Perella Weinberg Partners affiliate to acquire AIG Rail Services

An affiliate of Perella Weinberg Partners’ Asset Based Value strategy has entered into a definitive agreement to acquire AIG Rail Services Inc., a provider of customized full service and net leases servicing the railroads. Financial terms of the transaction were not disclosed.

As part of the transaction, certain funds within the Asset Based Value strategy have formed a new entity to purchase and manage AIG Rail Services Inc., which will be converted into a limited liability company as part of the transactions and continue operations under the name Flagship Rail Services LLC. Eugene Henneberry, president and CEO of AIG Rail Services, will assume the title of president CEO of Flagship Rail Services and will continue to run the business, along with AIG Rail Services’ existing management team. Subject to certain conditions, the transaction is expected to close in the second quarter of 2011.

Through this transaction, Perella Weinberg Partners’ Asset Based Value strategy will continue to expand its rail leasing and investments. Upon consummation of the transaction, the Asset Based Value strategy will own over 10,000 railcars that are deployed in the North American rail industry, making it the 9th largest lessor of railcars in the region.

David Schiff, partner at Perella Weinberg Partners and portfolio manager of the Asset Based Value strategy, stated, "Today’s announcement reflects our ongoing commitment to pursuing compelling investment opportunities that generate cash flow. We continue to see long-term value in rail and this transaction will allow us to expand our portfolio of rail-related assets, including railcars, chassis solutions and intermodal leasing. Rail remains the most efficient mode of transportation and we expect to benefit from the positive industry dynamics going forward."

Henneberry said, "This transaction enables the AIG Rail Services employees and management team to partner with David Schiff and his team to continue providing our clients with the best-in-class service that they have come to expect. We are pleased to be joining forces with such an experienced team that shares our desire to grow Flagship Rail Services."

Pennsylvania receives $6.8M from feds for freight upgrades

The Federal Railroad Administration awarded a $6.8 million grant to upgrade freight rail service in four central Pennsylvania counties supporting the Marcellus Shale natural gas deposits. Thanks to these projects, one of the world’s largest natural gas deposits will receive the rail transportation improvements needed to meet growing demand.

The project, which includes 200 miles of track improvements and bridge rehabilitation, is expected to create more than 300 construction jobs in Pennsylvania. These upgrades will expand the capacity, efficiency and safety of Pennsylvania’s short line rail network in Lycoming, Centre, Blair and Northumberland counties.

The grant from the TIGER II program will be matched by $4.6 million from the Susquehanna Economic Development Association – Council of Governments Joint Rail Authority.

UP to put $17M into Illinois track improvements

Union Pacific will continue improving Illinois’ transportation infrastructure with a nearly $17 million investment to enhance the rail line that runs from Dupo to about five miles south of Valmeyer. The nearly 26-mile project includes removing and installing new rail, renewing the surfaces in 38 road crossings and replacing five switches.

Additionally, the rail yard at Dupo will receive improvements including the removing and installing more than 11,000 ties, replacing seven switches and spreading more than 4,000 tons of ballast.

CTA, Parsons Brinkerhoff receive award for Dearborn Subway track renewal Project

The Chicago Transit Authority and co-recipient Parsons Brinkerhoff received an Honors Award for exceptional engineering achievement in the transportation category from the American Council of Engineering Companies for the track repair and replacement in the Blue Line’s Dearborn subway.

The criteria for this award involved complexity and innovation, quality, safety, cost control, sustainability, customer service and public benefits.

The Dearborn Subway Track Renewal Project rehabilitated more than 39,000 feet of track on the second busiest of CTA’s rail lines. As part of the project, crews replaced nearly seven miles of running rail, contact rail and ties, including all wooden ties dating back to the 1950s, which were replaced with concrete. In addition, 6,000 feet of ballasted track in the subway was replaced with a direct fixation concrete slab track system. CTA began work in April 2009 and the work was completed in March 2010.

"Receiving this high honor from National Council of Engineering Companies is a great accomplishment and recognizes CTA’s continued efforts to improve the reliability of service for our customers," said CTA President Richard Rodriguez. "CTA worked hard under an aggressive schedule in order to minimize the impact of construction on our customers and completed the project on-time and under budget."

