COOS BAY — The Oregon International Port of Coos Bay wants to purchase the Coos Bay rail line. But the agency wants more track than what Central Oregon & Pacific Railroad is ready to abandon.

In its feeder line application to the U.S. Surface Transportation Board, the port said it is willing to purchase the embargoed line for $9.8 million. It will only do so if it gains ownership of three stations at the eastern end of the line that CORP has expressed no interest in letting go.

In earlier filings with the STB, CORP said it would abandon the line from milepost 669, near Vaughn, to milepost 763, near Cordes on the North Spit, while discontinuing service on the line out to Coquille, which is owned by Union Pacific.

CORP’s existing holdings extend about 17 miles farther east, serving stations in Noti, Veneta and Danebo. It is this stretch of line that the port views as critical to making acquisition of the line economically viable.

Three shippers, Swanson Lumber and Swanson Brothers in Noti; and Roseboro in Vaughn, generated approximately 970 and 758 carloads of freight in 2006 and 2007, respectively. Based upon port estimates, this traffic generated $454,800 and $582,000 of gross revenue for CORP. And in a letter of support of the port’s application, Swanson said it could ship up to 1,200 carloads a year, or about $720,00 gross revenue by port estimates.

If CORP were allowed to keep the easternmost 17 miles of track, the port argues it would reduce transportation efficiency.

“CORP’s continued ownership of the eastern part of the Line would constitute a ‘steel barrier,’ meaning that CORP could extract various handling charges for the movement of traffic over its segment,” the port wrote.

The port also wants the STB to order CORP to make repairs to railroad tunnels or at least provide compensation. When CORP closed traffic on the line in September 2007, it cited safety risks in three of the line’s nine tunnels.  Yet, the port contends the railroad company knew about the problems long before the closure. Studies were performed in 1994 and 2004, the port said, that indicated the severity of the tunnel problems.

“The necessary repairs represent the deferred maintenance that CORP should have been doing over the past 13 years,” the port wrote. “[T]he Board should not allow CORP to simply wash its hand of the line, ignoring the future hardship that will be incurred by the local communities as they try to restore rail service.”

The port did not suggest how much it would cost to repair the line, though previous estimates came to $23 million.

The port would pay much less to gain ownership of the line.

The suggested purchase price is based on estimates of the line’s track assets coupled with the underlying land’s real estate value.

The port has said it would purchase the line and then find a railroad operator to provide service over it. Portland & Western Railroad, RailServe, and Yreka Western Railroad Co. have expressed interest in that role, the application indicated. The port said it could have an operator on contract before the STB makes a ruling on the line, and reopen railroad operations on or about Jan 1, 2009.

CORP issued a notice of intent to abandon the line to the STB in June. It suggested the principal reason for abandonment was lack of revenue, with safety concerns secondary.

CORP submitted an abandonment application Monday, but it was unavailable on the STB’s Web site. World attempts to contact CORP officials were unsuccessful.

(Staff Writer Alexander Rich covers Port of Coos Bay issues for The World. He can be reached by calling 269-1222, ext. 234; or by e-mailing to arich@theworldlink.com.)