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5/14/2008



Rail News: Rail Industry Trends

RailAmerica left with 'little choice' but to abandon Coos Bay Line, short-line holding company says


RailAmerica Inc. plans to seek Surface Transportation Board (STB) approval to abandon the Central Oregon & Pacific Railroad Co.'s (CORP) Coos Bay Line between Coquille and Eugene, Ore.

Rejections by the state, shippers and Union Pacific Railroad to proposed options to restore the line have left RailAmerica "little choice but to abandon the line," officials of the short-line holding company said in a STB filing. For example, CORP officials had proposed establishing a railroad/state joint venture that would own, reopen and operate the 65-mile line, which the 440-mile short line closed last fall because of safety concerns. But Oregon Gov. Ted Kulongoski rejected the idea last month.

In addition, contrary to state, shipper and UP claims, CORP did not act illegally, but "reasonably" to obtain financial assistance from interested parties to restore and preserve service on the line, RailAmerica officials said in the STB filing. The officials have filed a motion with the STB seeking a protective order for certain documents associated with a Coos Bay Line abandonment transaction.

"Upon assessing these reactions to our efforts to build a coalition to address the long-term viability of the Coos Bay Line ... CORP made a decision following (April 24-25) hearings to seek to abandon the Coos Bay Line," RailAmerica officials said in a STB filing. "We have instructed our counsel to file the required notice of abandonment and a formal application seeking authority to abandon the Coos Bay Line at the earliest time permitted under the board's regulations."

CORP officials still are willing to work with interested stakeholders to discuss solutions to keeping the line open, but RailAmerica "cannot justify investing many millions of dollars to rehabilitate a line that shows little, if any, prospect for returning to profitability," the filing states.


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