Warren Buffett's Berkshire Hathaway Inc. plans to boost capital spending at its railroad to $3.9 billion this year, an increase of 11 percent from 2011, as the company adds capacity for coal shipments.
The 2012 proposal includes $2.1 billion on the core network and $1.1 billion on locomotive, freight car and equipment acquisitions, the BNSF Railway Co. said Wednesday. The Fort Worth, Texas-based unit is also spending $300 million this year on a U.S. rail-safety mandate.
The largest U.S. freight railroads may lift capital expenditures to a record $13 billion in 2012 as their revenue rises amid gains in freight traffic, the Association of American Railroads said Jan. 30. BNSF's weekly volume climbed to a three-year high as the economy improved outside of the housing market, Buffett, the Omaha-based Berkshire's chairman and CEO, said in October.
"That's stuff moving around the country, supplying merchants and doing all kinds of things," he said at Fortune magazine's Most Powerful Women conference.
The railroad's plan calls for $400 million in terminal, intermodal-expansion and efficiency projects, which will focus on coal routes.
BNSF is also benefiting as oil drilling in the northern-U.S. Bakken region outpaces pipeline growth, boosting petroleum shipments by rail. Intermodal shipments, which can move by sea, rail and highway, are rising as higher fuel prices prompt truckers to partner with railroads.
The investment will "ensure our infrastructure remains strong and improve the efficiency of our operations," Matthew Rose, CEO of the railroad, said in the statement.
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
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