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6/2/2003



Rail News: Rail Industry Trends

RailAmerica acquires 288 track miles in Alabama from BNSF


RailAmerica Inc. recently obtained 288 track miles in and around Mobile, Ala., from Burlington Northern Santa Fe for $15 million cash.


On June 1, RailAmerica subsidiary Alabama & Gulf Coast Railway L.L.C. (AGR) began operating trains on the track, which runs from Amory, Miss., to Mobile, and connects with AGR at Kimbrough, Ala.


"Through our agreement with RailAmerica, BNSF will continue to have the access needed to participate in future economic growth opportunities in south Alabama, Mobile, and the port of Mobile," said Matthew Rose, BNSF chairman, president and chief executive officer, in a prepared statement.


The deal — which includes purchase and lease contracts, and trackage rights — enables AGR to gain direct access to the port to serve large shippers, such as Gulf States Paper Corp., EKA Chemicals Inc., Kerr-McGee Chemical Co. and Weyerhaeuser Corp.


The short line, which expects to haul 23,000 addtional carloads and generate $12 million more in revenue during its first full year of operating the line, also gains new interchanges with fellow small-road operators Meridian & Bigbee Railroad, Golden Triangle Railroad, Columbus & Greenville Railway Co., Luxapalilla Valley Railroad Inc. and Terminal Railway-Alabama State Docks.


"This line acquisition is consistent with our strategic approach in North America to build geographic clusters of operations to achieve operating and marketing efficiencies and to grow the existing customer base," said Gary Marino, RailAmerica chairman, president and CEO.


AGR now operates 429 track miles and expects to move about 58,000 carloads annually, including paper and paper products, pulp, chemicals and grain. The short line interchanges with five Class Is, including BNSF at Amory and Columbus, Miss.


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