The Oregon International Port of Coos Bay is getting the short line its shippers wanted, and the chance to get the mostly closed rail route back in operation, but it will not get another major break on the price. That's the latest decision from the Surface Transportation Board, which earlier approved the port's effort to buy an 111-mile rail link from the state's interior that will need a lot of repair to again serve the port's freight community and forest products shipments.
The port, however, thought the nearly $17 million selling price was about twice what it should be, so it challenged the STB's reasoning and asked it to cut at least $9 million.
Central Oregon & Pacific Railroad had shut most of that segment down in September 2007, after managers learned some of their Pacific Northwest rail tunnels were in poor condition. But instead of repairing the damage on its own and getting the line back in operation, RailAmerica-owned CORP months later was still trying to round up contributions from other parties, and coming up short.
Last year, pressed by STB commissioners after members of Congress and shippers from Oregon said the railroad had illegally abandoned its line service obligations, CORP agreed to formally abandon the line and the port jumped in to buy.
The STB first awarded the line to the port and was computing a price, but after steel prices plunged with the financial market collapse last fall the board ordered the line sold for $16.606 million based on much lower steel costs as of Oct. 31. The port received bridge loans for most of the cost from a state agency.
On March 12, regulators rejected the port's latest challenges almost across the board. Acknowledging a technical error in its calculations, the board agreed to cut $20,227 off the selling price, which is now $16.586 million.
The case is docketed at the STB as Finance 35160.