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Project Title & Location
Palouse River & Coulee City RR Acquisition -- Grant, Lincoln, Spokane, Whitman, & Adams Counties
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Project Description
Purchase the 296-mile Palouse River and Coulee City RR to preserve the transportation corridors for long-term availability. Select operators for each Branch and make emergency repairs to provide an immediate opportunity for economically viable freight transportation operations.
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Recent Progress
On February 8, 2007, Governor Gregoire and a Watco official signed a binding Memorandum of Understanding (MOU) for the State to purchase the entire CW Branch of the PCC, the operating rights on the PV Hooper and P & L Branches, and certain real estate leased to third parties along the latter two branches. The MOU also included provisions for reimbursing Watco some of its operating costs in return for its agreement to operate the CW and P & L Branches from June 1, 2006 through May 31, 2007 without substantial shipper surcharges. Final negotiations were concluded in May. The purchase and sale closed on May 11, 2007 effective June 1, 2007. The United States Surface Transportation Board (STB) approved the transaction on May 30, 2007.
Watco continued to operate all three branches until May 31, 2007. Watco will operate the PV Hooper Branch after that date under the terms and conditions of the existing operating agreement with WSDOT with some modifications to reflect changes resulting from the purchase and sale agreement. WSDOT issued a Request for Proposals for operating the P & L and CW Branches on March 5, 2007. US Rail was chosen to operate the CW Branch, and will do business as Eastern Washington Gateway Railroad. Operations began on June 4, 2007. The Washington & Idaho Railroad will operate the P & L Branch, and began operations on June 1, 2007.
After performing a due diligence review of the Material Inventory the State had an option to buy under the purchase and sale agreement, WSDOT decided not to exercise its option. A due diligence review of rehabilitation and maintenance expense reimbursements payable under the terms of the purchase and sale agreement is underway, as is a due diligence review of surcharge reimbursements. Review of Watco’s operating loss claims must be completed after July 1, 2007, and WSDOT must review purchased property and prepare deeds by October 31, 2007.
WSDOT began the process to identify areas along each Branch where rehabilitation is urgently needed. The information to be gathered by mid-August will be used to select the most urgent and beneficial projects.
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Environmental Impacts / Compliance
No environmental compiance is required, because the railroad is already in operation.
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Impacts to Traffic
Purchase of the railroad will ensure continued availability of lower cost local rail service in eastern Washington.
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