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Rail News: Short Lines & Regionals

Watco to acquire two west Texas short lines


Watco Cos. announced earlier this week that subsidiary Watco Transportation Services (WTS) entered into a definitive agreement with Iowa Pacific Holdings LLC to acquire two west Texas short lines.

WTS has begun the process to seek regulatory approval from the Surface Transportation Board to acquire the Austin & Northwestern Railroad Co. Inc., also known as the Texas New Mexico Railroad (TNMR), and West Texas and Lubbock Railroad Co. Inc. (WTLC), Watco officials said in a press release.

The new railroads owned by WTS will be called the Texas and New Mexico Railway, which will take over the TNMR operations; and the Lubbock and Western Railway, which will take over the WTLC rail line.

Closing is expected to occur after regulatory approvals are obtained.

The TNMR extends from a Union Pacific Railroad connection at Monahans, Texas, to Lovington, N.M. The railroad serves oil fields in west Texas and southeast New Mexico. Primary commodities shipped on the line are oilfield chemicals and minerals, construction aggregates, industrial waste and scrap.

The Lubbock and Western Railway is divided into two segments, one of which runs from north of Dimmitt, Texas, to Plainview, Texas. The second segment runs west from Lubbock to Whiteface, and southwest from Lubbock to Seagraves. Commodities shipped by the railroad include fertilizer, construction aggregates, grain, cotton, chemicals, peanuts and plastics.

"We see this addition of the two Permian Basin lines as a tremendous growth opportunity for Watco," said Executive Vice President and Chief Marketing Officer Stefan Loeb.

Iowa Pacific President and Chief Executive Officer Ed Ellis said the WTLC and TNMR's freight traffic "has grown exponentially, track speeds have increased, safety incidents have decreased and new customers have opened facilities" over the short lines.

The acquisition represents the culmination of a turnaround project for Iowa Pacific, Ellis said.

"Watco has established itself as a leader in the U.S. rail industry and we believe shippers are in good hands with Watco," Ellis said. "We look forward to building upon this success by continuing to focus on future growth opportunities on the rest of our rail network."

Contact Progressive Railroading editorial staff.

More News from 5/22/2015