BNSF's capital spending climbs to a Class I-high $3.5 billion

On February 7, BNSF Railway Co. announced it has budgeted $3.5 billion for 2011 capital expenditures — the largest capex budget among the Class Is this year. In 2010, the Class I budgeted $2.6 billion.

This year, BNSF plans to spend $2 billion on core network initiatives and related assets. In addition, the Class I is budgeting about $450 million to acquire 227 locomotives and $350 million to purchase freight cars and other equipment. The capex program also includes about $300 million for positive train control work, and $300 million for terminal, line and intermodal expansion and efficiency projects, primarily focused on mid-continent and coal routes to boost velocity and improve throughput capacity, according to BNSF. “As we demonstrated with our capital commitments during one of the deepest recessions in U.S. history, we remain committed to making the necessary investments to maintain and grow the value of our franchise’s capacity and to provide the nation’s supply chain with more efficient freight transportation,” said BNSF Chairman, President and Chief Executive Officer Matt Rose in a prepared statement. Other Class Is announced their 2011 capex budgets last month, including:

• Union Pacific Railroad, $3.2 billion (up 23 percent year over year);
• CSX Corp., $2 billion (up 11 percent);
• Norfolk Southern Corp., $1.74 billion (baseline spending, up 19 percent);
• CN, $1.7 billion (similar to 2010); and
• Canadian Pacific, between $950 million and $1 billion (up 25 percent).

Kansas City Southern announced last month that its capex budget will total 17.5 percent of annual revenue, similar to last year’s budget. The railroad is anticipating low double-digit revenue growth in 2011. Meanwhile, CSX announced it increased spending last year on products and services obtained from minority providers.

The Class I spent a record $105 million purchasing products and services — such as signals — from firms owned by minorities and women.

Source: Progressive Railroading