Union Pacific Allots $1.6 Billion to Improve Speed on Rail System
Union Pacific Corp., the biggest U.S. railroad, said Wednesday that it would spend $1.6 billion this year on track improvements to help speed its trains.
The plans include $1.3 billion for projects such as replacing 1,055 miles of rail on its 33,000-mile system, the Omaha-based company said.
UP also said it would spend $295 million to increase capacity on its Los Angeles-New Orleans route and in the North Platte, Neb., area.
The railroad has been trying to reduce delays that began in late 2003 when cargo demand unexpectedly rose and were aggravated this year by storm damage on the West Coast. The company on March 22 raised its first-quarter profit forecast because of higher rates and a faster-than-expected recovery from the storm damage.
The spending on track-improvement projects is about the same as last year, spokesman John Bromley said. Those projects are part of UP’s capital budget of $2 billion, which also is about the same as in 2004. The capital spending also includes equipment such as locomotives and freight cars.
UP also said it would spend $220 million to add tracks to serve a new Toyota Motor Corp. factory in Texas and ethanol plants in Iowa and Minnesota, and on yards in Texas and Utah for freight that moves by a rail-truck combination. The railroad said it would lease 315 new locomotives and more than 4,000 rail cars.
On Wednesday, shares of UP rose $1.49 to $69.84 on the New York Stock Exchange.