Neil Buckley, CEO, RISP, B.E., M.B.A.

Repowering of Old Locomotives

AusRail Plus 2009

REPOWERING OF OLD LOCOMOTIVES

Neil Buckley, Chief Executive Officer, Rail Industry Service Providers P/L (RISP)

SUMMARY

The average age of the locomotive fleet operating in Australia is in excess of 30 years. Improving the
reliability, availability and productivity of older locomotives is a challenge for many rail operators.
Replacing old locomotives with modern, state-of-the-art units, whilst appealing, may not be economically
viable because the returns that these locomotives can generate in many cases are insufficient to provide a
reasonable payback on the huge capital outlay. Overhauling the locomotives so that they are brought back
to an original specification condition may address reliability issues but the process will not capitalise on
productivity advances in fuel efficiency, environmental emissions and tractive effort that have been made
over the years. Repowering of locomotives, where the engine, alternator and traction control equipment is
replaced with a new upgraded system provides an alternative, cost-effective option for many locomotive
applications in Australia.

1. INTRODUCTION 2. BACKGROUND

It is widely reported that the general freight task
in Australia will double between the years 2005
and 20201. However, for rail to maintain or even
grow its current transport market share in
Australia of 26%2, there will need to be significant
investment in railway assets, including rolling
stock. Yet when we look at investment in rail in
Australia over the last few decades there has only
been relatively modest investment in rail outside
of coal, mineral and passenger traffics. This
paper will examine some of the reasons why
there has been this under investment,
particularly in rolling stock in the general freight
market. It will introduce the concept of
repowering locomotives as an alternative to a
standard overhaul or investment in new motive
units. The paper will then discuss the costs and
benefits of repowering locomotives and focus on
a case study application of repowering 48 class
locomotives.
An analysis of locomotives still in operation on
the contestable rail network (i.e. excluding
private railways) in Australia determines an
average locomotive age of 30.4 years3. Figure 1
shows the spread of ages of this population of
approximately 1700 locomotives and reveals that
over a one quarter of Australia’s locomotive fleet
is over 40 years old. This quartile includes the 48
class locomotive where there are still over one
hundred of these locomotives listed as
operational and they remain the backbone of
regional rail transport in NSW. The youngest
locomotives in the Australian fleet, tend to be
used on coal and mineral traffics and long
distance intermodal.

