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Recent Progress
The 2004 Legislature appropriated funds to purchase the CW branch of the PCC Railroad that is owned by Watco Companies, Inc. In September 2005, the owner withdrew the property from the sale, claiming that the scrap value of the railroad had increased substantially. WSDOT restarted negotiations on January 2006, but an agreement has not been reached.
The 2006 Supplemental Budget combined the Palouse River & Coulee City Railroad Acquisition project and PCC Cheney-Coulee-Pullman Upgrades project into this single project.
It is unclear whether a voluntary acquisition agreement may be reached with Watco for the remaining line, or whether formal proceedings will be needed. Until the matters are resolved or an interim agreement reached, the purchase and projects will be held in abeyance.
Negotiations have resulted in resumed interim operations on the CW line until May 2007. The due date for completing a Memorandum of Understanding with Watco is October 31, 2006. Joine Net Liquidated Value (NLV) appraisals for WSDOT and Watco are being conducted to come to an agreed upon NLV that will be concluded within the next six weeks. Valuation of associated railroad properties will also be conducted jointly with the assistance of WSDOT Real Estate Services and Watco representatives. The short term operating plan for Watco is effective until the end of May 2006. $1M of immediate improvements have been identified as needed to keep the current operating levels on all three lines. A long term rehabilitation plan will be developed jointly with the State, the railroad operator, and committed shippers on each line to best leverage limited funds in conjunction with a new operating agreement.
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