John Wayne Airport to the Santa Ana train depot, passing South Coast Plaza and the county Civic Center along the way.

The decision follows a setback last month, when Irvine residents voted to block the line from pushing through to UC Irvine, an action that CenterLine critics believed would be a final blow to light rail in Orange County.

“It’s cheaper if it happens now than 10, 15 years down the line,” said county Supervisor Jim Silva, an OCTA board member. “CenterLine won’t solve the transportation problems in Orange County, but it’s a part of the solution.”

Board member Shirley McCracken agreed: “Now is the time. We have to have a bigger vision for our future.”

About 70 people spoke at the five-hour hearing, during which the transit board weighed a range of options, such as extending bus service and Metrolink, and killing CenterLine outright.

The proposed CenterLine route has shriveled as political and business support has withered over the years, particularly in north Orange County.

The route approved Monday already has bumps ahead.

Permission must be won from the Board of Supervisors to terminate the route at county-owned John Wayne Airport and a major developer has expressed concerns with the redrawn line.

A spokesman for C.J. Segerstrom & Sons, the owners of South Coast Plaza and a past supporter of the light-rail plan, told board members it would be premature to move forward with the latest version of CenterLine.


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FREIGHT LINES...  Freight lines...

EMD-70M Union Pacific Olympic Torch Relay Train

For NCI: Matthew Meltzer

Uniquely painted EMD SD-70M locomotives 2002 and 2001 lead the Union Pacific Olympic Torch Relay Train at Santa Barbara, Calif. on January 16, 2002. The special train would deliver the eternal Olympic flame to Salt Lake City, Utah just days later for the 2002 Winter Olympics.

 

State hands out $4 million

Pennsylvania makes freight rail grants

Pennsylvania DOT (PennDOT) Secretary Allen D. Biehler said on Friday more than $4 million in grants will help finance 30 rail freight railroad assistance projects that could lead to more than 1,000 new jobs cross the state.

Three counties – Fayette, Mercer and Westmoreland – will receive $250,000 or more.

Biehler said, “This program helps improve the operation of our freight railroads, allows them to move goods efficiently and timely, and to retain and create new opportunities for working men and women.”

He added, “Economic development is at the heart of Governor Rendell’s Plan for a New Pennsylvania.”

PennDOT’s Rail Freight Assistance Program funding is being used to construct, maintain, repair and rehabilitate rail lines, sidings and grade crossings.

Pennsylvania has 67 operating railroads with 5,600 miles of track, and ranks fifth in the nation in total track mileage.

In Adams County, the Gettysburg & Northern Railroad Co., Gettysburg, $157,132 for track rehabilitation and to construct a runaround track within the Gettysburg yard. The project will create one new job, PennDOT stated in a press release.

In Allegheny County, the Wheeling & Lake Erie Railway Co., of Clairton and Jefferson Townships, will get $205,823 to rehabilitate track and a bridge that will allow the Clairton Branch to return to service.

In Beaver County, Nova Chemicals, Inc., of Potter Township will get $77,400 to rehabilitate track within the insulation manufacturing plant, increasing safety and allowing heavier freight cars inside the facility.

In Blair County, Cargill Inc., of Taylor, will receive $149,425 to rehabilitate track and to construct an additional track, allowing the company to receive feed by rail from the Midwest with local distribution by truck. The project will create nine jobs.

Elsewhere, the Everett Railroad Co., of Greenfield and Freedom, will get $86,670 to repair six crossings at grade along the Claysburg Branch.

Three Bucks County carriers will get financial help.

Courier Times, Inc., of Falls Township, will receive $45,450 to construct a siding for newsprint delivery to a new production facility in the Penn Warner Industrial Park.

East Penn Railways, Inc., of Perkasie and Rockhill, will get $84,525 to rehabilitate 4.5 miles of track and repair the lining of the Perkasie Tunnel, allowing a new business to be rail served and create 25 jobs.

Shelly Enterprises, Inc., of Richland, will get $175,000 to rehabilitate a loading dock and construct a new siding for lumber delivery, creating 12 jobs.

In Butler County, Community Development Corp. of Clinton will receive $81,252 to rehabilitate track and construct a new rail spur that will allow an increase in rail service to the former USX sintering plant site, creating 25 jobs.

Carbon County’ Railroad Commission, Jim Thorpe (Carbon County) and Rush and Nesquehoning (Schuylkill County), will receive $39,361 for track rehabilitation on the Carbon and Schuylkill main line.

In Crawford County, Charter Plastics, Inc., of Titusville, will get $35,250 to rehabilitate a rail diamond, facilitating a plant expansion that will allow manufacturing large diameter pipe and create 20 jobs.

Lord Corp., of Saegertown, will receive $100,000 to construct a new siding to increase safety in handling hazardous materials.

Oil Creek and Titusville Lines, Inc., of Titusville and Oil Creek and Cornplanter townships (Venango County), $158,880 to rehabilitate track and a bridge deck on the Titusville Main and Fieldmore Springs lines to allow handling heavier rail cars. The project will create 10 jobs.

