(The following story by Alexander Rich appeared on the Coos Bay World website on November 14.)
COOS BAY, Ore. — Central Oregon & Pacific Railroad has filed a complaint in Douglas County Circuit Court, claiming the state breached its agreement to provide $7.7 million to help build a new rail yard in Winchester, north of Roseburg.
The filing preceded a meeting of the Oregon Transportation Commission, which originally was scheduled to terminate the grant agreement as part of its consent agenda.
The railroad’s action Wednesday apparently led the state commission to place the issue on its regular agenda. In the end, transportation commissioners didn’t vote on whether to cancel the grant.
Scott Williams, vice president and general counsel of RailAmerica, CORP’s parent holding company, said the railroad already has spent $4 million to buy the land, develop it and prepare the foundation. The state suspended the grant in September 2007, after CORP shut down the rail line between Eugene and Coos Bay.
“Frankly, we were hoping we could amicably resolve this,” Williams said.
The filing contends there was no justification to suspend the funding in the first place, let alone to terminate the agreement. Williams said there were very specific reasons that would allow the termination of the contract, such as CORP canceling the project. It hasn’t done that.
He also suggested the project’s delay is hurting shippers in the Roseburg area due to congestion and backups that could be relieved by the rail yard.
“It’s a very important project to Roseburg,” Williams said.