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Closed rail spur hurts progress

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A nine-mile spur prevents a key West Feliciana Parish industrial site from linking to the remaining 2,900 railroad miles in Louisiana - and to business beyond the state, industry leaders claim, local media report. The spur runs west from Slaughter in lower East Feliciana Parish, crosses U.S. 61 at Delombre and enters West Feliciana Parish shortly before reaching the Renew Paper mill on the Mississippi River.

Known as the "Zee" Spur
for its former service to what was once a Crown-Zellerbach mill, the track saw
operations suspended after Renew Paper’s predecessor, Tembec, closed in 2007 as
the final customer on the line, a spokesman for Canadian National Railway’s U.S.
operations confirmed.

"It’s not abandoned," CN
spokesman Patrick Waldron said. However, the track sustained damage from
Hurricane Gustav in 2008, and improvements are needed at road and bridge
crossings, he said.

Meanwhile, Renew Paper’s
chief executive, Allen Byrd, said the mill that’s now operating at between 40
percent and 50 percent capacity expects to approach full capacity in the next
several months. More capacity means Renew Paper must sell more paper and
container products to customers farther away, he said.

When Renew Paper begins
engaging customers more than 500 miles away, something that could happen by
year’s end, rail shipments would be more cost-effective than truck shipments,
Byrd said. Former operators of the mill divided shipments about evenly between
truck and rail, he said.

The state struggled for
two years to recruit a new mill operator at a time when forest products plants
were closing throughout the country because of pressure from imports, higher
operating costs and lower demand in the recession – so curtailing costs is a
key to industrial success.

In addition, West
Feliciana recently was eliminated, in part because of no rail service, from
consideration by a major industrial employer, one that considered locating near
Renew Paper, said Steve Jones, who heads the West Feliciana Community
Development Foundation. The prospect is still looking at other sites in
Louisiana, he said.

Both Jones and Byrd said
CN claims the repairs could cost $2.5 million.

"From a business point of
view, I can see (CN) saying, ‘If we’re going to spend $2 million, we need to
get a return on our money,’" Jones said. "That’s logical. But at the same time,
there doesn’t seem to be any haste to do anything."

Waldron wouldn’t confirm
the $2.5 million figure but didn’t dispute it. Asked what it would take to
resume service on the Zee Spur – state or local assistance, federal
transportation or economic development grants, matching business investments –
he didn’t offer a remedy.

"That’s a difficult
question to answer," Waldron said. "I can just tell you what its status is now.
We are willing to talk to anybody and talk about future business, but at this
point we don’t have anything there and there’s not a timeline for restoring its
service."

An irony, Jones said, is
that CN also operates the railroad running south from Slaughter through downtown
Baton Rouge, on to New Orleans and connecting with the former Illinois Central
line to Chicago, assets it picked up in a 1998 merger. The downtown Baton Rouge
rail right-of-way contains disputed development rights the city-parish is
attempting to acquire with state help for the Alive project. The development
rights have been a point of contention there for years.

"They’re just very slow
to respond," Jones said. "They have been slow to respond in resolving issues with
the city-parish and the state on the park."

About the downtown Baton
Rouge project, Waldron said, "We do believe a resolution will be reached, and
it won’t be an issue."

But he said he could
forecast neither a timeline nor a possible outcome on the Zee Spur.

Rail service also helps
Renew Paper because it can load railcars for two to three days before shipping,
Byrd said, while tractor-trailers arrive at the mill expecting quick
turnarounds every 30 minutes to an hour. Renew Paper and CN have been in discussions
since June about the costs of reopening the nine-mile track, he said.

"That’s what it boils
down to: How does the $2.5 million get paid?" Byrd said. "It’s a business
discussion. … We envision having rail to this site again. The two parties just
have not been able to make a lot of progress on the negotiations."

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