Dauphin County’s UGI Energy Services, Inc., in Swatara Township, will get $218,584 for track rehabilitation at the propane terminal to allow inbound rail shipments, creating five jobs.

In Elk County, Albert A. Prechtl, doing business as Eagle Express in St. Mary’s, will get 100,000 to construct a siding that will provide rail service to an intermodal warehouse and create 12 jobs.

In Fayette County, Fay-Penn Industrial Development Corp., of Dunbar and Bullskin townships will get $250,000 to help rehabilitate a bridge and seven miles of track.

In Lackawanna County, the Delaware & Hudson Ry. Co., Inc., of Scranton and Nicholson (Wyoming County), will receive $129,538 for track rehabilitation and signal system installation for 11 miles between Clark Summit and Scranton. The project will create five jobs.

Delaware-Lackawanna Railroad Co., Inc., of Scranton and Tobyhanna (Monroe County), will get $233,610 to rehabilitate the Pocono and Carbondale mainlines that will allow three new businesses to be served by rail, creating 175 jobs.

Flexible Foam Products, Inc., in Archdale Borough, will get $50,000 to construct a new siding for raw materials delivery, creating 100 jobs.

Luzerne County’s Community Area New Development Organization, Inc., in Hazle Township, will receive $100,000 to construct a 2.5-mile extension to the Humboldt Industrial Park Railroad to provide an eight-track yard and create 500 jobs.

In Mercer County, Duferco Farrell Corp., in the City of Farrell, will get $250,000 to rehabilitate existing track to increase car-handling capacity to the steel plant, creating 15 jobs.

In Monroe County, United Steel Products Co., of Stroud, will get $80,626 to relocate fence and construct track that will allow inbound shipments of raw steel and outbound shipments of steel pallets and create 50 jobs.

Northampton County’s CTS Bulk Terminals Co., in Lower Nazareth, will receive $189,161 to rehabilitate track and a crossover to enable proprietary cement products to be shipped and received by rail, creating 15 jobs.

Also, East Penn Sanitation, Inc., of Lower Nazareth, will get $55,594 to rehabilitate track at the solid waste handling facility, which will add transloading capability, creating one job.

Philadelphia’s Delaware Avenue Enterprises, Inc., will receive $100,000 to construct two new sidings that will expand rail-loading capacity at the steel slab handling facility and create 10 jobs.

James J. Anderson Construction Co., Inc., also of Philadelphia, will get $128,720 to rehabilitate track at the Riverside Materials aggregate unloading facility.

Elsewhere in the city, S.P.C. Corp., Inc., will receive $127,250 to rehabilitate track and construct a siding to establish rail service at the scrap-handling facility.

In Schuylkill County, Gilberton Coal Co., of Mt. Carmel Township, will get $242,000 to rehabilitate track and construct a switch in the Locust Summit Yard, creating 10 jobs.

The Locust Valley Coal Co., in Mahony Township, will receive $238,750 to rehabilitate 5.5 miles of track between Delano and Skytop Intermodal Facility to increase safety and operating speeds of coal trains. The project will create two jobs.

In Westmoreland County, the county’s Industrial Development Corp., located in Empfield and East Huntingdon townships, will get $250,000 to rehabilitate the Mt. Pleasant and Radebaugh lines to ensure safer transport of hazardous materials.


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NS derails runaway locomotives

Norfolk Southern crews derailed three runaway locomotives July 22 after the engines sprinted along more than seven miles of track between Virginia and West Virginia.

Echoing actions last month on Union Pacific, the Bluefield Daily Telegraph reported the locomotives were finally derailed near Nemours, W.Va. at 3:08 a.m., spilling more than 6,000 gallons of diesel fuel. Environmental crews contracted by NS worked throughout the day to contain the spill, which did not reach the nearby Bluestone River, NS spokeswoman Susan Bland said.

An unnamed engineer exited the idled locomotives near Bluefield to perform another duty when the locomotives began rolling.

“We had an engineer with three pusher engines pushing 124 loads of coal going to Bluefield,” Bland said. “The engineer completed the push, separated the locomotives from the train, then got off the engine and got out of the cab to perform another duty when the three locomotive units began rolling free westbound. The engineer attempted to reach the units unsuccessfully. They rolled free for 7.4 miles.”

Bland said local emergency officials in Mercer and Tazewell counties were notified, and a NS crews determined they needed to derail the unmanned locomotives near the yard at Nemours.

“I think the division supervisor assessed the situation, and they decided on this course of action,” Bland said. “They took a course of action, and it was over in like 15 minutes.”

A manually operated derailing device was used to stop the vehicles. There were no injuries, and no damage to nearby structures.

“The lead locomotive and the trailing locomotive ended up on their side, the middle unit stayed upright at a 45-degree angle,” she said.

No one stated how fast the engines were traveling when they left the rails, but the impact of the derailment resulted in some 6,000 gallons of diesel spilling on the ground in the freight yard.

Bland said, “Norfolk Southern personnel arrived on the scene within the hour and contained the spill well before 4:00 a.m., and then our environmental contractors we use were on the scene by 5:00 a.m.”

