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ENLARGE
U.S. Rep. Peter DeFazio address the federal Surface Transportation board during a hearing Thursday in Eugene. Gov. Ted Kulongoski looks on beside him, while behind them Rep. Susan Morgan of Green and Rep. Bruce Hanna and Sen. Jeff Kruse, both of Roseburg, wait their turn.
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Charles Nottingham, chairman of the Surface Transportation Board, left, and board member Douglas Buttrey listen to testimony during Thursday's rail hearing at the Wayne L. Morse Courthouse in Eugene.
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Douglas County Commissioner Doug Robertson explains how the closure of the 111-mile rail line between Coos Bay and Eugene has caused problems for shippers, while Coos Bay City Manager Charles Freeman looks on.
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Paul Lundberg, a RailAmerica vice president, left, tells the board that Central Oregon & Pacific Railroad tried its best to serve the Coos Bay coastal area before shutting down the railroad last September for safety reasons, while CORP attorney Terence Hynes listens.
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Fred Jaquot, manager of American Bridge's plant outside Reedsport, tells the board how CORP's shutdown of the Coos Bay line has raised his company's costs and made it impossible to ship large bridge components.
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EUGENE — Gov. Ted Kulongoski led a long list of government, business and other interested parties in urging the federal Surface Transportation Board to award the 111-mile Coos Bay rail line to the Oregon International Port of Coos Bay.
Leading off a daylong hearing at the Wayne L. Morse Courthouse on Thursday, the governor said last September’s closure of the line between Eugene and Coos Bay 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, RailAmerica, to abandon the line except for a 25-mile segment west from Eugene.
“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.
Two of the STB’s three members, chairman Charles Nottingham and Douglas Buttrey, attended the hearing. The board is based in Washington, D.C., but agreed to come to Oregon because of the wide interest in this issue.
Later in the hearing, Terence Hynes, a RailAmerica attorney, said it wasn’t the company’s intention to hold onto the section from Vaughn to Danebo to make it harder on another operator taking over the Coos Bay line. He said it was simply to give the railroad a way to continue a connection to CORP’s Siskiyou line at Eugene.
“They raise legitimately the question (of) why should you have another railroad in-between them and the (Union Pacific) at Eugene. We agree operationally if someone else is going to take over the feeder line segment it makes perfect sense for them to connect directly with the UP,” Hynes said.
He said the company was willing to give up that section if the Surface Transportation Board awards the Coos Bay line to the port or another entity.
More than 200 people attended the hearing, which included 48 speakers and lasted six hours.
A decision is expected to be made on both applications before the end of November.
U.S. Rep. Peter Defazio blasted RailAmerica for failing to make the necessary investments to ensure the continued safe operation of the line during more than 10 years of ownership.
He said that if the company was serious about continuing operations on the line, which was closed after a study found conditions inside several tunnels had deteriorated to the point where they posed a hazard, it would have worked with shippers to fix the line before shutting it down, what’s known as an “embargo” in railroad circles, without notice.
“The embargo of the CORP rail line connecting the south coast of Oregon with the Union Pacific mainline here in Eugene has already had a significant impact on the economy of southwest Oregon,” DeFazio said. “I have no doubt the proposed abandonment of the line will have devastating consequences.”
The governor 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 how Southport Lumber invested in a new facility at an old Weyerhaeuser plant near Coos Bay because of the diverse transportation options, including rail. The company has had to freeze wages and shelve incentives because of $70,000 in additional monthly transportation costs borne by the company since the rail shutdown on Sept. 21, 2007, company president Jason Smith told board members later in the hearing.
Paul Lundberg, a RailAmerica vice president based in Boca Raton, Fla., disputed DeFazio’s characterization that the company had neglected the line. 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 again. It also sought a shipping surcharge and an ongoing subsidy from the state.
Kulongoski at the time said the railroad would have to make the repairs and reopen the line before he would consider providing any financial assistance from the state. The railroad wasn’t willing to do that.
Douglas County Commissioner Doug Robertson said it was “inconceivable” to abandon the line completely and sell the rails and the land the railroad owns for its scrap value.
He echoed the sentiments of other speakers calling on the board to accept the port’s application to take over the line.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.
Leading off a daylong hearing at the Wayne L. Morse Courthouse on Thursday, the governor said last September’s closure of the line between Eugene and Coos Bay 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, RailAmerica, to abandon the line except for a 25-mile segment west from Eugene.
“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.
Two of the STB’s three members, chairman Charles Nottingham and Douglas Buttrey, attended the hearing. The board is based in Washington, D.C., but agreed to come to Oregon because of the wide interest in this issue.
Later in the hearing, Terence Hynes, a RailAmerica attorney, said it wasn’t the company’s intention to hold onto the section from Vaughn to Danebo to make it harder on another operator taking over the Coos Bay line. He said it was simply to give the railroad a way to continue a connection to CORP’s Siskiyou line at Eugene.
“They raise legitimately the question (of) why should you have another railroad in-between them and the (Union Pacific) at Eugene. We agree operationally if someone else is going to take over the feeder line segment it makes perfect sense for them to connect directly with the UP,” Hynes said.
He said the company was willing to give up that section if the Surface Transportation Board awards the Coos Bay line to the port or another entity.
More than 200 people attended the hearing, which included 48 speakers and lasted six hours.
A decision is expected to be made on both applications before the end of November.
U.S. Rep. Peter Defazio blasted RailAmerica for failing to make the necessary investments to ensure the continued safe operation of the line during more than 10 years of ownership.
He said that if the company was serious about continuing operations on the line, which was closed after a study found conditions inside several tunnels had deteriorated to the point where they posed a hazard, it would have worked with shippers to fix the line before shutting it down, what’s known as an “embargo” in railroad circles, without notice.
“The embargo of the CORP rail line connecting the south coast of Oregon with the Union Pacific mainline here in Eugene has already had a significant impact on the economy of southwest Oregon,” DeFazio said. “I have no doubt the proposed abandonment of the line will have devastating consequences.”
The governor 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 how Southport Lumber invested in a new facility at an old Weyerhaeuser plant near Coos Bay because of the diverse transportation options, including rail. The company has had to freeze wages and shelve incentives because of $70,000 in additional monthly transportation costs borne by the company since the rail shutdown on Sept. 21, 2007, company president Jason Smith told board members later in the hearing.
Paul Lundberg, a RailAmerica vice president based in Boca Raton, Fla., disputed DeFazio’s characterization that the company had neglected the line. 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 again. It also sought a shipping surcharge and an ongoing subsidy from the state.
Kulongoski at the time said the railroad would have to make the repairs and reopen the line before he would consider providing any financial assistance from the state. The railroad wasn’t willing to do that.
Douglas County Commissioner Doug Robertson said it was “inconceivable” to abandon the line completely and sell the rails and the land the railroad owns for its scrap value.
He echoed the sentiments of other speakers calling on the board to accept the port’s application to take over the line.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.
