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The Association of American Railroads has published a new report updating the industry’s progress on installing Positive Train Control (PTC), which the nation’s freight railroads said is delayed because of the FCC directive that suspended installation of approximately 20,000 communication antennas necessary for PTC to work until the antennas are assessed through the FCC’s process.
The approval process originally mandated by the FCC includes the use of the National Historic Preservation Act (NHPA), in which railroads must ascertain if each of the 20,000 communication antennas will harm areas of historic, cultural, or religious significance. Currently, the FCC is still determining how to streamline this review of the antennas. PTC can take place only with a communications network in place that includes the antennas, which are spaced along the 60,000 or so miles over which PTC is being installed.
“Everyone in the industry is greatly frustrated at the inability to move forward and do what we need to do to advance PTC installation,” said Association of American Railroads President and CEO Edward R. Hamberger. “It’s been two steps forward, three steps back for months and we simply don’t have the certainty we need to move ahead and get PTC tested, fully functioning, certified and ready to go.”
At one time the freight railroads had projected that they would have PTC installed on 40 percent of the network mandated by FRA by 2015. The railroads now believe that, because of the FCC issues, only 20 percent of the PTC network will be up and running by the congressionally imposed deadline of Dec. 31, 2015.
Hamberger had alerted congress to the inability of the rail industry to get FCC approval for installing the antennas in the first week of March. “The FCC’s stop-work order has effectively prevented us from doing what Congress mandated and we’re fully committed to doing – installing a nationwide PTC system,” he said. “We are caught between a statutory requirement and an unworkable bureaucratic process and don’t see a viable path forward to deploy PTC in a timely manner.”
Railroads have been working on other projects required to implement the PTC and, to date, have one third of required wayside units deployed, replaced one half of signals needed for implementation and have mapped most of the track that will be equipped with PTC. Also, PTC equipment has been installed or partially installed on 50 percent of the locomotives that require the equipment.
The freight rail industry has spent approximately $4 billion to date implementing the PTC system, which was part of the 2008 Rail Safety Improvement Act, and the FRA estimates that the total cost to the freight rail industry will be $5 billion.
AAR’s report to FRA includes a summary of the freight railroad industry’s progress, an in-depth look at issues such as delays in availability of critical back-office-server software, complexities of mapping a nationwide rail network, and taking a phased approach to testing and implementing PTC on each railroad’s PTC network.
In conclusion, the AAR report states, “Despite the railroads having spent approximately $1.5 million to develop and install PTC, the December 31, 2015, deadline for implementation of a nationwide interoperable PTC network is not achievable.
Union Pacific Corporation has reported a net income of $1.1 billion for the 2014 first quarter, or $2.38 per diluted share, compared to $957 million in the 2013 first quarter, or $2.03 per diluted share. Diluted earnings per share increased by 17 percent. The 2014 first quarter operating ratio of 67.1 percent was a first quarter record, 2.0 points better than the first quarter 2013.
Operating revenue for the 2014 first quarter totaled $5.6 billion, an increase of 7 percent when compared with the 2013 total of $5.3 billion. Operating income for the 2014 first quarter totaled $1.85 billion, up 14 percent from the 2013 first quarter. First quarter business volumes for 2014 increased 5 percent and quarterly freight revenue increased 6 percent compared to the first quarter of 2013.
“Union Pacific achieved record first quarter financial results, leveraging the strengths of our diverse franchise in the face of challenging weather conditions,” said Union Pacific CEO Jack Koraleski. “We’re proud of the efforts of the men and women of Union Pacific, who worked tirelessly to serve our customers despite these weather challenges and helped us achieve such a solid start to the year.”
Freight revenues increased in the following commodity groups in the 2014 first quarter when compared to the first quarter 2013: agricultural products, up 16 percent; industrial products, up 10 percent; intermodal, up 4 percent; and coal, up 3 percent. Automotive volumes were flat as were chemicals volumes, with growth in base chemicals offset by a reduction in crude oil shipments.
“As we look forward, we’re watching the economy very closely, as well as the potential impacts of weather, particularly on our coal and grain business. There’s still a lot of year ahead of us, but we are seeing signs of gradual economic improvement, and we’re encouraged by the opportunities it presents,” remarked Koraleski. “With the power and potential of the Union Pacific franchise, we’ll leverage these opportunities to drive record financial performance and shareholder returns this year and in the years to come.”
The Company repurchased 3.8 million shares in the first quarter 2014 at an average share price of $178.85 and an aggregate cost of $683 million.
