THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Friday, January 24, 1997 TAG: 9701240555
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 38 lines
Due to a big new contract with Ford Motor Co., Norfolk Southern plans to boost its capital spending in 1997 by nearly 12 percent.
``Our projected 1997 capital spending includes more than $100 million for equipment and facilities for an automotive mixing center network we are creating under a 12-year contract with Ford Motor Company,'' said Norfolk Southern Chairman David R. Goode. ``Excluding this major project, our capital spending is actually less than that budgeted for 1996.''
Details of the Norfolk-based railroad's $792 million spending plan for this year were released Thursday. The company had $708 million in planned capital spending last year.
No major projects are budgeted for Hampton Roads. The railroad owns a major coal terminal in Norfolk, a large switching yard in Chesapeake and connects to all the marine cargo terminals in the port.
Two years ago, Norfolk Southern got all the necessary permits for a planned $100 million coal storage facility in Isle of Wight County but tabled it because of softness in the international coal market.
The bulk of the budget will be spent on improving the rails along Norfolk Southern's 20-state, 14,400-mile system. That accounts for 30.3 percent, or $240 million, of the budget.
The railroad will also spend $239 million buying and rebuilding locomotives and freight cars. On the budget this year are new six-axle, high-adhesion locomotives, 324 automobile carriers, 157 boxcars for automotive parts and 112 cars for aluminum canstock.
Other major expenses include:
$39 million for computer hardware and software.
$33 million to upgrade and standardize train dispatching.
$28 million to replace and upgrade bridges and trestles.
$21 million to replace pole lines systemwide with electronic track circuits and data radios.