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Rail News Home Short Lines & Regionals

August 2006

Rail News: Short Lines & Regionals

Holding Companies Buy, Sell Short Lines


Last month, one short-line holding company reached an agreement to acquire its 17th railroad while another completed a deal to reduce its holdings to 17 short lines.

The Watco Cos. Inc. will acquire the Minnesota, Dakota & Western Railway Co. (MD&W) from Boise Cascade under a deal expected to close by Aug. 31. Watco currently owns 16 short lines operating in 14 states.

The transaction includes the four-mile, International Falls, Minn.-based MD&W and a portion of the International Bridge, a rail and toll bridge linking International Falls and Fort Frances, Ontario, Canada. Abitibi Consolidated, an MD&W customer, will continue to own the bridge's Canadian portion.

Established in 1910, MD&W also operates 20 miles of track at Boise Cascade's International Falls mill. A building materials and paper product manufacturer, Boise Cascade has owned the short line since 1965.

"Boise was our first customer in DeRidder, La.," said Watco Chief Executive Officer Rick Webb in a prepared statement, referring to the company's initial industrial switching operation that's now managed by Watco's Timber Rock Railroad.

Meanwhile, OmniTRAX Inc. completed a deal under which Iowa Interstate Railroad Ltd. (IAIS) purchased the Great Western Railway of Iowa L.L.C. The holding company reached a sale agreement with the 552-mile regional in March.


The acquisition will enable IAIS to expand operations in the Council Bluffs, Iowa, area.

"Our intermodal facility was nearing capacity, and interchange business with Union Pacific and BNSF has been growing, also," said IAIS President and Chief Executive Officer Dennis Miller. "The long-term plan will be to rehabilitate the newly acquired railroad, and incorporate the yards and operations into one facility."

A terminal switching carrier, the Great Western operates 30 miles of yard and industry tracks, provides rail-car storage and repair services, and serves a transload facility and grain elevator. The short line interchanges with IAIS, BNSF, UP and CBEC Railway Inc.


Twin Cities & Western celebrates 15th anniversary

On July 27, the Twin Cities & Western Railroad Co. (TC&W) marked its 15th anniversary. To celebrate, the 229-mile short line operated passenger trains between St. Louis Park and Cologne, and Cologne and Glencoe, Minn., July 21-23.Since launching operations on former Milwaukee Road track acquired from the Soo Line, TC&W has doubled its workforce to 60 people, nearly doubled freight volume to 22,000 annual carloads and doubled service to six days per week.In 2001, the Minnesota Valley Regional Rail Authority selected TC&W's Minnesota Prairie Line subsidiary to restore and operate 94 track miles between Norwood and Hanley Falls, Minn.


Operating Pact

Southern Railway to operate trains on British Columbia line

Last month, Southern Railway of British Columbia Ltd. (SRY) began operating freight and passenger trains between Victoria and Courtenay on the former E&N Railway line on Vancouver Island, British Columbia. A Washington Cos. subsidiary, SRY is providing the services under the name Southern Railway Vancouver Island Ltd.

The 125-mile short line reached an agreement with the Island Corridor Foundation (ICF) to be the line's service provider. Earlier this year, the non-profit ICF purchased the 181-mile E&N Railway's right of way from RailAmerica Inc. for $850,000 in cash and a $300,000 promissory note. The foundation is managed by 13 First Nations groups and six Vancouver Island municipalities.

SRY also operates freight trains in B.C.'s lower mainland and the Fraser Valley, and interchanges with Canadian National Railway Co., Canadian Pacific Railway, BNSF Railway Co. and Union Pacific Railroad in New Westminster, B.C.


Browse articles on Watco OmniTRAX Twin Cities & Western Southern Railway of British Columbia short line railroad acquisition

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