OMAHA, Neb. — Union Pacific said Friday it plans to invest $1 billion in railroad projects in Nebraska over the next several years to upgrade the capacity of its network.
Jim Young, the CEO of Union Pacific Corp., said he expects the investments to help create at least 1,000 jobs in Nebraska. The company plans to invest the money over about seven years, but the projects could be accelerated if the economy improves quicker than expected.
"We are renewing our commitment to the state," said Young, whose company has been based in Omaha for 150 years.
Union Pacific Railroad can receive as much $100 million in state tax breaks in exchange for making the investments. State Tax Commissioner Doug Ewald said Nebraska's incentive program allows companies to recover as much as 10 percent of their investment if they meet job creation criteria within seven years.
The actual amount the company will receive depends on how quickly it invests and how many jobs are created. Union Pacific officials said these projects likely would have been done regardless of the incentives, but the tax breaks make it possible to complete the upgrades sooner.
Republican Gov. Dave Heineman praised Union Pacific's plans to invest in the state.
"This is extraordinary news," Heineman said. "We've never had a billion dollars invested in this state by one company."
The projects the company announced Friday include $200 million in upgrades to the main east-west track crossing Nebraska. About 125 trains a day already use that line, and Union Pacific wants to expand its capacity.
The company also plans to upgrade its North Platte rail yard, which is already the world's largest, by spending $70 million to add track and improve technology.
Union Pacific has the means to invest that much in the state partly because the railroad just completed its best year ever. The railroad said Thursday that it generated $3.29 billion net income in 2011, which was 18 percent higher than the previous year's $2.78 billion net income.
The railroad said Thursday that it plans to spend $3.6 billion in 2012 on upgrades to its network of 32,400 miles of track in 23 states.
Union Pacific Corp.: www.up.com