UTU News Digest - Friday, February 4, 2000

UTU Daily News Digest

Information of interest to operating railroad and transportation employees

Friday, February 4, 2000

CANADA: CN, BNSF ask regulators to spend year to review merger

MONTREAL -- Canadian National Railway and Burlington Northern Santa Fe Railway on Thursday proposed that U.S. regulators should take up to 365 days to review their planned $19 billion merger into North America's largest railway, Reuters reported.

The proposed review scheduled filed with the U.S. Surface Transportation Board (STB) is longer than the panel has spent looking at other recent railway mergers, but not as long as the regulators are allowed to take to consider the deal, a BNSF spokesman said.

The proposal to merge Montreal-headquartered Canadian National and U.S.-based Burlington Northern Santa Fe and create a rail network of nearly 50,000 miles (80,465 kilometres) of track has drawn fire from several other large railways and shipping groups.

"BNSF and CN have been talking with their customers and understand their concerns about service and competitive issues. BNSF and CN will be making proposals to resolve the issues in the near future," the companies said in a press release, quoting from its filing to the STB.

The two companies said they would file their formal application seeking approval by the STB of the merger "as soon as practicable" after March 20. The board is allowed to spend up to 15 months to review the proposed deal.

The transportation board has also scheduled a public hearing March 8, on the issue of rail mergers and the future structure of the North American rail industry.

CALIFORNIA: Incidents involving tucks vs. Metrolink trains are on alarming rise

LOS ANGELES -- Concerned about the alarming increase in the number of collisions between trucks vs. Metrolink trains, Metrolink officials today issued an alert to trucking companies to have their drivers be extra-vigilant and always expect a train when approaching railroad tracks, the agency said in a press release.

There have been five separate train vs. tractor-trailer incidents involving Metrolink trains in the last three months throughout the Southland, a significant increase from the prior 24 months when there was only one such incident throughout an almost two year period.

While there have been only minor injuries in each of the five incidents, Metrolink officials are worried about the growing trend. Over the last seven years a total of 17 truck vs. Metrolink train incidents have occurred. Fourteen of the incidents have occurred in Los Angeles County, most of them in the San Fernando Valley.

"There is more and more truck traffic on our streets today," said Metrolink CEO David Solow. "The booming economy has brought with it an increase in freight carrier commerce, and that has meant a steady influx of additional truck drivers who may not be familiar with Metrolink's level of train operations. We have been working with the trucking industry to help bring new truckers up to speed on some of the hazards around railroad tracks and how to avoid them."

The most recent incident occurred at the intersection of Grandview Ave. and San Fernando Rd. in Glendale on Jan. 28 when a tractor-trailer rig hauling an oversized oil refinery processor got stuck on the tracks and was hit by a Metrolink train. Metal debris was scattered for a block and several wheels on the train were derailed.

Metrolink safety officials are focusing attention on reaching out to the trucking industry, but because there are many out-of-state vehicles, it is a challenge, according to Sgt. Corky Jackson of the Metrolink/L.A. County Sheriff's Unit.

"To date, we have focused our outreach toward businesses very near railroad tracks that may have trucks delivering goods from out-of-state," says Jackson. "We try to work with the businesses and freight carriers to let them know what safety precautions these trucks should take since often the companies are not aware of our particular commuter rail routes."

Sgt. Jackson says that Metrolink plans to deploy additional personnel in the coming months to make presentations to trucking companies and meet with drivers. In 1999 a total of 2,815 professional drivers from throughout Southern California heard presentations by rail volunteers on railroad safety, according to the non-profit rail education group California Operation Lifesaver, Inc. For now, Jackson says the best advice for truckers is to drive defensively and always expect a train when approaching the tracks.

Metrolink's first concern whenever an incident occurs is for the safety of the passengers from injuries or fatalities, but even incidents with no serious injuries are costly. Metrolink Director of Equipment Bill Lydon says that the moment an incident happens, it triggers a whole series of costs. He estimates the damage from the recent Glendale incident at $750 thousand, but says there are often uncovered expenses such as securing bus transportation for stranded passengers, labor and repair costs, and the cost of special equipment that may have to be leased.

