Alaska Railroad Diversifies to Beat Downturn

The Alaska Railroad has been facing increased financial and legal challenges over the past five years. New unfunded federal regulations, environmental lawsuits and depressed export markets have put pressure on the company, according to President and CEO Chris Aadnesen…

 

Aadnesen: “You add those all together and we’ve had a cash financial swing of about $45 million from 2011 to right now in 2013 on an annual basis.”

 

Aadnesen said the vast majority of their revenue comes from freight, so they’re diversifying to stay solvent…

 

Aadnesen: “First of all by finding other sources of revenue to replace the revenue that we’ve lost. The State has agreed to pay for our [federally mandated] Positive Train Control project, because there’s no way we can. It’s too big an expense for us. But we’re hoping that the coal market and the change in the law that applies to the State arrangement with Flint Hills causes that business to come back.”

 

Aadnesen said they’re also investing in real estate (which currently brings in $9 million annually) and possibilities for traffic from the Lower 48.

 

 

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