The Metropolitan Transportation Authority (MTA) has awarded two contracts valued at $627.79 million for the installation of communications systems in Grand Central Terminal’s future Long Island Rail Road (LIRR) concourse and for the lining of newly excavated tunnels with permanent walls.
“The work to be performed through these contracts will significantly advance East Side Access, the most complex and largest transportation infrastructure project underway in North America,” said President of MTA Capital Construction Michael Horodniceanu. “Tunnels that have been drilled through Manhattan bedrock will be waterproofed and lined with concrete and readied for tracks. A cavern that is presently a raw concrete space will be activated with advanced communications networks that will be used by tens of thousands of people each day. When Long Island Rail Road riders come to Grand Central, the systems that will be put in place through these contracts will serve as an unseen backbone making train service possible.”
Tutor Perini Corporation has been awarded a $333.59 million contract, with options leading to a total of $550.4 million, to complete communications systems that will be used by both the public and employees in the future LIRR concourse. They will also be responsible for infrastructure support systems needed to make the space usable by the public. Communications systems will include telephone, two-way radio, public address, digital signage and fire detection. Infrastructure support systems include tunnel ventilation, drainage and lighting as well as plumbing and fire protection.
A $294.2 million contract has been awarded to Frontier-Kemper Constructors to build permanent structural concrete lining on 10,000 linear feet of newly excavated tunnels north of Grand Central Terminal running from 50th Street and Park Avenue to 63rd Street and Second Avenue. Work on the tunnels will include embedded mechanical, electrical and plumbing systems.
Under the contract, Frontier-Kemper will also rehabilitate the segment of the 63rd Street Tunnel under the East River that will be used by LIRR trains, which was completed in the early 1970s. The firm will also complete work on the underground portions of two facilities, located at 50th Street and 55th Street, which will ventilate the tunnels and cavern that will house the new LIRR station at Grand Central. The above-ground portion of the 50th Street ventilation facility and blasting underneath the 55th Street ventilation facility have been completed.
The East Side Access project will bring trains from Long Island Rail Road to a new concourse being built beneath Grand Central Terminal. Each cavern will contain four tracks, an upper and lower level platform, and a mezzanine.
$249.8 Million Approved for Charlotte LYNX Blue Line Extension and Blue Line Capacity Project ConstructionApril 18th, 2014
The city council off Charlotte, N.C., has authorized $249.8 million for construction of the LYNX Blue Line extension (BLE) and the Blue Line capacity project. The completion of the BLE will give the Charlotte Area Transit System (CATS) more than 18 miles of rapid transit in the city.
The $119 million contract for construction of the BLE was awarded to Lane Construction Corporation and includes construction of bridges, arterial roadways and retaining walls. Erosion control, sewer and water main installation and drainage as well as traffic signals and traffic control are also included in the contract.
The BLE extends the LYNX Blue Line light rail by 9.3 miles, which will allow the service to run from Uptown Charlotte to the UNC Charlotte campus and will include 11 light rail stations and four parking facilities. Operations on the line are scheduled to begin in spring of 2017.
Balfour Beatty Infrastructure Inc. was awarded the $114 million contract for the installation of the light rail track, train control and signal systems. They will also be responsible for the overhead catenary and traction power system as well as the communications systems.
The remaining $16.4 million will be used for the expansion of platforms and systems on the current LYNX Blue Line to accommodate three-car trains at the I-485/South Blvd., Stonewall and Seventh Street Stations. Upgrades will also be made to the communications, power, train control and signal systems to run the longer train.
CATS and the City of Charlotte received an $18 million Transportation Investment Generating Economic Recovery III (TIGER III) grant from the U.S. Department of Transportation to assist with the capacity enhancements along the LYNX Blue Line.
The Massachusetts Bay Transportation Authority (MBTA) has put the first of 40 new environmentally friendly diesel-electric locomotives into service on the Haverhill Commuter Line. The new locomotives will be tested and placed into service throughout the MBTA’s 12 commuter rail lines as they arrive through summer of 2015. They will replace existing locomotives between 35 and 40 years old.
MBTA General Manager Dr. Beverly Scott was at North Station when the first of the new commuter rail locomotives went into service. “This is a great day,” commented Dr. Scott. “This state-of-the-art equipment allows us to continue our efforts to improve customer satisfaction by providing the most reliable rail service possible.”
The Authority awarded a $222 million contract in 2010 to MotivePower, Inc. (MPI), a Wabtec company, for 40 new diesel-electric passenger locomotives. The locomotives feature new communications systems and are compliant with current EPA Emission Standards. GE is predicting up to a 6% increase in fuel efficiency when compared to the MBTA’s older locomotives, which may result in approximately 10,000 gallons of fuel saved per locomotive per year.