She said, “It’s our understanding that it didn’t impact the waterway. I’ve been told it is completely within our right-of-way. We will truck it out and dispose of it properly. The contaminated soil will be disposed of correctly.”

Bland said officials are still investigating why the unmanned locomotives rolled free.

“The cause is still under investigation,” she said. “We don’t know why they were able to run free. They were idling. He wouldn’t have shut them off. He was getting ready to go back.”

The incident was initially reported to emergency crews in Tazewell County, who determined the derailment had occurred in West Virginia.


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Johnson joins NS board

George D. Johnson Jr., CEO and director of Extended Stay America Inc. has been elected a director of Norfolk Southern Corp. NS Chairman David R. Goode said the board elected him July 24, 2003.

In 1995, Johnson co-founded Extended Stay America, headquartered in Spartanburg, S.C.. ESA owns and operates 461 hotels nationwide. He has been a businessman for more than 30 years, including managing general partner of American Storage and a founder and director of Advance America. His real estate development company, Johnson Development Assoc., manages five million square feet of retail, industrial, office and apartment space. Johnson is a director of Boca Resorts Inc. and Duke Energy Corp.


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Greenbrier Europe gets big order

The Greenbrier Companies of Lake Oswego, Ore., (NYSE: GBX) said on July 23 its European operations had received orders for more than 500 new freight cars from Deutsche Bahn and Transwaggon GmbH. The cars will be built at the company’s WagonySwidnica facility in Poland. Since September 2002 the carbuilder reports it has received orders from the European marketplace for more than 1,300 new freight cars valued at $130 million. Its European backlog as of June 30 was about 1,900 units valued at $165 million. That is up from 600 units valued at $45 million as of June 30, 2002.


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Total rail freight traffic up slightly

Total freight traffic on the nation’s railroads was up slightly during the week ended July 19 in comparison with the corresponding week last year, the Association of American Railroads (AAR) reported Thursday.

Total volume was estimated at 28.1 billion ton-miles, up 0.7 percent from last year. Carload freight totaled 321,541 units, down 0.2 percent from last year, with loadings up 1.3 percent in the East and down 1.4 percent in the West. Intermodal volume, which is not included in the carload data, totaled 194,492 trailers or containers, up 2.4 percent from the comparable week last year.

Most of the decrease in carload traffic was attributed to a 16.9 percent drop in motor vehicles and equipment. Also down were loadings of metallic ores, which registered a 4.4 percent decrease over last year. Forest products showed a 4 percent increase.

Eleven of nineteen commodities were up from the comparable week last year, with coke up 37.4 percent; grain mill products rising 8.4 percent and crushed stone, gravel and sand gaining 3.2 percent.

The AAR also reported the following cumulative totals for U.S. railroads during the first 29 weeks of 2003: 9,287,915 carloads, almost identical to last year; intermodal volume of 5,377,798 trailers or containers, up 6.3 percent; and total volume of an estimated 819.0 billion ton-miles, up 0.7 percent from last year’s first 29 weeks.

Railroads reporting to AAR account for 90 percent of U.S. carload freight and 96 percent of rail intermodal volume. When the U.S. operations of Canadian railroads are included, the figures increase to 96 percent and 100 percent. Railroads provide more than 40 percent of the nation’s intercity freight transportation, more than any other mode, and rail traffic figures are regarded as an important economic indicator.

Intermodal traffic was up and carload freight was down on Canadian railroads during the week ended July 19. Intermodal traffic totaled 43,758 trailers and containers, up 9.1 percent from last year. Carload volume of 56,742 cars was down 2.8 percent from the comparable week last year.

Cumulative originations for the first 29 weeks of 2003 on the Canadian railroads totaled 1,774,459 carloads, down 1.4 percent from last year, and 1,192,747 trailers and containers, up 9.3 percent from last year.

Combined cumulative volume for the first 29 weeks of 2003 on 15 reporting U.S. and Canadian railroads totaled 11,062,374 carloads, down 0.2 percent from last year and 6,570,545 trailers and containers, up 6.8 percent from last year.

The AAR also reported that originated carload freight on the Mexican railroad Transportacion Ferroviaria Mexicana (TFM) during the week ended July 19 totaled 7,405 cars, down 3.7 percent from last year. TFM reported intermodal volume of 3,450 originated trailers or containers, up 2.6 percent from the 29th week of 2002. For the first 29 weeks of 2003, TFM reported cumulative originated volume of 248,411 cars, up 1.7 percent from last year, and 102,755 trailers or containers, up 30.1 percent.

The AAR is online at www.aar.org.


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QUARTERLY AND ANNUAL REPORTS...  Quarterly and annual reports...

An FEC intermodal passes

NCI: Leo King

Railroads are reporting positive numbers for the last quarter, and some for their fiscal year. Florida East Coast is among them. Seen here is FEC intermodal 101 – a Hurricane Train – at St. Augustine, Fla., en route from Jacksonville to Miami last spring.

 

Quarterly and annual reports…

CN

Canadian National Ry. (NYSE:CNI)(TSX:CNR) reported on July 22 that its directors approved a third-quarter dividend on its outstanding common shares. A quarterly dividend of 25 cents Canadian per common share will be paid on September 30 to shareholders of record on September 9.

