The Cost Savings of Steam Today.

[NW Mailing List]

Ron,



On Jan 17, 2008 10:12 PM, 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.



Yes, the payback time is long.  Especially for theses days.



>

>

> 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.



Also If I had taken into account other factors like improving efficiency of
the locomotives the pay off would have been quicker.  The good thing is the
investment is not all up front it is spread out between the years so the Net
Present Value is not a big factor in this.



>

>

> 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.



Yes, This paper is an overview and I could expand it greatly.



>

>

> Ron Davis



And Thanks for looking at it.

John Rhodes
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://six.pairlist.net/pipermail/nw-mailing-list/attachments/20080118/7c581f95/attachment.htm>