Railroad not budging on closure

By Elise Hamner, City Editor
Saturday, October 06, 2007 | 8 comment(s)

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They met with shippers Thursday.

They met with South Coast lawmakers Thursday afternoon.

They met with Gov. Kulongoski’s staff Friday.

They came up with a timeline, too.

But the document railroad officials gave to legislators is not a timeline for repairing three deteriorating tunnels on the closed Coos Bay short line. Instead, Central Oregon & Pacific Railroad and its parent company RailAmerica provided “A Draft Timeline for Coos Bay Line Public/Private Development.” (see sidebar)

“We can’t force them to run freight. We can’t force them to run trains,” said Chris Warner, Gov. Kulongoski’s transportation adviser.

 And CORP can’t force the state to pay for repairs to the century old, privately owned rail line. The company has said that’s what a public/private partnership would do.

“If there is going to be any kind of public investment, there has to be accountability,” Warner said.

CORP filed an embargo on the line Sept. 21, announcing it would end rail shipments on the line that links Coos and Western Douglas county to Eugene and destinations south, east and north. At the time, a company 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.

The state’s in no rush to forge any deals. The money it’s planning to spend is $2 million set aside by the 2007 Oregon Legislature to look at all rail facilities. The study would figure out capacity on lines statewide now and future, and point out how the state could make the wisest use of its dollars — should it choose to invest in rail.

There’s a saying in Salem these days, Warner said, “If you have seven tunnels on a system and you fix six of them, it doesn’t do you a lot of good.”

The one-day warning of the Coos Bay line closure Sept. 21 whipped up a flurry of cross-state and cross-country phone calls, e-mails and face-to-face meetings.

The state demanded to see an engineering report justifying the closure. State officials got their hands on that Wednesday, but said it will not be released to the public since it is privileged business information.

“I will tell you it was a report that was written in July,” said Oregon Rail Division Administrator Kelly Taylor. “... It outlines concerns with different parts of the tunnels.”

Congressman Peter DeFazio demanded an investigation into the railroad’s statements that three of the nine tunnels pose a safety hazard. He wants Federal Railroad Administration inspectors on the tracks and in the tunnels. The team is due here next week, DeFazio’s office said Friday.

“The FRA is going to perform focused inspections that will include reviewing and auditing inspection and maintenance records, and that will include visual inspections,” said Warren Flatau, the agency’s public affairs specialist.

While inspectors might be hustling, there’s no indication trains will budge for eight months or more.

CORP’s general manager, Kevin Spradlin, who’s based in Roseburg, answered his mobile phone Friday afternoon. He had little to say.

“I need to refer you to our public relations’ folks,” Spradlin said three times before hanging up.

The company’s spokeswoman, at Boca Raton, Florida-based Tilson Communications, has returned no phone calls or e-mails since the closure.

At meetings Thursday and Friday, railroad officials indicated the soonest repairs might happen is May. In the meantime, Union Pacific railroad officials reportedly are meeting with sawmill owners and Reedsport-based American Bridge to come up with other options to help get their products and raw materials from factory to rail.

All the while, American Bridge is left scrambling trying to figure out how complete steel structure jobs for projects in Washington and California and still make money on contracts signed long ago. What would cost 5 cents per pound to ship by rail costs 25 cents per pound to ship by truck, said Donna Train, manager of the Port of Umpqua.

Train has been working through the Douglas County Industrial Development Board to help Reedsport-area businesses expand. American Bridge was hoping to boost its work force from 57 to 80 by the end of the year. A second company, Dailey Wood Products, was planning to open a wood pellet production mill at Bolon Island. Train isn’t sure how the loss of rail will affect those businesses’ plans.

Then there’s Oregon Resources, the company moving through the permitting process to open a chromite mine and processing facility in Coos County. Chief Operating Officer Dan Smith told Coos Bay port officials at a meeting last week his company plans to ship out 700 to 1,000 rail cars a year on the Coos Bay line.

That would bolster CORP’s statewide rail car shipments that totaled 45,017 in 2006, according to the Oregon Rail Division. That was down from a 10-year high of 49,446 rail cars in 2005, but a big jump from the 32,000 carloads that moved across the tracks in 1995. Taylor estimated the Coos Bay line accounts for 10 to 15 percent of that traffic.

Statistics aside, railroad officials have told lawmakers they aren’t making money off the Coos Bay line, especially if millions of dollars in needed repairs are penciled in.

The meeting between Southern Oregon legislators and railroad officials Thursday afternoon was cordial, but there’s no hint of a solution. Sen. Joanne Verger, D-Coos Bay, said she felt the railroad managers left with a clear understanding of the issues they face with the shippers, with the public and with the Legislature.

