February 3, 2012

BNSF breaks the CapEx bank

BNSF breaks the CapEx bank

Rail sets record with $3.9 billion in planned capital expenditures for 2012.

By Mark B. Solomon

Just days after Union Pacific Corp. announced the biggest annual capital expenditure (CapEx) budget in U.S. railroad history, its rival in the West has bettered it.

BNSF Railway Co. announced today a planned 2012 capital budget of $3.9 billion, $400 million above its 2011 capital spending and $300 million more than the amount budgeted by Union Pacific.

Fort Worth, Texas-based BNSF, which is privately held and part of Warren E. Buffett's Berkshire Hathaway empire, said it would spend $2.1 billion on improving its "core network and related assets." An additional $1.1 billion will be spent on locomotive, freight car, and other equipment acquisitions, BNSF said in a statement.

"BNSF remains committed to making the necessary investments to maintain and grow the value of our franchise's capacity to meet customers' needs, and to provide the supply chain with more efficient freight transportation," said Matthew K. Rose, BNSF's chairman and CEO, in the statement.

Earlier this week, the Association of American Railroads (AAR) announced that the seven largest freight railroads operating in the United States collectively planned to spend a record $13 billion in 2012 on capital expenditures to improve their networks. Last year, the rails spent an estimated $12 million on capital improvements, AAR said.

The rails are Union Pacific, BNSF, Norfolk Southern Corp., CSX Corp., Kansas City Southern Railway, and the U.S. operations of Canadian railroads Canadian National Railway and Canadian Pacific Railway.

More articles by Mark B. Solomon

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