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BNSF’s Rose says federal tax breaks key for rail development

BNSF’s Rose says federal tax breaks key for rail development

   BNSF Railway President and Chief Executive Officer Matthew Rose Monday said a moderate amount of tax breaks from the federal government would enable railroads to better keep infrastructure development even with trade growth.

   Railroads are investing heavily in capital but need a public sector incentive to build important intermodal facilities, Rose said at the Journal of Commerce’s Trans-Pacific Maritime conference.

   “Ensuring capacity in the rail network would take $2 billion to $4 billion, compared to the $80 billion to $90 billion for highways,” he said. “Two-billion in a $16 trillion economy is a rounding error.”

   Rose said railroads need to work better with ports to provide more on-dock rail and more staging areas to build long-haul trains, as well as better forecasting of cargo volumes.

   In the meantime, Rose said the nation’s railroads have invested about 50 percent more in physical infrastructure the past two years than they did the previous four years – about $9 billion to $10 billion in 2005 with a similar amount planned for this year.

   “BNSF spends about $1.5 billion just to keep physical assets in the same shape as the previous year,” Rose said.

   BNSF will spend $800 million over 2005 and 2006 on expansion projects, including double-tracking its line from Chicago to Los Angeles.

   “After 2006, we’ll be down to about 60 miles of single track between L.A. and Chicago, and after that, we’ll start triple-tracking,” Rose said.

   Roughly half of the units BNSF moves are intermodal, a sector of the company that will surely gain even more attention in future years.

   “We are setting up our railroad up to handle more and more of this business,” he said.

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