But, she said, lawmakers, too, walked away with a clear understanding of railroad managers’ sentiment.

“They don’t look at it like it’s their problem,” Verger said.
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Company’s timeline memo


The following is the text of a memo Central Oregon & Pacific Railroad and RailAmerica representatives provided to state officials on a timeline concerning the Coos Bay short line:


“Draft Timeline for Coos Bay Line Public/Private Development


By Nov. 1, 2007


Gather Facts and Data on the Line


By Nov. 15, 2007


Synthesize Data and Organize a Meeting with Stake Holders


Meet, Review, and Share Information


Brain Storming and Problem Solving


Assign Tasks as Necessary


By Dec. 15, 2007


Follow-up Meeting to Report on Tasks


Refine Options and Determine Best Path Forward


By Dec. 31, 2007


Preliminary Recommendations”
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jdlampke wrote on Nov 7, 2007 7:06 AM:

This whole affair is sad. Very short-sighted of the State and CORP, to allow that line to close. Coos Bay could substantially increase shipping traffic, with the resultant increase in railroad intermodal freight and local jobs. Invest in the line. Upgrade the tracks and tunnels to enable heavier, double-stacked containerized freight. More and bigger ships will go to Coos Bay. There will be more good jobs for residents of the Coos Bay area. The railroad will see the increase in traffic it needs to turn a good profit. Have a vision for the future of Oregon, the railroad, Coos Bay and the good people living and working there

Trimodal wrote on Oct 27, 2007 9:22 AM:

Send the FRA out on the rest of the CORP before Rail decides to close it to. It's simple Rail owners u need to spend capital to grow the business. Your lucky the state hasn't figured out the rest of the CORP needs capital. U make a lot of $$ on that though and u can't abandon it since UP is the lessor. Please reinvest in the railroads you own FORTRESS. Prove u are in it for the long run. U better reinvest in the FEC its a high speed rr just in case u didn't know

me2 wrote on Oct 22, 2007 12:55 PM:

ANother Rail America employee here, the new ownership of the company is irresponsible in its "stewardship" of the properties it acquired. If they don't want it sell it to someone that does . They want the traffic but are stingy in their capitalization or repair projects. have they complied with all Surface Transportation Board protocols and proceedures? Have they met all standards established by the State of Oregon? Powerful action on the part of employees, shippers, the government and on line communities is all that these jackals will understand! good luck!

Me wrote on Oct 22, 2007 10:25 AM:

I work for another Fortress owned railroad. Its all about the money and they will close and abandon roads that do not make the grade. expect more Fortress railroads closed. They lied to us, and said they are in it for the long haul. I dont think so.

Jim Long wrote on Oct 7, 2007 12:04 PM:

Oregon DOT needs to acquire this critical piece of transportation infrastructure, the same way they own the Astoria branch line along the Columbia and the former Oregon Electric line. This needs to happen soon, before the line deteriorates any further. Let the state own the road bed, bridges and tunnels, and lease trackage rights back to CORP. This route is just as critical to the area as State Highway 38 and 42, and if private industry lacks the vision to find value in regional short-line railroads, then the Department of Transportation must step in to avoid losing these lines to abandonment.

RailTex wrote on Oct 6, 2007 6:18 PM:

It used to be employees, constituents and shareholders. With Fortress its just about the shareholder. Sorry!

kem wrote on Oct 6, 2007 3:51 PM:

One can only hope when some natural disaster happens in Florida that affects this railroad company that any plea for assistance is met with a resounding NO. They are apprently holding the Coast as hostages until they get what they want. They don't give a damn about the folks here.

The Advisor wrote on Oct 6, 2007 11:48 AM:

CORP is privately owned and they can do as they please with their railroad. That being said, CORP has a contract with the Port of Coos Bay to provide a 120 day warning prior to closure. The Port has said they will sue but I would advise that the lawsuit go for $100 MILLION as large punitive damages are the only way to wake up the megacorp that owns the CORP portfolio as to their wrongdoing in regards to breaking the contract. Winning the lawsuit is a slam dunk. Make that slam dunk pay off BIG TIME and there will be plenty of money to rebuild the line with tens of millions left over. CORP then can decide to partner up and make some profit after a winning lawsuit has been completed or else they can face eminent domain actions that seize the railroad, with plenty of capital in hand to pay them off as well as rebuild the line. Having the trial in Coos County gives the Port of Coos Bay home field advantage. If CORP loses and appeals, interest on that $100 MILLION will be substantial and tacked on as due when the case runs it's course. We the people of Coos County will lose jobs for now due to CORP's actions and there is nothing we can do about that directly, however the Port of Coos Bay can get the last laugh on CORP if they are brave and smart enough to take a HUGE chunk out of their corporate hide over CORP breaking the contract.


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