(BRK.A), (BRK.B)
BNSF Railway has budgeted $130 million for Minnesota in 2016. The money will be used for replacing and upgrading rail, rail ties and ballast. BNSF has already spent $550 million in Minnesota over the last three years.
In 2015, BNSF spent $326 million in Minnesota, which included 13 miles of new double tracks in the Staples area, new track in the Twin Cities, and upgrading a connection with another railroad in the Twin Cities.
With a slowdown in shipping revenues, last year’s record $6 billion in capital spending by BNSF will be cut 26% to $4.3 billion for 2016, which represents the first reduction in spending in six years.
Heavy spending in 2015 helped resolve shipping bottlenecks that outraged grain producers when their shipments experienced extensive delays in 2014. The investment included 82 miles of new double track on the northern tier.
“Each year, our capital plan works to balance our near term need to regularly maintain a vast network that is always in motion with the longer term demand outlook of our customers,”said Carl Ice, BNSF president and chief executive officer. “While our customers’ demand outlook has softened in a number of sectors, regular maintenance of our network continues to drive the majority of our annual investments and helps ensure we continuously operate a safe and reliable network.”
© 2016 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.