NP Ex-NP "CW" branch closure!

Sorry Dan, I read it in the newspaper I saw sitting on a counter at a restraunt in Spokane. I also went to a train show at Spokane CC on sunday and talked to some of the Members who are building the muesum at Rearden and they are all very concerned about the possible tearing up of the line.
Kevin D Mumaw

 

I nearly went to that show, but had to work. I have wondered how this would affect them. Thanks anyway.

 

Well at least as far as N scale the show was a bust. There was hardly and N scale and most of it was wayover priced, how about a NP LL GP18 for $90 or a IM NP FT set for $175.
Kevin

 

PCC was taking some empty well cars up the line this morning so there is still some activity on the CW.
Kevin D Mumaw

 

Washington Wheat Commission on the fun with the CW:

http://www.wawheat.com/article_0206whitepaper.asp

Dan

 

Here is a recent report (3-6-06) from the Washington State DOT (department of trucks )

http://www.wsdot.wa.gov/news/2006/Mar03_RailroadAnalysis.htm

and

http://www.wsdot.wa.gov/Projects/Rail/PCC_Acquisition/

 

With BNSF offering to serve the line mabey things are looking up, and hey, seeing as I start Condutor training in Spokane in two weeks mabey I can run the line someday.
Kevin D Mumaw

 

To quote a post at Altamont Press:

The following is from the front page of the March 9, 2006 edition of "The Davenport Times." They don't have a website, so I'm retyping it all for you.

Wheat growers scrambling for transportation options in the wake of unaffordable new surcharges being charged along the Palouse River and Coulee City Railroad (PCC) have new hope this week, state sen. Bob Morton (R-Orient) reports. Morton said that BNSF issued a written offer to the line's owner, Watco, on March 2, offering to provide haulage between Coulee City and Cheney for a period of up to five years. BNSF said the offer would would remain on the table for 45 days while the two companies work out a formal agreement.

The offer from BNSF calls for haulage trains of no more than 78 car units originating on the PCC between Coulee City and Cheney with haulage rates of $110 per loaded car. The rate would be adjusted annually according to 75 percent of the Rail Cost Factor, unadjusted for productivity (RCAF-U). The company would provide transportation up to a maximum of 2025 loaded cars per year. Any more than that would be moved at BNSF's discretion. In the letter, BNSF also offered to work with PCC and its customers to develop a shuttle facility at Coulee City. "We believe such a facility may reduce total transportation and handling costs and best serve the shippers and producers in the Coulee City-Almira area for the long term," the letter said.

There was more published, but I think this was the important part.

 

Ooooh. The bad news has surfaced. The haulage agreement is only between Cheney and Ritzville, not Coulee City. Got this from the general manager of the grain elevator company at Coulee City.

 

Last night I got stuck at the highway/railway crossing in cheney cause BNSF was pulling a big cut of cars off the PCC, power was GP28's 1521 and 1522, both operation lifesave units. This is the first time I have seen BNSF on the branch. A haulage agreement from Ritzville is not going to do a thing to help the roads out up north though.
Kevin D Mumaw

 

I understood it to be accidental. The newspaper from Davenport, WA said Coulee City, but the agreement did not.

 

Latest piece from the local paper...

From the Moses Lake, WA "Columbia Basin Herald."

By Matt Weaver

PCC Railroad future in question

The fate of a short-haul rail line has some people concerned about the fate of the area's rail service and roads.

Sen. Mark Schoesler, R-Ritzville, Washington, explained in his February and March 2006 SRC Ag Alerts, releases from his office, that the state Legislature agreed in 2003 to buy and renovate three key sections of the Palouse River and Coulee City (PCC) Railroad from Kansas-based Watco Companies, Inc.

In November 2004, the state paid $6.5 million to buy the P&L Branch, which runs north and south between Marshall and Pullman, and the PV Hooper Branch, a line linking Hooper, Winona, Thornton, Colfax and Pullman, WA.

But the state failed to purchase the 108-mile CW Branch, which runs between Coulee City and Cheney. The Legislature allocated $1.2 million for the line, and Watco and the state Department of Transportation had a verbal agreement on the sale of the branch, but no signed agreement. Watco is now asking for more money for the stretch and closed the line down in November 2005.