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Figure 1 – Age Profile of Locomotives in Australia
It is generally accepted that locomotives have an
economic life of 20 to 25 years4. This compares
favourably with the average age of locomotives in
the United States, which is reported to be only 8
years5. Why then is the Australian locomotive
fleet over 3 times the average age of the
American fleet and 50% more than the
recognised life of these assets? The underlying
cause for the aging locomotive fleet and the
distribution of locomotive ages on different hauls
in Australia is largely a function of the returns the
locomotives can generate and whether they can
support investment in new equipment. Revenue
for many rail traffics in Australia is capped by
competition from road transport, which can
provide a highly flexible and reliable door to door
service. Added to this, road has an apparent cost
advantage, where the Productivity Commission6
has found that despite recent changes, heavy
trucks were still only paying marginal costs for
the use of transport infrastructure whereas
freight rail pays average costs plus a profit
margin. Heavy vehicles also do not pay for
externality costs such as environmental emissions
and congestion delays.
With new locomotives costing between $6 million
- $7 million7, rail operators/asset owners need to
earn in the order of $700,000 per year or $2000
per day capital charge for each locomotive to
cover interest and an appropriate risk adjusted
return. From the author’s experience,
locomotive capital costs make up approximately
half of total rolling stock capital costs, which in
Repowering of Old Locomotives
turn is approximately one third of the total
haulage costs, including access charges.
Therefore each locomotive, if it is viewed as a
revenue centre, has to generate approximately 6
times its capital charge or $4.2M per year in
freight revenue to provide an adequate return.
When you look at rail freight traffics around
Australia, many of them simply do not generate
sufficient revenue to support new assets being
deployed in the operation. For example, in
2007/08 Pacific National earned total revenue of
$99 million from its grain and general freight
business8. This revenue would support only
approximately 24 new generation locomotives in
the business. PN’s grain/general freight
locomotive fleet, which mainly comprises of 48
class and 80 class locomotives, is in excess of 100
locomotives, so even with replacing old
locomotives with new generation units on a three
for one basis, the numbers do not stack up.
3. REBUILD/OVERHAUL OPTIONS
A standard locomotive overhaul typically involves
the reconditioning of an old locomotive back to
original condition using new or reconditioned
parts. Major components such as the engine,
alternator, traction motors, compressor, bogies,
draft gear/couplers and brake equipment are
replaced or reconditioned on a like for like basis.
The performance of the locomotive after
overhaul is basically the same as when the
locomotive was originally supplied.
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The advantage of this form of overhaul is that it
improves reliability of the locomotive, costs less
than a new locomotive or repowering and
involves less risk if the locomotive has already
proven to perform well in service. However, a
standard locomotive overhaul does not offer any
improvement in productivity of the locomotive in
terms of power output or tractive effort nor does
it improve environmental emissions. In addition,
finding parts for some old locomotives is
becoming increasingly difficult and the question
of how much is the asset owner prepared to
spend on a 40 year locomotive is a burning
question. This results in owners/operators taking
the detrimental approach to maintenance where
the locomotives are virtually run until they fail
and maintenance practices are centred around a
“fix when fail” mentality. This results in poor
reliability of services using old locomotives, which
exacerbates rail’s competitiveness in certain
markets.
The need for more reliable and productive
locomotives in the general freight market is
apparent given competition from road. It is
generally not possible to incrementally modify
existing traction equipment as its vital
components are designed around a certain power
rating and tractive effort. However
owner/operators of these locomotives can obtain
additional power/tractive effort through
repowering the locomotive.
There are two basic approaches to repowering
locomotives. The first is to replace the existing
engine with a compatible but more
contemporary locomotive engine and traction
package. The second approach is to repower the
locomotive with a medium speed, base mounted
engine/alternator set, sometimes referred to as a
“gen set” locomotive. This approach typically
involves retaining the original locomotive
structure and bogies but increasing its power.
Both repowering approaches typically
incorporate a full locomotive overhaul to ensure
the reliability of other critical components match
the new engine/traction packages.
Both Electro Motive Division (EMD) and General
Electric (GE) are offering new engine packages
aimed at improving the fuel economy and
emissions from old locomotives. EMD has
Repowering of Old Locomotives
developed the 710ECO Repower engine, which
can be used to replace the old 645 engines in SD-
40 series locomotives. EMD claims9 that these
locomotives can achieve fuel savings of up to
25%, meet EPA Tier 2 environmental emissions
standards and have 90% parts commonality with
other EMD engines. Whilst the cost of this form
of repowering has not been published, a payback
period of 5 years is being quoted.
GE has also recently entered the repower
market10 with its Evolution Series 2,350-hp shunt
locomotive. This locomotive is powered by a