The $87.8 million project was one of the first construction projects funded by the American Recovery and Reinvestment Act of 2009. General contractor Kiewit-Reyes, J.J.V. handled the construction with numerous local subcontractors.

 

Koppers to market rail joints

Koppers Inc., producer of crossties and related pressure-treated wood products for railroads, is now designing, manufacturing and marketing an extensive line of rail joint products acquired from Portec Rail Products Inc. late in 2010.

These rail joint products are continuing to be manufactured at the former Portec Rail Products Inc. plant in Huntington, W.V., which was acquired in the transaction.

Progress Rail to acquire Balfour Beatty trackwork business

Progress Rail Services, a wholly-owned subsidiary of Caterpillar Inc., has signed a definitive agreement to purchase the trackwork manufacturing business of Balfour Beatty Group Ltd., based in Sandiacre, England. Upon completion of the transaction, Balfour Beatty’s trackwork business will become part of Progress Rail Services UK Ltd., a U.K.-registered associated company of Progress Rail Services Corporation.

"With the acquisition of Balfour Beatty’s trackwork business, which includes five locations in the United Kingdom, Progress Rail will complement and globalize its existing Engineering and Track Services business unit, allowing even broader service coverage for its customers," said Progress Rail CEO Billy Ainsworth.

Balfour Beatty’s trackwork business, includes manganese steel castings, track panels, turnouts and crossings, which will allow Progress Rail to focus on improved rail engineering and coordinate customer-focused efforts through Progress Rail’s existing trackwork facilities.

"Investing in transit systems technology will enable Progress Rail to participate in the early stages of high-speed rail projects, while exceeding our customers’ expectations for the latest rail products," said Dave Roeder, Progress Rail senior vice president of engineering and track services. "We continue to aggressively grow our ETS business unit and the acquisition of Balfour Beatty’s trackwork manufacturing business will allow us to significantly broaden our trackwork operations."

The relevant people and assets currently utilized in Balfour Beatty’s trackwork business will be transferred to the Progress Rail family of companies.

"In Progress Rail we have found an industry partner that will develop the switching and crossing business further and will integrate it into their worldwide manufacturing program," said Manfred Leger, CEO of Balfour Beatty Rail Division. "I am looking forward to working with Progress Rail as a strong supply chain partner for our global rail infrastructure contracting activities."

The acquisition is expected to close in May 2011. The acquired trackwork business will remain headquartered in Sandiacre, England, in addition to its four other facilities located in the United Kingdom.

Transport funding hit hard by congressional cuts

The vote by Congress April 15 on a budget that keeps the federal government operating through Sept. 30 contains harsh spending cuts for Amtrak, transit and high-speed rail.

As for the budget bill keeping the federal government operating through Sept. 1, the cuts include:

• Amtrak funding for the remainder of this federal fiscal year through Sept. 30 was cut by some $78 million. The fiscal year 2011 Amtrak budget is thus cut from more than $1 billion to $924 million.

• Federal Transit Administration funding was cut by $400 million, plus an additional $280 million was cut from unobligated fiscal year 2010 funding, all of which will affect transit system capital and operating subsidies and expanded training for transit workers.

• All funding was cut for the high-speed and intercity passenger rail program for the remainder of fiscal year 2011, and an additional $400 million in unobligated funds from the fiscal year 2010 budget were eliminated. This is an especially harsh blow to President Obama’s vision to spend $53 billion to create high-speed and higher-speed rail corridors and expand conventional passenger rail to where 80 percent of Americans would have access to passenger trains by 2035.

Among the funds lost will be the billions initially intended for high- and higher-speed rail lines in Florida, Ohio and Wisconsin. As those funds had been rejected by those states and not reallocated yet to other states or Amtrak, the funding is now lost as part of the budget cuts.

Also lost in the budget cutting agreement were federal grants of some $50 million to help develop and implement positive train control technology, plus some $24 million to assist with rail line relocation and improvement.

