UP reopens lines, estimates $200 million storm cost

UP reopens lines, estimates $200 million storm cost    Union Pacific has reopened the last two of five lines that were closed because of damage caused by the recent storms, which the railroad said could have cost the company some $200 million.
   The two lines that have been reopened are the California “Coast Line” and the Nevada “Caliente Line.” UP said traffic on both lines will be limited for a short period as final work is completed.
   The railroad said it expected to resume commuter operations on the “Coast Line” between Los Angeles and Oxnard Monday. Before the “Coast Line” can fully accommodate passenger train schedules it has been limited to a number of freight trains so that further maintenance work can be done. The work includes removal of mud from the track and replacement of ties, which has to be done during daylight hours when the passenger trains normally operate, UP said.
   The railway estimates passenger train services between Santa Barbara and Los Angeles should be possible by Feb. 8, while full restoration of through passenger service between Los Angeles and Oakland is expected to be available by Feb. 28.
   The railroad will limit the “Caliente Line, which travels across a rugged desert canyon line northeast of Las Vegas, to about 15 freight trains per day for approximately one week. Afterwards, the line will be opened to its full capacity of 25 to 30 trains per day.
   “We are still assessing the financial impact of the storm,” said Dick Davidson, chairman and chief executive officer of UP.
   “However, at this time our best estimate is that it could approach or even exceed $200 million in total,” he added. “About $100 million of that would be the capital expenditure for the repairs. The remainder would hit operating income through lost revenue and higher costs. We do have insurance coverage, but there is a $50 million deductible and it will take some time to sort this all out with our insurance carriers, so these estimates don’t yet include any insurance recovery.”