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11/11/2010



Rail News: Rail Industry Trends

UP proposes $3 billion capital spending budget for next year


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Next year, Union Pacific Railroad’s capital spending budget likely will go up — enough to reach the $3 billion mark.

Although the 2011 capex budget hasn’t been finalized, the Class I is projecting a $3 billion spending plan compared with 2010’s $2.6 billion capex budget, said UP Executive Vice President and Chief Financial Officer Robert Knight Jr. during the railroad’s analyst conference Nov. 4 in Chicago. About $250 million of the $3 billion budget would be dedicated to positive train control development, said UP spokesman Tom Lange in an email.

The proposed budget also would include funds to acquire 100 new high-efficiency locomotives, said Knight. During the next few years, UP plans to acquire 100 to 200 new locomotives annually.

Overall, UP expects to maintain capital spending in a historical range of 17 percent to 18 percent of total annual revenue, said Knight. Capex decisions will be based on infrastructure needs, traffic volumes, and efficiency and service requirements.

Jeff Stagl


Contact Progressive Railroading editorial staff.

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