BNSF to Spend $3.4 Billion in 2017

(BRK.A), (BRK.B)

BNSF Railway is committing $3.4 billion in 2017 to maintain and upgrade its 32,000-mile system.

“Each year we establish a capital plan that reflects the future needs of our customers and the constant need to keep our infrastructure in good working condition. This year’s capital plan ensures we continue to operate a safe and reliable rail network while capturing the new opportunities our customers will present to us,” said Carl Ice, BNSF president and chief executive officer. “Our ongoing investments, along with the outstanding efforts of our employees, resulted in the lowest number of derailments in company history last year. The strength and condition of our railroad today gives us the confidence that we will operate safely in the communities we serve and meet our customers’ expectations of reliable and consistent service.”

The company notes that similar to last year’s $3.9 billion plan, the largest component of the plan will be to replace and maintain BNSF’s core network and related assets.

This year that component is expected to be $2.4 billion. The projects included in this part of the plan will primarily be for replacing and upgrading rail, rail ties and ballast (which are the main components for the tracks on which BNSF trains operate) and maintaining its rolling stock. This year’s maintenance program will include approximately 20,000 miles of track surfacing and/or undercutting work and the replacement of about 600 miles of rail and nearly 3 million rail ties.

Rounding out the plan will be $400 million for expansion projects, $100 million for the implementation of positive train control and $400 million for locomotives, freight cars and other equipment acquisitions.

The states on the BNSF network estimated to receive the largest investments this year include:

· Texas – $255 million
· Illinois – $190 million
· Washington – $175 million
· California – $170 million
· Kansas – $125 million
· Missouri – $120 million
· Montana – $100 million
· Nebraska – $100 million

© 2017 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.