According to e-mails dated April 25 from Barbara Ivanov, director of the WSDOT Freight Office, with recipients including PCC stakeholders and House and Senate members in affected districts, Ivanov's office and the state's office of financial management began discussions April 24 with Watco to restart rail service on the CW and P&L branch lines, with the intention of developing a short-term agreement providing access to rail service for shippers on both lines during the 2006 harvest season with no rail car surcharges.

In an e-mail dated Tuesday, Ivanov reported that WSDOT had learned Friday that a shipper on the CW branch line attempted to order rail cars last week and was informed by Watco representatives that Watco embargoed that line in December.

Sen. Joyce Mulliken, R-Moses Lake, worked with Schoesler and others to persuade grain growers and Watco earlier in the year to reach agreement to keep the line in operation. She felt that shippers who use the rail line, the WSDOT rail division and Watco needed to come together in order to do so. Mulliken explained that the department needed to demonstrate an ability to purchase the tracks, Watco to be willing to work with the state and shippers, and shippers to be willing to commit to the service. The parties involved need to recognize that Watco is in the business of making a profit and can't operate at a loss and still be in business, while shippers need service in a timely manner to make rail lines equitable to shipping by truck, she said.

Coulee City wheat farmer Phil Isaak said an estimated 13,000 semi-trucks, primarily carrying wheat, will go on public roads, primarily county roads running north and south, if the rail line fails to operate. It's an amount of traffic that would probably break the roads "all to pieces," Isaak said.

Area farmers and shippers want rail to run their product, Isaak said, noting that rail cars make dealing with a bulk commodity like wheat much easier. Each car holds a little over three semi-trucks worth of grain, he said, and the process of loading grain onto a semi-truck is "cumbersome," is Isaak's opinion.

"I think most people feel the trucks and rail will keep one another in line," Isaak said. "If it gets down to someone having a monopoly on the situation, we're at the mercy of whatever someone wants to charge us."

Ed McKechnie, chief commercial officer for Watco, echoed Isaak's sentiments, saying as soon as the railroad is gone, higher road maintenance costs and transportation costs would be the result.

"Truck rates would increase the next day," he said. "You will see money leave the economy of eastern Washington. That's a decision local people have to make. We can't make that for anybody."

McKechnie said the CW branch has been suffering from loss of carload volume in the past several years.

The Burlington Northern Santa Fe Railway put in a shuttle loader in Ritzville two years ago, and McKechnie said the rates to truck products from the shuttle loader in Ritzville to the coast are cheaper than the rate to use the rail from the line to the coast.

The east half of the railroad, in particular, has suffered a decline in volume.

"When you have 108 miles of railroad, it takes a significant volume of rail cars to keep that line operating," McKechnie said, explaining that the rule of thumb is about 50 rail cars per mile, but it also depends on the rate. "We just need more cars than what shippers can ship, because they're trucking it to Ritzville. What shippers are doing is, they're using us to reduce their shipping costs, but they want the railroad to stay in place to keep truck rates down. Once the railroad goes away, the next day, truck rates will go up just because of the market."

McKechnie said his company is awaiting a response from the state, having proposed several scenarios Watco has determined to be feasible and can work with.

"We've really seen a lack of commitment by the Department of Transportation to work in a positive way for this to be successful," he said, noting that the contentious issue is a "small" surcharge per car, around $225 to $250. "The shippers are not willing to either make a commitment on the volume to ship or pay a higher price. Since that's the case, they're not shipping. So that's where we're at."

The company is ready to sell the railroad and has priced it to the state, but McKechnie said the state wants to pay a reduced price for the line.

"We bought it, we own it, we know what the value of it is," McKechnie said of the railroad. "The state consistently wants to pay an amount lower than it's worth, and we don't think that's right."

If the railroad closes down, McKechnie said, it will lead to severe deterioration on local roads as grain is moved by truck in significantly higher volumes, primarily on secondary and county roads.

