(The following appeared at Shipping Digest.com on September 22.)
Union Pacific Railroad is aiming for a capital budget in 2009 that will share some rough outlines of the one it is implementing this year.
James R. Young, the company’s chairman, president and chief executive, told the federal Surface Transportation Board in a peak season update letter that it expects to spend about $3 billion on rail system infrastructure and to expand capacity next year. That would be in the same range as the $3.1 billion capital plan for 2008 that UP first announced last February.
In it, the company aimed to spend $1.6 billion this year to maintain and upgrade the track network, and another $840 million to expand capacity of the rail system and its terminals.
UP also targeted $490 million for improving its train power and railcar fleet, and $170 million on other projects including an information technology upgrade and testing a positive train control product.
Young said UP officials “are in the planning cycle now and have not made specific decisions about which projects to fund.”
However, he said UP plans to spend about $2 billion next year “to maintain the railroad, replace existing infrastructure and ensure safety.” In addition, “we tentatively expect” to spend about $1 billion on new capacity, he said, where projected returns justify the work.
He said some of UP’s top needs include additional mainline track for Wyoming coal operations, more coal train capacity in southern Illinois, clearing bottlenecks in Missouri between St. Louis and Jefferson City, and adding capacity to the line between Tucson and Southern California.
The list goes on, but UP, like some other carriers, stressed the need to smooth out congestion snags at the key gateway of Chicago.