Oregon, railroad settle lawsuit

Central Oregon & Pacific Railroad is sending bills totaling more than $1.4 million to Salem, Ore. It will be the second step in resuming construction of a rail yard in Roseburg. The first was settling a lawsuit with the state, local media report. A formal agreement is still in the works, but Scott Williams, general counsel for CORP's parent company, RailAmerica, said the railroad and Oregon have settled the dispute that erupted when CORP closed the Coos Bay rail line.

A draft copy of the
agreement, obtained by The News Review of Roseburg, says the project will go
forward as planned, but with about $1 million less in state funding. The deal
allows CORP to reduce the scope of the project, rather than have to pay more
out of its own money. CORP had agreed to pay 20 percent of the original project
cost.

Tracks have been delivered
and the rail yard site is graded, Williams said. Once the state receives the
invoices, CORP will have eight months to finish the work.

"We should be able to
get it done quicker than that," he said.

CORP has been waiting for
state funds since September 2007, about the time the railroad closed its Coos
Bay line citing tunnel safety concerns.

The Roseburg-based railroad
sued the Oregon Transportation Commission, claiming ODOT’s decision to hold up
a $7.7-million grant was retaliation for the Coos Bay rail line’s closure. The
state argued the grant was for a project that was supposed to improve the
entire railroad system, including the Coos Bay line.

A Douglas County judge had
started interviewing jurors for a trial when the two sides said they had a
tentative deal.

Patrick Cooney, a spokesman
for the Oregon Transportation Commission, said he couldn’t comment about the
deal until his boss signs the agreement. He estimated it would be finalized
next week.

CORP has operated a
switching yard in downtown Roseburg that has been plagued by traffic tie-ups.
The new yard is expected to provide relief from those problems.