The Montreal-based carrier stated it produced a “Net income of $244 million, or $1.26 per diluted share, compared with operating income of $280 million, or $1.39 per diluted share, for the same quarter of 2002,” but its net income declined 12.9 percent and revenues were off 6 percent.

The freight carrier also showed “Strong intermodal and forest products results, coupled with tight cost focus, partially offset effects of the stronger Canadian dollar, reduced grain traffic and higher fuel expense.”

It also noted “Free cash flow of $169 million, up from $164 million for the same period last year.”

The railroad noted a supplementary schedule was developed using non-generally accepted accounting principal measures, which is attached to its financial statements and contains CN’s definition of “free cash flow and reconciliation to comparable GAAP numbers.”

CN’s operating income for the second quarter of 2003 declined 11 per cent to $437 million. Revenues declined six per cent to $1,463 million, while operating expenses declined three per cent to $1,026 million. The company’s operating ratio for the latest quarter was 70.1 per cent, compared with 68.4 per cent for the same quarter last year. Carloadings declined 1 per cent to 1,052,000.

The 11 per cent year-over-year appreciation of the Canadian dollar relative to the U.S. dollar in the second quarter of this year affected the conversion of CN’s U.S. dollar-denominated revenues and expenses into Canadian dollars. The stronger Canadian dollar reduced CN’s second-quarter 2003 revenues, operating income, and net income by approximately $90 million, $25 million, and $11 million (six cents per diluted share), respectively.

E. Hunter Harrison, president and CEO, said, “CN management kept its eye on the ball during the quarter, extracting maximum value from our franchise amid a host of major challenges, chief among them a significantly stronger Canadian dollar and the lingering effects of last summer’s drought-reduced grain crop.

“The stronger Canadian dollar reduced second-quarter revenues by approximately $90 million. If you exclude this impact on our business, CN’s revenues would have increased slightly, and four of the company’s seven business units would have posted revenue gains. Our second major challenge was reduced Canadian grain volumes – a result of drought conditions last summer in Western Canada – that cut our revenues by $37 million this quarter, and by $80 million for the first half of 2003.

He said the carrier’s intermodal unit “remained a stand-out, benefiting from new business and the discipline of our Intermodal Excellence initiative. At the same time, our continuing focus on discretionary spending aided CN’s improved expense performance. Free cash flow also remained strong, rising to $169 million for the quarter from $164 million during the same quarter last year.”

Harrison said, “We are guardedly optimistic about the company’s prospects for the balance of the year and into 2004. Precipitation levels on the Prairies in Western Canada lead us to believe the 2003-2004 Canadian grain crop could be a good one. Most of the crop is harvested in September and October, so we would anticipate improved grain volumes in the fourth quarter.”

The 3 percent decline in CN’s operating expenses was mainly due to lower expenses for purchased services and material, labor and fringe benefits, and equipment rents, largely as a result of the positive impact of the stronger Canadian dollar on U.S.-dollar denominated expenses. Partly offsetting the decrease were higher fuel costs and increased casualty and other expenses.

Net income for the first half of 2003 was $496 million, or $2.53 per diluted share, compared with net income of $510 million, or $2.54 per diluted share, for the same period of 2002.

Net income for the first six months of this year included a cumulative after-tax benefit of $48 million (24 cents per diluted share), resulting from a change in the accounting for removal costs for certain track structure assets. Excluding the effect of this change, first-half 2003 net income was $448 million, or $2.29 per diluted share.

First-half 2003 operating income declined nine per cent to $811 million. Revenues declined three per cent to $2,959 million, while operating expenses declined one per cent to $2,148 million. CN’s operating ratio for the first six months of 2003 was 72.6 per cent, compared with 70.7 per cent for the year-earlier period. Carloadings rose two per cent to 2,090 thousand for the first half of the year.

The eight per cent year-over-year appreciation of the Canadian dollar relative to the U.S. dollar in the first half of this year affected the conversion of CN’s U.S. dollar-denominated revenues and expenses into Canadian dollars. The stronger Canadian dollar reduced first-half 2003 revenues, operating income, and net income by approximately $135 million, $40 million, and $20 million (10 cents per diluted share), respectively.

CN added its financial results in the firm’s press release were reported in Canadian dollars and were determined on the basis of U.S. generally accepted accounting principles.


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BNSF

Burlington Northern & Santa Fe Corp. reports its second-quarter 2003 earnings were $0.54 per share compared with second-quarter 2002 earnings of $0.51 per share. Freight revenues increased 3.7 percent to $2.26 billion compared with the prior-year period, on a 4.6 percent increase in units handled, the carrier reported, and fuel expense increased $56 million, year-over-year.

A press release stated its operating income was $412 million compared with $421 million a year ago, and lower second-quarter 2003 income tax expense primarily reflects a favorable tax settlement.

“Strong international volumes led BNSF to having overall revenue growth for the second consecutive quarter,” said Matthew K. Rose, BNSF Chairman, President and CEO, “however, our bottom line continues to be impacted because of a 27 percent increase in fuel expense year-over-year.”

