The story of the Boston and Albany during the past ~70 years provides a good case study illustrating the essential importance, management challenge and resulting impacts arising from a capital-intense business uniquely owning its infrastructure amongst competitors and dependent upon expensive long-term investments:
1956-66 During an era of New York Central investments necessary to modernize and increase productivity, the plan to single track the B&A with CTC traffic control in light of its traffic density are unrealizable, even with a positive return-on-investment, given the total amount of capital investment the railroad's returns can support and its ranking in competition amongst all of the needs. Among large impactful government investment into competing public infrastructure creating the Interstate Highway System and St. Lawrence Seaway, the easternmost ~11 miles of right-of-way is sold to the MA Turnpike Authority with planning executed for an eventual exit out of Boston and transition to containers with a small intermodal container terminals investment made toward productivity improvement and in land for future facilities.
1966-76 During an era where the B&A's owners are generating such poor financial results from operations they can't even invest capital necessary to maintain the railroad, the B&A falls victim to deferred maintenance and a number of expensive derailments, with a limited shot of federal investment into mainline track made late in this timeframe and sale of the railroad Framingham-Boston to the Commonwealth for its commuter rail service.
1976-86 With a big infusion of federal investment and then rapidly rising fortunes once again generating resources to be used to invest in the railroad under Conrail ownership and regulatory (including light-density spinoffs) and labor reforms, the B&A receives major investment in mainline track and necessary execution of earlier plans for new traffic control and single tracking, and, relatively small investment in intermodal terminals, all leading to productivity improvement and with that, more resources for investment generated by operations.
1986-96 With an industry-transforming big new traffic opportunity and introduction of container doublestack technology requiring new overhead clearances, despite sizable benefits the positive return on investment to clear the B&A does not clear the necessary hurdle rate determined by the amount of available capital generated from operations and in light of other competing and strategic return needs. Consequently, among less expensive capital options, a filleting/toupeeing Syracuse NY terminal is created for single-stacking as needed and low/high-cube doublestack container capability created only with a Commonwealth of MA shared infrastructure investment, and increased terminal capacity investments spun off to the Mass Central and Providence & Worcester. Additional B&A public investment is made for re-introducing extended commuter rail as far west as Worcester and with the MA Turnpike Authority selling the land under Conrail's Beacon Park yard for its redevelopment, political pressure for an exit and planning execution for that eventuality begins.
1996-2006 CSX, as part of the Conrail split, becomes the B&A's new owner making capital investments in terminal facilities as well as infrastructure supporting planned growth coming from projected new markets arising from their purchase short-lived and with overall returns well below their cost of capital and rumors of a partial or total New England ownership exit. Additional public investments are made supporting further increased commuter rail into Worcester.
2006-16 A large deal involving CSX and Commonwealth of MA 50/50 $300 million investment leads to full overhead B&A clearances as far east as Worcester, sale of the railroad between Worcester and Framingham, and closure of Beacon Park yard with improved terminals in Westborough, Worcester and West Springfield as well as commuter rail into Worcester, spurring investment in a renewed-Grafton & Upton and resulting in CSX operational productivity improvement.
2016- (2026) CSX, now generating healthy returns exceeding their cost of capital under PSR operating principles, despite early rumors of a New England ownership exit, purchases Pan Am Railways and half of Pan Am Southern for $600m with planned and continuing -execution 1/3 public 2/3 CSX ~$150m initial infrastructure investment offering B&A traffic re-structuring and growth potential; East-West passenger rail receives a $2-3b public investment political commitment for expanded B&A passenger service with CSX agreeing to Amtrak conditions freezing its traffic considerations at PAR/PAS acquisition projections, including an additional NS intermodal/auto trackage rights train pair negotiated to be moved over in consideration of a necessary sizable $300 million investment hurdle for full PAS overhead clearance; and, with a $500m. CSX/pubic I-95 full-overhead clearance improvement investment offering renewed B&A traffic growth potential once earlier short-lived, all in simultaneous play.
