Chadron, Neb., roundhouse coming back to life

Written by jrood

Nearly two decades after the Chicago and North Western Railroad closed up shop in Chadron, Neb., a new railroad company is bringing the Chadron rail-yards, and the railroad roundhouse back to life, the Chadron Record reports. And principals in the new company say they see tremendous potential for niche railroad services in the community, based on the community's location near a main BNSF rail line, and the presence of a roundhouse that can handle repair and refurbishing of large railroad equipment.

"The railroad will never,
ever, be what it was (in Chadron) but we have experienced people here and we
recognize there are niches out there that we could service," Terry Doyle, a
former Chadron resident who worked for the CNW until shortly before it left
Chadron and then became an official with the federal railroad administration,
said in an interview Friday.

Doyle’s title is vice
president of operations for the newly created Nebraska Northwestern Railroad,
which recently acquired the Chadron yard and the track to Dakota Junction,
where the line joins the Canadian Pacific (formerly Dakota Minnesota and
Eastern) line between Crawford and Rapid City, S.D. In the same deal, NNR
signed a lease agreement for the line from Dakota Junction to Crawford, as part
of its plans to bring various kinds of rail equipment to Chadron for servicing
and repair.

"There is significant
potential," NNR president Jack Nielsen said in the office that the company
recently took over from West Plains Grain, owner of the Nebkota Railroad that
had been operating in the yard under lease from DME/CP. "We are sitting on top
of the Powder River Basin and we have the track."

Coal trains from the
Powder River basin pass through Crawford daily, the men point out. Most of the
locomotives and much of the other equipment used by BNSF and other large rail
companies is actually leased, not owned, Nielsen noted. That equipment,
including locomotives and other items, has periodic servicing and repair needs,
and at the end of its life cycle is often put up for sale to firms that
refurbish and resell the useable pieces.

Nielsen, who is also a
principal of Diamond Hill Farms in Alliance and once worked as a trainmaster,
said he has a strong affinity for railroads and believes that the nation was
shortsighted in shifting so much of its shipping to trucks while letting rail
lines be abandoned.

Nielsen also said that he
is "not a philanthropist" regarding railroads, and that he saw several years
back, when the Farmers Coop in Gordon decided to sell its stake in the Nebkota
Railroad, that there was money to be made. "I made a serious attempt to buy it,"
he said. "I saw what the elevators were making in shipping and I felt some of
that could go to the farmers."

A few years later, in the
spring of 2007, Nielsen said he learned that Nebkota, which by that time was
owned by West Plains Grain, was planning to abandon the line from Gordon to the
west, and again made efforts to keep the line intact, but without success.

About the same time Doyle
said he learned of the coming line abandonment from Roy Fitzgibbon, general
manager of the Nebkota, and that the two hatched the idea of buying the line
from Chadron to the west.

Doyle said he went
looking for venture capitalists, but soon learned of Nielsen’s interest and got
in contact with him.

The next step was to
contact the DME and negotiate the purchase. The deal was nearly complete in
fall of 2008, the men said, when DME was purchased by CP, which set the process
back to square one. The renewed negotiations had just been successfully concluded,
according to the men, when the West Plains elevator in Chadron burned. Not long
after, they learned for the first time of West Plains’ plan to build a high
speed loading facility for grain cars on its remaining four miles of track,
east of Chadron.

In any case, as part of
its contract with CP, NNR has to honor the ‘trackage’ agreement that
Nebkota/West Plains has, and that agreement specifies how much it can charge
for the train cars that pass over the lines, Nielsen said.

While grain hauling would
be a welcome income, NNW is building its business plan on the idea of utilizing
the existing Chadron infrastructure, particularly the roundhouse, to service
the railroad industry’s need for mechanical services.

The first part of that
plan is already under way, said Nielsen, with a signed contract from Railway
Equipment Services of Oil City, La., for servicing of track laying equipment.
RES has a contract to purchase all of the track equipment going off lease or
being sold by BNSF, Nielsen said, and needs additional help in refurbishing the
pieces for sale. "Our role is to clean them, tear them down, and rebuild them
and paint them," said Nielsen.

The first part of the
contract involves work on 11 ‘Speed Swings,’ a specialized machine similar to a
front end loader but designed to work on rails. More work on other equipment is
likely to follow shortly, said Nielsen.

A test run last week also
gave the men confidence about another part of their plans: repair to the
electric motors that drive the huge locomotives that pull (or push) trains down
the tracks. About a week ago, one of the largest locomotives in the BNSF fleet
was brought into the Chadron roundhouse, to make sure that it would fit inside.

"These are relatively
new. That’s a $2.5-million piece of equipment…We wanted to make sure (it would
fit)," Nielsen said, displaying a photo of the locomotive inside the
roundhouse. "To walk in the roundhouse and see it sitting here after 25 years
of nothing does get your blood flowing."

A key part of the
locomotive repair contract currently under negotiation with EMD, one of two
firms that make the huge machines, is the existence of two ‘drop pits,’ in the
roundhouse, said Doyle. That allows workers to remove the engine’s huge wheels
and axles and lower the motors onto a track so they can be moved to another bay
and lifted up to working height by a large winch.

Chadron’s wooden
roundhouse, which was built after a fire in the early 1900s, is one of only a
few still standing in the region, said Nielsen. "You go from Huron to Denver
and there are only two, here and Cheyenne," he said.

With work in hand and
plenty of opportunities on the horizon, NNW has formed a management team and is
beginning to hire workers, said Doyle. Among the management employees are
several with long ties to railroading in Chadron. Roy Fitzgibbon is general
manager, George LaPray, a former general manager of Nebkota, is vice president
of administration, and Chadron city council member John Chizek is chief
mechanical officer. Hiring of people to work on the railroad equipment is also
under way, said Doyle. "We have, as of today, put on six jobs… good jobs,
technical jobs," he said.

The region’s existing
labor pool, which includes many former or laid off railroad employees, should
be able to provide the workers needed, said Nielsen. ‘One of the things that
Chadron needs is jobs," he said.

A railroad wouldn’t be
complete without a locomotive, and NNW already has one, newly painted, sitting
in the roundhouse. "That’s our flagship," said Nielsen, "It’s a SD 18. That’s a
1,750 horsepower engine that came off the Duluth Misssabe & Iron Range."

Safety is the company’s
first priority, said Nielsen, who noted that even a small-scale railroad like
NNW must meet the same standards as the largest operators. Doyle said his
career with the federal government would help the firm stay in full compliance
with the myriad regulations governing railroads.

Although NNW has only
recently taken over the Chadron yards, Doyle said he thinks people will notice
of the efforts that are under way on the property. "In 90 days, we have
breathed new life into this," he said. "We are trying to preserve the past and
focus on the future."

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