The House voted 260-167 and the Senate voted 81-19 to pass the budget-cutting bill, President Obama said he will sign the bill into law.

LACMTA reaches agreement with BNSF for Foothill Extension project

The Los Angeles County Metropolitan Transportation Authority and BNSF Railway have entered an agreement that will result in BNSF abandoning its rights to use the corridor between the future Arcadia and Irwindale stations along the Metro Gold Line Foothill Extension from Pasadena to Azusa, Calif. The agreement was completed just over one year following approval of full funding for the project in March 2010.

"This is a truly historic day," said Doug Tessitor, board chairman for the Construction Authority. "This agreement, which has been in the works for many years, will allow a significant portion of the Foothill Extension from Pasadena to Azusa to be built as a stand-alone corridor – reducing cost for the project’s construction and future impacts to the community."

Amendment of the shared-use agreement between the agencies was a critical path item for the Foothill Extension project. It was one of a number of conditions required of the Construction Authority in the Funding Agreement with Metro that needed to be satisfied before significant funds would be released for the project.

The original shared-use agreement was executed in the early 1990s, when the Los Angeles County Transportation Commission purchased the right-of-way between Pasadena and Claremont from Atchison, Topeka and Santa Fe Railway as part of a multi-billion dollar county-wide right-of-way purchase. The initial agreement allowed ATSF right to continue use of the rail right-of-way with the understanding that sometime in the future it would be needed for a planned rail line. BNSF Railway inherited the agreement, after ATSF merged with the Burlington Northern Railroad to form BNSF Railway in 1996.

"This has taken a significant effort," said Construction Authority CEO, Habib Balian. "Metro staff made this agreement a priority for the agency and committed themselves to seeing it completed in time for the Construction Authority to award a design-build contract this summer for the approximately $450 million Pasadena to Azusa Alignment work."

FRA extends TTCI

On March 29, 2011, the Federal Railroad Administration extended a Care, Custody and Control contract with the Transportation Technology Center, Inc., for an additional 10-year period ending September 30, 2022.

A mutual partnering agreement also was signed by FRA Administrator Joseph Szabo and TTCI Board of Directors Chairman Edward Hamberger "to maintain and improve the facilities at the Transportation Technology Center in Pueblo, Colo., and to enhance the use of those facilities for transportation research, development, security, training and test activities."

"This is one of the finest rail research and testing facilities in the world," TTCI President Roy Allen said. "And we are pleased with the extension of the contract, which allows us to move confidently forward with meeting the needs of the industry and the government."

AECOM awarded $32.5M contract for downtown Edmonton LRT extension

AECOM Technology Corporation, provider of professional technical and management support services for government and commercial clients around the world, has been awarded a US$32.5-million contract extension by the City of Edmonton in Alberta, Canada, to provide project management and engineering services during construction of Edmonton’s Light Rail Transit extension from downtown Edmonton to the Northern Alberta Institute of Technology.

The company recently completed the detailed design phase for the US$782-million LRT extension project. Under this extended contract, AECOM will provide project management and engineering services during construction of the two-mile extension.

"We are very pleased to play a key role on this important infrastructure project," said John Dionisio, AECOM president and chief executive officer. "AECOM is proud to continue this relationship with the City of Edmonton as we enhance mass transit systems in Canada."

The construction phase of the project is scheduled to be complete by December 2013 and service to commence in April 2014.

Rail Link wins Wyoming Governor

Rail Link, Inc., a subsidiary of G&W, received the Wyoming Governor’s Award for Safety and Health in the Large Mine-Site Contractor category. The award is the highest honor given by the State of Wyoming for recognition of an employer’s commitment to excellence in workplace safety and health.

Rail Link loads more than 400 million tons of Powder River Basin coal annually into trains for railroad companies at more than a dozen mines in Wyoming and Montana. This represents approximately 90 percent of Powder River Basin coal production and more than a third of all coal burned in North America. The company has 160 employees in the Powder River Basin.