Freight revenues for the second quarter increased 3.7 percent, or $80 million, to $2.26 billion compared with 2002 second-quarter revenues of $2.18 billion. Consumer Products revenues increased $63 million, or 7 percent, to $911 million reflecting record growth in BNSF’s international, truckload and perishable sectors. Coal revenues increased $16 million, or 3 percent, to $504 million, largely from index-driven rate increases.

Agricultural Products revenues grew $5 million, or 2 percent, to $317 million, “reflecting increased ethanol shipments from plants in the Midwest to California,” Rose reported.

Elsewhere, “Industrial Products revenues declined $4 million, or 1 percent, to $531 million with revenue growth in both the building and construction products sectors offset by weak demand in the chemical and petroleum products sectors. Second-quarter freight revenues included increased fuel surcharges of $24 million compared with the prior year,” he said.

Operating expenses of $1.88 billion “were $96 million, or 5 percent, higher than the same 2002 period primarily related to fuel expense and higher volumes handled. The $56 million increase in fuel expense primarily relates to an average increase of $0.16 per gallon in the cost of diesel fuel to $0.89 per gallon, after hedge,” he continued.

Rose said, “Operating income was $412 million for the 2003 second quarter compared with $421 million for the same 2002 period. Lower income tax expense in the second quarter of 2003 primarily reflects a favorable tax settlement.”

The carrier reported during the 2003 second quarter, BNSF repurchased approximately 2 million shares of its common stock at an average price of $27.57 per share. This brings total repurchases under BNSF’s 150-million share-repurchase program to approximately 120 million shares as of June 30, 2003, at an average price of $25.98 per share since the program was announced in July 1997.


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FEC

Florida East Coast Industries reported on July 24 its railway’s second quarter freight revenues increased 1.9 percent to $41.8 million versus its second quarter 2002 results.

The freight carrier reported its railway segment’s operating profit increased 3.1 percent to $11.2 million, and the railway’s operating profit before depreciation increased 6.1 percent to $16.1 million.

The corporation’s realty operations and land sales were also profitable.

Robert W. Anestis, Chairman, President and CEO said, “In the second quarter of 2003, our railway and realty businesses continued to hold up relatively well despite the soft economy and realty rental market.”

He also noted “Railway freight revenues increased over the prior year period for the seventh consecutive quarter.”

FECI reported consolidated revenues of $72.6 million for the second quarter 2003, compared to $61.7 million for the second quarter 2002. Revenues included realty sales of $10.2 million for the second quarter 2003, compared to $2.1 million for the second quarter 2002.

Income from continuing operations was $8.9 million, or $0.24 per diluted share, for the second quarter 2003 (which includes $4.7 million of after-tax profit from land sales), compared to $6.4 million, or $0.18 per diluted share, for the second quarter 2002 (which includes $1.0 million of after-tax profit from land sales).

FECI reported consolidated net income of $9.3 million, or $0.25 per diluted share, compared to net income of $2.0 million, or $0.05 per diluted share, for the prior year quarter.

Included in net income is income or loss from discontinued operations related to a building sold, partnership interests held for sale and the company’s former telecommunications and trucking businesses.

Anestis said “The company’s expectations for the full year 2003 assume moderate improvement in the economy during the second half of the year. For 2003, the company continues to expect the railway segment’s revenues to range between $174 and $177 million and the railway segment’s operating profit to be comparable to 2002.”

Capital expenditures for the railway are expected to range between $30 and $32 million.

Carload revenues grew 3.2 percent primarily due to a 2.8 percent increase in aggregate revenues, reflecting strong construction demand, and transporting vehicles for the Florida National Guard.

Intermodal revenues decreased 0.3 percent, compared to the prior year period. Lower revenues from a connecting carrier for intermodal haulage and from less-than-carload carriers were partly offset by higher revenues from the Hurricane Train service from Atlanta to South Florida and business from new and existing retail intermodal customers.

Railway segment’s operating profit increased by 3.1 percent to $11.2 million versus $10.9 million due to higher revenues, which were partly offset by higher equipment costs, depreciation expense and lower casualty and insurance expense.

The Railway’s operating ratio was 75.2 percent, compared to 73.9 percent in the prior year quarter. The operating ratio was impacted by the addition of lower margin drayage operations that are currently managed by the railway as a result of discontinuing the trucking division in late 2002.


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KCS

The Kansas City Southern (KCS) (NYSE:KSU) directors last week declared a quarterly dividend of $5.9028 per share on the outstanding KCS 4.25 percent “redeemable cumulative convertible perpetual preferred stock,” even though it expects to fall short of expectations.

The firm reported its dividend is payable on August 15 to stockholders of record of the cumulative preferred stock at the close of business on August 1.

The KCS board also declared a regular quarterly dividend of 25 cents per share on the outstanding KCS 4 percent non-cumulative preferred stock. The dividend is payable on October 7 to stockholders of record of the non-cumulative preferred stock at the close of business on September 8.

KCS disclosed last week that it anticipates its second-quarter 2003 consolidated earnings will be significantly below current consensus estimates.

