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Rumours & Speculation & Rants
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   Author  Topic: Rumours & Speculation & Rants  (Read 21290 times)
B_Winkler
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Re: Rumours & Speculation
 
« Reply #260 on: Mar 24th, 2006, 11:25am »
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on Mar 24th, 2006, 10:40am, FSD8014 wrote:       (Click here for original message)

Perhaps your earlier post regarding a $50,000 payment for exclusive bidding rights qualifies as a "memorandum of understanding"?

 
I dont think that 'exclusive bidding rights' does qualify as a memorandum of understanding or, more importantly, any kind of an agreement.  It is simply a method of keeping out potential competition that would likely drive up the price.  
 
Aquiring an operator that knows the local market and has the potential to bring new customers or bring back old ones is way more important.  With RailAmerica, we have seen what can happen when a company pays too much for too little.   I dont thing we want to go there again.
 
Bob Winkler
Nanaimo, BC
 
 


« Last Edit: Mar 24th, 2006, 11:26am by B_Winkler » Logged
FSD8014
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Re: Rumours & Speculation
 
« Reply #261 on: Mar 24th, 2006, 12:18pm »
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on Mar 24th, 2006, 11:25am, B_Winkler wrote:       (Click here for original message)

 
I dont think that 'exclusive bidding rights' does qualify as a memorandum of understanding or, more importantly, any kind of an agreement.  It is simply a method of keeping out potential competition that would likely drive up the price.  
 
Aquiring an operator that knows the local market and has the potential to bring new customers or bring back old ones is way more important.  With RailAmerica, we have seen what can happen when a company pays too much for too little.   I dont thing we want to go there again.              

Its been my experience that competition for a given service usually drives the price down while lack of competition does the opposite.  
I agree that an operator with local knowledge and a proven ability to turn around failing shortlines is of prime importance in this instance. RailAmerica didnt screw this up by paying too little for the E&N, they mismanaged the lines biggest paying customer driving them to trucks. FWIW, Norske(Catalyst) now ships by truck from their facility at PA to their railyard at Crofton, transloads to rail and barges to Washington state skipping RA, CPRail and up to a 10 day wait shipping product to market. RA also kissed off the Propane customer in Victoria, were there others? CP had given RA a viable operation but prevented (by contract) going after new customers on their part of the line.
Had the contract to operate the line been more favorable Washington Group probably would have gotten it. They were interested then.
I'm a little concerned that Washington Group is 'playing' the ICF preventing other companys from bidding, that would seem an unfair advantage against the ICF who have no experience running a railway.
 
 


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B_Winkler
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Re: Rumours & Speculation
 
« Reply #262 on: Mar 24th, 2006, 12:22pm »
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on Mar 24th, 2006, 12:18pm, FSD8014 wrote:       (Click here for original message)

Its been my experience that competition for a given service usually drives the price down while lack of competition does the opposite.  

 
How would that work in this case?  If there was another operator bidding to run the E&N rail service how would that bring the price down?


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B_Winkler
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Re: Rumours & Speculation
 
« Reply #263 on: Mar 24th, 2006, 12:32pm »
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on Mar 24th, 2006, 12:18pm, FSD8014 wrote:       (Click here for original message)

RailAmerica didnt screw this up by paying too little for the E&N, they mismanaged the lines biggest paying customer driving them to trucks.  
 
CP had given RA a viable operation but prevented (by contract) going after new customers on their part of the line.
 
Had the contract to operate the line been more favorable Washington Group probably would have gotten it. They were interested then.

 
You seem to be arguing both sides here.  No doubt that RA mismanaged, but there is also no doubt that CP screwed them.  The short piece of track in Port Alberni.  Controlling access to the railroad.  Preventing RA from going after new customers.  
 
That was my point.  RA paid too much for too little.  There were too many raodblocks and limitations from day one. They would have been better buying the entire operation from bargeslip to railhead (s).  
 
