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AAR: Freight railroads to spend $22 billion on capex in 2017

Freight railroads are expected to spend $22 billion this year to maintain and upgrade the U.S. rail network.
Photo – BNSF Railway Co.

U.S. freight railroads are projected to spend $22 billion this year to maintain and upgrade the nation's private rail network, the Association of American Railroads (AAR) announced today.

The railroads' investments will include upgraded track and locomotives, as well as advanced technology designed to meet demand and improve railroad safety, according to an AAR press release.

"This year's private network spending, a combination of capital expenditures and maintenance, is part of a continued trend of remarkable proportions, including more than $630 billion since the industry was partially deregulated," said AAR President and Chief Executive Officer Edward Hamberger.

Freight railroads spend six times more of revenue on capital expenditures than the average U.S. manufacturer, according to AAR. In 2014 alone, freight railroads created nearly $274 billion in economic activity, generated nearly $33 billion in state and federal tax revenues and supported nearly 1.5 million jobs nationally.

"As the House of Representatives convenes today to discuss a '21st century infrastructure' and policymakers continue bipartisan discussions with the Trump administration, we hope these leaders realize how important America's private freight-rail network is in moving raw and finished products, supporting the U.S. manufacturing sector, providing a foundation for commuter and passenger rail and lessening deterioration of this country's public infrastructure," Hamberger said.

Meanwhile, Kansas City Southern Railway Co. announced yesterday it will spend $25 million this year on construction and improvement projects on its Beaumont Subdivision.

Rail, crosstie and crossing improvements are planned for the area between DeQuincy and Hornbeck, La. Work is expected to begin in early February and last through April, KCS officials said in a press release.

The project will include the replacement of 24 miles of rail and 70,000 ties, and improvements to 56 grade crossings.

Contact Progressive Railroading editorial staff.

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