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ENLARGE
U.S. Rep. Peter DeFazio, D-Eugene, criticizes Central Oregon & Pacific Railroad’s operation of the Coos Bay line during a hearing Thursday before the Surface Transportation Board, while Gov. Ted Kulongoski listens. Behind them, Sen. Floyd Prozanski, House Republican Leader Bruce Hanna and Sen. Jeff Kruse wait their turn to address the board.
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ENLARGE
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Paul Lundberg, a RailAmerica vice president, and Central Oregon & Pacific Railroad attorney Terence Hynes address the Surface Transportation Board after federal, state and local officials and shippers criticized the Roseburg-based railroad’s decision to shut down the 111-mile Coos Bay line last September. The officials said the company did everything possible to maintain the service.
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EUGENE — Officials with the Central Oregon & Pacific Railroad said Thursday they would give up a 20-mile segment of track west of Eugene if another operator is named to take over the shuttered Coos Bay line.
Terence Hynes, an attorney for the Roseburg-based railroad, told the federal Surface Transportation Board at a hearing at the Wayne L. Morse Courthouse in Eugene that it wasn’t the company’s intention to hold on to the section — from Vaughn to Danebo — for profitability or 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 if the rest of the Coos Bay line was abandoned.
Critics have blasted the railroad for wanting to keep the section of track, which serves several shippers, as a way to retain profits while making it harder for another entity to take over the other 111 miles of track on the Coos Bay line that was shut down for safety reasons last September.
“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.
Gov. Ted Kulongoski led a long list of speakers — including U.S. Rep. Peter DeFazio, seven Oregon legislators, county and city officials and shippers — in urging the Surface Transportation Board to award the rail line to the Oregon International Port of Coos Bay.
Leading off a six-hour hearing, the governor said the closure of the line between Eugene and Coos Bay has caused “great economic uncertainty” for businesses in southwestern Oregon.
“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.
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.
DeFazio criticized 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, 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.”
After nearly three hours of testimony from speakers critical of CORP, Buttrey asked Paul Lundberg, a RailAmerica vice president based in Boca Raton, Fla., to explain the controversy.
“Have you all figured out yet why these folks out here are so mad at your company?” asked Buttrey, a Tennessee attorney who in the past served as a private consultant in security and biotech and as a corporate lobbyist for Federal Express.
“To be quite honest with you, no, I haven’t figured that out yet,” Lundberg replied, to murmurs from the audience.
“I think I’ve figured it out,” Buttrey said.
Lundberg disputed DeFazio’s characterization that the company 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 shut down, CORP sought a partnership with the state, the Coos Bay port, shippers and 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.
Shippers have paid up to 15 percent more to ship their wood products by rail since the railroad shut down. Southport Lumber near Coos Bay has frozen wages and shelved worker incentives after facing increased costs of $70,000 per month, company president Jason Smith said.
Allyn Ford, president of Roseburg Forest Products, said there will be a shortage of trucks available when the housing market recovers and there’s increased demand for wood products.
Fred Jacquot, the manager of American Bridge’s plant on Bolon Island outside Reedsport, said his company chose the site because it had an existing rail line.
Since opening the plant in 2003, American Bridge has sold $28 million in highway, railroad and pedestrian bridges for projects in the West and Midwest, he said. Many of the 80 workers hired by the company, which projects a $2.3 million payroll this year, were displaced timber workers, he said.
American Bridge relied on rail service to deliver raw materials to its plant and to deliver finished products to project locations.
“This embargo has seriously impacted our operations, resulting in both direct and indirect costs” Jacquot said.
By rail, the company paid 5.8 cents per pound to have raw materials delivered. Trucking those same materials after unloading from rail cars in Portland now costs 9 cents per pound, he said.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.
Terence Hynes, an attorney for the Roseburg-based railroad, told the federal Surface Transportation Board at a hearing at the Wayne L. Morse Courthouse in Eugene that it wasn’t the company’s intention to hold on to the section — from Vaughn to Danebo — for profitability or 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 if the rest of the Coos Bay line was abandoned.
Critics have blasted the railroad for wanting to keep the section of track, which serves several shippers, as a way to retain profits while making it harder for another entity to take over the other 111 miles of track on the Coos Bay line that was shut down for safety reasons last September.
“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.
Gov. Ted Kulongoski led a long list of speakers — including U.S. Rep. Peter DeFazio, seven Oregon legislators, county and city officials and shippers — in urging the Surface Transportation Board to award the rail line to the Oregon International Port of Coos Bay.
Leading off a six-hour hearing, the governor said the closure of the line between Eugene and Coos Bay has caused “great economic uncertainty” for businesses in southwestern Oregon.
“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.
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.
DeFazio criticized 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, 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.”
After nearly three hours of testimony from speakers critical of CORP, Buttrey asked Paul Lundberg, a RailAmerica vice president based in Boca Raton, Fla., to explain the controversy.
“Have you all figured out yet why these folks out here are so mad at your company?” asked Buttrey, a Tennessee attorney who in the past served as a private consultant in security and biotech and as a corporate lobbyist for Federal Express.
“To be quite honest with you, no, I haven’t figured that out yet,” Lundberg replied, to murmurs from the audience.
“I think I’ve figured it out,” Buttrey said.
Lundberg disputed DeFazio’s characterization that the company 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 shut down, CORP sought a partnership with the state, the Coos Bay port, shippers and 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.
Shippers have paid up to 15 percent more to ship their wood products by rail since the railroad shut down. Southport Lumber near Coos Bay has frozen wages and shelved worker incentives after facing increased costs of $70,000 per month, company president Jason Smith said.
Allyn Ford, president of Roseburg Forest Products, said there will be a shortage of trucks available when the housing market recovers and there’s increased demand for wood products.
Fred Jacquot, the manager of American Bridge’s plant on Bolon Island outside Reedsport, said his company chose the site because it had an existing rail line.
Since opening the plant in 2003, American Bridge has sold $28 million in highway, railroad and pedestrian bridges for projects in the West and Midwest, he said. Many of the 80 workers hired by the company, which projects a $2.3 million payroll this year, were displaced timber workers, he said.
American Bridge relied on rail service to deliver raw materials to its plant and to deliver finished products to project locations.
“This embargo has seriously impacted our operations, resulting in both direct and indirect costs” Jacquot said.
By rail, the company paid 5.8 cents per pound to have raw materials delivered. Trucking those same materials after unloading from rail cars in Portland now costs 9 cents per pound, he said.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.
