Investments



Eliminating unneeded assets
Many older railways have excess assets that could be monetized. For example, railways may have extra depots because modern rolling stock requires fewer maintenance inputs, hence fewer but more sophisticated workshops and depots. Many railways have inventories of old rolling stock that should be scrapped. At 2010 prices, scrap steel yields about US$400/ton, so an average freight car at 22 tons is worth nearly US$8,000, and an average locomotive, at nearly 100 tons, US$40,000.

Asset disposal by state-owned railways is often difficult. In many cases, railway assets are state property and come under the authority of a state property agency — in such cases the railway may not receive the proceeds from selling excess assets and the disposal must pass through an additional bureaucracy. When restructuring a state-owned railway into an enterprise, it is important to value railway assets and give the new state-owned enterprise title to them. The railway enterprise should be able to dispose of assets and to retain the proceeds from any such sale.

In the past, many railways comprised multiple self-contained small industries to service railway needs in outlying locations. Modern computer and communications systems have reduced the need for local offices and staff. Introducing modern technologies has reduced the number of facilities needed for track maintenance, rolling stock repair, and for machinery, which mean these assets are no longer needed. Railway restructuring should include a major effort to reduce or eliminate unneeded assets.

    











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