At the mine sites, Rail Link employees receive empty coal trains from the railroad companies, operate them slowly through the mine’s loading stations where the cars are filled with coal and then hand the loaded, mile-long trains back to the railroad companies in a non-stop cycle of as many as 70 trains daily. Rail Link’s coal loading operations and GWI’s Utah Railway comprise GWI’s Rocky Mountain Region, which worked more than 445,000 man-hours in 2010 without a single reportable injury.

"Receiving the Wyoming Governor’s Award is a great honor," said GWI Rocky Mountain Region Senior Vice President Andrew Chunko. "Safety is our top priority, and our Rail Link employees’ commitment to working safely pays off with every single individual in the Powder River Basin returning home safely every day. It’s wonderful to be recognized by the State of Wyoming, and since safety is also our customers’ top priority, it’s a big part of our competitive advantage in the Powder River Basin."

 

Sherwood Wakeman appointed BART interim GM

The Bay Area Rapid Transit’s Board of Directors voted 6-3 to appoint a man who retired in July 2007 as BART’s general counsel to be the agency’s interim general manager. Sherwood Wakeman will begin as the interim general manager on April 23, 2011, the day after BART general manager Dorothy Dugger’s resignation becomes effective.

"Mr. Wakeman has complete integrity and a love for BART and will capably guide the agency until a permanent general manager is appointed," BART Board President Bob Franklin said.

Wakeman started with the agency in 1973 as an attorney shortly after train service began. In May of 1987, he became the agency’s general counsel. Wakeman twice served as interim general manager during his 31-year tenure at BART.

"It was important to appoint someone who was outside of, yet familiar with, BART on an interim basis only, to provide stability to the organization during the transition and to not offer a future candidate for the permanent position the unfair advantage of incumbency," BART Board Member Joel Keller said.

Rep. McNerney introduces bill to create new rail project for Altamont Corridor

Representative Jerry McNerney (D-CA) introduced legislation to help fund the Altamont Corridor Rail Project, which will expand rail services between the Central Valley and the Bay Area, Calif. H.R. 1504, the Altamont Corridor Rail Improvement Act, invests in a project that will serve thousands of people, create jobs and reduce traffic along some of the region’s most heavily traveled highways.

"The Altamont Corridor Rail Project is an important part of improving both our area’s economic future and our quality of life," said Rep. McNerney.

Currently, the Altamont Commuter Express (ACE) runs weekday trains from the Central Valley to the Bay Area and shares tracks with freight trains and Amtrak. Use of these shared tracks limits travel speed and adds delays to the ACE system. The Altamont Corridor Rail Project establishes a dedicated track for passenger rail services. This 85-mile corridor has the potential to carry 35,000 people each way once completed and could cut commute time between Stockton and San Jose, Calif., in half.

H.R. 1504, the legislation introduced by Rep. McNerney, authorizes the Secretary of Transportation to provide up to $450 million in grants over the next decade for preliminary engineering, final design and construction of the Altamont Corridor Rail Project.

Scott Haggerty, Alameda County Supervisor, and Brent Ives, Mayor of Tracy, both of who also serve on the San Joaquin County Rail Commission, offered words of support for the project and Rep. McNerney’s legislation.

"The Altamont Corridor Rail Project is a key part of expanding our region’s transportation network, working hand in hand with BART improvements and the development of high speed rail," said Haggerty.

"This project is vitally important to our region and for Northern California in general," said Ives. "Establishing a dedicated rail line that provides service between San Joaquin County and the Bay Area will decrease travel time for commuters and stimulate economic growth in our area. I appreciate Rep. McNerney’s leadership in introducing legislation that will provide funding needed to help make this project a reality."

H.R. 1504 is now expected to be referred to the Committee on Transportation and Infrastructure for further consideration.

CSXT

Mike McMaster has been promoted to assistant vice president of Strategic Development and Execution, reporting to John West, vice president-engineering. He is a 36-year railroad veteran with the last 14 as a CSXT employee.

Kelly Piccirillo has been promoted to assistant chief engineer of Capital Projects replacing Ricky Johnson who was promoted to chief engineer MOW in March 2011.

Greg Mellish moves from the position of division engineer Albany to the assistant chief engineer of Inspection Process Engineering in Jacksonville reporting to McMaster.

