STB vs CORP..

Check out the link for the full document:
http://www.stb.dot.gov/decisions/re...e86bd210bef1db45852574280052fb32?OpenDocument

Here is an excerpt:

 

Bill, what's the current status of the Siskiyou Line (weekly ops if any), and what's that doing to the YW?

Scott

 

I agree with Boxcab...looks like an uphill climb though!

 

That doesn't read like a "need to go through everything step by step" to me when you read the entire judgment.
It also doesn't entirely jive with what we were discussing in the other thread about CORP's previous managment refusing to shut down the line.
It suggests that a year long outside contractor study is what prompted the shut down. It points out that since the condition of the tunnels should have been well known since a previous tunnel collapse, that CORP had every opportunity to repair the line and not affect service. It then points out that the original embargo of the line was not for financial reasons. Those were brought up later. That the Embargo was placed for the tunnels only which have a significantly lower repair cost then they 23million requested which includes repairs for other parts of the line that did not cause the shut down. Finally, it points out that CORP and RailAmerica have received ample information from the stakeholders. Oregon and the shippers will not contribute until the tunnels are repaired and service restored. Then they will consider funding the additional repairs. That isn't what CORP wants, but that's what the other stakeholders are willing to provide. That decision was made in February. The line's been closed over 6 months now and it's been a month since that decision. Failure of the Railroad to either begin repair efforts, or formaly file for abandonment constitutes unlawful abandonment.


Basically, the STB is saying they need to @#$% or get off the pot.

 

Bill,

I thought CORP was going to keep with the limited service on the Siskiyou line and was tripling thier rates. At least this is what I was told last time I was in Yreka, but that was two weeks ago so things might have changed again since then.

 

I like the executive summary, Yoho!

 

Well, lets hope something good happens.

 

Yreka Western

A strong maybe on that, Bill - let's talk. Lori and I both are making good progress against this whatever-it-is bug. I'll contact you this week.

Scott

 

Alright! More people from trainboard. Alot more work then just the 19 too and not enough people.

 

more in the news...

Federal board demands railroad explain its actions

ByWinston Ross
The Register-Guard

Published: April 12, 2008 12:00AM

COQUILLE — Federal railroad officials have issued a stern edict to the owner of a short line between Coquille and Eugene: By this time next month, Florida-based RailAmerica must prove that it didn’t unlawfully abandon the critical route.

The edict represents the first time a government agency has forced Central Oregon and Pacific Railroad to explain itself, and it could be a harbinger of the next step — a mandate to abandon the railroad altogether or to repair the aging tunnels that prompted the shutdown and reopen the line.

The Surface Transportation Board issued its order Thursday, asking tough questions about the railroad company’s claims when it closed the line six months ago and about its appeals for public funding since then.

The decision came as welcome news to lawmakers and advocates for the four major industrial companies on the south coast that have been moving products by truck or barge since the September shutdown. The added costs are estimated between $3 million and $4 million this year, said Bob Ragon, executive director of the Douglas Timber Operators, which is representing the affected lumber mills and steel company.
“This is very positive news,” Ragon said. “It looks like the STB is finally going to take some action.”

When CORP closed the line in September,it did so under federal rules that allow for an “embargo,” which is supposed to be a temporary emergency stoppage.

Embargoes often follow landslides or earthquakes that damage train tracks. But from the day the company announced its decision — with 24 hours notice to the affected shippers and government agencies — lawmakers and business representatives have voiced suspicions about RailAmerica’s stated reasons for the closure.

In its initial news release, the Bacon Raton company said the Coos Bay line “just doesn’t have enough business on it to justify us making the repairs,” but added that the line could be reopened if a shipping container terminal could be built.

In the weeks that followed, the company revealed that it had known about unsafe tunnel conditions cited as the reasons for the shutdown for at least a year, which led critics to question the company’s “emergency” declaration.

To them, RailAmerica’s decision sounded less like an embargo and more like a complete abandonment of the line. But abandonment requires more notice, government approval and spending money to remove the line’s infrastructure, state Sen. Joanne Verger said.

“Abandonment means they have the responsibility for paying for all the dismantling of those bridges and everything that has to do with that line,” Verger said.

