Date:
Friday, May 11, 2007
Contact:
Mike Rowswell, WSDOT, (360) 705-7930
Olympia - The future of rail transportation in Eastern Washington was improved by the execution of a purchase and sale agreement between the state of Washington and Watco Companies, Inc. (Watco). The Washington State Department of Transportation (WSDOT) announced today the closing of its purchase of 110 miles of rail line and other properties and rights from Watco, a Kansas based rail holding company.
Governor Chris Gregoire helped move the process forward when she signed a Memorandum of Understanding with Watco Companies, Inc. for the purchase of the CW line of the Palouse River Coulee City (PCC) Railroad in February. “Washington, for the first time, will become the owner of a critical operating rail system that supports a large portion of our agricultural community,” said Governor Gregoire. “If the Legislature had not stepped up, if the farmers, WSDOT and Watco had not all participated in making this happen, this critical infrastructure would be lost.”
The purchase of the CW Branch of the Palouse River and Coulee City Railroad (PCC) is part of a nearly six-year effort to preserve the PCC, which is important to Eastern Washington’s agricultural industry. The state will pay $9.0 million for all track and right of way on the CW Branch, which runs from Coulee City to Cheney and Spokane, and certain real property on the PV Hooper and P & L Branch not previously purchased. The state will also receive the operating rights on all three branches.
“Rail is a vital part of our transportation system and supports a large portion of Washington’s agricultural community,” said Paula Hammond, WSDOT Chief of Staff. “This purchase conforms to the recommendations of the recently completed statewide Rail Capacity and System Needs Study and supports Governor Gregoire’s goals for economic growth in our communities.”
Not only does rail provide a cost-effective option for movement of agricultural products and commodities to market, but it also helps reduce wear and tear on the highways. Without rail, shippers would likely shift their freight to trucks, which may contribute to higher maintenance costs and increased congestion on our roadways.
“As we entered into these discussions with the state, two goals were critical for the success of this interaction,” said Ed McKechnie, Watco’s Chief Commercial Officer. “The first was that the rail lines be preserved for the long-term benefit of the customers and citizens of Eastern Washington. The second was to allow Watco to receive a fair market value for the rail assets. By working together, we successfully satisfied both of these goals.”
The state and Watco worked together to have this transaction completed before the 2007 summer harvest. Transfer of the property will take place on June 1, 2007. Watco will continue operating the PCC until May 31. It will continue to operate the PV Hooper Branch after May 31 under the terms of its existing lease with the state.
WSDOT recently selected US Rail Partners Ltd., headquartered in Illinois, to operate the CW Branch after June 1 under the name of Eastern Washington Gateway Railroad. Washington and Idaho Railway Inc., located in Lewiston, Idaho, will operate the P & L Branch after June 1. Continued operations will depend on the BNSF Railway Co. continuing to provide rates that will allow the new short line operators to be competitive.
More details about this project are at http://wsdot.wa.gov/Projects/Rail/PCC_Acquisition.
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