LITTLE ROCK — Union Pacific Corp.’s chief executive officer said lawmakers are discouraging needed investment even as federal transit authorities call for $77.7 billion in rail- and bus-system improvements.
Congressional legislation now in committee would increase government oversight of mergers and allow shippers to challenge rates. The measures are making it hard for rail companies to plan, said CEO Jim Young.
“I’m having a hard time seeing how those policies encourage new investment,” Young said Thursday. In addition, he said the government’s push for high-speed passenger rail service distracts from the more pressing concerns for freight.
Rail and bus systems nationwide need billions of dollars in improvements to reach good condition, the Federal Transit Administration said Wednesday in a report.
Union Pacific, the nation’s largest railroad, said Thursday that second-quarter net income jumped 53 percent to $711 million, or $1.40 a share, from $465 million, or 92 cents, a year earlier. The average estimate of 25 analysts surveyed by Bloomberg was a profit of $1.21 a share.
The company will invest $2.6 billion in its rail infrastructure this year, $2 billion of which will go toward maintaining facilities, track and equipment, Young said.
Based in Omaha, Neb., Union Pacific agreed Tuesday to move forward on a highspeed rail line from Chicago to St. Louis after settling with the government on minimum terms, including recovery of its initial investment. Work is to begin in September.
“If I had a choice, I wouldn’t be doing this investment,” he said. “We need to focus on freight for our good and for the good of the country.”
The company was among the freight railroads that objected to May guidance from the Federal Railroad Administration that spelled out relationships between them and operators of high-speed passenger service on their tracks.
The Chicago-St. Louis route received $1.1 billion from last year’s $787 billion economicstimulus package. Passenger trains will travel 110 miles per hour on the new line, Young said.
Business, Pages 30 on 07/24/2010