(The following story by John Sowell appeared at OregonNews.com on April 22.)
ROSEBURG, Ore. — Oregon Gov. Ted Kulongoski said today the refusal of the Central Oregon & Pacific Railroad to reopen the Coos Bay spur line constitutes “an unlawful embargo” and a violation of the railroad’s freight-hauling obligation.
In a strongly worded letter to Paul Lundberg, vice president of RailAmerica, CORP’s Florida-based parent, Kulongoski said it appeared the company had no intention of repairing and reopening the line without a large cash investment from the state.
“Since you have made no effort since the September 2007 closure to re-open the line, I believe that your actions constitute an unlawful embargo and you are violating your common carrier obligation, thereby causing a hardship for Oregon’s businesses and threatening the economic health of Oregon’s coastal communities,” Kulongoski wrote in his one-page letter.
The governor told the company to either re-open the line or abandon it so the state or the Port of Coos Bay could take it over.
“We need to come to a conclusion on this matter,” Kulongoski wrote. “I will continue to press federal authorities and Oregon’s congressional delegation to close this chapter.”
More than two months ago, Kulongoski asked RailAmerica to make the repairs and re-open the line as a “sign of good faith.” He said the state would not consider putting any money into the railroad until the 120-mile spur line was back up and running.
The railroad submitted a proposal to the governor on April 9 proposing a joint venture to operate a 65-mile portion of the Coos Bay line from North Bend to Vaughn. Under the proposal, details of which weren’t publicly released until today, the railroad and the state would each own 50 percent of the line, with the state hiring CORP to operate the line under contract.
The state would contribute the money needed to restore the line to a safe operating manner, while CORP would contribute the line itself to the venture and all revenue generated. Profits would be split equally.
“We have worked hard to find a viable solution to the problems facing the Coos Bay line, and to preserve rail service to Southwest Oregon,” Bob Jones, CORP president said in a written statement received before the governor sent his letter. “Our desire has always been to restore the line and to continue to provide rail service to the Coos Bay shippers and to the Port of Coos Bay.”
Jones had hoped his company’s proposal would be met favorably by the state and shippers. It wasn’t.
“We are totally in support of the governor’s position on this,” said Bob Ragon, executive director of the Douglas Timber Operators and spokesman for the shippers coalition that formed after the Coos Bay spur was shut down.
On April 13, the federal Surface Transportation Board demanded that CORP defend its decision to keep the rail line closed. The board asked the railroad to answer why its failure to reopen the line should not be considered an unlawful abandonment.
The STB is scheduled to hold a hearing Thursday morning in Washington, D.C., on the matter. Roseburg Forest Products President and CEO Allyn Ford, whose company is spending up to $167,000 a month to ship products from the coast by truck since the rail shutdown, is scheduled to address the board.
Rep. Peter DeFazio, D-Springfield, and Oregon Sens. Ron Wyden and Gordon Smith, also plan to attend the meeting.
The meeting can be viewed live online at www.stb.dot.gov. It is scheduled to begin at 6 a.m. Pacific time.