Leo Kreisel will report to McMaster as director of engineering standards.

"I am very pleased to welcome Kelly, Greg, Mike and Leo to the leadership team," said West. "They have already proven their abilities so I am confident they will be an asset to the Engineering Department and successful in their new roles."

 

RSSI names new executive director

RSSI has appointed Michael Drudy to executive director of the Board of Directors for RSSI. Drudy is filling the vacancy of Donald Remaley who retired in February after 32 years of service to RSSI as both a board member and executive director.

Drudy brings more than 43 years of experience in the railroad industry with him to RSSI. He started his career in 1967 as a BRS signalman with the Pennsylvania Railroad in Richmond, Ind., and worked with the Penn Central, Conrail and CSX Transportation before joining the sales and marketing department of Safetran/Invensys in 2001.

 

Virginia DOT releases statewide multimodal freight study

The Virginia Department of Transportation completed the Virginia Statewide Multimodal Freight Study – Phase II, which presents findings and recommendations to improve freight movement across the commonwealth.

"This study has enabled us to identify the projects and develop strategies that are most important to moving nearly $2 trillion worth of freight annually throughout Virginia," said Virginia Secretary of Transportation Sean Connaughton. "The resulting improvements to our transportation infrastructure would substantially enhance our ability to move freight that supports approximately $350 billion of Virginia’s annual gross state product, contributing significantly to jobs and our economy."

The Virginia Statewide Multimodal Freight Study (Phase II) consists of the following:

• Statewide freight study – Identifies projects from all modes (rail, port, airport and highway) that are most important to freight movement, including both programmed near-term projects and potential long-term projects. It also includes potential policies, actions and initiatives that supplement capital projects.

• Multimodal freight corridor and subregion profiles – Provides concise descriptions of the geography, economic structure, commodity flows, transportation facilities and potential capital projects within each of the 11 multimodal freight corridors and four subregions in Virginia.

• Potential freight strategies – Strategies to be considered have been proposed in several areas, including business information and outreach, intelligent transportation systems, transportation system/demand management, freight planning and funding.


"The findings and recommendations in this report will help shape an effective freight transportation policy," added Connaughton. "We need to work closely with the freight industry to find a comprehensive solution and accurately project the impact or value of each transportation improvement project versus another."

The study was completed under the direction of the Secretary of Transportation’s Office of Intermodal Planning and Investment. The office was established in 2002 to encourage the coordination of multimodal and intermodal planning across the various transportation modes within the commonwealth. Phase I of the study was completed in 2007.

Executive summaries and complete reports for both Phase I and II are now available on The Office of Intermodal Planning and Investment website at http://www.vtrans.org/.

Axion to expand manufacturing facility

Axion International, producer of industrial building products and railroad ties made from 100 percent recycled plastic, will be implementing various expansion initiatives that will effectively double the capacity for Axion’s Recycled Structural Composites (RSC).

Due to the increasing number of contracts and market demand, Axion requested that the expansion at its manufacturing partner, Ultra-Poly Corporation, be implemented and it is expected to be completed by early May. As part of the expansion, the manufacturing facility will be implementing longer worker shifts, adding two additional molding machines, as well as dedicated bale-breakers and grinders to process the incoming bundles of raw recycled plastic material more efficiently for Axion.

"Expanding our manufacturing capabilities has been a major focus for Axion over the past several months," said Steve Silverman, Axion’s president and CEO. "With our sizable recent influx of new domestic and international orders from countries such as Canada, Morocco and Australia, we are quickly adapting to our current sales orders and expect to be increasing our production requirements even further to meet the growing demand."

"We are pleased to work with Axion as we implement various capacity enhancements for their manufacturing process at our facility," said Alan LaFiura, co-owner of Ultra-Poly Corporation. "We pride ourselves on being a ‘one stop’ source for virtually all of our clients’ plastics needs, and look forward to working more with Axion as their technology grows in popularity in the United States and countries around the world."

 

Siemens receives $83 million light rail order from Houston METRO

Houston METRO has awarded Siemens Industry, Inc., an $83-million contract to build and deliver nineteen S70 light rail vehicles including spare parts, training and manuals. The vehicles will be manufactured from start to finish at Siemens’ rail vehicle manufacturing plant in Sacramento, Calif.