The ICF and their operator are still going to have trouble if they are forced to use Wellcox and the CP access.  The same kind of trouble that RA had.  
 
I am no expert on SRY and it would be nice to hear from someone who is.  If SRY takes over the E&N, can they barge rail cars directly to SRY on the mainland without dealing with CP or CN?   Do they have the ability to ferry rail cars directly to the US from Wellcox or  is that going to be a contractually limited option?  Who owns Wellcox?  Who owns the railbarge dock?  is all of this included in the ICF deal?


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Henry
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Re: Rumours & Speculation
 
« Reply #264 on: Mar 24th, 2006, 1:02pm »
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Thursday March 23, 2006 10:06 am ET
 
BOCA RATON, Fla. (AP) -- RailAmerica Inc. on Thursday said it will transfer  
ownership of its 181-mile E&N Railway to Canada's nonprofit Island Corridor  
Foundation for $850,000 in cash and a $300,000 promissory note.
 
The consideration covers the sale of contract and regulatory rights  
associated with the railway. RailAmerica said it expects to get about $4.3  
million in tax benefits in Canada from the charitable donation.
 
The transfer of ownership is slated for Friday. RailAmerica's E&N Railway  
subsidiary will continue to operate the railroad until operations are  
handed over to a new operator on or before June 30.
 
RailAmerica announced in September 2004 it would sell the E&N Railway  
because of its declining carloads. The company, which bought the railway  
for $11 million in 1999, recognized an impairment charge of $8.7 million in  
the third quarter of 2004.
 
The company does not expect the transaction to affect 2006 financial  
results.
 
The Island Corridor Foundation is managed by 13 indigenous communities and  
six municipalities in Vancouver.


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FSD8014
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Re: Rumours & Speculation
 
« Reply #265 on: Mar 24th, 2006, 1:45pm »
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Bob. Since when does competition drive prices up? Competition between competing companies drives margins down. One will provide more for less- its the basis of a free market economy. This is how Wal-mart or Costco beat out other companies. Show an example otherwise.                   RailAmerica signed the contract that screwed them, Washington Group would not. More incompetent management. You seem to argue that RA was blindsided by the restrictions given them by CPRail- they werent, they signed that document. Neither one of us is arguing both sides of this argument.

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Pennsy
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Re: Rumours & Speculation
 
« Reply #266 on: Mar 24th, 2006, 2:21pm »
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Hi All,
 
We are missing a point here. The competition for the freight hauling business does not have to be another RR. It could be a Truck freight moving outfit.
 
As an example; General Dynamics produced the Phalanx weapon system and shipped it to Norfolk, VA via Union Pacific flat cars. One fine day a truck company makes them an offer that they cannot refuse. Next thing you know, a tractor trailer affair pulls up. The trailer has a depressed center and many, many wheels. It can handle lots of weight. A special fork lift truck shows up, heavy lift fork lift truck, and places a Phalanx unit in the depressed center of the trailer. Riggers attach the unit to the trailer and off it goes. And Union Pacific watches as its contract is terminated.


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Dyed in the wool PRR fan.
FSD8014
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Re: Rumours & Speculation
 
« Reply #267 on: Mar 24th, 2006, 2:31pm »
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That already happened. In this particular case we'd like to see Norske (Catalyst Paper) come back to the rails. Both operations that used to see service by the E&N. Right now Norske bypasses the E&N by truck and then ships by rail.

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B_Winkler
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Re: Rumours & Speculation
 
« Reply #268 on: Mar 24th, 2006, 2:37pm »
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on Mar 24th, 2006, 1:45pm, FSD8014 wrote:       (Click here for original message)
Bob. Since when does competition drive prices up?

 
I cannot believe I have to explain this.  
 
The ICF has a rail business.  SRY is interested.  If another company is interested and they both want the contract, they will bid against each other.  They wont bid down.  The dollar value paid wont go down.  It will go up.  
 
