ARSTCO
Crystal Lake, IL
Steve Orrell
Georgetown Rail
Equipment Company
Georgetown, TX
EXECUTIVE DIRECTOR
Judi Meyerhoeffer
Spring 2007
Vol. 1 0 No.1

Official publication of the Railway Engineering-Maintenance Suppliers Association Once again, REMSA and National Railroad
Construction and Maintenance Association
people journeyed to the warmth of
South Florida the first week of
January for a conference and
exhibit rated successful on
all fronts.
The 2007 NRC Conference
and NRC/REMSA
Exhibition took place
Thursday, January 4,
through Sunday, January 7,
2007, at the Doral Golf Resort
& Spa in Miami, FL. There was
record attendance in the general
sessions, record attendance in the exhib-
it halls, record attendance at the banquet
dinner and a lineup of top speakers. More
than 500 railroaders, railroad contractors
and suppliers and lots of other folks took
advantage of Floridas warm January weath-
er as well as to gather important business
information and to network.
As in the first joint gathering in 2005, also in
South Florida, NRC organized the
conference portion, while REMSA applied its
expertise and experience to staging the
tradeshow.
Once again, this proved to be a great way
to kick off a new business year, said
REMSA President Jon Reilly, Harsco Track
Technologies. We were pleased that about
50 exhibitors signed up for
booths. The talk I heard among
exhibitors during and after the exhibit
was decidedly positive.
The 2007 tradeshow exhibition, organized
by REMSA, was another huge success,
said NRC Chairman Jon M. McGrath,
McGrath construction. In addition to a
substantial turnout from our contractor
members, there were also dozens of rail-
road or transit employees in attendance. We
set an NRC attendance record. The exhibit
and conference complemented each other
extremely well, setting up a real
win-win situation.
The next REMSA exhibit will be held
concurrently with the AREMA annual
conference in Salt lake City, UT, in the fall
of 2008.
REMSA
Again Stages
Successful
Exhibit
with
NRC
in Miami in January
INSIDE THIS ISSUE
REMSA Again Stages Successful Exhibit with NRC in Miami in January
AAR Outlook Shows Railroads On Track and Steaming Ahead in 2007
FRA Denies DM&E Powder River Basin Loan Application
UPs Bill Wimmer named Railway Age Railroader of the Year
REMSA Scholarship Competition Offering 5 $2,000 Stipends Events to Note page 2
2006 was a very good year for U.S.
freight railroads. That should be
welcome news for all of us.
Responsive, financially-healthy rail-
roads are critical to our economic
health and global competitiveness,
said Craig Rockey, Vice President
of Policy and Economics at the
Association of American Railroads.
Mainline
asked Craig to review the
previous year and comment on the
year ahead.
According to Rockey, 2006 saw a
continuation of trends that began a
few years ago, including:
High fuel costs, which favor the
energy efficiency advantages of
railroads (railroads are three or
more times more fuel efficient
than trucks on a ton-mile basis);
Capacity constraints in the truck-
ing industry, driven largely by
congested highways and truck
driver shortages;
Booming international trade,
including a surge in imports from
Asia and higher agricultural
exports;
High natural gas prices, which
encourage utilities to generate
more electricity from coal; and
A still-strong domestic economy
overall GDP has now grown
for 21 straight quarters, despite
current weakness in the housing
and automotive sectors.
Railroads are hauling more freight
today than at any time in their histo-
ry, with coal and intermodal pacing
rail traffic gains in 2006. As has
been the case virtually every year
for the past 25 years, intermodal
traffic set another annual record in
2006. Agriculture-related traffic also
had a solid 2006. Ethanol traffic
surged too.
One important result of the increase
in rail traffic over the past couple of
years is an improvement in rail
finances, which means railroads
have more money to carry out
maintenance and capital projects.
Over the past couple of years rail-
roads have made massive invest-
ments in infrastructure and equip-
ment. Rockey noted, for example,
that Class I capital
expenditures were
$5.7 billion in 2002.
Preliminary data for
2007 suggest that
Class I capital com-
mitments (capital
expenditures plus an
accounting adjust-
ment to account for
new operating leas-
es) will exceed $9
billion in 2007.
