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Coos Bay Port considers taking over railroad
Monday 12 Nov 2007, 10:46
Filed under: Railroad

So far though, the railroad says it will take up to 27.1 million to fully reopen it and “maintain status quo”. Something if you follow railroads enough, is all shortline railroads have a major need of money, to fix deferred maintenance, upgrade tracks, to handle heavier cars, etc. Also most of the comments seem to be against the railroad.

By Elise Hamner
City Editor
Saturday, November 10, 2007 12:07 PM PST

COOS BAY – Central Oregon & Pacific Railroad officials broke a seven-week silence in talking publicly about the defunct Coos Bay rail line on Friday afternoon.

CORP’s manager of marketing sales was making phone calls Friday. He announced his company intends to host a meeting in Eugene next week to talk about plans for the railroad. It won’t be a public meeting, Thomas Hawksworth said. It will be a discussion about CORP’s idea for a public-private partnership to deal with the line.

While railroad officials appear to be heading down the tracks seeking public money to fix the rail line, the Oregon International Port of Coos Bay is chugging along with legal action.

The announcement came about four hours after the port commission took a first step in trying to wrest control of the railroad away from CORP, with the goal being to reopen the tracks. Three of the port’s five commissioners met with staff in a closed-door meeting at 7 a.m. Fifty minutes later, the board opened the doors and voted to authorize port executive director Jeffrey Bishop to spend up to $200,000 in pursuing the issue.

Technically, the port will work with attorneys to file a “feeder line application” to the U.S. Surface Transportation Board, which oversees railroads.

“We would put together an operation and acquisition plan,” Bishop said Friday.

Through that, the port has to show it can pay the net liquidation value of the rail line and provide rail service for at least three years.

“The port has no intention of operating the railroad,” Bishop said.

Instead, it will try to find someone else to run the railcar end of the business. The port would control the infrastructure. (It already owns the Coos Bay rail bridge and North Spit rail spur.)

This is not the only legal punch the port has swung at CORP. On Oct. 22, the agency filed a complaint against CORP in U.S. District Court in Eugene. The lawsuit seeks at least $15 million in damages. The port contends the railroad breached its lease contracts for the rail bridge and rail spur by closing the line without giving 180 days’ notice. There’s no estimate on how long that case may take to resolve.

As to the takeover process, Bishop said it could take a year or more. And legal fees could cost a lot more than the port commission discussed Friday, Bishop said. The money will come from a rail bridge special revenue fund filled by tariffs paid by shippers, not property taxpayers. Should the port actually gain control of the railroad, Bishop said the agency intends to seek partners with deeper pockets to help finance investment.

No one’s talking about how much the rail line might be worth, but costs for repairs are all over the place.

Initially, a CORP press release said it would cost $7 million over the next five years for tunnel repairs. It would cost $2.8 million to open the line now. However, the railroad made a presentation to the state Senate Interim Committee on Transportation in late October and pegged the cost to reopen the line and maintain status quo service at $27.1 million.

And again at that meeting, the railroad sought public money to help finance repairs and investment.

Next week, Hawksworth said, the railroad intends to divulge its idea.

“We’ve come up with a plan, this public/private partnership proposal, and we want to run it by everybody to see if it’s good, bad or indifferent,” he said.

Hawksworth said his company is inviting the rail line’s former shippers, state officials, Union Pacific, Port of Coos Bay, media and railroad corporate representatives.

As to the plan’s specifics, Hawksworth wasn’t talking. He did say the railroad wants to follow a timeline its officials handed out more than a month ago. By mid-November, CORP wanted to meet with stakeholders to brainstorm about a public/private development.

It’s apparently not a proposal in which the state or local people have had input. Kelly Taylor, administrator of the Oregon Rail Division, said she had not been invited to the meeting but had heard rumor of one. Same with Martin Callery, the port’s director of communications and freight mobility.

On Friday, Taylor was skeptical about whether there is a plan to reopen the line.

“If somebody wants to cough up $27.1 million, then they’ll reopen it again,” she said.

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