Should the US government buy the freight railroads, take what it wants, and sell them.

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Continuing on thoughts on high speed rail, we get to the question of rights-of-way. Acquiring rights-of-way for new HSR corridors is likely to be expensive. The owners of the best rights-of-way are freight railroads. Of course many of those lines are used for freight travel.

Warren Buffett's Berkshire Hathaway recently purchased BNSF for $28B.
http://stocks.investopedia.com/stock-analysis/2010/Buffett-Rides-The-Rails-CP-NSC-UNP-CSX0504.aspx?partner=YahooSA">Buffett Rides The Rails

Current market capitalizations for major US railroads are (from yahoo finance:
CP $9.7B
UNP $38B
NSC $22B
CSX $21B
KSU $3.8B

So these six RRs (assuming BNSF at $28B) could be purchased for a mere $122.5B. (Which is apparently nothing in the modern world of Washington, and less than the market value of Apple, Inc.)

Then, the good passenger tracks for both HSR and urban transit could be stripped, and the remainder of the RRs re-privatized for some large (but not quite as large) sum of money.

I posit this would be cheaper than negotiating for lines on an individual basis. To illustrate, the cost of merely running rights for the Northstar Commuter line on BNSF track for about 40 miles, plus paying BNSF to operate the train was $107.5M. This is not grade separated, and even more importantly, has to share tracks with freight, prohibiting high-speed operation. This is well less than 1/1000 of the scope of a national HSR network (which has been estimated at $2T), (though perhaps more than 1/1000 of the distance).

At any rate, if HSR advocates are serious, they should contemplate nationalizing the freight RRs, and stripping them of RoW rather than negotiating piecemeal.

Mind you, I do not think this is a good idea.

1 Comment

A couple issues here:

1. The most expensive parts of high speed rail are in cities. I can't find the document, but in California, the per-mile cost of HSR in the Central Valley is $20m, which is not much more than the cost of electrification ($5m/mile) and infrastructure ($5-10m/mile). Getting in and out of San Francisco and LA is quite a bit more expensive.

2. HSR and freight rail are different technologies and require, in many places, different infrastructure. On straight, flat plains they could run side-by-side. But HSR is time- and distance-sensitive, freight rail is less so. Thus, freight lines can follow sinuous river valleys to eliminate grades, HSR uses tunnels or steeper grades (which it can tolerate) to cut down on distance. Freight rail can be curvy—speeds rarely exceed 60 mph. HSR needs straightaways to attain high speeds.

3. Finally, the only places where acquiring freight rail lines would really be helpful would be through forbidding terrain. A freight line could sell to the government for next-to-nothing across the plains and turn around and build a new line right next-door. But the freight lines would fight tooth and nail against seizure of passes and tunnels which see more than a hundred trains a day—these few sections are worth much more to everyone.

What we really need are two things. First, we need the FRA to allow for mixed traffic for the first and last ten miles in and out of cities, where there is no room for new HSR ROW. Second, we need to use eminent domain to take 50-foot rights of way across flat areas for new HSR, not focus on upgrading freight lines which may never even be able to support speeds over 110 mph.

David Levinson

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This page contains a single entry by David Levinson published on May 5, 2010 7:25 AM.

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