Since the shutdown, Verger and other lawmakers have been pressing the company to justify its embargo and to set a date for repairing and reopening the line. Instead, RailAmerica has asked for a taxpayer bailout, not only for the $2.9 million needed for tunnel repairs but also for another $20 million in improvements to the three tunnels.
The company sought $4.66 million from each of four entities: the state of Oregon, the Oregon International Port of Coos Bay, a consortium of shippers on the line, and Union Pacific Railroad Co., CORP’s connecting rail carrier.

Led by Gov. Ted Kulongoski, the groups balked at the proposal, insisting that RailAmerica fix the tunnels with its own money and reopen the line. The two sides remain at a standstill.

The Surface Transportation Board’s notice recounts the six-month saga with a few pointed observations.

RailAmerica “has continued to indicate that it will not repair the three tunnels that precipitated the shutdown until it has secured funding for the additional work,” the order says.

Federal law requires rail carriers to provide service upon reasonable request, allowing for temporary suspensions if the carrier is incapable of providing service due to weather or flood damage, tunnel deterioration or operating restrictions caused by traffic congestion.

“But a carrier is not given a free pass to choose not to serve just because of circumstances that make it difficult or expensive to provide service,” the order says.
Even if the embargo were lawful or justified at the time it was issued, the law that allows a shutdown also requires rail companies to reopen embargoed lines in a timely fashion or abandon them.

RailAmerica’s actions “suggest that CORP’s embargo of the line, although it may have been reasonable when imposed, may have gone on for so long that it may have become an unlawful abandonment,” the board said.

The tough talk was lauded Friday by Kulongoski and by Rep. Peter DeFazio, who have been pressuring the transportation board and RailAmerica for a speedy solution to the problem.

“The STB’s decision supports what I’ve told RailAmerica,” the governor said in a news release. “Fix the railroad and get freight moving.”

DeFazio pointed out that the company recently entered into an agreement with pop singer Michael Jackson that will help him come up with the $24.5 million he needed to keep the Never­land Ranch in California from going to auction last month.

“If they can afford $24 million for Neverland, they can afford $20 million to fix their tunnels and put this critical public asset back on line,” DeFazio said.

RailAmerica officials did not return phone calls seeking comment Friday.

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Feds to CORP: Use it or lose it

By Elise Hamner, City Editor
Saturday, April 12, 2008

Railroad regulators suggest firm should repair CB line or relinquish ownership



COOS BAY — Federal railroad regulators say it appears RailAmerica and the Central Oregon & Pacific Railroad have abandoned the Coos Bay rail line.

And they want to know why.

The U.S. Surface Transportation Board issued a decision to RailAmerica, CORP’s parent company, on Friday demanding it explain its lack of action. It ordered the railroad to justify why it should be allowed to keep the rail line closed and why it shouldn’t be forced to fix the tunnels and run railcars — or give up ownership.

CORP closed the line Sept. 21, 2007, on 24 hours’ notice. The railroad told companies three tunnels were unsafe and needed $7 million in repairs. It filed an embargo legally limboing future of traffic on the line. Since then, the railroad has made no repairs and apparently hasn’t maintained the tracks. All the while, it’s called on the state, shippers and port of Coos Bay to pony up the biggest chunk of $23 million it deems necessary to bring the line back to status quo.

Federal regulators aren’t buying it.

Strong language

“... A carrier is not given a free pass to choose not to serve just because of circumstances that make it difficult or expensive to provide service,” the agency concluded in its decision.

RailAmerica’s senior vice president and general counsel, Scott Williams, said Friday he was taking his first look at the STB decision.

“We can’t comment on it. We need some time to understand it,” he said.

The agency gave the railroad until May 12 to respond to the order.

In meeting rooms in Washington, D.C., the South Coast’s representatives — Rep. Peter DeFazio and Sens. Gordon Smith and Ron Wyden — have been hammering away on the issue ever since the railroad closed.

“It’s a great decision,” DeFazio said of the STB action Friday. “The arrogance of RailAmerica has been extraordinary. They’ve hired a new lobbyist to work this issue. I think they knew they were about to get handed their head.”

DeFazio said the STB order reflects unusually strong language. The decision surprised people on the South Coast who’ve hired lawyers trying to find a swift solution to a maddeningly leisurely bureaucratic process.

“This is very rare. It’s very thorough, very detail-oriented,” said Jeffrey Bishop of the six-page STB order.