This is why the ICF was paid  a $50,000 deposit for exclusive bidding rights.  To avoid competition and keeping SRY's  end price down.  In this case, competition WILL drive prices up.  
 
Companies like SRY negotiate in secret, pay these kinds of deposits and have RFP's worded in their favour all for one reason.  To keep the competition from getting in their and driving the prices up.  Life in the real world.  
 
Bob Winkler  
Nanaimo


« Last Edit: Mar 24th, 2006, 2:39pm by B_Winkler » Logged
FSD8014
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Re: Rumours & Speculation
 
« Reply #269 on: Mar 24th, 2006, 3:29pm »
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Okay, okay... I get you now. I had it backwards because I'm an idiot.

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B_Winkler
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Re: Rumours & Speculation
 
« Reply #270 on: Mar 24th, 2006, 3:32pm »
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on Mar 24th, 2006, 3:29pm, FSD8014 wrote:       (Click here for original message)
Okay, okay... I get you now. I had it backwards because I'm an idiot.

 
You did have it backwards.  No big deal


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Pyronova

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Re: Rumours & Speculation
 
« Reply #271 on: Mar 24th, 2006, 3:56pm »
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Its too bad that the line at this time can't support 2 different  RR companies from running the rails, like highways support an infinate number of trucking companies.   Then you would see competition to some degree.  Could you imagine say SRY and Omnitrax both running up and down the  Island servicing 50+ customers?   Plus the RDCs?  What great railfaning it would be!!!!    
 
 


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B_Winkler
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Re: Rumours & Speculation
 
« Reply #272 on: Mar 24th, 2006, 4:32pm »
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The new operator will have all the competition it can handle.  Wont need a second operator to provide that.  
 
The rail-fanning is going to get better this year.  I have my camera ready and am really looking forward to it.  
 


« Last Edit: Mar 24th, 2006, 4:33pm by B_Winkler » Logged
FSD8014
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Re: Rumours & Speculation
 
« Reply #273 on: Mar 24th, 2006, 6:29pm »
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Trucks will provide all the competition the E&N can tolerate. If you can picture Geep nines and GMD-1s (or endcab switchers) in SRY paint moving a lot of freight through the cities and forests of VI you can guess how interesting this railway can be. If you've ever seen an SRY train climbing uphill into Surrey you know what I mean. I'd like to see SD-38s on the Port sub. That'd take some doing.

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boxcar
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Re: Rumours & Speculation
 
« Reply #274 on: Mar 24th, 2006, 11:17pm »
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thing that could save customers from going to truck is this,  there isn't much coming off the island. yes exept for pa, but out of victoria etc. most stuff is trucked in and not much leaving. definatly could be an asset because alot of trucking comapies charge for the ferry both ways to the consignee.

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Ttm Alyth yard
xxswitchxx
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Re: Rumours & Speculation
 
« Reply #275 on: Mar 25th, 2006, 11:00am »
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 hey i heard that the e&n is looking for switchmen.

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The_fan
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Re: Rumours & Speculation
 
« Reply #276 on: Mar 25th, 2006, 1:36pm »
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Engineers.........Switchmen could try to send a Resume to florida.....good luck.
A snowball has a better chance.


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FSD8014
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Re: Rumours & Speculation
 
« Reply #277 on: Mar 27th, 2006, 9:06am »
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Hey, I heard RailAmerica has sold its E&N holdings and wont be operating here much longer. I'm kidding (a little) but I doubt the E&N is hiring just now. Try SRY in a few months.

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xxswitchxx
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Re: Rumours & Speculation
 
« Reply #278 on: Mar 27th, 2006, 6:02pm »
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I was just fishing. but thanks maybe i will try the sry in the spring.

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xxswitchxx
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Re: Rumours & Speculation
 
« Reply #279 on: Apr 1st, 2006, 3:12am »
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heard a good reliable rumour, heard cn was going to fire some of the new guys because their not working out, and i heard that they well be hiring soon.  rumour is from a great source. in soon i mean within 2 to 3 weeks.

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