version of GE's proven 12-cylinder GEVO engine
used on the Evolution Series locomotives. The
unit is designed for shunting applications and is
planned to achieve improved fuel efficiency,
lower emissions, greater reliability, and extended
life. Additional benefits of the design include
parts commonality with GE's high horsepower
Evolution Series locomotives.
The alternative to replacing an old locomotive
engine with a modern derivative is to repower
the locomotive with a medium speed, base
mounted diesel engine/alternator package.
There are no freight locomotives in commercial
use in Australia, which have been repowered
using this approach however, there are several
overseas examples of repowered old locomotives
and some new locomotives using this technology.
A 36 year old Swedish NOHab t43 multipurpose
locomotive,11 which was originally powered by an
EMD12-567-Di engine and generator was refitted
with a modern 50-litre Cummins KV series diesel
power pack, increasing output from 1065kW to
1268kW. After 3700 hours of heavy-duty
operation since 1999, it is reported that the
repowered locomotive has achieved impressive
results in terms of operating costs (overall
reduction of 20% including fuel savings of 26%),
improved environmental performance (60%
reductions in NOx and reduced noise emissions
from 94 to 86 dB (A)) and improved vehicle
availability (engine overhaul period of up to
30,000hrs).
In North America a number of old locomotives
have been repowered for use in shunting
operations. These include a recent project where
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Neil Buckley, CEO, RISP, B.E., M.B.A.
Union Pacific and Progress Rail12 repowered five
SD40-2 locomotives, which were originally built in
the 1970s. These locomotives have been
repowered with Caterpillar 3516 engines and will
meet Tier 2 emissions standards. The
locomotives will be tested on intermediate-haul
routes in the Midwest and California.
MotivePower13 has developed a range of low
emission locomotives utilising medium speed
diesel engines. The MP20B/C models are 2000hp
single engine locomotives fitted with MTUDD
12V4000 or equivalent engines. Thirteen of the
MP20C models are in operation for Pacific
Harbour Lines14 serving the Ports of Long Beach
and Los Angeles. MotivePower is also
understood to have a multi engine (i.e. 3 x 700hp)
demonstration shunt locomotive.
National Rail Equipment Company in the United
States has developed its “N-ViroMotive”
locomotive15 which is a “genset” locomotive
utilising up to 3 x 700hp medium speed diesel
engines, which can be synchronised together or
used individually or in pairs depending on power
requirements. The locomotives have primarily
been constructed for shunting applications but
are being considered for regional operation.
Over 250 locomotives have been built or in the
process of being built for customers such as BNSF
Railway, the Canadian Pacific Railroad, CSX and
Union Pacific.
In summary, the benefits of repowering old
locomotives with medium speed diesel
engine/traction packages include:
• Improved tractive effort of up to 60%16
through the use of an integrated micro-
processer managed traction control systems
coupled with the new engine/alternator;
• Improved fuel consumption of up to 20-35%17,
depending on duty cycle due to more precise
control of fuel injection and combustion;
• Reduced exhaust emissions (NOx and
particulates reduced by up to 80%18) and noise
emissions by over a half19, particularly in the
low frequency, high energy range and tonality.
Resilient mounting of the engine/alternator
Repowering of Old Locomotives
assembly and air compressor virtually
eliminates frame-transmitted noise and
vibration from these sources;
• The engine running at higher speed means it is
more compact than the traditional locomotive
engine for the same or increased horsepower,
thus providing additional space and greater
flexibility for equipment and crew amenity
layout;
• Up to one third 20 reduction in lubricating oil
volume compared to that of a conventional
low speed engine with oil change intervals
extended;
• Modular equipment within the traction pack
and electrically driven auxiliaries allowing for
easier component replacement and better
maintenance accessibility; and
• Extended maintenance and overhaul periods
provided by the new diesel engine,
alternators, air compressor and cooling
system components provided in the proposed
package will result in a 40% to 50%21
reduction in maintenance costs on these
components and an overall reduction of some
40% of total locomotive maintenance costs.
Environmental considerations in terms of exhaust
emissions (including greenhouse gases) and noise
levels are playing an increasing part with
investment decisions in rail. In Australia,
transport contributes approximately 14% of the
country’s total greenhouses emissions with rail
causing only 3% of the total transport
emissions22. The inherent efficiency of steel
wheels on steel rails, makes rail part of the
solution rather than part of the problem with
global greenhouse emissions. However,
repowering of old locomotives so that the old
engines are replaced with modern fuel and
carbon efficient engines will improve rail’s green
credentials even further and maintain rail’s
natural competitive advantage over road with
respect to greenhouse emissions.
Diesel locomotives produce a number of
emissions including nitrogen oxides,
hydrocarbons, carbon dioxide and particulate
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matter. There are currently no emission
standards for locomotives in Australia, however,
experience from overseas shows that a number
of countries including the United States, Europe
and Japan have introduced standards on
emissions from locomotives. For example, the
United States has introduced regulations for
locomotives based on their age (or when they are