The railroad reported in a July 21 press release, “The primary factors contributing to missing consensus were lower earnings from Grupo TFM, which were heavily impacted by U.S. generally accepted accounting principles deferred tax provisions primarily tied to the strengthened Mexican peso versus the U.S. dollar and lower future Mexican corporate tax rates, and lower U.S. operating income compared to second quarter 2002 resulting from higher fuel, insurance and casualty related costs.”

The press statement added, “The current First Call second-quarter 2003 earnings per share consensus estimate for KCS is $0.19. KCS anticipates its earnings per share will be reported in the low single cents per share.”

KCS expects to release its second-quarter earnings before the opening of trading in the NYSE on July 30.

KCS management will discuss the company’s second-quarter earnings and operating performance at a conference beginning at 1:00 p.m. (EDT) on July 30 at the J.P. Morgan Building in New York City.

The presentation will also be available via telephone at 800-955-1795 in the U.S. and Canada, or 1-706-643-0096 (International).

A replay of the presentation will be available for one week after by calling 1-800-642-1687 (U.S. and Canada) or 1-706-645-9291 (International), and providing the conference I.D.: 1599169. The accompanying visuals to the presentation will be available on the KCS website, www.kcsi.com, on July 30 prior to the conference.


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NS

Norfolk Southern Corp. (NYSE: NSC) reported on July 22 an increase in the quarterly dividend to 8 cents per share on its common stock, payable on September 10 to stockholders of record on August 1. The railway unit was profitable while a subsidiary company reported nearly a one-third net sales increase for the quarter but sustained a $6 million operating loss for the period.

“Norfolk Southern has a long history of emphasizing a return to shareholders through the payment of dividends,” said Chairman, President and CEO David R. Goode. He added, “This dividend increase underscores our commitment to that principle.”

NS stated its railway’s net income rose 15 percent to $137 million during the second quarter of 2003 vs. the same period of 2002.

The carrier reported coal revenues climbed 11 percent on increased utility coal shipments, and the railway’s operating revenues set an all-time record of $1.63 billion, up 3 percent.

Income from railway operations declined 7 percent to $298 million, earnings per diluted share improved 13 percent to $0.35, and its operating ratio increased to 81.8 percent.

“We produced better results despite continued economic slowness in the quarter and considerable downward pressure on general merchandise traffic,” Goode said.

He added, “The quality of our transportation continues to improve due to the strength of our operating plan and our ability to operate a high-service railroad in a tough economy.”

For the first six months, net income from continuing operations, before required accounting changes, was $222 million, or $0.57 per diluted share compared with net income of $205 million, or $0.53 per diluted share, during the same period of 2002, the carrier reported in a press release.

Net income for the first six months was $346 million, or $0.89 per diluted share, and included a $114 million, or $0.29 per diluted share, gain largely due to a required change in accounting for the cost of removing railroad crossties, and a $10 million, or $0.03 per diluted share, gain from discontinued operations resulting from the 1998 sale of a former motor carrier subsidiary.

Second-quarter railway operating revenues of $1.63 billion were the highest of any quarter in Norfolk Southern’s history and improved 3 percent compared with $1.59 billion in the second quarter of 2002. Railway operating revenues for the first half of 2003 also set a six-month record rising 3 percent to $3.19 billion compared with $3.09 billion for the same period a year earlier.

Coal revenues in the second quarter climbed 11 percent to $389 million compared with second quarter 2002. The growth was driven by an increase in utility shipments as power companies replenished stockpiles. For the first half, coal revenues improved 5 percent to $743 million compared to the same period a year earlier as the result of stronger electricity production due to seasonable weather conditions in Norfolk Southern’s service region.

Intermodal revenues set records rising 2 percent to $300 million in the second quarter and 4 percent to $589 million for the first six months compared with the same periods of 2002. The growth was the result of strong international business and the successful conversion of new truck-competitive, transcontinental interline services.

Second-quarter general merchandise revenues of $944 million were down slightly compared to second quarter 2002, particularly in the automotive, metals and construction and chemical commodity sectors.

For the first six months, general merchandise revenues increased 2 percent to $1.86 billion compared with the year-earlier period. Agricultural revenues, strengthened by fertilizer and grain shipments, posted the largest gain, growing by 12 percent in the quarter and 9 percent for the first six months, compared to the same periods a year ago.

In addition, paper and forest products revenues grew by 6 percent for both the second quarter and the first six months compared with the same periods of 2002.

Railway operating expenses increased 5 percent for both the second quarter and the first six months of 2003 compared with the same periods last year. These increases primarily were due to increased compensation and benefits, higher diesel fuel costs and increased casualty and other claims costs.

For the quarter, the railway operating ratio, the percentage of revenues required to operate the railroad, was 81.8 percent compared with 79.8 percent in the same period of 2002. For the first six months, the operating ratio was 83.4 percent, compared with 81.9 during the same period of 2002.

Elsewhere, subsidiary NS Group, Inc. (NYSE:NSS) stated its results for the quarter ended June 30 showed net sales for the quarter were $65.9 million, a 31 percent increase from the first quarter of 2003, but its operating loss for the quarter was $6.0 million compared to an operating loss of $9.8 million in the first quarter of 2003.

