CONFESSIONS OF A MONOPOLIST: 
Investment in, and Management of, the Vertically Integrated Railway 
 
   
   
     

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  SPEECH DIRECTORY:

BACKGROUND ON RDC

USA
Argentina
Guatemala
Peru
Malawi / Mozambique
Estonia

TYPICAL CHALLENGES

Operational
Safety
Cultural
Case Study: Guatemala
Financial
Macro

STRUCTURAL & FINANCIAL CONSIDERATIONS

CONCLUSIONS

Q & A SESSION
 

Typical Challenges

Now let’s consider some diverse and graphic examples of the challenges that we face in our business. The challenges take many forms – operational, safety and cultural. We’ll review a case study of the challenges that we face in Guatemala and then provide an overview of why our business is so challenging.

Operational Challenges

Our operational challenges are relatively straightforward. We operate across the Andes in Peru, through squatter colonies in Guatemala, on track that cannot handle a Hy-Rail vehicle, and have to deal with various issues regarding rolling stock.

click to enlarge image of Peru's track profileIn Peru the ruling grading is 4.2%; this is one of the steepest main line gradients in the world and it is worked by adhesion. This railroad has over 20 zigzags as its way of climbing up the Andes, not across the Andes. The more intense zigzags of Peru’s track profile are shown in this graphic.

The Central is a unique railroad and if you have the opportunity to go on the Ffestiniog Travel charter which will be operating in July, I encourage you to do so. If you cannot join this charter, we have a passenger train and a steam locomotive which is available for charter at your whim.


 
 

photo of dual braking system
click to enlarge

 

Although the Central is a North American style operation, to deal with the mountain operations there are two air hoses between freight wagons. One is for conventional air brakes as used in the UK, but the other is direct air, meaning the entire train has essentially an independent brake like found in locomotives that have been multiple-united together. In this particular case, the types of braking systems used in the Andes are air brakes, direct air, dynamic brakes and hand brakes for a quadruple-redundant braking system.

 

 

photo of runaway track on Chaucha line-Peru
click to enlarge

 

And if the quadruple braking systems do not work, there is always the runaway track. These tracks are lined for the siding unless you are proven to be under control. The way you prove that you are under control is to stop the train, go into the cage, throw the switch by hand, and hold the switch down as the train passes, otherwise the train winds up on the siding.

 
  photo of rebuilt locos from North America operating on the Central
click to enlarge

 

Interestingly, after doing some research and despite the mythology that the clearances were so tight that special locomotives were needed, we were able to buy off-the-shelf, used locomotives from North America and have them rebuilt, reconfigured with straight air systems, etc. and they are now operating on the Central.

 

  photo of commercial squatters at Bananera Market, Guatemala
click to enlarge

 

Shown here is our main line in Guatemala. In many cases, since the railway was abandoned, the main line was taken over by squatters. In this case, these are commercial squatters but we also have residential squatters, meaning people who put up their houses along the track. We even have municipal squatters where towns and cities have taken pieces of our main line. This situation is not ideal, but this is what we have to do to operate the railway. As I tell the folks in Guatemala, we recognize that “this is not Switzerland”.

 

  photo of mgmt inspecting river damage at Los Robles, Guatemala
click to enlarge

 

Another challenge is inspecting narrow gauge railways. In North America a Hy-Rail vehicle is used, meaning a highway vehicle with railroad wheels that drop down and operate on the track. You cannot use this method on narrow gauge because no one has built a pickup truck so narrow that it will work on the  3-foot gauge. Therefore track motorcars are used.

 
  photo of 2 westbound trains, Narva, Estonia
click to enlarge

 

In the case of Estonia we inherited a Soviet locomotive fleet. These locomotives are maintenance intensive, fuel inefficient and highly polluting. We are in the process of replacing them with locomotives from North America.


Top

  photo of 8-axle tank wagons, Muuga Yard, Estonia
click to enlarge

 

In Estonia this is big-time, heavy-haul railroading. This is the Mother of All Freight Wagons, a 165-ton, 8-axle tank wagon. A lot of North Americans think that they have the most heavy-duty railroads in the world; the Soviets have always had them beaten – we just never knew it until the Iron Curtain came down. By the way, these wagons are not easy to re-rail. This is one of the reasons that it is important to have a very strong track structure, which fortunately we do.

 

  photo of skateman, Tapa, Estonia
click to enlarge

 

The other interesting thing for a North American is seeing wagons rolling through a yard and then noticing that there are no hand brakes. The Soviet legacy is a system, which is better than what we have in North America, of using skates. The man on the left is putting a metal wedge on the track called a skate; when the wagon hits the skate, it grinds to a stop. It is better than a hand brake because you cannot sabotage it or replace it by hand; you need a locomotive to pull it off.

 
  photo of test run of used GE C36-7 locos put into operation in Estonia
click to enlarge

 

These are the used GE C36-7 locomotives that have been re-gauged and put into operation in Estonia. These off-the-shelf locomotives are replacing the Soviet locomotives on a 1-for-2 basis. I rode this particular locomotive when we set an all-time record for a single locomotive in Estonia – we hauled 5500 tons with one locomotive which had never been done before.

 
  photo of inside of M62 cab, Estonia
click to enlarge

 

Keeping in mind that I’m an American, when I stepped into one of the Soviet locomotives for the first time, I was quite surprised to find a steering wheel. It was very tactfully pointed out to me that it is in fact a throttle. So there are cultural and technological differences.

 
     

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