(The following story by Winston Ross appeared on The Register-Guard website on May 15.)
FLORENCE, Ore. — Under intense pressure from federal lawmakers and regulators, Central Oregon and Pacific Railroad has given up on its attempts to get the state to pony up millions of dollars to fix the rail line from Coquille to Eugene that the company shut down last fall.
In documents filed with the federal Surface Transportation Board this week, the company defended its decision to abruptly halt service on the 120-mile line, a critical means of transport for four major employers on the southern Oregon Coast. CORP also said it would apply to abandon the line altogether, which is what unhappy lawmakers and industry representatives have been accusing the company of doing in a roundabout way for the past eight months.
Federal law requires that any immediate shutdowns of a rail line — known as an “embargo” — only happen in the event of an emergency, such as an earthquake or flood that temporarily disables tracks. Railroad owners are required to justify embargoes and set about fixing whatever the problem is as soon as possible.
CORP said its embargo was the result of an emergency — a series of unsafe tunnels — but added that the line wasn’t profitable enough to warrant a repair job without some kind of “public-private” partnership. The shippers who rely on the route and their elected representatives howled in protest, accusing the company of holding them hostage in order to get a public bailout from the state and other parties.
The Surface Transportation Board issued an order last month, demanding that the company prove its embargo was justified, and not an illegal abandonment. An abandonment involves a bureaucratic process that would have taken at least a year.
In response, CORP told the federal government that the company’s shutdown was reasonable and that its safety concerns were based on rock falls and multiple failures of timber lining in tunnels along the route. The company blames “seasonal weather conditions” since September for preventing it from repairing the line. “CORP could not practicably have completed repairs to the tunnels and reopened the Coos Bay line under any circumstances until September 2008 at the earliest,” wrote Scott Williams, the company’s attorney, in the government filing.
CORP spent 32 percent of freight revenues generated by traffic on the Coos Bay line in 2006 to maintain tracks, bridges and crossings, Williams wrote, far more than other short line carriers owned by CORP’s parent company, Florida-based RailAmerica.In 2004, Weyerhaeuser Corp.’s decision to close its paper plant in Cordes cost CORP 3,000 carloads of business per year and caused an operating loss of more than $578,000 that year, Williams wrote. Rising fuel prices drove losses to $1.17 million in 2006, he added.
The company spent $1.7 million in November 2006 to repair a collapsed tunnel, at a time when the line was losing $1 million annually, an expense that “belies the notion that CORP intended to close the line,” Williams wrote. “It would make no economic sense for CORP to make such a large investment, or to continue to pour such a large percentage of gross freight revenues into ordinary maintenance, on a line that it secretly desired to abandon.”
The company said it was “disappointed” that Gov. Ted Kulongoski and other government officials shot down its repeated attempts to get help fixing the line, calling the governor’s insistence that CORP reopen the tracks before any talks begin “untenable,” requiring it to “invest a minimum of $3 million in a line that is losing more than $1 million per year, without any assurance that making such an investment will result in a viable plan to preserve service on the line.”
As a result, the company said, it has no realistic alternative but to seek to abandon the line. It said its embargo was perfectly appropriate and it should not be forced to pay to reopen the line in the meantime.
Lawmakers disagree. U.S. Rep. Peter DeFazio said Tuesday that the company’s filing was an attempt to avoid a formal complaint that could lead to punitive damages, which DeFazio said are warranted. He added that even in abandonment the company is still trying to maintain control of a small section of the line, which would require traffic to pass through CORP property between Coquille and Eugene, a proposal for a “stranglehold” that “I believe the STB will not support.” he said.
The congressman will continue to push for punitive actions against the company, while entities such as the Oregon International Port of Coos Bay continue legal efforts to get the line reopened now. Once it is abandoned, the port could take ownership of the line, and is preparing an application to do so, said Martin Callery, director of communications and freight mobility. But Callery expressed skepticism about what CORP will do next.
If the company is serious about abandonment, a key point will be how much the line is worth, DeFazio said.
If the port or another government entity is forced to pay prohibitive costs to take over a line that needs millions in repairs, “it’ll be hard for anybody to deal with,” DeFazio said. “It does not look good for getting this thing done before we get into winter.”