The Cost Savings of Steam Today.

[NW Mailing List]

NW Mailing List <nw-mailing-list at nwhs.org> wrote:  John,

I glanced over your paper. One detail that I have not heard 
mentioned, and one that I see as the biggest hurdle is the cost of 
capital to invest in the project you describe. For starters, the 5 to 
11 year payback would never be sufficient to justify the investment 
and the risk. Our quarterly-dividend-obsessed friends on Wall Street 
would never allow a publicly traded company to invest in such a 
massive risky project that does not pay back for years and years.

Secondly, your figures describe savings across the entire North 
American rail system. It would be very unlikely that all the major 
Class I roads would be willing to make the investment. This further 
reduces the savings that can be shown against the development investment.

Maybe being a little less conservative with your figures, a payback 
in two years or less could be shown.

I second Ben's comments on your work. Now it needs to be broadened to 
include some of the non-technical issues being raised.

Ron Davis

 For a thought, when N&W switched to diesel, they incurred the cost of facilities for diesel locos and the margin between coal/oil was very thin. Ron Hash
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