(The Associated Press circulated the following on February 13.)
FLORENCE, Ore. — Oregon Gov. Ted Kulongoski has turned down a railroad company’s request for state aid to repair tunnels along a 120-mile stretch of Coast Range track it has closed.
The owners of the Central Oregon and Pacific Railroad are asking the state, the federal government and the shippers who use the line from Eugene to Coquille for a commitment of more than $20 million before they sink $3 to $4 million into repairing the tunnels that prompted the Boca Raton-based hedge fund RailAmerica to close the line last fall.
“Let me be clear,” Kulongoski said in a letter Tuesday to Paul Lundberg of RailAmerica’s Operations Support Group. “I do not believe that it is possible for the state to provide a subsidy to a private corporation to cover the operating expenses on your privately held railroad.”
Kulongoski also said that any public-private partnership to fix tunnels and other problems on the short line was possible only after CORP reopens the route.
Patrick Kerr, assistant general manager of the railroad, offered no comment on the letter Tuesday, saying he hadn’t seen it.
The letter also caused renewed talk of a public takeover.
“They have a sense of humor there at Railcorp,” said U.S. Rep. Peter DeFazio. “The last offer was unacceptable, and now they’re saying they want more money. I think we should still look at taking back ownership of this priceless asset.”
A leader of the coalition of 30 organizations affected by the shutdown said members want guarantees before shippers agree to absorb any repair costs.
“RailAmerica, the CORP folks, have shown no good faith in any of their dealings so far,” said Bob Ragon, executive director of the Douglas Timber Operators. “It’s best for someone else to own the line.”
Ragon said at least five major companies that rely on the line are still being forced to absorb 10 to 15 percent increases in shipping costs to move products off the Oregon Coast by truck.