KCS Applies for Loan to Rehab Victoria-Rosenberg Line

friscobob Jun 6, 2007

  1. friscobob

    friscobob Staff Member

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    Press Release Source: Kansas City Southern

    KCS Applies for RRIF Loan to Rehabilitate Important Victoria to
    Rosenberg Line
    Tuesday June 5, 1:11 pm ET

    KANSAS CITY, Mo.--(BUSINESS WIRE)--Kansas City Southern (KCS) (NYSE: KSU - News) announced today that it has applied for an approximate $100 million Railroad Rehabilitation and Improvement Financing (RRIF) loan from the Federal Railroad Administration (FRA) to finance the rehabilitation of its line between Victoria and Rosenberg, Texas, on an existing rail corridor.

    Rehabilitation of the line will shorten KCS' U.S. route to Mexico by approximately 70 miles. It will also eliminate the need for KCS to operate over nearly 160 miles of Union Pacific-controlled track between Rosenberg and Victoria, Texas, via Flatonia, Texas, which is a heavily used rail corridor. This would allow a mileage reduction in KCS' use of trackage rights over Union Pacific between Beaumont and Robstown, Texas, by over 40 percent.

    "This project is one of the most strategically important actions our company could undertake right now," said Michael R. Haverty, KCS chairman and chief executive officer. "Upon completion, it will immediately reduce our operating costs to the point that the project will pay for itself. It will facilitate the development of a superior service route for intermodal shippers to and from Mexico, add badly needed rail capacity to south Texas and return vital rail service to communities along the line."

    Rehabilitation of the line will allow KCS to re-establish rail service along the line, which has been out of service, but never abandoned. This will stimulate economic growth and opportunity in communities along the corridor. KCS will work closely with the Texas Department of Transportation (TxDOT) and local communities along the line as the project progresses.

    Review of the KCS RRIF loan application will take place initially at the FRA. FRA is very familiar with the project and was briefed on it previously by KCS and TxDOT officials. KCS' subsidiary, Texas Mexican Railway (Tex-Mex), received approval for a RRIF loan for main line rail rehabilitation in south Texas in 2004. The Victoria to Rosenberg rehabilitation project is a logical extension of the work funded by the earlier Tex-Mex RRIF loan. KCS is hopeful for a quick review by the FRA and other federal officials, given the FRA's existing knowledge of the project and its importance to south Texas.

    Some track salvage and preliminary grading has already been done along the northern end of the line. KCS intends to begin other work on the project immediately. Separate from the RRIF application, KCS will pursue a rail by-pass around Victoria.

    Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.

    Contact:
    Kansas City Southern
    C. Doniele Kane, 816-983-1372
    dkane@kcsouthern. com
     
  2. Flash Blackman

    Flash Blackman Staff Member TrainBoard Supporter

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    Very interesting. I've been Google Earth checking it. Where to after Victoria? On to Mexico, obviously. I am not sure where they (Tex-Mex RR, the KCS extension) crosses the border.
     
    Last edited by a moderator: Jun 8, 2007
  3. friscobob

    friscobob Staff Member

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    Flash:

    According to the system map on www.kcsi.com , they run to Robbstown and over the Texas Mexican to Laredo, entering Mexico there at Nuevo Laredo to Saltillo, San Luis Potosi, and Lazaro Cardenas (the latter on KCSdeM). KCS is currently treated like a redheaded stepchild by UP, encountering delays on the latter's Sunset Route by heavy traffic. Rehabbing Rosenberg-Victoria would shave hours off of KCS's present transt times.
     
  4. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    If this loan goes through, following the project would be interesting. Seems like something a video producer might document. As close as you can get to building a new line.

    :D

    Boxcab E50
     
  5. r_i_straw

    r_i_straw Staff Member

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    So far they have only ripped up most of the track and cleared brush off the right of way. This is where the old rail ends south west of Rosenberg at McHattie. They have fixed up this track a little since I took this shot. I think just enough to park their ribbon rail train on till they lay some new track and then they will replace this.
    [​IMG]
     
  6. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    How is the support for this project amongst locals? The usual NIMBY outcry?

    :(

    Boxcab E50
     
  7. r_i_straw

    r_i_straw Staff Member

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    Oh, there was a little moaning and complaining from some but mostly because they were not able to benifit from it directly. A few felt they became owners of the right of way adjacent to their property and wanted money for "giving" it back. That was settled when they were shown the county tax records and who had acctually been paying the taxes on the land, the railroad. The counties where the railroad runs were pretty good about keeping squatters off the right of way. They were hoping for this kind of outcome.
     
  8. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    Good. Glad to hear that the RR was careful about their property. We've all seen what happens when they are not diligent.

    :thumbs_up:

    Boxcab E50
     
  9. Flash Blackman

    Flash Blackman Staff Member TrainBoard Supporter

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    A few years ago this happened in New Braunfels, Texas, a little north of San Antonio. As I remember, MoPac or UP owned the MKT line but had not used it for years. Some developer built a golf course over a portion of the tracks and used it like that for 3-4 years. When UP came to open the MKT tracks...oops. No doubt about who owned the ROW, so the golf course cleared out. Maybe they bought an easement or something. The home owners adjacent to the golf course were probably pretty surprised. Of course, now they have a prime rail fanning spot, so there is good in everything, you know?
     
  10. friscobob

    friscobob Staff Member

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    IIRC, wasn't this once called the Macaroni Line? I seem to remember that name popping up over on Railspot from time to time.
     
  11. r_i_straw

    r_i_straw Staff Member

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    Yup, Macaroni.
     
  12. Flash Blackman

    Flash Blackman Staff Member TrainBoard Supporter

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    If 1882 was the last time they worked on this track, it needs repair by now! :teeth:

    That was interesting about the Macaroni Line. Good stuff.
     
  13. r_i_straw

    r_i_straw Staff Member

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  14. BoxcabE50

    BoxcabE50 Staff Member TrainBoard Supporter

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    Sounds good so far.

    And this article is even positive. Could it be the writer actually understands something about business? Plus, even has a bit of railroad knowledge? :eek:mg:

    Boxcab E50
     
  15. r_i_straw

    r_i_straw Staff Member

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    It also helps that Rosenberg Mayor Joe Gurecky is a rail fan. :) He help out at the Rosenberg Railroad Museum. He is doing his part to "smooth the rails" for both projects mentioned in the article.
     
  16. Matthew Roberts

    Matthew Roberts TrainBoard Member

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    Of course, look at the comments to the article. That first guy obviously has no idea what he's talking about! Now the second guy has a more "railfan" type attitude. ;)

    Sound like a really good thing for Fort Bend County.
     

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