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Web posted
The state-owned railroad is predicting revenues of $99 million in 2003, with profits of $1.1 million. That compares to an estimated $107 million in revenues for 2002, with profits of $4.2 million, according to railroad's budget released in December.
A recently released five-year forecast by the railroad shows revenues will not reach $107 million again until 2007. The biggest negative spike to the railroad's balance sheet in 2002 comes from its loss of coal-hauling revenue now that Usibelli Coal Mine Inc. has lost its contract with South Korea-based Hyundai Merchant Marine Co. Ltd. Alaska Railroad Corp. hauled its last load of coal in 2002 from Healy to the Port of Seward, marking an end to an 18-year relationship that provided millions in revenues for the railroad. The railroad had forecasted coal-hauling revenues to rise from $3.8 million in 2002 to $4.2 million in 2006, or about 5 percent of its freight earnings overall. The railroad now expects freight revenues to be $74 million for 2003, down from $81 million in 2002. Freight revenues had more than quadrupled in the last few years, but the railroad is projecting only modest growth through 2007. Patrick Flynn, Alaska Railroad spokesman in Anchorage, said the slide is "natural maturation after a sustained period of growth." Petroleum makes up most of the freight revenue for the railroad, projected at $34.5 million for 2003, down about $1 million from 2002. Decreased oil activity on the North Slope will hurt revenues for the railroad's joint rail-barge venture with Seattle-based Lynden Inc. The railroad is predicting revenues of $22.6 million in 2003, down from $24.3 million in 2002. The shipments by barge from Seattle, then transferred to rail, mostly include pipes and other supplies and heavy equipment used in oil field operations and maintenance. Freight revenue for the railroad is projected to decrease slightly in all other categories, including in-state coal and gravel, which was hauled in near record numbers in 2002. Some $71 million in rail improvements are slated for 2003, most of which are dedicated to the third year of a multiyear project that will straighten some 70 curves on the Anchorage-to-Wasilla line. Road crossings along the track also will be improved for increased safety, according to the railroad. Most of the funding for the project comes from the Federal Railroad Administration, with the railroad matching about 20 percent of the overall cost. A $2.8 million rehabilitation of the railroad's Seward dock also is slated for 2003. A $4.4 million grant from the federal government for passenger rail improvements and maintenance is being applied as profit in 2002. The railroad did not factor federal grant money for passenger rail improvements in its profits in past years. Passenger revenues are estimated at $14.95 million for 2003, an increase from $14.92 million for 2002. Passenger numbers are projected to be about 500,000 for 2003, about the same as the year prior. The railroad has seen passenger numbers dip dramatically since 1999 when ridership was pegged at 679,000. The drop in ridership occurred after the 2.5-mile Anton Anderson Memorial Tunnel opened Whittier to road traffic in June 2000. Real estate revenue from land the railroad leases is expected to decrease from $10.5 million in 2002 to $9.6 million in 2003, according to the railroad's budget. About 18,000 acres the railroad owns along the 525-mile line are either leased or available for lease, according the railroad. Along with passenger and freight revenues, money from leases is used for operating expenses, capital improvement programs, track maintenance and federal grant matches. The railroad receives no money from the state.
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