Kansas City Southern (KCS) has reported first quarter 2014 revenues of $607 million, an increase of 10% over first quarter 2013, with carload volumes 4% higher than the 2013 first quarter.
Reported net income in the first quarter of 2014 totaled $94 million, or $0.85 per diluted share, compared with $104 million, or $0.94 per diluted share, in the first quarter of 2013. Excluding the impacts of lease termination costs, foreign exchange rate fluctuations and debt retirement costs, adjusted diluted earnings per share for first quarter 2014 was $1.05, an 18% increase when compared with $0.89 in the first quarter of 2013.
First quarter revenue growth was led by a 40% increase in agriculture and minerals compared to the first quarter of 2013. This was primarily due to an increase in grain volumes over 2013 volumes, which were affected by the 2012 drought conditions in the Midwest. Intermodal and automotive revenues grew by 10% and 7%, respectively. Chemical, petroleum, and industrial and consumer revenue grew by 3%, and energy revenue grew by 2%, compared with the 2013 first quarter.
“We are pleased with how our company performed during the first quarter,” stated David L. Starling, Kansas City Southern’s president and chief executive officer. “All six commodity groups reported year-over-year revenue gains led by agriculture and minerals, which increased 40% over the prior year. Later in the first quarter, KCS also recorded higher than expected utility coal volumes and revenues as a result of higher natural gas prices, which made coal a more competitive option benefitting certain plants we serve.”
After adjusting for lease termination costs, operating expenses in the first quarter were $418 million, 7% higher than 2013 operating expenses. Adjusted operating income for the first quarter of 2014 increased by 17% with a reported income of $190 million compared with $163 million for the same time period in 2013. First quarter 2014 adjusted operating ratio was 68.7%, a 1.8 point improvement over the 2013 first quarter.
“While it is still early in the second quarter, KCS business levels have improved in April,” commented Starling. “The indication that our core business appears to be gaining strength provides us with positive momentum towards achieving the 2014 goals we outlined to investors in January.”
Glen R. Murray, Minister of Transportation and Infrastructure of Ontario, has announced that progress is being made on Toronto’s new Eglinton Crosstown Light Rail Transit (LRT), the province’s largest public transit construction project in more than half a century.
Tunneling is underway from the west launch site area near Black Creek Drive to Yonge-Eglinton station and construction has also begun at the tunnel boring launch site east of Brentcliffe Road. The headwalls that will form the future underground station boxes have been completed at Keele and Caledonia, and work has begun on the future Dufferin and Oakwood stations. Construction has also started on extraction and launch shafts at Allen Road, which will allow the tunnel boring machines to skip over the TTC subway Line 1 so it can continue to operate during construction.
“Our government is making progress on the biggest investment in public transit in the City of Toronto,” said Murray. “The new Eglinton Crosstown LRT will help advance economic development and get residents and businesses to work, school and play faster than ever before.”
The Eglinton Crosstown LRT line will run about 19 kilometers along Eglinton Avenue between Mount Dennis (Weston Road) and Kennedy Station and include up to 25 stations and stops. About 10 kilometers will be underground between Keele Street and Laird Drive and will continue east on an at-grade right-of-way lane.
The province is investing $5.3 billion toward the construction of the line, which began in 2011 and is expected to be in service by 2020. Metrolinx, Ontario’s regional transportation agency for the Greater Toronto and Hamilton Area, is responsible for building the transit line.
“The Eglinton Crosstown is one of The Big Move projects currently under construction in the region. Metrolinx continues to make progress on its mandate to transform transit and improve how the region is connected,” stated Metrolinx President and CEO Bruce McCuaig.
Earlier this week, the government released its Moving Ontario Forward plan. The 10-year plan would invest $29 billion for priority infrastructure projects such as public transit, roads, bridges and highways.
U.S. Transportation Secretary Anthony Foxx visited the Siemens USA, Norwood Motors Manufacturing Facility during his Invest in America, Commit to the Future bus tour, a multi-state tour highlighting the need to invest in America’s transportation infrastructure when the nation’s surface transportation programs are set to expire and the Highway Trust Fund is running out of money.
Secretary Foxx toured the plant and met with employees who are building motors and gears for Amtrak Cities Sprinter (ACS-64) locomotives for use on Amtrak’s heavily-traveled Northeast Corridor (NEC) and Keystone Corridor. Siemens relies on more than 60 suppliers in over 20 states for parts and materials to build the locomotives.
