The U.S. Surface Transportation Board has breathed life into the South Coast’s hope for a reopened rail line, by approving the Oregon International Port of Coos Bay’s bid to purchase the route.

But it isn’t a done deal just yet.

The STB’s ruling on Friday didn’t state a purchase price for the line. The STB ultimately will dictate that price, and the two sides have debated how it should be set. One of the fiercest points of contention has been the value of the rails, which would be sold as scrap if the line were abandoned.

The Central Oregon & Pacific Railroad wanted to set the value when the price was higher, or at least base it on an average including past months. The port has argued in favor of using the latest available price, given a recent precipitous drop from a spike of $540 per ton in August to Thursday’s price of $161.

The STB agreed to set the cost based on steel prices as of Friday and asked that the port submit a net salvage value for the line by Wednesday. CORP then will have a chance to respond to that filing.

Other decisions didn’t go the port’s way.

The final sales figure will include a $6.7 million price tag for the land under the tracks, which was higher than the port suggested. The STB also denied the port’s request to establish an escrow account to pay for rehabilitation costs. It said the railroad continued to perform maintenance while the line was in operation and shouldn’t be penalized for “economizing” when rail traffic declined.

Along with approving the port’s application to buy the track, the STB issued a separate ruling, approving CORP’s abandonment application if the port decides against buying the rail line. That means, if the cost comes in too high for the port to accept, CORP can abandon the line for good.

The board criticized the railroad company for leaving shippers in limbo following the line’s closure in 2007, though it didn’t suggest the actions justified turning down the abandonment application.

“No railroad should be required by the government to keep operating indefinitely a money-losing line,” it read. “CORP’s conduct in this matter, however, should not be viewed as an appropriate model ... for how to respond when circumstances require the closure of an active rail line.”

Supporters of the port’s efforts were happy with Friday’s ruling, though port officials themselves remained mum on the subject.

“Until we see what that final dollar amount is, it doesn’t make sense to comment,” said Martin Callery, director of communications and freight mobility.

Bob Ragon, a spokesman for the Coos-Siskiyou Shippers Coalition, was more optimistic.

“The port didn’t win everything, but they won the case,” he said.

He said shippers will continue to work with the port to ensure the line can be financially viable.

“If it can be done, the port will pull it off,” he said.

Anna Richter-Taylor, a spokeswoman for Gov. Ted Kulongoski, said the STB decision was good news, though there now needs to be a reasonable price to consider.

“This is a solid first step,” she said. “But there’s still some significant steps that need to be taken.”

In a press release, U.S. Sen. Gordon Smith, R-Ore., said he was pleased with the decision.

“I am committed to working with the port and our Southern Oregon communities to secure the funding necessary to restore this crucial rail service,” he said.

U.S. Sen. Ron Wyden, D-Ore., echoed those sentiments.

“I’ll work to make sure the Port can purchase the Coos Bay line and provide southern Oregon with rail service and the economic benefits it brings,” he said in a press release.

Scott Williams, senior vice president and general counsel for RailAmerica, CORP’s parent holding company, said he had expected the STB to approve both applications. Although he would have liked to have steel prices based on an average or earlier date, he said the pricing methodology was reasonable.

“They laid out a methodology consistent with their past practices,” he said. “We’re satisfied that the STB followed its past precedents and handled the case fairly.”

CORP closed service on the rail line in September 2007, citing safety concerns in three tunnels. Railroad representatives met with shippers and government officials to see if stakeholders could reach a settlement to repair the line. Those efforts stalled, resulting in CORP’s filing its abandonment application in July. The port responded by filing a feeder-line application to take possession of the line.

The port has indicated it has as much as $23.5 million available to buy and rehabilitate the line, and possibly an additional $8 million that previously was earmarked for repairing the Coos Bay swing bridge.