Twin Rivers’ rail line use in question despite new operator

Posted April 05, 2011, at 8:25 p.m.
Last modified April 05, 2011, at 11:21 p.m.

AUGUSTA, Maine — Eastern Maine Railroad will be the primary freight carrier on 233 miles of state-owned rails in northern Maine deemed vital to the state’s economy, but that might not compel what was once the line’s largest customer to use the tracks, officials said Tuesday.

Maine Department of Transportation officials announced that a five-member selection committee unanimously chose EMR out of five applicants to be the line’s operator. Lease details are not complete, but the selection means that EMR, a subsidiary of JD Irving Ltd., will handle maintenance and operational costs associated with the line, DOT officials said.

Anthony Buxton, an attorney for Twin Rivers Paper Co., the line’s largest customer, said he was pleased with the ruling. He said he hoped that EMR would work with the line’s former operator, Montreal, Maine & Atlantic Railway, to secure favorable conditions by which Twin Rivers could begin to use the lines once again.

“It is good to have the decision made,” Buxton said Tuesday, “specifically where in the [DOT letter of notification] it said that Eastern is to work with MM&A and resolve the challenge to” Twin Rivers using the line again.

Robert C. Grindrod, MM&A’s chief executive officer, said he wasn’t surprised that Eastern won the lease arrangement. His company was among those that submitted proposals to the DOT.

“I expected that they would win the bidding because they have been campaigning the hardest. They had let it be known back into last summer that they wanted to do this,” Grindrod said.

In his letter to Ian Simpson, general manager of Eastern Maine Railroad in New Brunswick, the transportation department’s rail director, Nate Moulton, wrote that MDOT officials and the committee “felt EMR provided the best proposal and plans to operate these lines and reestablish reliable, cost-effective service to the region.”

“One specific interest of the state is to reestablish direct rail service to the Twin Rivers mill [in Madawaska] that meets their needs to keep the mill competitive,” Moulton added in the letter, which is dated Monday. He said he would appreciate any ideas EMR has on how to make that happen.

Twin Rivers, formerly known as Fraser Papers, employs about 650 people in Madawaska and is among about a dozen Aroostook County manufacturers for which the tracks are a lifeline that gets their products to market. Twin Rivers officials have estimated that under increased MM&A transportation fees for incoming raw materials and outgoing product, it would pay roughly an additional $3 million annually.

MM&A has maintained that a reduction in Twin Rivers’ rail usage is among several factors, along with degrading track conditions, that forced the rail company last year to begin seeking to give up ownership of the 233 miles of track, which the state is buying for $20.1 million. The lease arrangement with EMR is part of the state purchase plan, state officials have said.

MM&A officials also said the mill’s decision to split traffic between them and Canadian National Railway Co. helped cause the railroad’s financial woes

Yet neither the lease nor sale agreements will fracture the MM&A’s easement and allow EMR immediate use of the spur of track that his railway still owns and which leads to the Twin Rivers paper mill, Grindrod said.

“And that is not likely to change,” Grindrod said.

“The fact that MM&A kept part of the tracks between the tracks that Eastern is leasing and the mill means that Twin Rivers has to pay twice, two railroads, to use the track,” Buxton said. “It effectively creates a situation where we need to use the rail service and we can’t use the rail service.”

The higher costs associated with MM&A, Twin Rivers officials have said, have forced the company to truck its paper into Canada for transshipping onto rail cars from CN and others.

It is also why Twin Rivers joined CN in a lawsuit against MM&A, but the Hermon-based rail service secured a victory on Friday when a federal judge denied CN a temporary injunction that would have allowed it access to Twin Rivers.

“We are in this ridiculous situation of a piece of [rail] line being kept by MM&A,” Buxton said. “Is the referendum that appropriated the money to pay for the short line being properly implemented when there is only one customer islanded by the MM&A? How can that be in the public interest?”

Grindrod said his company would like to resume handling Twin Rivers shipping between Madawaska, Millinocket and Montreal “or however they want to route it.”

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Business