Debtor's estate. Also, fairly included within these two classes are projects which are necessary to comply with governmental directives. In addition, no objection is raised with respect to projects such as the construction of side tracks where a shipper or developer initially advances the funds for the project and the Debtor is required to pay for the project only out of revenues derived from the use of the side track. See Tr. 4777.
The real dispute here centers on the standards to be applied in authorizing the remaining class of projects, those proposed for economic reasons, i.e., projects that save money or generate revenue or (and these are the projects most clearly in dispute), enable the Debtor to maintain or improve service. See the specific projects listed in paragraph 4 in the "Objections of Indenture Trustees." The comparatively clear-cut and stringent standards set forth in paragraph 5 of Order No. 677 are appropriate to insure that capital expenditures for which no prior approval of any sort is required are well within the proper limits that should govern expenditures of the Debtor's assets. But application of the standards of paragraph 5a to each of the present proposed projects would be to insure that the Debtor's railroad could not be operated as a rationally managed business enterprise.
The main source of difficulty in applying the standards the indenture trustees propose is that in many instances it is not possible to quantify the economic gain or avoidance of loss attributable to a particular project. However, what is known is that, overall, projects where the economies are identifiable return on the average 100% on investment. Testimony of William H. Moore, Tr. 4750. While it may not be possible to assign a dollar value to projects that promote faster service, improve the quality of service in other ways or enable the Debtor to compete with other carriers, it is obvious that expenditures for such projects are essential to the rational operation of the Debtor's business. See Tr. 4761-63; 4765-67.
It is not practicable and would not be desirable to litigate the merits of each of these proposed projects. I am satisfied that the criteria applied by the Trustees in identifying the most rewarding projects to be implemented with the limited funds available to the Debtor are fully adequate to insure that each project is essential to the efficient operation of the Debtor's business (Testimony of William H. Moore, Tr. 4748-53; Affidavit of Robert W. Orr, Document No. 3005), and that, overall, the implementation of these projects will result in no depletion of the Debtor's estate. Accordingly, expenditures for the projects listed in the Trustees' "Listing of Projects Pursuant to Order No. 677" (Document No. 3497) will be authorized on the same basis as the major projects authorized in paragraph 1 of Order No. 677.
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