Net loss for the quarter was $7.4 million, or a $0.36 loss per diluted share, compared to a net loss of $11.2 million, or a $0.54 loss per diluted share, in the first quarter of 2003.


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UP

Union Pacific Corp., battling high diesel fuel prices and a slow economy – as are all other U.S. railroads – said July 24 that second quarter profits fell 5 percent to $288 million, but were still strong enough to beat Wall Street estimates.

The company that owns the nation’s largest railroad said net income came to $1.10 per share, compared to $304 million, or $1.15 per share in the second quarter of 2002.

Analysts surveyed by Thomson First Call had expected $1.02 a share.

Revenue of $3.3 billion for the period ended June 30 was the best quarter ever for the company and marked a 3 percent increase over the same period last year.

Union Pacific’s steady business hauling farm products and coal helped make up for a weak quarter for carrying consumer goods like television sets and cars, the company said.

“In a weak economic climate with car loadings flat compared to last year, this excellent revenue performance indicates the strength of our business mix,” chairman and CEO Dick Davidson said.

Fuel surcharges helped offset but did not fully mitigate an additional $54 million spent on fuel because of a 16-cent-a-gallon increase in diesel prices from a year ago, Davidson said.

Net income also took a hit from a one-time expense of 3 cents a share for costs associated with the $500 million redemption of the company’s convertible preferred securities, Davidson said.

Revenue from agriculture and energy products was up 6 percent in both sectors and industrial products was up 5 percent, the company said, but revenue from consumer goods was flat and fell by 2 percent in both the automobile and chemicals businesses.

For its first six months, Union Pacific had net income of $717 million on $6.3 billion in revenue, compared with $526 million on $6.1 billion in revenue in the first half of last year.

“We are cautiously upbeat about the second half of the year,” Davidson said, but he added, “One cloud on the horizon, however, continues to be energy prices.”

Diesel fuel and natural gas prices remain high, creating a drag on the economy and affecting Union Pacific and its customers, he said.

Davidson observed, “With help from a little stronger economy, we’re positioned for growth.


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STOCKS...  Selected Friday closing quotes...

Source: Bloomberg.com

  Friday One Week
Earlier
Burlington Northern & Santa Fe(BNI)27.94028.720
Canadian National(CNI)52.02048.260
Canadian Pacific(CP)24.08022.350
CSX(CSX)32.59031.520
Florida East Coast(FLA)28.32029.610
Kansas City Southern(KSU)12.21013.270
Norfolk Southern(NSC)18.95019.520
Union Pacific(UNP)61.22059.040


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OFF THE MAIN LINE...  Off the main line...

In Pennsylvania

Elderly, spindly viaduct collapses

Last tour train on Kinzua Viaduct passes overhead

Andrew Kinzua Stauffer watches as the final sightseeing train rumbles over Kinzua Viaduct on May 18, 1958. (Pittsburgh Post-Gazette Archives)

Blustery thunderstorms sweeping across Pennsylvania toppled a historic railroad bridge on July 21 near the Allegheny National Forest in McKean County that was once the tallest and largest in the world, state officials said. The span is about 110 miles northeast of Pittsburgh.

According to state park officials and crews at the site, storms packing winds up to 80 mph caused part of the Kinzua Viaduct to collapse near Mount Jewett, sending most of it crashing into the gorge below, the AP reported. The bridge was built in 1882 and reconstructed in 1900.

“Essentially the middle part of the bridge is gone,” said Gretchen Leslie, a spokeswoman for the state Department of Conservation and National Resources, which owns the bridge.

Leslie said crews had reported that as many as 12 of the 20 support towers that make up the 3,300-ton, half-mile bridge collapsed.

State officials closed the bridge to train and pedestrian traffic last summer because they feared a strong wind whipping through the valley could stress the structure enough to send parts of it crashing into the gorge.

“Our fears were realized today and the winds collapsed a good portion of the bridge,” Leslie said.

The span, made of iron in 1882 and rebuilt using steel in 1900, stretched almost a half-mile. At 301 feet high, it stood almost as tall as the Statue of Liberty and remained the fourth tallest railroad bridge in the nation.

The Kinzua Viaduct – 1,552 tons of iron – was built in 94 days and when it was completed, some hailed it as the Eighth Wonder of the World, but since the last freight train crossed it in 1959, the bridge fell into disrepair.

Cement casings around the original brick foundations were dyed orange from rust; some scarred with cracks and gouges from age. Rust had eaten through cross members and columns, sapping half of the strength from the bottom of the bridge and leaving piles of rust flakes a foot thick on the ground.

Heavy loads had bent some of the girders over the years.

“The storm did it in. I have lost one of my best friends,” said Dick Robertson, 76, a director of the McKean County Historical Society.

Crews with W.M. Brode, of Newcomerstown, Ohio, began work to shore up the bridge in February working from the edges of the bridge to the middle. Crews were cleared from the area before the storms swept through, Leslie said.

The Kinzua Viaduct was on the National Register of Historic Civil Engineering Landmarks and National Register of Historic Places.

