State, federal officials moving on rail plan

Posted April 14, 2010, at 10:16 p.m.

Voters will have the final say, but state and federal officials are working now to save about 240 miles of northern Maine rail lines slated for abandonment but deemed crucial to the state’s economy.

The federal Surface Transportation Board announced Wednesday that it will ask officials from Montreal, Maine & Atlantic Railway Inc. and the Maine Department of Transportation to discuss formal mediation efforts in Washington. No date is set.

“I think it is important that there continues to be an open and honest discussion between the railroad and the major stakeholders,” said U.S. Rep. Mike Michaud, who approved of the STB’s decision.

“The possibility of formal mediation efforts is another step in this important process. I hope that both parties will strongly consider working with the STB to find the best solution for Maine,” the 2nd District Democrat added.

MMA sought federal approval in February to abandon the tracks, most of which run from Madawaska to Millinocket, by summer. The Hermon-based company says it is losing $4 million to $5 million a year hauling freight on the lines because of the recession and the housing industry collapse.

Representatives of 22 major Maine manufacturers that use the freight lines, including Fraser Papers, Irving Woodlands LLC, Louisiana-Pacific Corp., Old Town Fuel & Fiber, R.H. Foster Energy LLC and Seven Islands Land Co., have pressed to save them.

They say they would be devastated without the service. Some shippers complain that the freight carrier frequently blows shipping deadlines and mismanages cargoes, forcing shippers to hire trucks, often on the fly, to make their own deadlines.

Robert C. Grindrod, MMA’s president and chief executive officer, acknowledged that the railroad has had difficulties, but said most are caused by safety concerns, insufficient track maintenance by MMA’s predecessor and problems shared by the railroad and its clients.

As many as 1,722 jobs could be lost immediately if the freight lines are abandoned, state officials said.

Maine DOT officials are shaping a tentative $21 million deal to buy the tracks from MMA in case voters approve the purchase as part of a $47.8 million bond package on the June ballot.

“Between now and the bond [vote], we are continuing to talk with the railroad to reach a solution so that we can purchase this line and go forward,” said Nate Moulton, director of the state DOT’s rail program.

Moulton said he did not know what would happen if voters rejected the proposal.

“This project is a means to an end of supporting economic development,” he said. “This is very early in the process.”

As part of the June referendum, the state seeks $7 million in bonds and permission to reallocate $4 million in bonds voters approved in November 2009, to purchase the MMA line.

Outside of the bond request, and according to plans still being shaped, the state would add $7 million in cash to the deal, and private-industry rail stakeholders would contribute $3 million in fees once the lines are purchased and operational, officials said.

Besides solidifying the track-purchase deal, state officials are pursuing several other goals, Moulton said. They include:

ä Working with the 13-member Aroostook Rail Advisory Task Force to devise the public-private partnership among the rail users, the state and a railroad carrier that federal rail officials say is vital to securing federal aid for the railroad.

Gov. John Baldacci ordered the task force’s creation on Tuesday. Members are being selected.

ä Seeking requests for proposals to run the railroad service from private rail carriers, including MMA, under the tentative new arrangement.

Besides Montreal, Maine & Atlantic, Eastern Maine Railway, Maine Eastern Railroad, Pan Am Railways and St. Lawrence & Atlantic Railroad are based or operate in Maine.

Moulton and Mark Latti, DOT’s spokesman, declined to comment on whether any of these were among the three or four railroads that have offered to replace MMA if state officials wish. Moulton said the carriers will not submit requests for proposals without the state rail line purchase.

“These are smart guys,” Moulton said. “They are going to want to know exactly what the business deal will look like before they agree to anything.”

ä Seeking federal aid for the purchase of the tracks.

If the purchase occurs, the 240 miles of track would join 320 in Maine already owned by the state, Moulton said. Of the 320, 100 miles are active rail lines. The rest are being held for future rail development.

Thirty-three states own railroad tracks within their borders, Moulton said, for the same reason Maine buys them: to help struggling rail services and their clients, maintain tracks for future economic development, and reduce pollution, traffic and road maintenance costs.

“The state invests in transportation infrastructure like railroads because it’s so vital to moving people and goods,” Latti said.

The state will model the track purchase and proposed Aroostook County oversight operation on the 60-mile, state-owned rail line from Rockland to Brunswick that it bought in 1992, Moulton said.

The tracks had been abandoned when the state bought them, Moulton said, but the state rehabilitated and now leases them to Maine Eastern Railroad, with MER handling day-to-day maintenance.

“The railroad isn’t an end-all, but it’s a piece of the transportation puzzle — a valuable piece,” Moulton said.

THE BOND QUESTION:

Question 3 (bond issue): “Do you favor a $47,800,000 bond issue to create jobs in Maine through improvements to highways, railroads and marine facilities, including port and harbor structures, and specifying the allocation of $4,000,000 of the transportation bond approved by voters in November 2009 to be used for capital rail purposes?”

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