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6/14/2001


Rail News: Rail Industry Trends
Kansas short lines seek STB approval to merge operations



Pursuant to a purchase agreement, Watco Companies Inc. June 1 assumed ownership of 890-mile Central Kansas Railway (CKR) from OmniTRAX Inc., and now is requesting Surface Transportation Board approval to merge CKR’s operations with Watco’s 286-mile South Kansas and Oklahoma Railroad Inc., which would be renamed Kansas & Oklahoma Railroad Inc. (K&O).
Through K&O, Pittsburg, Kan.-based Watco — which owns and operates seven short lines in eight states — plans to acquire and operate CKR’s 678 track miles in Kansas, lease 225 track miles in Kansas and Colorado from Union Pacific Railroad, and acquire (by assignment from CKR) incidental trackage rights over seven rail segments in Kansas owned by UP and Burlington Northern Santa Fe.
CKR already agreed to grant K&O temporary overhead trackage rights for a 16-mile line between Garden Plains and Wichita, Kan., that CKR planned to abandon. To gain STB approval on that agreement, K&O will be required to complete a track relocation project near Kingman, Kan., and rehabilitate the Garden Springs-to-Wichita line.
The temporary trackage rights would enable K&O to move traffic to and from Wichita while the short line completes the relocation and rehabilitation projects later this year.
Watco officials expect to receive STB approvals later this month.

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