"Five years from now, you will see severe deterioration on the roads," he said. "Everyone will say, 'Geez, what happened here?' The public policy question is, do you want to pay a higher amount to maintain the roads or do you want to pay a smaller amount to maintain the railroad?"

Isaak agreed that additional trucks would only serve to enhance the problems of safety and congestion.

"Highway 17 is busy enough and has been identified as a safety problem already," he said. "I think when you understand the whole picture, the best thing is to keep the rail operation to move this product out of here."

 

From the local Moses Lake, WA paper

State makes offer for rail line
Posted: Monday, May 22, 2006 - 03:56:24 pm PDT
By Matthew Weaver
Herald staff writer

Watco to make decision by May 26
COULEE CITY -- The state and area rail users alike are awaiting with bated breath a company's response to an offer to purchase part of a key rail line.

The state Legislature agreed in 2003 to buy and renovate three key sections of the Palouse River and Coulee City (PCC) Railroad from Kansas-based Watco Companies, Inc.

In November 2004, the state paid $6.5 million to buy the P&L Branch, which runs north and south between Marshall and Pullman, and the PV Hooper Branch, a line linking Hooper, Winona, Thornton, Colfax and Pullman.

But the state failed to purchase the 108-mile CW Branch, which runs between Coulee City and Cheney. The Legislature allocated $1.2 million for the line, and Watco and the state Department of Transportation had a verbal agreement on the sale of the branch, but no signed agreement. Watco is now asking for more money for the stretch and closed the line down in November 2005.

Earlier this week, the state made an offer to Watco to purchase the line, and Washington State Department of Transportation director of freight strategy and policy office Barbara Ivanov said a response is expected by the close of business May 26.

"It's very important in particular to the grain co-ops who have made capital investments on that line and seek to gain the most economic output from those investments," Ivanov explained of the CW Branch, adding many cooperative members are also growers.

Kevin Whitehall, general manager of Central Washington Grain Growers, said there are several important reasons to purchase the line and keep it in operation, including maintaining the infrastructure to move commodities to market.

"(It's a) competitive issue as far as growers having the option of going by rail or by truck," Whitehall said. "Once you lose rail, for example, we're at the mercy of one mode of transportation and sometimes that's not the best option to have for our members."

Whitehall added the wear and tear done to county and state highways over the years to come, if the rail line is not operational, will cost "way more" than the cost to purchase the line, according to several studies on the subject.

"Each study has indicated it is in taxpayers' best interest to purchase the lines to save the roads," Whitehall said, adding another issue is the question of safety with hundreds of trucks running up and down those roads. "Sooner or later, there's going to be some serious accidents and fatalities. It will happen."

Ivanov said that the state is still sorting out the importance of the line to the state, and said there are no clear policy directions on why short-line railroads are important to Washington.

"However, the state Legislature has very clearly instructed us to acquire not only the track and the track right-of-way, but the operating rights to run it," Ivanov said. "And they're doing that to serve their constituent base -- the grain co-ops and the members that they have."

Ivanov said the best case scenario will be if Watco accepts the offer, a deal is put in place and moves forward. "We have no desire for further litigation or lengthening the process in any way."

Ivanov said the state respects the fact that it needs to make economic sense for Watco to operate the line.

"Other than that, I certainly think that any operator on that line with the current business model might find similar issues," she said. "The fundamental business problem we're trying to sort out is new competition through the Ritzville shuttle loader, there's always the barge system that's very efficient and low cost. So the CW line, over the last three or four years, has been losing business to competition. That's the real issue. The fundamental problem there would exist no matter who the parties were."

The state is working to sort the issue out, Ivanov said, with the Legislature working to resolve the problem for constituents and shippers indicating their willingness to make a level of commitment to ship carloads by rail. The state is also working on how to get an operating plan in place to work long term for grain co-ops and their members.

Whitehall gave kudos to those legislators and lobbyists stepping up and making a stand for the shippers.

"A lot of this hit rather soon," he said, noting the issues essentially came up in December. If the shippers had not taken the charge and started working with area legislators, and if the legislators had not seen the same level of importance as the shippers, "we probably would not have the railroad. Once it's gone, you're never going to get it back."