Rail agreement reached

By Kathy McCarty 
Staff Writer
    Good news has been on the fast track, following last week’s announcement that federal government had awarded over $10.5 million to MDOT through the second round of grants from the Transportation Investment Generating Economic Recovery (TIGER) program and, most recently, the governor’s announcement that an agreement between the state and Montreal, Maine and Atlantic Railway had been reached for the purchase of 233 miles of track between Madawaska and Millinocket.
    The grant was announced Oct. 15, with Sens. Susan Collins and Olympia Snowe, Congressman Mike Michaud and Governor John E. Baldacci welcoming the news.
    As the only member of the Maine delegation on the Appropriations Committee, Collins has led the effort to preserve the rail line in northern Maine. At a Transportation Appropriations Subcommittee hearing in March, she secured a commitment from Secretary Ray LaHood to explore all available federal options to help address this critical issue. A letter from Collins to LaHood in September urged the DOT to fully fund the project.
    The funding (the award totals $10,546,436) will be used for the Aroostook Railroad Preservation and Rehabilitation Project, which seeks to replace railroad ties, rail sections and clear drainage ditches to restore the rail routes serving northern Maine. Maintaining operability of the rail line is critical to the economic viability of the region, as the line is northern Maine’s sole link to the national rail network.
    “I am delighted that the DOT has fully funded Maine’s grant request for this project, as I requested,” said Collins. “As an Aroostook County native, I understand how important the continued operation of this rail line is to northern Maine’s economy. This federal investment will help ensure continued rail service to nearly two dozen employers and help prevent the loss of nearly 2,000 jobs in northern Penobscot and Aroostook counties.”
    Snowe said the grant announcement was “welcomed news and will make great strides towards ensuring the economic competitiveness of this vital region of Maine.”
    “As I conveyed to Secretary LaHood in a letter on Aug. 25, when offering my strong support for this grant, an effective rail transportation system in northern Maine is crucial for the companies and communities along the rail corridor and the overall economic vitality and health of the entire state,” said Snowe, noting that she and others remain committed to providing freight rail service to the region at reasonable rates to the many shippers who must have access to affordable rail lines to remain competitive.
    Michaud said the grant would go a long way in ensuring rail service to the region.
    “I am pleased that they have agreed to our request and will make resources available to help protect the many businesses and jobs,” said Michaud, a member of the House Transportation and Infrastructure Committee, who spoke to LaHood and the White House earlier in the week to press the case for approval of the funding. “I started meeting with stakeholders and officials from the Department of Transportation on this issue almost a year ago. I even took time out of President Obama’s vacation in Maine to make sure that he was personally aware of how important this is to our economy. It’s terrific news that this investment has been approved.”
    Baldacci acknowledged the benefits of a working rail line.
    “Rail is the most economical, most cost-effective and environmentally sound way to move wood and finished forest products to market. Ensuring the viability of the rail is essential to the economy of Maine, and that is why the Congressional Delegation, Maine Legislature and my administration have been working together to save this economic lifeline,” said Baldacci.
    Positive news continued on Monday, as Baldacci announced a deal had been reached between the state and MMA for the state to purchase 233 miles of track in Aroostook and Penobscot counties.
    “This agreement will ensure that northern Maine continues to have access to rail service,” said Baldacci. “Improved rail connections are critical to Maine’s economy, and this line particularly will help to protect thousands of jobs and major employers in Aroostook and Penobscot counties. The economic impact of the successful rehabilitation of this line will be felt throughout Maine.”
    The owners of the railroad had begun the process to abandon the line, which would have cut off rail service to northern Maine and hurt important industries throughout Maine.
    The agreement, which concludes more than a year of negotiations between the state and the MM&A, calls for a purchase price of $20.1 million in cash for the rail line from Millinocket to Madawaska and branch lines to Caribou, Presque Isle, Easton, Houlton and Limestone.
    Baldacci said the state will receive title to the line, free of any liens, along with overhead traffic rights to move freight over certain lines that MM&A is retaining. These trackage rights will allow a new operator to connect with the Canadian National line at Van Buren and the Eastern Maine Railway in Brownville Junction. MMA will provide any needed interchange infrastructure and track at these interchange locations for the new operator.
    Funding for the purchase includes: $7 million from June 2010 bond, $4 million from a November 2009 bond that is being repurposed, $7 million from state reserve accounts, $1.1 million from rail balances from canceled projects and $1 million from a major shipper on the line.
    As the sale is finalized, MDOT will issue a request for proposals to solicit a private rail operator to provide service over the lines being purchased. MDOT has already received numerous expressions of interest from established railroads and expects lively competition for this franchise.
    “This will certainly improve the business climate in northern Maine,” said MDOT Commissioner David Cole. “Lifting this cloud of uncertainty not only helps stabilize these rail-dependent industries, but with improved services lays the groundwork for future expansion and new business opportunities.”
    The combination of the TIGER II capital grant to improve the rail infrastructure and the opportunity for more efficient rail operations means a great deal to the overall state economy as well. The preservation and improvement of this service ensures the steady supply of raw products to paper mills in the south and to manufacturing customers throughout the region and the nation.