The End of the Line?

Posted Aug. 21, 2009, at 5:54 p.m.

At a time when more products should be transported by rail rather than road and when the economy in Northern Maine is struggling, it is distressing that the only railroad to serve the area is threatening to abandon the rail line from Millinocket to Madawaska. Fortunately, state policy makers have time to look for ways to preserve the line. Unfortunately, the state has no additional resources to make a quick fix.

Instead, state officials must weigh the benefits of moving freight by rail and decide whether it makes sense to use money now devoted to other modes of transportation to keep trains running in Aroostook County.

Last week, Montreal, Maine & Atlantic notified the governor and Maine Department of Transportation that it was taking steps to sell or abandon 241 miles of tracks it owns in Maine, primarily in Aroostook County. The main line runs from Millinocket to Madawaska with spurs to Presque Isle, Easton, Limestone and Houlton.

Lawmakers from Aroostook and northern Penobscot counties have already submitted legislation to authorize a $20 million bond to enable the state to purchase and maintain the line.

“The reason for this action is purely economic,” the railroad’s President Robert Grindrod wrote in a letter.

“We have too many miles to maintain and too little revenue to do it with,” he added. Weak lumber and forest product markets and the general economic downturn have reduced demand for service on the lines, which represent about half of Montreal, Maine and Atlantic’s in the state. Traffic has dropped by about 40 percent over last year, Mr. Grindrod said. Wood chips, lumber, pulp wood and cooking oil for McCain Foods are the primary freight on the lines. Transporting this freight by road would mean more wear and tear on the state’s roads and more pollution.

Mr. Grindrod suggests that a state takeover of the rail lines is the “best possible solution.” However, another sentence in his letter should give state officials pause. “MMA, as a private company, cannot continue to sustain the level of financial loss which is currently ongoing, with little or no pros-pect of improvement,” he wrote.

The state certainly can’t sustain such financial loss either.

An industry standard says that a railroad should earn between $50,000 and $60,000 per mile annually. MMA is earning about $20,000 on these lines. The only way to earn more is to get more companies shipping more freight on these lines, a difficult proposition in Aroostook County, where indus-try is spread out and generally not growing. But, if the state is to intervene, it must work to get more volume on the line. Local elected officials could also help in this regard.

Annual maintenance expenses are about $2.5 million and an estimated $6 million is needed to upgrade the tracks. The tracks and surrounding land are worth about $17 million, according to the company.

A first step is to maintain the rail corridor. A second, more difficult, decision is whether subsidizing service on the line is worth the cost.

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