(The following story by Leo King appeared on The Examiner website on June 10, 2009.)
JACKSONVILLE, Fla. — The Federal Railroad Administration (FRA) awarded $15 million to nine states two weeks ago for emergency repairs to damaged short-line railroads resulting from natural disasters. The funding from the Railroad Rehabilitation and Repair Program is the first time the short-line industry has received federal disaster relief funds. The move reflects the growing economic impact of short-line railroads and their critical role to the manufacturers and communities they serve throughout the U.S.
“Railroads are receiving a lot of attention right now as the nation struggles to find ways to increase industrial competitiveness, improve our transportation infrastructure and minimize impacts to the environment,” said John Giles, CEO of RailAmerica, the nation’s largest owner and operator of short-line railroads. “Short lines offer many of the same benefits of the national railroad superhighways, but their unique role is often overlooked. As more and more manufacturing facilities are located in rural areas, short lines often present the only access these manufacturers have to the national rail network.”
According to the American Short Line and Regional Railroad Assn. (ASLRRA), short lines have grown from 8,000 miles of track in 1980 to more than 50,000 miles today. As the large national railroads were forced to dramatically downsize their systems in the 1970s and 80s, entrepreneurs saved short-line railroads by taking huge financial risks to purchase and rehabilitate long-neglected track. Now, 550 short-line and regional railroads operate in 49 states. In 30 states short lines operate at least one quarter of the rail network.
Under the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, FRA was authorized to make $20 million available to repair and rehabilitate railroad infrastructure, such as bridges, track and signals, in areas declared by the President as a major disaster. The FRA intends to issue another solicitation for the remaining $5 million.
Two RailAmerica short lines received funds, including the Indiana Southern Railroad, which suffered extensive damage from 100-year floods that wreaked havoc on Indiana’s southwestern counties last year. The railroad took quick action – spending $1.5 million on repairs – to meet the pressing needs of its customers, including Indiana coal shippers and receivers such as Indianapolis Power & Light.
The Missouri & Northern Arkansas Railroad suffered 10 track washouts and $1.9 million in infrastructure damage during the March 2008 storms and subsequent flash flooding in Arkansas and Missouri.
“Working around the clock and at great expense to the railroad, trains were able to move again in just four days,” said Giles. “If the railroads had not taken immediate action without regard to the resulting cost burden, its customers would have been severely impacted.”
One customer, utility company Entergy, would have run through its coal stockpile and been forced to cease power generation within 30 to 40 days. Other major customers affected by the shutdown included Tyson Foods, Unimin, Future Fuels, Arkansas Lime and Poinsett Rice.
RailAmerica owns and operates North American regional and short-line railroads. The company operates railroads in 26 states and three Canadian provinces, with more than 8,000 miles of track. RailAmerica is owned by funds managed by affiliates of Fortress Investment Group, a leading global alternative asset manager with approximately $34.3 billion in assets under management. They are online at www.railamerica.com and www.fortress.com.