(The Associated Press circulated the following on May 13, 2009.)
JACKSON, Miss. — Canadian National Railway, parent of Illinois Central Railroad, said Wednesday it has sold 252 miles of rail line in Mississippi, including unprofitable routes from Natchez to Brookhaven and from Canton to Memphis, Tenn.
The Montreal-based company said it has sold those two segments plus another line to Grenada Railway LLC and Natchez Railway LLC – both non-carrier affiliates of V&S Railway LLC and A&K Railroad Materials Inc., which are headquartered in Salt Lake City.
CN said the deal transfers ownership of 252 miles of track and preserves rail service on the two longest of these rail lines for at least the next two years.
The terms of the transaction were not disclosed.
The longest of the rail lines runs 175 miles and parallels Interstate 55 from Memphis, Tenn., to about two miles north of Canton. The Natchez-to-Brookhaven line runs about 66 miles. The third segment – the 11-mile Water Valley Branch Line – intersects the Grenada Line at Water Valley Junction and extends to Coffeeville in Yalobusha County.
Jim Vena, CN’s senior vice president of the southern region, said Wednesday in a statement that the deal will allow the rail lines to remain open to serve local businesses.
“CN will continue to offer interchange service to the new short lines, maintaining every customer’s seamless access to the broader CN network,” Vena said.
Vena said CN had worked with the state since 2003 to bring additional rail business to these routes. He said no substantial increase in rail traffic came about. He said traffic volume on the routes had dropped to the point where it is no longer economically viable for CN to continue their operation.
“CN recognizes the importance of rail service to Mississippi and remains committed to the state. We continue to operate nearly 600 miles of mainline track serving scores of Mississippi businesses and carrying Amtrak passenger service,” Vena said.
V&S Railway is a local, or “short-line,” railroad that operates in Kansas and Colorado. A&K Railroad Materials is a supplier of new and used track materials with storage and distribution centers across the country.
In 2005, CN agreed – at the urging of Mississippi Gov. Haley Barbour – to keep open the Brookhaven-to-Natchez line for at least a year even though it had filed a notice to abandon the line. The decision came after Georgia-Pacific announced it would reopen a mill in Roxie to process hardwood felled by Hurricane Katrina. GP closed the Roxie mill in 2006.