remanufactured) and the nature of operation
(e.g. linehaul or shunting)23. “Tier 2” standards
currently apply to locomotives and locomotive
engines originally manufactured or
remanufactured in 2005 and later.
Such exhaust emission standards can be met in
repowered locomotives by means of technologies
within the diesel engine envelope such as
common rail injection systems and electronic
governors. This eliminates the need for
expensive and power depleting exhaust after
treatment such as exhaust scrubbers.
Noise emission in built up areas is also a problem
for rail operations in Australia. In NSW the
maximum noise level for locomotives under all
service conditions is 87 dB(A), with specific
tonality requirements24. This requirement is
difficult to achieve in standard new locomotives,
let alone in older locomotives where noise levels
can be as high as 92 to 95 dB(A). As mentioned,
the noise level of repowered locomotives is in the
order of 86 dB (A), which is below the current
standard and ideal for applications in noise
sensitive areas.
4. 48 CLASS REPOWER CASE STUDY
The following presents a case study on the cost
and benefits of repowering 48 class locomotives.
The 48 Class locomotives were introduced during
the 1960’s to operate on the light rail branch
lines in NSW. A total of 165 locomotives were in
the class, spread over four versions. Their light
axle load of 13 TAL, made the 48 Class locomotive
ideally suited for operation on lighter track
structures in country areas for haulage of grain
and mineral commodities. The 48 class
locomotives were also used extensively to
perform shunting and trip train operations within
the Sydney metropolitan network.
Repowering of Old Locomotives
The Mark I and Mark II 48 class Locomotives were
fitted with small fuel tanks and light draft gear
and have mostly been withdrawn from revenue
service. The locomotives have been dispersed
and ownership is distributed between Pacific
National, RailCorp, Junee Railway Workshops,
Silverton / Coote Industrial Rail and GrainCorp.
The 48 class locomotives were last overhauled in
the late 1980’s and are due for major overhaul in
the near future if they are to remain in active
service. The 50 year old technology currently
employed in these locomotives makes them
extremely expensive to operate and maintain and
parts are getting difficult to come by.
The upgrade of a 48 class locomotive to a higher
power output together with the installation of
new a traction control system, to increase the
adhesion level from the 18.7% current level to
nominally 28%, will provide a number of
extremely useful operational advantages. It will
permit a 50% increase in load hauling capacity for
a single locomotive, with no significant loss of
running time over a given haul. A modest 12.5%
increase in fuel tank capacity will allow the same
operating range as the existing 48 class
locomotives with the 50% load increase.
The 50% increase in locomotive hauling capability
would allow a 2 for 3 replacement within a 48
class fleet. This equates to a direct reduction of
33% in overhaul and maintenance costs, without
taking the reduced maintenance requirements of
the new equipment into account (e.g. oil
changes). The versatility of the upgraded
locomotive in substituting for a mainline
locomotive would also prove extremely valuable.
For example, two upgraded 48 class locomotives
could be substituted for a single 81 class
locomotive or three upgraded 48 Class
locomotives can substitute for a single NR class
locomotive. Trailing load versus speed for the
existing 48 class, a repowered 48 class and the 81
class locomotives are shown in Figure 3 below.
With the use of a medium speed, more compact
diesel engine, it should be feasible to add
dynamic brake to the 48 class.
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Figure 2 – Trailing Load vs Speed for a standard 48 cl, Repowered 48 cl and 81 cl Locomotives
The cost to repower a 48 class locomotive is in
the order of $1.9 million including a new 1500hp
medium speed diesel engine, traction
alternator/rectifier and auxiliary alternator
compared with a standard overhaul cost of
approximately $1.2 million25. The scope of the
repower includes overhauling the existing bogies
including traction motors to ensure they handle
the increased horsepower and tractive effort.
The new engine is based on electrically driven
auxiliary equipment. This approach is more
flexible and allows better use of available space.
The auxiliaries include an AC motor driven air
compressor, AC driven radiator fans, AC driven
traction motor blowers and inertial filter dust
extractor fans. This modification will include a
complete high and low voltage rewire as well as
new air, fuel and cooling water pipe work. A
microprocessor based control system is necessary
to cover traction control, alternator excitation,
and dynamic brake control, where fitted.
Repowering of Old Locomotives
Although not factored into this analysis, a new,
forward-facing cab costing approximately
$200,000 to improve the crew’s visibility and
amenity could also be included in the scope.
The benefits of repowering the locomotives
include fuel and maintenance cost savings and
improved locomotive availability compared with
a non-overhauled unit. Other non quantifiable
benefits which include improved locomotive
reliability and improved environmental emissions
have not been factored into this analysis.
The cost and benefits of a typical 48 class
locomotive configuration are shown in Figure 3.
The analysis compares the relative cost and
benefit differentials between operating non
overhauled locomotives, standard overhauled
locomotives and repowered locomotives. The
cumulative costs of the three options over a 10
year period, showing the relative break even
points are presented in Figure 4.
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5. RESULTS

