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Thursday, February 11, 2010

New railroad files to buy track in Chadron, Neb.

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A new railroad company based in Alliance, Neb., has filed papers with the federal Surface Transportation Board to purchase the seven miles of railroad line from Chadron west to Dakota Junction and to lease 21 miles of line from Dakota Junction to Crawford. Chadron, Neb., the Chadron Record reports.

The filing by Nebraska Northwestern Railroad Inc. was filed with the STB, which has regulatory authority over railroad operations, on Jan. 25. It is recorded as a Verified Notice of Exemption.

John D. (Jack) Nielsen of Alliance, president of Nebraska Northwestern Railroad, said the company has been working on the project since the fall of 2007, and was formed in response to the abandonment of the rail line from east of Chadron to Rushville.

"Our purpose was to preserve the railroad," he said in a phone interview. "I feel strongly that the railroad is essential and it's a requirement that we keep a grain market open for farmers in northwest Nebraska."

That sentiment appears to correspond with the plan announced last month by West Plains Grain to build a high-speed grain loading facility on the four miles of track that it owns from Chadron to the east, and Nielsen said NNR approves of the West Plains project. "Nothing of what we are doing impacts what he (West Plains CEO Bryce Wells) wants to do," Nielsen said. "We are supportive of his efforts."

Wells said in an email that his firm is "seriously considering the implications of this filing as it relates to our investment," but had no additional comment.

According to the STB, sales of short segments of railroad line are usually handled under the exemption process, and are routinely approved unless an objection is filed.

Dakota Minnesota & Eastern Railroad in Sioux Falls, S.D., is the owner of the lines that NNR intends to buy and lease, which begin at Mile Post 404.5, on the eastern edge of Chadron. The DM&E line joins with a BNSF main line at Crawford.

Nebkota Railroad, which is a division of West Plains Grain, owns the remaining four miles of line to the east of Chadron. The rest of the former Chicago and North Western Railroad 'Cowboy Line', which once extended east all the way across Nebraska, has been abandoned in the years since 1986, when C&NW closed its division headquarters in Chadron.

The West Plains project includes improvements to the track from Chadron to Crawford, a segment that currently doesn't have the ability to handle heavy loads and higher speeds. West Plains officials said they project shipping as much as seven million bushels of grain annually from the new facility.

Nebkota has trackage rights to use the line through Chadron to Dakota Junction and Crawford. Those rights continue even if the line changes hands, unless a filing for discontinuance is made and approved, a STB staff member said.

Work to upgrade the line would have to be approved by the owner, however, Nielsen said. "The fact that we now control the track to Crawford will make (West Plains) job much easier," he said.

Nielsen, a farmer and former railroad trainmaster for the Burlington Northern, said the other members of the company are Terry Doyle, a former trainmaster for the C&NW in Chadron, and George LaPray, a former manager of the Association of American Railroads and the first general manager of the Nebkota railroad. LaPray is currently general manager of the Minnesota Northern Railroad in Crookston, Minn.

Nielsen said more details of NNR's plans for the area will be released after the agreement with DM&E is finalized.

STB approval of the Nebraska Northwestern exemption for the purchase could come as soon as Feb. 24, the STB staffer said.

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