Future of northern Maine track rests with STB Close to 70 people from a wide array of business, eco

Close to 70 people from a wide array of business, economic development and state and local organizations joined forces July 7 to implore members of the federal Surface Transportation Board to refuse to allow Maine, Montreal & Atlantic Railway to abandon 233 miles of tracks that run through Aroostook and Penobscot counties, the Bangor Daily News reports.

But officials from MMA
argued during the five-hour hearing that the railroad is suffering massive
financial losses each year that they keep the line operating, and the company
no longer can sustain such a drastic hit to its bottom line.

The Surface Transportation
Board mediates railroad disputes. The hearing, which was so heavily attended
that some had to watch the proceedings from an overflow room, was held at the
Presque Isle District Court building.

Robert Grindrod, president
and chief executive officer of MMA, testified that the railroad is seeking
federal approval to abandon the lines because it is suffering devastating
financial losses. MMA sought federal approval in February to abandon the
northern Maine tracks this summer, citing losses of $4 million to $5 million
annually. 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. Nearly two dozen of Maine’s largest
manufacturers and growers use those lines for shipping.

David Cole, commissioner of
the state Department of Transportation, said that the state is still hoping to
buy the tracks and lease them to a rail operator that would keep northern Maine’s
freight moving. In June, voters approved a bond package that contains $7
million to save the tracks. Despite the vote, the Maine DOT has not yet
successfully negotiated with track owner MMA to purchase the tracks.

During the hearing, MMA
officials said that they could no longer afford to continue service or make the
necessary repairs to keep the tracks viable, telling the board that it would
take between $18 million and $19 million to upgrade the tracks appropriately.
They said that insufficient maintenance over the years by MMA’s predecessor has
played into their financial difficulties.

MMA has suggested options
for companies that use the rails to ship their products if the lines are
abandoned, such as shipping by truck or through transloading, which is using
several types of transportation to get the product to its destination. Transloading
could involve, for instance, trucking products to the nearest available airport
or rail line and transferring the goods.

Cole told the three members
of the federal board that 21 businesses currently ship by rail in Aroostook
County. He said that if those companies were forced to ship all of their
products by truck, they would have to absorb increased operating costs, which
would make them less competitive in regional and national markets. More than
70,000 trucks would be added to Maine roads if companies were forced to abandon
rail cars, according to an environmental analysis done by the state.

He said that an estimated
750 to 1,000 direct jobs would be lost if the tracks are abandoned. More than
700 indirect jobs also are at risk if the lines are shut down, according to the
commissioner.

Cole said that the state
has been working with MMA on a viable solution since the start of the year and
continued up until the evening before the meeting to negotiate with them
regarding the purchase of the tracks. The parties have asked for another
discussion with a mediator from the Surface Transportation Board next week,
according to Cole.

If the board grants MMA the
abandonment authority it seeks, Cole said, the state will still attempt to
acquire the lines and take steps to operate them successfully. Negotiations by
the state with MMA also will continue if the board refuses to let them abandon
the lines, he said.

Cole said that despite MMA’s
claims of financial distress, the state believes that the lines can be operated
profitably.

Much of the afternoon was
taken up by statements from shippers who use the lines.

Officials from economic
development groups such as the Southern Aroostook Development Corp., the
Aroostook Partnership for Progress and Leaders Encouraging Aroostook
Development also urged the board not to allow MMA to abandon the tracks. They
fear the ripple effect of such a move, pointing out that if a company lays off
employees because it has lost business due to the abandoned tracks, those
employees would not have as much money to spend in the community, which could
lead to the closing of stores and other businesses.

Daniel Elliott, chairman of
the Surface Transportation Board, said that the board would take all of the
comments into consideration while it weighs its decision. A spokesperson for
the board said after the hearing that a decision could be issued within two
weeks.