Railroad, Maine DOT in talks on track deal

The state could buy 233 miles of northern Maine freight rail tracks slated for abandonment within several weeks if it and track owner Montreal, Maine & Atlantic Railway agree on a price, officials said July 28, according to the Bangor Daily News. The railway and Maine Department of Transportation are working to find common ground between DOT's argument that the tracks and other equipment are worth $18.1 million and MMA's contention that they should fetch $26.2 million as a whole or $23.7 million if broken into smaller pieces or parcels.

The
federal Surface Transportation Board will decide which offer is more suitable
if the negotiators can’t and if it approves MMA’s request to abandon the lines,
DOT spokesman Mark Latti said. No decision date has been set.

"All
parties agreed that it would be beneficial if we could all agree on a price
rather than go through the abandonment process," Latti said Wednesday.

"We
are hopeful that negotiations could be concluded in relatively short order
here. I am thinking in terms of perhaps a week," said Robert Grindrod, the
railroad’s president and chief executive officer. "Obviously, we would not have
a finalized agreement with the 50 pounds of legalese that would come with it,
but you might have an outline of an agreement within a week. We are talking
amongst ourselves and also with them [STB officials]. We have been going back
and forth with the state virtually every day, several times a week at least."

MMA
sought federal approval in February to abandon the tracks, most of which run
from Madawaska to Millinocket, by summer, citing losses of $4 million to $5
million annually. Grindrod said the rail service did not want to abandon the
lines but had no choice, given its losses. Stakeholders in the railroad
service, such as 22 major Maine manufacturers, have said it would be disastrous
to the state’s economy if the tracks were lost.

The
state plans to buy the tracks with $7 million in bonds and other funds and
lease the tracks to a rail operator that would keep northern Maine’s freight
moving. Voters approved during a June referendum the $7 million allocation as
part of a $47.8 million bond package.

The
tracks’ preservation would help maintain as many as 1,722 jobs that could be
lost if the freight lines were abandoned, Aroostook County economic development
officials have said.

MMA
provides the only rail freight service in Aroostook County, serving primarily
the pulp and paper, agriculture and potato processing industries. The tracks
targeted for abandonment run from Madawaska to Millinocket, with spurs to
Caribou, Easton, Houlton, Limestone and Presque Isle.

Several
freight railroad services besides MMA have expressed interest in a lease deal,
state officials have said.

If
the deal were made, the state would put the bond money toward the purchase
while rail stakeholders would commit to $3 million in hauling fees.

The
STB will use both sides’ arguments, testimony collected at a July 7 public
hearing in Presque Isle and other data to decide whether the tracks should be
abandoned, said 2nd District U.S. Rep. Michael Michaud, a House Transportation
and Infrastructure Committee member who has been working with the other members
of Maine’s congressional delegation to save the lines.

If
the abandonment is granted, the STB will review the Offer of Financial
Assistance the state submitted to the board and determine that MMA should sell
the tracks to the state for $18.1 million; that the state should accept MMA’s
offer; suggest new terms; or work with both parties to modify the existing
proposals, Michaud said.

Grindrod
said he believes that only the DOT has expressed interest in buying the tracks.

"The
major factor here is just having some certainty going forward for the customers
and everyone involved in the process," Grindrod said. "Once we know where we
are going, it will be a lot easier for all concerned to go forward and make
decisions about what the next steps are. We all need to get the financial
problems this represents behind us.

The
DOT would have 40 days to accept an STB decision, Latti said.

"We
are hopeful – I guess is the best way to put it – that we will have a deal
soon," he said.