The state could buy 233 miles of northern Maine freight rail tracks slated for abandonment within several weeks if it and track owner Montreal, Maine & Atlantic Railway agree on a price, officials said Wednesday.
The railway and Maine Department of Transportation are working to find common ground between DOT’s argument that the tracks and other equipment are worth $18.1 million and MMA’s contention that they should fetch $26.2 million as a whole or $23.7 million if broken into smaller pieces or parcels.
The federal Surface Transportation Board will decide which offer is more suitable if the negotiators can’t and if it approves MMA’s request to abandon the lines, DOT spokesman Mark Latti said. No decision date has been set.
“All parties agreed that it would be beneficial if we could all agree on a price rather than go through the abandonment process,” Latti said Wednesday.
“We are hopeful that negotiations could be concluded in relatively short order here. I am thinking in terms of perhaps a week,” said Robert Grindrod, the railroad’s president and chief executive officer.
“Obviously, we would not have a finalized agreement with the 50 pounds of legalese that would come with it, but you might have an outline of an agreement within a week,” he added. “We are talking amongst ourselves and also with them [STB officials]. We have been going back and forth with the state virtually every day, several times a week at least.”
MMA sought federal approval in February to abandon the tracks, most of which run from Madawaska to Millinocket, by summer, citing losses of $4 million to $5 million annually. Grindrod said the rail service did not want to abandon the lines but had no choice, given its losses.
Stakeholders in the railroad service, such as 22 major Maine manufacturers, have said it would be disastrous to the state’s economy if the tracks were lost.
The state plans to buy the tracks with $7 million in bonds and other funds and lease the tracks to a rail operator that would keep northern Maine’s freight moving. Voters approved during a June referendum the $7 million allocation as part of a $47.8 million bond package.
The tracks’ preservation would help maintain as many as 1,722 jobs that could be lost if the freight lines were abandoned, Aroostook County economic development officials have said.
MMA provides the only rail freight service in Aroostook County, serving primarily the pulp and paper, agriculture and potato processing industries. The tracks targeted for abandonment run from Madawaska to Millinocket, with spurs to Caribou, Easton, Houlton, Limestone and Presque Isle.
Several freight railroad services besides MMA have expressed interest in a lease deal, state officials have said.
If the deal were made, the state would put the bond money toward the purchase while rail stakeholders would commit to $3 million in hauling fees.
The STB will use both sides’ arguments, testimony collected at a July 7 public hearing in Presque Isle and other data to decide whether the tracks should be abandoned, said 2nd District U.S. Rep. Michael Michaud, a House Transportation and Infrastructure Committee member who has been working with the other members of Maine’s congressional delegation to save the lines.
If the abandonment is granted, the STB will review the Offer of Financial Assistance the state submitted to the board and determine that MMA should sell the tracks to the state for $18.1 million; that the state should accept MMA’s offer; suggest new terms; or work with both parties to modify the existing proposals, Michaud said.
Grindrod said he believes that only the DOT has expressed interest in buying the tracks.
“The major factor here is just having some certainty going forward for the customers and everyone involved in the process,” Grindrod said. “Once we know where we are going, it will be a lot easier for all concerned to go forward and make decisions about what the next steps are.
“We all need to get the financial problems this represents behind us,” he added.
The DOT would have 40 days to accept an STB decision, Latti said.
“We are hopeful — I guess is the best way to put it — that we will have a deal soon,” he said.