Railway abandonment notices posted

Mona Mattei
By Mona Mattei
September 23rd, 2010

The hammer dropped this week as OmniTrax Inc. posted notice of rail abandonment for the Kettle Falls International line from Kettle Falls to Danville. The death knell gives six months until the last car travels the line. The notice was not a total surprise to politicians and the businesses involved with the efforts to keep the line open.   “We expected it. They told us that the loss of revenue was continuing, and that when the board of directors decided to post notice they would go ahead,” said Grand Forks Mayor Brian Taylor. “We weren’t being led astray at all. To some extent they’ve been holding off and we wondered why, but I think that was just some breathing room.”   Taylor indicated that the business case study that was commissioned by the city council in August should be ready by the end of the month and that will give them some idea of their next steps.   “We will have our information from Davies and company within the next 30 days, we’ll have a preliminary report, and we’ll be ready to respond with some kind of a plan,” explained Taylor. “Whether we’re going to go forward and look at the offer to purchase or whether or not we’re going to decline.” Mike Ogborne, spokesperson for OmniTrax, explained that the company is still open to working with stakeholders to turn around this line, but that the company needed to make their decision to use their asset appropriately. He indicated that although the notice is posted, if an agreement changes the conditions of the situation, OmniTrax will consider suspending the notice of abandonment. “We have been working with the communities and the shippers up there in an attempt to find a way to keep the line in operation, and we’re still co-operating and working with the communities and the shippers. But as we told them we had to start the process of discontinuing the line at some point,” said Ogborne. “As this process of abandonment proceeds there’s nothing to stop us from suspending the process or stopping it altogether if we reach an arrangement where the line is sold, or we reach another agreement that money is available for infrastructure and we continue to operate. There’s time for those kind of choices too.”  OmniTrax has not posted notice on the American portion of the line yet, but Ogborne said that they will be starting that process as well. The process for closure is different for both countries, but Ogborne said it will be about the same time frame by the end of the process.   Regional area D director Irene Perepolkin was disappointed with the company’s decision and the way they went about their notice.   “I was surprised but not surprised that they gave notice of abandonment. Living on the ‘other’ side of the tracks I have watched the deterioration of the ties and crossings for the past three years thinking that they already have their minds made up to abandon and sure enough that is what they did,” said Perepolkin. “I am disappointed in their decision and know it is going to have a very detrimental effect on the economy of this area – both the city and the regional area.”   Craig Dohm of International Forest Products Ltd., spokesperson for the business stakeholders impacted by the railway plans, said he was unable to comment at this time since he was just made aware of the notice to abandon the line.   Since the railways owners, OmniTrax Inc., gave notice in 2008 of their intention to close the international rail line supporting shipping for businesses from Grand Forks through to Kettle Falls a group of business stakeholders and local government from both the Boundary and Washington State have been trying to find a solution to the dilemma. A presentation from the stakeholder group to the City of Grand Forks proposed that the solution would be for the city to either purchase the line, or invest in the needed infrastructure upgrades, or both.   Since OmniTrax has already given notice of abandonment, the line could be shut down on very short notice. A business solution sought by the businesses involved with the shipping line has not resulted in a viable option to date. An economic impact study commissioned by the stakeholders and paid for by the businesses using the line indicated severe economic problems for the City of Grand Forks should the line be abandoned. 

Grand Forks city council chose to proceed with the development of a business case that will provide information needed for the council to make further decisions. The three possible actions that are the solutions to the current threat of the loss of the railway are: to provide the money that OmniTrax Inc. feels is needed to upgrade the rail line and hope that they continue to operate the line; to purchase the line outright and then do infrastructure upgrades and operate (subcontract) the line; or to allow the line to be abandoned and deal with intermodal transport. 

Categories: Issues