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6/27/2003



Rail News: Rail Industry Trends

RailAmerica's portfolio returns to the half-century mark with Colorado short-line transaction


RailAmerica Inc. soon will operate an even 50 regionals and short lines. On June 27, the short-line holding company announced it purchased two Colorado line segments totaling 154 track miles from Union Pacific Railroad and formed short line San Luis & Rio Grande Railroad Co. (SLRG) to operate the lines. On June 29, SLRG is scheduled to launch rail service between Walensburg and Derrick, and Alamosa and Antonito.


RailAmerica expects SLRG to generate about $3.5 million in revenue during its first full year of operation, moving minerals, potatoes and malt barley for such shipper as Harborlite Corp. and Coors Brewing Co. The short line will interchange with UP near Walsenburg and San Luis Central Railroad at Monte Vista.


"The SLRG acquisition is consistent with our strategic approach to manage geographic clusters of operations that achieve significant operational synergies and cost savings, and grow the existing customer base," said Gary Marino, RailAmerica chairman, president and chief executive officer in a prepared statement. "In addition, branch-line transactions with Class I carriers — including the Mobile, Ala., line acquisition we completed last month with Burlington Northern Santa Fe — allow RailAmerica to preserve rail service for customers in rural locations while at the same time provide carload growth for our Class I partners."


In 2000, RailAmerica owned and operated 50 small roads until the company sold several short lines as part of an asset-rationalization plan.


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