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CORRECTED-U.S. rail sector plans to boost infrastructure spending as volumes rise
February 2, 2015 / 4:42 PM / 3 years ago

CORRECTED-U.S. rail sector plans to boost infrastructure spending as volumes rise

(Corrects that Union Pacific already reported fourth-quarter results)

WASHINGTON, Feb 2 (Reuters) - U.S. railroads expect to boost spending to $29 billion this year to lay track, add engines and otherwise upgrade a national network tested by a surge in energy and agriculture deliveries, the leading industry trade group said on Monday.

The investment announced by the Association of American Railroads is the second annual increase for a transportation system that has become a vital tool for North Dakota oil producers and Midwest farmers enjoying bumper grain crops.

Farmers, miners and oil producers have complained in recent years that the rail industry is not doing enough to clear congested lines.

At the urging of regulators and politicians, operators like BNSF Railway Co, CSX Corp, and Union Pacific Corp have promised to increase spending to ease bottlenecks.

The industry spent roughly $27 billion in 2014 and about $25 billion in 2013.

CSX, the third-largest U.S. railroad, on Jan. 13 reported a higher quarterly profit that was in line with analyst expectations and said it expected a strong increase in its freight business and double-digit earnings growth during 2015.

Union Pacific, the nation’s number 1 rail operator, last month reported a 22 percent jump in fourth-quarter profit.

Ed Hamberger, president of AAR, said rail companies rely on profits to fund investment in a private network that often serves the public interest.

“Unlike most other transportation modes, freight railroads rely on their own funds, not taxpayer dollars, to build and maintain their networks,” he said in a statement. (Reporting by Patrick Rucker; Editing by Phil Berlowitz)

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