• PAR wants to operate ex-MMA/BAR trackage

  • Guilford Rail System changed its name to Pan Am Railways in 2006. Discussion relating to the current operations of the Boston & Maine, the Maine Central, and the Springfield Terminal railroads (as well as the Delaware & Hudson while it was under Guilford control until 1988). Official site can be found here: PANAMRAILWAYS.COM.
Guilford Rail System changed its name to Pan Am Railways in 2006. Discussion relating to the current operations of the Boston & Maine, the Maine Central, and the Springfield Terminal railroads (as well as the Delaware & Hudson while it was under Guilford control until 1988). Official site can be found here: PANAMRAILWAYS.COM.

Moderator: MEC407

  by BigLou80
 
MEC407 wrote:Well, there's got to be some way that they'd make money on this, or else they wouldn't have submitted a bid. It's as simple as that.
What do they know compared to a bunch of guys on the internet LOL.

Like Kevin said maybe is a long term play, from the outside looking in the Billrica brain trust has made a lot of smart (albeit unpopular) plays over the years. The whole Billrica deal being one of them. Or maybe they are broke, being a privately held corporation it's really hard to tell
  by MEC407
 
Cowford wrote:407, are you referring to making money off the rebuilding of the line vs its continued operation?
Either, or both. They're not going to take on new lines and new responsibilities just out of the goodness of their heart or because they think it'll make for good press; they're bidding because they think they can make some money at it. How they do that is anyone's guess, but I think we've seen over the past 30 years that this company generally doesn't take a lot of risks (airline debacle excepted), and I can't imagine they'd put themselves in the running for this thing if they thought there was a good chance they'd lose money at it. Let's face it, they don't do anything unless it benefits them.
  by KSmitty
 
OT
Personally the airline was more Tim Mellon seeing an opening to dabble in his hobby. Yes it was risky, but he is reported to be quite the airfan (is that the word?) It would be like you or me buying the MMA, risky but hey who cares its a railroad, and one with Maine tradition!
/OT

I agree, they are a company out to make money, how they do it, who knows, but they will make money. So they placed a bid because they see a chance to turn profit. Simple, easy, understandable business logic.
  by Cowford
 
What is this Billerica masterstroke that keeps getting mentioned?
  by ShortlinesUSA
 
BigLou80 wrote:
MEC407 wrote:Well, there's got to be some way that they'd make money on this, or else they wouldn't have submitted a bid. It's as simple as that.
What do they know compared to a bunch of guys on the internet LOL.

Like Kevin said maybe is a long term play, from the outside looking in the Billrica brain trust has made a lot of smart (albeit unpopular) plays over the years. The whole Billrica deal being one of them. Or maybe they are broke, being a privately held corporation it's really hard to tell
I realize it may be an apples to organges comparison, but in the world of contracting, particularly construction, some companies underbid on a project to get the work with the sole intent to make their money through add-ons or other modifications to the contract. PAR may believe, based on the economics in the RFP, that there is a good prospect for additional subsidies or grants in the future, especially if a major change comes about with the MMA or a shipper on the now state-owned lines occurs.

The more we discuss the topic, and it has been a great discussion I might add, I am now more firmly believing this is some sort of future positioning by PAR.
  by BigLou80
 
ShortlinesUSA wrote:
BigLou80 wrote:
MEC407 wrote:Well, there's got to be some way that they'd make money on this, or else they wouldn't have submitted a bid. It's as simple as that.
What do they know compared to a bunch of guys on the internet LOL.

Like Kevin said maybe is a long term play, from the outside looking in the Billrica brain trust has made a lot of smart (albeit unpopular) plays over the years. The whole Billrica deal being one of them. Or maybe they are broke, being a privately held corporation it's really hard to tell
I realize it may be an apples to organges comparison, but in the world of contracting, particularly construction, some companies underbid on a project to get the work with the sole intent to make their money through add-ons or other modifications to the contract. PAR may believe, based on the economics in the RFP, that there is a good prospect for additional subsidies or grants in the future, especially if a major change comes about with the MMA or a shipper on the now state-owned lines occurs.

The more we discuss the topic, and it has been a great discussion I might add, I am now more firmly believing this is some sort of future positioning by PAR.
did I mention I am a contractor ? I know all about change orders, its how large bids are won and lost, by who can find the most change orders in the "final" plans. I have lost many a job by giving the client a realistic price to do the work only to find out the company they selected ended up costing slightly more then my original bid.

However Pan AM is not a construction company of any sort so I somehow doubt this is their game plan but I could be all wrong. Will pan am even be doing the rebuild or just running on the rebuilt track ?
  by KSmitty
 
I believe as the operator (if they are selected) they would have the option to perform the work. I'm not sure, that particular part of the RTF was a little fuzzy to me...
  by trackspv
 
Who couldn't make money on a line that is owned by someone else. All capital projects will be paid by someone else (the state), then the railroad that is running it is suppose to send reports to the state on what they are making, show me an accountant that cant make something look like a loss....
  by trackspv
 
I am understanding that whomever gets awarded the work will NOT be getting the 10.5M.
  by KSmitty
 
The 10.5 Mill. in TIGER grants is to be used only for maintenance. If PAR wins the operating contract and opts to do the maintenance then they would receive the money. Though you can be damn sure, if the state gives PAR, or anyone, free money they will watch it, and make sure it goes where it belongs, the maintenance and rebuilding of the state owned lines.
  by Cowford
 
"All capital projects will be paid by someone else (the state)..."

Where did you get that? The RFP says that whoever wins the contract must maintain the line to existing (post-TIGER) condition. That requires ongoing capital investment.

"The 10.5 Mill. in TIGER grants is to be used only for maintenance."

More accurately, it's for rehabilitation and upgrades based on deferred maintenance, no?
  by trackspv
 
Cowford wrote: More accurately, it's for rehabilitation and upgrades based on deferred maintenance, no?
Thats how I read it also. Its to upgrade the tracks to a higher standard, and increase speeds.
  by KSmitty
 
Cowford wrote:"All capital projects will be paid by someone else (the state)..."

Where did you get that? The RFP says that whoever wins the contract must maintain the line to existing (post-TIGER) condition. That requires ongoing capital investment.

"The 10.5 Mill. in TIGER grants is to be used only for maintenance."

More accurately, it's for rehabilitation and upgrades based on deferred maintenance, no?
Cowford, who are you quoting in the first set of ""? Just curious, but I didn't see it when I looked back through the page real quick...

And yes, I meant rehab, to me rehab/maintenance are the same thing a one time investment in the infrastructure, where "regular maintenance" is what should be done every few years (tie replacement, ballast dumping, crossing work...) a continuing scheduled investment in the infrastructure.