“Siemens is creating jobs and increasing work not just in Ohio but across the country, thanks in part to President Obama’s commitment to improving passenger rail,” remarked Secretary Foxx. “I’m traveling across the country all week to highlight work like this that shows the difference we can make and the jobs we can create if we invest in America and commit to the future.”
Siemens Norwood Facility is currently manufacturing traction motors and gears for 70 energy-efficient, electric locomotives as part of Amtrak’s equipment modernization effort. The plant will also manufacture motors to power 32 next-generation passenger train locomotives being built under a Multistate Procurement led by the Illinois Department of Transportation, with funding from the Federal Railroad Administration (FRA) under its High-Speed and Intercity Passenger Rail Program. The Norwood facility previously manufactured motors for the Port Authority Trans-Hudson (PATH) rapid transit system, and the New York City Transit Authority, with $1.5 billion in multi-year federal grants from the FRA.
After touring the facility, Secretary Foxx spoke about the U.S. Department of Transportation‘s plan to address the infrastructure deficit with a $302 billion, four-year surface transportation reauthorization proposal, which includes $19 billion for current and future rail service improvements. Secretary Foxx and President Obama will send the bill to Congress later this month.
“Throughout our history, Americans have always been able to leave their children a brighter future, thanks in part to the opportunities transportation has provided. We are at risk of failing our children. We need to not only invest in America, but commit to the future – not only rebuild and repair our roads and bridges, but re-imagine how we do it,” said Secretary Foxx.
The Invest in America, Commit to the Future five-day bus tour includes visits to manufacturers, bridges, freight facilities and highway projects through eight states. In an effort to raise awareness of America’s infrastructure needs, Secretary Foxx is visiting with business leaders, stakeholders and community members to highlight infrastructure gaps that need to be filled in order to promote economic growth and American competitiveness.
Keolis Commuter Services, which will begin operating the Massachusetts Bay Transportation Authority (MBTA) commuter rail system on July 1, has named David T. Mitrou general counsel and director – labor affairs for the company’s MBTA commuter rail contract.
“As we rapidly prepare for taking over the MBTA commuter rail contract this July, we’re pleased to be getting legal guidance from such an experienced and well-respected railroad expert,” said Gerald Francis, acting general manager for Keolis Commuter Services in Boston.
Before joining Keolis, Mitrou was employed by The McCormack Firm in Boston, where he was a partner who represented commuter rail operators and other public transportation service providers in Massachusetts. His client experience includes the MBTA, its past two commuter rail operators, and the Canadian National Railway Company. Previously, Mitrou was an assistant district attorney in Nassau County, N.Y.
Mitrou earned a bachelor’s degree from Ithaca College and a law degree from Northeastern University School of Law. He has been recognized in “Massachusetts SuperLawyers – Rising Star Edition” seven times. He is a member of the National Association of Railroad Trial Counsel.
CSX Corporation has reported a decrease in its 2014 first quarter net earnings of $398 million when compared with its 2013 first quarter net earnings of $462 million. Earnings per share were $0.40 for the first quarter of 2014 compared with $0.45 per share in the same quarter of 2013.
Revenue increased by 2 percent to $3.0 billion for the 2014 first quarter on 3 percent volume increases. Declines in coal were offset by strength in intermodal and merchandise markets.
Operating income declined 16 percent to $739 million and the operating ratio increased 520 basis points to 75.5 percent, primarily due to the impact of winter weather conditions. CSX estimates that weather-related disruptions increased expenses by approximately six cents per share and impacted revenue contribution by approximately two to three cents.
Michael J. Ward, CSX chairman, president and chief executive officer, praised the work of employees challenged by winter’s extreme weather conditions. “The company is indebted to the dedicated men and women of CSX who worked tirelessly through one of the worst winters on record to keep the network running as fluidly as possible,” he said. “Thanks to the hard work of our employees, service levels are gradually recovering, and we are capitalizing on an economy that continues to show positive momentum.”
CSX expects modest full-year earnings growth for 2014 on the strength of broad-based merchandise, intermodal gains and an improving domestic coal environment. The company is confident it can sustain double-digit earnings growth and margin expansion in 2015 and beyond for its shareholders and also expects to sustain a mid-60s operating ratio longer-term.
The company’s Board of Directors approved a 7 percent increase in the quarterly dividend to $0.16 per share, payable on June 13, 2014 to shareholders of record at the close of business on May 28, 2014. This represents a 20 percent compound annual growth rate during the past eight years.