Houston METRO currently has 16 stations and eighteen S70 light rail vehicles in operation, with an average daily ridership of 34,600.

"Siemens is proud to provide these light rail vehicles, built right here in the United States and using sustainable manufacturing practices," said Oliver Hauck, president, Mobility Division, Siemens Industry, Inc. "Light rail is a zero-emission transportation option, and it takes cars off the crowded roadways."

The new rail cars will be delivered beginning in October 2012. The S70 has a maximum operational speed of 66 miles per hour. Its low floor design enables passengers to board the train at street level, providing quicker and easier access for people of all abilities.

 

CN acquires 1,000-plus domestic containers

CN has acquired more than 1,000 new domestic containers to better serve manufacturers and distributors of grocery and consumer goods in domestic markets across Canada and grow the railway’s participation in the segment.

Roughly 80 percent of the new containers are heated, ensuring year-round quality service for temperature-sensitive goods; the balance of the boxes are standard dry containers.

Jean-Jacques Ruest, executive vice president and chief marketing officer of CN, said: "CN’s intermodal service is more cost effective than truck while offering customers truck-like transit times and a lower carbon footprint. CN has established a growing business transporting temperature-sensitive goods in long-haul markets across Canada. Our continued investment in infrastructure will benefit the reliability of the supply chains of our grocery, consumer goods and manufacturing customers. Together, we want to grow with them."

Approximately 540 containers will be used to renew CN’s domestic container fleet, while another 520 new containers will increase CN’s overall domestic container fleet to almost 6,000 units.

Craig McLaughlin, vice-president, supply chain, for Kraft Canada, said:"At Kraft Canada, it is important that we work with suppliers capable of investing in their infrastructure in support of enhancing service and enabling our growth. CN’s continuing effort to listen to us as a valued customer and taking action is a key component of the foundation for our strong partnership."

Jens Grellmann, manager, transportation services for Hopewell Distribution Services Inc., which handles warehousing and distribution for Campbell Company of Canada, said: "CN’s acquisition of a significant number of additional containers, specifically heated equipment, will help our supply chain. The new containers will improve equipment supply, allow us to achieve many of our cost-saving initiatives and generate growth opportunities for both companies."

CN’s domestic intermodal business is focused on delivering truck-competitive, cost-effective service. CN Intermodal offers shippers an approximate 24-hour rail advantage from central Canada to Western Canada. At the same time, CN Intermodal is competitive with single-truck-driver service between central Canada and Winnipeg, Calgary, Edmonton and Vancouver markets.

 

Wabtec signs contract to build locomotives for CBH Group of Australia

Wabtec Corporation’s MotivePower subsidiary has signed a contract to build 22 new locomotives for CBH Group, handler and transporter of grain in Australia. The locomotives are scheduled to be delivered in 2012.

Under the contract, MotivePower will build a combination of standard- and narrow-gauge locomotives that will be among the most fuel-efficient and environmentally friendly models in Australia. The locomotives will include components from a number of other Wabtec divisions.

Albert J. Neupaver, Wabtec’s president and chief executive officer, said, "This project will meet our customer’s need for more-efficient locomotives, and will position Wabtec for similar opportunities in Australia in the future. Wabtec has had a meaningful presence in Australia for 20 years, and we continue to expand our operations in this important rail market."

The CBH Group is one of Australia’s leading grain organizations, with operations from grain storage, handling and transport to marketing, shipping and processing. The group receives, on average, 10 million tons of grain each year.

CBH Operations General Manager Colin Tutt said, "The tender process was very competitive with six companies from around the world bidding for the construction task. We are confident that MotivePower’s expertise and experience in building locomotives for freight rail will deliver Western Australia growers the best outcome. MotivePower’s locomotives were the best option for the task of moving grain on our rail lines, have good fuel economy and meet U.S. Tier 2 emissions standards. The locomotives will provide better operational and environmental efficiencies and ultimately greater productivity, as well as being much safer than the existing fleet."