Union Pacific, CSX oppose rail regulation bill before US Senate

A RAILWAY bill before the US Senate is opposed by Union Pacific (UP) boss Jim Young because it would add millions to operational costs, drive up freight rates beyond affordability, leading to more trucking which the bill seeks to reduce for environmental reasons.

"While there seems to be agreement in [Washington] DC that more freight rail is needed for the environment, regulations and draft legislation do not support that, and in many ways impede it, " said Mr Young, chairman and CEO of America's largest freight railway that dominates lands west of the Mississippi.

He echoed the views of rival CSX chief executive Michael Ward, who said the Senate bill to reauthorise the Surface Transportation Board "is not balanced", particularly its rules for positive train control (PTC).

Mr Young said PTC rules would add US$200 million to the Omaha-based railway's capital budget in 2010 and $1.4 billion in the next six years, reported American Shipper.

"And that's just the capital installation cost. It will cost us millions more annually to maintain this system. The PTC mandate is an example of well-intended legislation with negative unintended consequences," he said.

"Union Pacific's shareholders cannot be expected to bear the financial burden of PTC. It must be passed onto our customers to the extent that market will permit, especially those chemical customers who drive the vast majority of our installation requirements.

"Our position, whether the discussion is PTC or other regulations, is that we must be allowed to earn adequate returns and attract new capital. With PTC for example, if we cannot be fully compensated, we will cut discretionary capital and our ability to expand and grow with our customers will be reduced," Mr Young said.
 

(Source: www.schednet.com)