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9/24/2003



Rail News: M&A

Study: Washington state better off by buying Watco short line


Washington State Department of Transportation (WSDOT) recently commissioned a study to analyze the public benefit of purchasing and preserving the 372-mile Palouse River and Coulee City Railroad Inc., according to American Short Line and Regional Railroad Association's bi-weekly newsletter.

The study found that line-preservation benefits outweighed the cost of purchasing the railroad from holding company The Watco Cos. Inc. The short line's annual public benefit is estimated between $12.8 million and $23.9 million, based on shipper savings, reduced highway costs, and increased jobs and wages tied to rail, the study said.

In summer 2001, Watco advised WSDOT that significant portions of the short line's eastern Washington system would be abandoned within the next five years because the lines don't generate enough revenue to cover the
costs of ownership, ongoing track maintenance and line upgrades needed to accommodate 286,000-pound cars (estimated to cost up to $40 million).

In addition to the study, WSDOT has commissioned additional analyses and consulted with local ports, county commissions, civic leaders, shippers and shipper associations. WSDOT determined that if the lines were abandoned, more than 29,000 truckloads would be added to state highways annually. Associated road damage is estimated at $4.8 million per year.


Contact Progressive Railroading editorial staff.

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