Bishop, the executive director of the Oregon International Port of Coos Bay, said he doubts anything can be done to get the rail line open this year, but this is progress. For repairs to happen, RailAmerica previously said bids would have to go out now, in time for crews to fix tunnels and tracks this fall, before wet winter sets in.

Worsening economics

For shippers, the situation is bad. RailAmerica plans to close its Siskiyou line into California. The economy is stalled and there’s a terrible housing slump, said Bob Ragon, spokesman for the Coos/Siskiyou Shippers Coalition.

Ragon said the coalition is compiling documentation to show the closure will cost lumber mills and other shippers on the Coos Bay line $3 million to $4 million a year in losses.

“Companies are not going to be able to sustain that,” he said.

Some of that loss is reflected in delays and damage. Lumber is loaded on trucks and sent inland to rail. Then it’s offloaded to sit and wait for reloading. And more, with a track closure at Oakridge due to a slide, those trains now head to Portland and east — even to get to California.

Seven months into the closure, the STB can’t force a quick fix. Ultimately, there seem to be three options:

n The STB can try to compel the railroad to run trains;

n it can direct another railroad to provide the service; and/or

n force formal abandonment.

The STB has a hearing scheduled on railroad issues later this month. Smith, Wyden and DeFazio all plan to be there.

“I would be thrilled in this matter if CORP stepped up and worked with the shippers. They’ve all told me they’re willing to pay a bit more and willing to help CORP,” DeFazio said.

But in the bigger picture, the Democrat sees welcome progress in that the STB is willing to regulate, officiate grievances and take action at a time there is a crisis with national transportation policy. The nation needs to maximize freight on rail, he said, but the U.S. rail system is simply “pathetic.”

Behind the competition

“We’re the only major industrial rail system on the earth without robust passenger rail and many other (countries) are better than us in freight,” DeFazio said.

The robber barons of two decades ago who consolidated big railroad companies and drained their assets are gone, but railroad problems aren’t going away.

“We’re in the days of the hedge funds, who would be as bad as the robber barons. That’s the new threat,” he said, using Fortress Investments LLC, the parent company of RailAmerica, as the example.

Still, DeFazio said he sees the first stirring of a rebirth of a coastal shipping industry. High fuel prices are feeding it.

RailAmerica might sense it, too. This week, the company sent its latest proposal to Gov. Ted Kulongoski. It is seeking a 50-50 joint venture with the Oregon Department of Transportation to own and operate the Coos Bay line.

But the written proposal doesn’t address the governor’s bottom line, said Rem Nivens, his deputy communications director. And the governor reiterated that in an e-mail Friday.

“The STB’s decision supports what I’ve told Rail America — fix the railroad and get freight moving. Once that happens, the state will sit down and discuss how we can partner to restore the jobs and economic opportunity for the South Coast for the long-term,” Kulongoski said.

 

If CORP abandons the line, they have to remove all the rails, bridges (?) etc. That sounds expensive.

If CORP repairs the line, that sounds expensive, too. But they can, in theory, recover those costs by raising rates as they have already discussed with customers.

If CORP raises rates too much, the customers may go to a coastal shipping solution (How close is that to reality?) and then CORP loses money there, too. OTOH, the customers should not have to pay Corp more than they would have to pay coastal shippers.

This is a difficult problem.

If the government was not involved in this, what would happen?

 

I'm not sure there is such a scenario possible. This gets to the root of what the STB exists for. There's really no precedent for what would happen if it didn't exist.

However, for the sake of argument. If the government weren't involved, it appears Rail America would shut down the line sell off anything that was profitable to sell and the local industries likely would shut down and the employees forced to move.

Rail America chose a bad time to play hardball. We've entered a recession and the countries infrastructure is falling apart. They should have known they were going to get a lot more attention then they wanted.

All that being said, I did Have to laugh at the DeFazio quote "many other (countries) are better than us in freight,”
really? Which countries are those? Cause last I heard, Our freight system, for all it's faults, is the envy of the world.
It's our passenger system that is horrid.

 

Sure, but that's only what $4.66 Million Plus they would have the good will of the state rather then the bad will that CORP has engendered. Actually, the State would likely be more willing to pick up expenses, possibly even buy the line should that happen.