Bridge after storm damage as seen from sky

The center section of the 93-year-old Kinzua Viaduct lies in shambles along Kinzua Creek after being toppled by 80 mph winds. (Francie Long, Bradford Era via AP)

Thieves steal steel

The AP reported the day following the bridge collapse, park officials were cracking down on Kinzua Viaduct looters.

People were taking metal souvenirs and scrap metal.

Officials said they would be prosecuted.

"It's property of the Commonwealth of Pennsylvania and it is not permitted," said Barrett Clark, manager of the Kinzua Bridge State Park, which owns the partly destroyed Kinzua Viaduct.

"Basically what they are doing is stealing from the residents of Pennsylvania."

Clark was investigating a report that at least one person hauled away a pickup truck full of debris. Park officials also have photographs showing people taking items and will be tracking them down.

The wreckage will be analyzed to see if any of it could be used for reconstruction – if officials determine that's possible – or for another use, Clark said.


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EDITORIAL...  Editorial...

The John Robert Smith era at Amtrak

An appreciation by NCI President and CEO Jim RePass

And so it ends, a little more than five years after it began; the John Robert Smith era at Amtrak is over.

News that Mayor Smith would not be reappointed by the President to the Amtrak Board of Directors, after a half-decade run that saw him help slowly pull the nation’s passenger rail system from the brink of collapse back to the path towards renaissance under new CEO David Gunn, has sent a cold and sorrowing wail through the transportation advocacy movement.

Mayor Smith, a conservative yet progressive Republican if ever anyone ever deserved those terms, worked closely first with Amtrak Chair Tommy Thompson, then Acting Chair Michael Dukakis, and finally as Chairman of the Board himself since early on, to re-structure Amtrak.

In appearances before Congress that were as compelling as any seen on the Hill over the past few years, Mayor Smith eloquently argued for the resources that, at long last, CEO David Gunn has began to receive to rebuild this essential but long-underfunded national asset. Amtrak’s own greatest asset are its long-suffering and dedicated employees, but the Smith-recruited David Gunn, and John Robert himself, as well as outgoing Amtrak Vice Chair Michael Dukakis, were a dynamic team who especially over the past 15 months worked tirelessly to turn the foundering ship of Amtrak and get it headed out on a more even keel, along with the other members of the Amtrak Board who, taken as a whole, probably comprise the best and most effective Amtrak Board in the railroad’s 33-year history.

There is much work to be done.

New Amtrak Chair, Attorney David Laney of Dallas, who has been well-regarded since his appointment to the board a few months ago, certainly faces challenges as great or greater than those faced by Mayor Smith and his team, especially since elements of the Bush Administration has shown such hostility to Amtrak, with a misplaced ideological notion that if only Amtrak can be somehow “privatized” or routes “franchised,” it will all work better.

The passing of the John Robert Smith era at Amtrak, I am happy to say, neither means the passing of John Robert Smith as a transportation advocate, nor, if America is lucky, does it mean he will disappear from the national scene. John Robert Smith is a healer as well as a leader, and he had a vision for Amtrak and its mission to serve all of America – not just the Eastern or California corridors – that was inclusive, balanced, and fair. He is a skilled and passionate political leader, which he demonstrated just this past month in seeing his town of Meridian through the kind of upheaval that in other hands could have led to riots and destruction, but in John Robert Smith’s hands – and with the help of the wonderful people of Meridian – lead instead to healing.

No, we have not seen the last of this man. And that’s a good thing, for Amtrak, and for America.


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THE WAY WE WERE...  The way we were...

Handling the mail

NCI: Leo King

The blizzard of March 1978 in Rhode Island and Southern New England brought hardships to railroaders. The mail must get through, railroaders have said since day one. The train, on the right, climbing the former Union Station’s “great Chinese wall,” three days following the blizzard, will stop in a moment so a baggage and mail handler can put on the Providence business after unloading any inbound mail. Within two minutes, the train from Boston will be on its way to New York City and beyond.

End Notes...

We try to be accurate in the stories we write, but even seasoned pros err occasionally. If you read something you know to be amiss, or if you have a question about a topic, we'd like to hear from you. Please e-mail the crew at leoking@nationalcorridors.org. Please include your name, and the community and state from which you write.

Destination: Freedom is partially funded by the Surdna Foundation, and other contributors.

Journalists and others who wish to receive high quality NCI-originated images that appear in Destination: Freedom may do so at a nominal fee of $10.00 per image. "True color" .jpg images average 1.7MB each, and are 300 dots-per-inch for print publishers.

In an effort to expand the on-line experience at the National Corridors Initiative web site, we have added a page featuring links to other rail travel sites. We hope to provide links to those cities or states that are working on rail transportation initiatives - state DOTs, legislators, governor's offices, and transportation professionals - as well as some links for travelers, enthusiasts, and hobbyists.

If you have a favorite rail link, please send the uniform resource locator address (URL) to the webmaster in care of this web site. An e-mail link appears at the bottom of the NCI web site pages to get in touch with D. M. Kirkpatrick, NCI's webmaster in Boston.


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