Figure 3 – 48 Cl Locomotive 10 Year Cost Comparison – No Overhaul, Std Overhaul and Repowered

Figure 4 – Cost Benefit Comparison of 48 Class Locomotive Overhaul and Repower Options

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The analysis shows that over a 10 year period
there is a quantifiable benefit of $2.6 million to
$2.9 million of repowering two 48 class
locomotives compared with standard overhaul or
non overhaul options. The repowering option
had a breakeven point of just less than 6 years
compared with the option to not overhaul the
locomotives.
Whilst a repowered 48 class locomotive would be
mainly used in regional freight operations and for
work and trip trains, the principles could be
extended to the development of a 4,000hp
single- engine, mainline locomotive. With an
appropriate donor locomotive, the cost to
repower and fully overhaul the locomotive is of
the order of $3 million. Depending on the duty
cycle and the characteristics of the original
locomotive, the payback period on the
investment can be as little as three to four
years26.
6. CONCLUSION
If rail in Australia is going to reach its potential
and play an increasing part in meeting the
forecast doubling of the freight task over the next
10 - 15 years, it needs a locomotive solution that
works economically where rail has to compete
with road transport. Repowering of old
locomotives provides a solution where high
productivity, reliability and environmental
advantage can be achieved at a fraction of the
cost of new units. Ideal applications for
locomotive repowering solutions include low to
medium duty cycle hauls including intermodal,
branch line, work train and short haul operations.
With the capital cost of a repowering solution,
including overhaul of non-replaced components,
costing approximately half the cost of a new
locomotive build, the estimated payback on the
cost of repowering a locomotive used for a
typical operation is estimated to be around 4 - 6
years. The case study of a 48 class locomotive
application shows a payback period of less than 6
years for repowering these locomotives
compared with a standard overhaul option.
Additional to this are the environmental benefits
of reduced noise and emissions from repowered
locomotives.
Repowering of Old Locomotives
7. REFERENCES
1
Australian Government Department of Transport and
Regional Services, Auslink White Paper,
Commonwealth of Australia, 2004, p. 4.
2
National Transport Commission Australia, Scoping
Rail Environment Issues Discussion Document, 2004,
Appendix 2.
3
Review of locomotives listed on
http://www.locopage.railpage.org.au.
4
For example, ATO TR 2009/4 Effective Life for
Depreciating Assets states an effective life of 20 years
for heavy haul diesel electric locomotives and 25 years
for general freight locomotives,
www.law.ato.gov.au/atolaw/view.htm?docid=%22TXR
%2FTR20094%2FNAT%2FATO%2F00001%22#PB.
5
Phillips, M. 2009, Challenges Australia faces in the
Development of our International Trades, AMSA
Conference, Sydney, 3 – 5 June 2009.
6
Productivity Commission, Road and Rail Freight
Infrastructure Pricing, Report no. 41, Canberra, 2006.
7
QR Media Release, Report on the Purchase of 12 x
C44 Aci for Downer EDI for more than $70 million, 18
January 2009.
8
Asciano, ASX Announcement, Release of Financial
Results for Full Year Ending 30 June 2008, 6 August
2008.
9
Electro Motive, Press Release, KCS Rolls Out EMD
TM
710ECO Repower Locomotives, 22 June 2009.
10
Locomotive repowers: investing in the future; Railway
Age, October 2008.
11
Repowering breathes new life into old locomotives –
Diesel Traction, International Railway Journal, April
2002.
12
Locomotive repowers: investing in the future;
Railway Age, October 2008.
13 X
MPE Low Emissions Locomotives Data Sheet,
www.motivepower-wabtec.com
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14 26
Pacific Harbour Lines Newsletter, Unpublished Rail Industry Service Providers P/L cost
www.anacostia.com, Summer 2008. and benefit analysis of a class of old locomotives
15
currently deployed on an intermodal operation in
N-ViroMotive: A New Locomotive Concept, Australia, 2009.
www.nationalrailway.com/nviro.asp.
16
For example, National Railway Equipment Company
claim tractive effort enhancements of 60%, N-
ViroMotive: A New Locomotive Concept,
www.nationalrailway.com/nviro.asp.
17
For example, MotivePower quote 35% fuel saving.
MPEX Low Emissions Locomotives Data Sheet,
www.motivepower-wabtec.com).
18
For example, National Railway Equipment Company
claim 80% reduction in NOx and particular emission,
www.nationalrailway.com/nviro.asp and Cummins
claim 60% reduction in NOx, International Railway
Journal April 2002.
19
For example, Cummins claim a reduction in external
noise levels from 94 to 86 dB (A), International Railway
Journal, April 2002.
20
For example, 165 litres of lubricating oil in the
MTUDD 12V 4000 R41 engine compared with 520
litres in an Alco 6-251B engine, is a considerable
maintenance cost saving.
21
Unpublished analysis by Rail Industry Service
Providers P/L, 2009.
22
Department of Climate Change, Transport Sector
Greenhouse Gas Emissions Projects, Canberra p3 &
p11, 2007.
23
Emission Standards – United States - Locomotives,
http://www.dieselnet.com/standards/us/loco.php
24
ARTC’s Environmental Protection Licence under
Section 55 of the Protection of the Environment
Operations Act 1997 (NSW)
http://www.environment.nsw.gov.au/prpoeo/licences
/L3142.pdf.
25
Unpublished Rail Industry Service Providers P/L cost
estimates, 2009.

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