"The cost of an incident depends on the extent of the damage," says Lydon. "Costs associated with the recent truck incidents are becoming astronomical." In addition, if a Metrolink rail car has to be kept out of service for any length of time, it reduces the number of available cars for growing passenger demand. This also puts more miles on the rest of the fleet.

Metrolink passenger cars and locomotives have withstood significant impacts over the years and due to the integrity of its construction the equipment holds up very well, according to Lydon. Officials assert that the Metrolink equipment is safe as demonstrated by its performance in prior collisions.

If trucking companies or any professional driver organization wishes a rail safety presentation, please call the Metrolink Rail Safety Training Office at (213) 452-0239.

NEBRASKA: City, U.P. agree to site sale terms

OMAHA -- The City of Omaha has completed an agreement to buy nearly all the land it wants for its proposed $281 million convention center-arena, the Omaha World Herald reported.

If Omaha voters approve May 9, the city will pay costs totaling $23.3 million for 104 acres at the northeast corner of downtown Omaha. The land price is included in the $281 million total.

The City Council still must approve the purchase agreement. City Council President Paul Koneck said he favors the agreement and he believes the council will approve it.

The Union Pacific Railroad, the current owner, will pay all environmental cleanup costs - including removing any contamination not yet discovered, officials said.

The price is fair and reasonable and represents a sizable concession by Union Pacific, Mayor Hal Daub said Wednesday in announcing the agreement.

The agreement gives the city control over 90 percent of the proposed convention center-arena site, Daub estimated. Talks continue with a few other land owners along the edges.

The mostly abandoned rail yard just west of Abbott Drive is the best site for a convention center and arena, said David Sokol, chairman of a board that is making preparations for the project.

In 1997, when Sokol headed a citizen’s commission, the Union Pacific site wasn't his commission's first choice. The Sokol commission recommended tearing down buildings and constructing a convention center-arena southwest of the Old Market.

Sokol said then that the U.P. site was too far from hotels and restaurants, the soil had environmental problems and railroad tracks would be expensive to relocate.

The Old Market site failed partly because businesses said that the historic part of downtown would be overwhelmed by traffic and people.

Daub continued to plug for the Union Pacific rail yard.

Divisiveness over a site was blamed in part for the Legislature's refusal in 1998 to help with convention center-arena financing. The Legislature wouldn't permit Omahans to vote on a proposed half-cent increase in the city sales tax to help pay for the project.

In the fall of 1998, Daub and the citizen’s commission united in favor of the Union Pacific site. Last year the Legislature approved a public-funding mechanism that could return up to $75 million in new state tax revenue for repayment of bond principal and interest.

Sokol said Wednesday that he now favors the U.P. site. Architects have moved the convention center-arena southward from an earlier plan, reducing the walking distance to the Old Market by three blocks, said Sokol, an Omaha businessman who now heads the interim Metropolitan Entertainment and Convention Authority.

The other problems that concerned the former Sokol commission have been solved, he said, with Union Pacific agreeing to do all environmental cleanup and with an agreed-on cap to the city's relocation costs.

The Union Pacific site already has good access to Interstate 480, which skirts the north edge of downtown, Daub said. Roadwork will improve I-480 entrances and exits, he said.

Considering acquisition and site preparation, the Union Pacific site will cost less than the Old Market site would have cost, Sokol said.

The agreement represents a substantial concession by Union Pacific compared with the price the railroad might have received on the open market, U.P. Chairman Dick Davidson and Daub said.

The City of Omaha's $23.3 million costs consist of a purchase price of $11.34 million and relocation costs capped at $12 million. The city will pay for removing buildings, except for removing asbestos, which Union Pacific will pay.

The rail yard is a part of Omaha history. A sign on the site will note the historic significance.

Union Pacific had large locomotive and car repair shops there for 123 years until moving the shops to Arkansas in 1988. Some repair of the railroad's business cars remains there, involving 40 employees. That work will be moved, probably to Council Bluffs, Davidson said.

Union Pacific already has spent $4 million to remove arsenic, lead, petroleum products and asbestos, Davidson said. "I think we already have got the worst of it out," he said.

