Kulongoski presses board to let Port buy rail line
Friday, August 22, 2008 3:16 PM PDT
EUGENE (AP) — Gov. Ted Kulongoski asked the federal Surface Transportation Board to let the Port of Coos Bay buy a rail line that runs from Eugene to Coquille, saying its shutdown has caused ‘‘great economic uncertainty’’ for businesses in southwestern Oregon.
He called on the board to reject the application from Roseburg-based Central Oregon & Pacific Railroad and its corporate parent to abandon the line except for a 25-mile segment.
The Surface Transportation Board is based in Washington D.C., but agreed to hold a hearing in Oregon because of the heavy interest. Two of the board’s three members attended Thursday’s hearing that lasted six hours and included almost 50 speakers.
The Port of Coos Bay wants the government to force the railroad and its Florida-based owner, RailAmerica, to sell the line for $9.8 million.
The railroad company, which abruptly closed the line for safety reasons last September, seeks to abandon the line, rip up the railroad, sell the track as scrap metal or reuse it in other operations, and then sell the real estate to the highest bidder.
Without the line, some coastal businesses have resorted to trucks for shipping, and that’s been driving up costs. In his testimony, Kulongoski mentioned the plight of American Bridge, which has its West Coast headquarters on Bolon Island between Reedsport and Gardiner. The company has lost business because its large bridge components can only be shipped by rail. He also noted that Southport Lumber invested in a new facility at an old Weyerhaeuser plant near Coos Bay because of the diverse transportation options, including rail. Its monthly transportation costs have soared since the shutdown.
‘‘RailAmerica must not be allowed to neglect a line, hold communities for ransom for repair and if they don’t pay up, then overprice it and sell it for scrap. This is not fair,’’ Kulongoski said.
The board is expected to make a decision before the end of November.
U.S. Rep. Peter DeFazio, D-Ore., criticized RailAmerica for failing to spend enough money to ensure the continued safe operation of the line during more than 10 years of ownership.
But Paul Lundberg, a RailAmerica vice president, disputed DeFazio’s characterization. For the past several years, CORP invested 28 percent of its gross revenues in infrastructure improvements. The national average, he said, is 13 percent.
‘‘It’s not a lack of investment in the asset that has caused the problems,’’ Lundberg said.
After the line was shut down, CORP sought a partnership with the state, the Coos Bay port, shippers and the Union Pacific to share in the $23 million cost it said was needed to make repairs and get the line operational.
