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Rail News Home Rail Industry Trends

1/28/2010



Rail News: Rail Industry Trends

Class Is set 2010 capital spending budgets


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While the Class Is report their fourth-quarter financial results this month, they’re also announcing their planned 2010 capital spending budgets.

Today, Canadian Pacific announced it plans to spend between $680 million and $730 million on capital programs, including $585 million to renew track infrastructure.

Yesterday, Norfolk Southern Corp. said it’s budgeting $1.44 billion for capital expenditures this year vs. $1.30 billion in 2009 and $1.56 billion in 2008. The budget includes $706 million for roadway work, such as rail, tie and ballast programs, and bridge replacements; $221 million for communications and signal projects, maintenance-of-way equipment, grade separations and other work; $184 million for facilities and terminals, including intermodal terminals and mechanical shops; $140 million for technology, including $40 million for positive train control (PTC); $110 million for key infrastructure, such as MidAmerica Corridor and CREATE projects; and $81 million for rolling stock.

On Wednesday, CN said it plans to invest about $1.4 billion in capital programs this year. The capital expenditure “target” reflects a “slight increase over CN’s 2009 capital spending,” said spokesman Mark Hallman in an email. More than $1 billion will be spent on track infrastructure to “maintain a safe railway, and to improve network productivity and fluidity,” he said.

Three other Class Is already announced their 2010 capex budgets earlier this month. CSX Corp. is budgeting $1.7 billion, about 70 percent of which will target infrastructure maintenance, with the remainder focused on the National Gateway intermodal corridor and equipment, as well as $200 million on regulatory requirements, including $170 million on PTC.

Union Pacific Railroad plans to spend $2.5 billion, the same amount as last year but down from $3.1 billion in 2007. The Class I will spend $150 million to complete an intermodal terminal in Joliet, Ill., and $200 million on PTC.

And BNSF Railway Co. is budgeting $2.4 billion, about $240 million less than last year because the railroad plans to acquire fewer locomotives in 2010 (about 170 units costing $320 million). The Class I expects to spend about $2.1 billion on track, signal systems, structures, freight cars and technologies, including PTC.

Meanwhile, the three Mexican Class Is announced their 2010 capex budgets earlier this week at Asociacion Mexicana de Ferrocarriles A.C.’s RT2010 AMF event in Monterrey.

Ferrocarril Mexicano S.A. de C.V. plans to spend $121.6 million. The budget primarily focuses on infrastructure improvements and the construction of a new yard in Rio Escondido, Coahuila, near Piedras Negras, said Ferromex spokesperson Leonor Torres Dueñas in an email.

Ferrosur S.A. de C.V. plans to spend $37.3 million for new AC locomotives, infrastructure work and “urban programs with several states,” said Dueñas.

Finally, Kansas City Southern de México S.A. de C.V. is budgeting $121 million, including $80 million for infrastructure upgrades.

Jeff Stagl