A protection order specifying the cleanup measures the railroad must take is awaiting the Environmental Protection Agency's signature, Daub said. "All substantive (environmental cleanup) issues have been settled," he said.

The environmental cleanup won't delay building work, Daub said. If voters approve $198 million in public bonds on May 9, the convention center-arena would open in 2003.

ILLINOIS: Douglas Blue Line to get major overhaul

CHICAGO -- The decrepit Douglas Branch of the CTA's Blue Line would receive a major overhaul under a $315 million deal to be announced in Chicago today, the Chicago Sun Times reported.

"We are very excited about this new full funding grant agreement for Chicago," Transportation Secretary Rodney Slater said on Thursday. "I know one of the lines we are going to be funding is the Douglas line, and that's one of the older lines in the country.

"My understanding is . . . that the speed along that particular stretch is very, very slow, which . . . makes it less efficient than it could be," Slater said.

Congress still must appropriate the money, but in practice, having the CTA's application approved by the Transportation Department means "you are first in line of the people who the administration has given approval to," Sen. Dick Durbin (D-Ill.) said.

Members of the Illinois congressional delegation and CTA officials have for years tried to get money for the six-mile Douglas Blue Line, built between 1895 and 1912. Because of poor track conditions, trains on the Loop-to-Cicero line have been traveling 15 mph instead of the usual 55 mph.

TEXAS: Burlington Northern Santa Fe claims record January 94.3% on-time performance

FORT WORTH -- Burlington Northern Santa Fe Corporation (NYSE: BNI) (BNSF) today announced in a press release it achieved 94.3 percent on-time performance, dock to dock across its 33,500-route-mile railroad network for the month of January, 2000, an all-time record for the company. The comparable on-time figure for January 1999 was 85.1 percent.

January 2000 system-wide on-time performance was better than the full-year 1999 level of 91 percent, which was up substantially from 82 percent system- wide on-time performance for full-year 1998.

BNSF's President and Chief Operating Officer Matthew Rose said, "In 1999, we met and exceeded our goal of 90 percent system-wide on-time performance, setting the industry standard in this important measure of operating performance. For 2000, we have raised our goal even higher for system-wide on-time performance, while continuing to focus on meeting all of our customers' commitments."

In January 2000, BNSF's on-time performance by type of rail business was as follows:

Coal: 100 percent

Intermodal/automotive: 93.8 percent

Agricultural products: 91.4 percent

Carload: 89.1 percent

SWITZERLAND: Italian-Swiss cargo merger may lead to more deals

BERN -- No sooner did Italian and Swiss rail executives agree this week to merge their cargo divisions than Italian railroad unions announced a strike for Feb. 18 to protest the agreement's labor provisions, the Journal of Commerce reported.

Despite what seemed to be a bad omen for the future of the merged Italian/Swiss rail freight company, top officials of both national railroads predicted the joint venture will lift them to the top echelon of European rail cargo carriers, and may lead to further mergers.

Benedikt Weibel, chairman of the Swiss railroad, Schweizerischen Bundesbahnen AG (SBB), declined to comment on speculation that the Italian/Swiss rail cargo venture, called Cargo SI, might discuss an alliance with Germany's DB Cargo. DB Cargo recently started its own rail freight joint venture with the Dutch national railroad's cargo division, NS Cargo NV.

Executives of that joint venture, called Railion, are reported to have contacted Denmark's national railroad, DSB, about the possibility of adding its rail-freight division, DSB Gods, to the north European partnership.

In a published interview, Weibel also said the Austrian railroad's cargo division, Rail Cargo Austria (RCA), might be a potential partner for the Italian/Swiss venture.

Meanwhile, the Italian and Swiss rail cargo venture - which is likely to start operating by this fall - plans to expand its services in national and international cargo transport, as well as in logistics, a spokesman said.

But labor problems, which have long plagued Italy's FS, could cause problems. A spokesman for Italy's railroad workers union said the Feb. 18 strike was being organized to protest plans to cut back on the number of locomotive engineers and to make other changes to save on labor costs.

Meanwhile, Switzerland's main railroad workers' union, while supporting the merger, plans to meet with its Italian counterpart.