Financial Aspects of Coal Transportation by Rail

摘要

The report evaluates both the financial capability of this country's railroads to invest in incremental coal-carrying capacity and the rates of return allowed on these incremental investments. Given coal movements scenarios are utilized to estimate incremental coal movements by railroad and investment requirements to handle these movements are determined. The financial resources of the railroads are analyzed and capital acquisition strategies are assessed and selected. Railroads are segregated by financial status and the various financial markets are examined to determine cost and availability of capital. A description of various debt and equity issues is included. Various rate-making methodologies are examined with regard to their treatment of return on investment. Utilizing the costs of capital determined above and the return on capital costs allowed by these rate methodologies, the effects on the financial viability of the railroads is analyzed.