We asked Rockey to
list a few of the
major public policy issues that the
rail industry will face in 2007.
The first issue he noted was
addressing the capacity issue.
According to Rockey, freight rail-
roads will continue to spend mas-
sive amounts of private capital to
improve and maintain their systems,
but even with their improved finan-
cial performance, funding con-
straints will likely prevent railroads
from meeting optimal future rail
infrastructure investment needs
entirely on their own.
One way to support additional rail
investment is through federal
income tax incentives for freight rail
capacity expansion. Under the rail
industry-supported Freight Rail
Infrastructure Capacity Expansion
Act of 2006 (S. 3742 in the 109th
Congress), projects to expand
freight rail capacity would be eligible
for a 25 percent tax credit.
Qualifying capacity-expanding
investments include raising tunnel
clearances to accommodate double-
stacked trains, upgrading single
track lines to double or triple tracks,
and adding and lengthening sidings.
Eligibility for the credit would extend
to any taxpayer that made a qualify-
ing expenditure, not just railroads.
For example, investors in a new
intermodal facility would be eligible.
Also high on the priority list is
ensuring that reregulatory legislation
that would degrade railroads ability
to expand and provide responsive
service does not pass.
Railroads would also like to see pol-
icymakers address the bet the
company gamble that transporting
AAR Outlook
Shows Railroads
On Track
and
Steaming Ahead
in
2007
Continued on page 3 Federal Railroad Administrator Joseph H. Boardman
denied a $2.3-billion Railroad Rehabilitation and
Improvement Financing (RRIF) loan application from
the Dakota, Minnesota, & Eastern railroad, concluding
it posed an unacceptably high risk to federal taxpayers.
Boardman found that while the Powder River Basin
project met some of the RRIF programs statutory
requirements, there remained too high a risk concern-
ing the railroads ability to repay the loan even with an
appropriate combination of credit risk premiums and
collateral.
He said he was concerned by several factors, including
the DM&Es current highly leveraged financial position;
the size of the loan relative to the limited scale of exist-
ing DM&E operations; and the possibility that the rail-
road may not be able to ship the projected amounts of
coal needed to generate enough revenue to pay back
the loan.
In addition, Boardman cited concerns that the applica-
tion did not sufficiently address how the railroad would
handle potential cost overruns and schedule delays
with the Powder River Basin construction project.
Kevin Schieffer, President & CEO of DM&E, made the
following statement in response to the Federal
Railroad Administrations decision to deny the loan
application.
While DM&E is disappointed in the Federal Railroad
Administrations decision denying our loan application,
we expect to move forward and will spend some time
assessing alternatives to accomplish that objective.
This project is too important to the future of our com-
pany, regional rail transportation and the many sup-
porters in the agriculture and energy sectors, the com-
munities we serve, and beyond who are relying on it.
DM&E will make appropriate announcements about
next steps in the process as it moves forward.
page 3
Continued from page 2,
AAR Outlook Shows Railroads...
highly hazardous materials entails. Rockey notes that the revenue that highly hazardous materials generate does not
come close to covering the liability associated with this traffic, and insurance sufficient to fully cover railroads risks is
impossible to obtain. Railroads believe that if the common carrier obligation is retained, railroad liability in case of a
hazmat accident should be limited, as is the case with Amtrak operations and incidents involving the release of
nuclear materials.
To summarize, the condition of the rail industry is strong, Rockey said. As railroads continue to creatively develop
capacity and technology, while avoiding unnecessary and counterproductive new regulations, their ability to provide
responsive and efficient service, while expanding to meet future demand, is promising.
FRA
Denies
DM&E
Powder River Basin
Loan Application page 4
UPs Bill Wimmer
named
Railway Age Railroader
of the Year
Bill Wimmer, Vice President-
Engineering for Union Pacific, was
named the 2007 Railway Age
Railroader of the Year, only the sec-
ond time a railroader from the engi-
neering side has received the honor
in its history.
In a historical aside, Robert Brown
of Union Pacific, who in 1978
became the first from the engineer-
ing side to win the honor, hired
Wimmer in 1974.
For his tireless work maintaining
UPs gold-plated status, building up
the railroad that is Building
America, and for his contributions t