STB slates hearing on effect of BNSF purchase price
Written by jrood
From the editors at Railway Age. The Surface Transportation Board announced that it will hold a public hearing March 22 "to explore the impact of the Berkshire Hathaway, Inc. acquisition of the Burlington Northern Santa Fe Corp. on certain costing determinations."
The board will look at the effect of the $43 billion purchase price on its annual Uniform Rail Costing System (URCS) and revenue-adequacy findings for BNSF.
URCS is the general purpose rail costing system used to estimate variable and total unit costs for Class I railroads. The Western Coal Traffic League and other parties argue that BNSF’s acquisition price produced an $8.1 billion write-up in the railroad’s net investment base for URCS costing purposes, and decreased BNSF’s 2010 annual depreciation calculations by $128 million. WCTL suggests that the Board should, beginning with its 2010 findings, adjust BNSF’s URCS costs by removing the $8.1 billion write-up and correspondingly adjusting the railroad’s annual depreciation.
