MMA To File 241 Mile Abandonment With STB

i have only been north of millinocket 3 times going to northern maine and i was crossing the MMA track on route 159 and i saw that looking south it was straight and out of sight so i looked at a maine atlas and turns out the straight track is 12 miles long

For sure most of the freight from northern Maine goes by truck. Do you suppose the lack of service from the last two owners of the railroad had anything to do with this?

E4, the beginning of the County's rail market share decline specifically (and economic decline generally) precede the last two owners by about 40 years. BAR started losing its potato business even before I-95 was completed to Houlton and was completely dead by the 70s. I'd guess that rail market share on paper/lumber/OSB hasn't changed considerably in the last 20 years.

The real problem is the non existent economy of northern Maine. They just do not generate enough rail traffic to support a profitable rail operation without some type of govt support. There is too much dependence on forest products that tend to suffer in recession. Maine is less and less competitive with forest products as compared to Canadian sources or the Southeast USA.

The MM&A is losing 4 to 5 million a year operating the line. The scrap value of the 220 miles of line is about 20 million, so this is tempting to convert a loss into a multi million dollar gain, money that can be used to support the remaining lines. Remember the MM&A has a debt service to pay for, the line was acquired for 50 million dollars and they have lost considerable sums over the years.

each mile of rail has 2,640 rail ties, at $40 each, that is $105,640 per mile.

100 lb relay rail is priced in April at $685 per ton. a mile of railroad (two miles of rail) has 176 tons of iron, at a cost of $120,560 per mile (and that's just the cost of the rail, not installation, sleepers, spikes etc).

So the value of ties and rail, for one mile of railroad, is $226,000. to support this infrastructure you need rail traffic, and Maine just does not have a lot of that.

It could make sense for the State the subsidize the lines, since there will be added cost to maintain the roads if all traffic is diverted from rail to them. Also the loss of employment from the shut down of rail service could cost the state a lot of tax revenue, which would offset the cost to support the rail infrastructure.

The MM&A situation has some parallels to the situation the state
of Vermont faced in 1961, when the Rutland Railroad shut down,
after the employees went out on strike. Faced with permanent loss
of rail service in the western part of the state, between Burlington
and Bennington and between Rutland and Bellows Falls, the state
purchased those lines from the Rutland Railroad and contracted the
operation to the Vermont Railway and the Green Mountain Railroad.

The Vermont Railway has established itself over the years as a customer
oriented operation and built itself into a moderate size regional railroad,
having purchased the former Delaware and Hudson line from Whitehall
NY to Rutland and assumed control of the Green Mountain Railroad in 1997.
The State of Vermont also purchased the remaining portion of the Montpelier
and Barre Railroad and the former B&M/CP line between White River Jct.
and Newport VT. The VTR is the contracted operator of these lines under
its Washington County division.

Had the State of Vermont not stepped up to the plate, few, if any, of these
lines would be in operation today. The Vermont Railway does have the
benefit of multiple interchanges with PAS, NECR, D&H(CP) and MM&A. It
does appear that the lack of interchange with other than the MM&A will be
a factor in the State of Maine takeover of the northern Maine MM&A lines.

Dick

A very interesting and thorough article about the proposed abandonment, and what the possible outcomes could be:

http://www.mainebiz.biz/news46314.html

Thanks to "CN9634" for the link!

It's surprising to see that the estimated carloadings for 2010 appears to be 5-10% lower than 2009, despite the rebound in North American (and even Northeast/New England) rail volumes.

That may be due to a lot of traffic on that portion being associated with lumber and building materials. CSX is saying they see everything but the new housing related traffic coming back this year. Then again, Ward said he saw everything but coal coming back just a few months ago, shortly before a big jump in export coal to China occurred...

I stand corrected... I misread eastern loadings. Western road lumber/related loadings are up 20% YTD, while eastern road loadings are down 13% for the same period.

The results of Question 3 will be known tonight. For those who aren't familiar with Question 3, this will decide the fate of whether or not the State will purchase the rail lines in Northern Maine. There are still 2 hours left in the poll so go and vote if you haven't!

CN9634 wrote:The results of Question 3 will be known tonight. For those who aren't familiar with Question 3, this will decide the fate of whether or not the State will purchase the rail lines in Northern Maine. There are still 2 hours left in the poll so go and vote if you haven't!

Looks like the bond package for the state to purchase the tracks was passed.

"Tony Donovan of the Maine Rail Transit Coalition was ecstatic that Maine voters approved bonds for rail for the first time in years.

'It's a new investment in a new system. It's always been roads, roads, roads,' Donovan said. 'In Aroostook County, central Maine and western Maine, here's a chance to look at a new alternative transportation system. It feels real good to us. It's time to move in a new direction for rail transportation.'"

http://wbztv.com/wireapnewsme/Early.ret ... 39659.html

The bond may have passed, but that didn't make all the issues disappear. A snip from today's Progressive Railroading reveals:

STB moves ahead with public hearing on MMA's proposed abandonment
Earlier this year, the state of Maine and Montreal, Maine & Atlantic Railway Ltd. (MMA) asked the Surface Transportation Board (STB) to extend its procedural schedule for the railroad’s line abandonment application. The state and MMA wanted to negotiate a resolution to the railroad’s plan to abandon 233 miles of track in Aroostook and Penobscot counties, and Maine's efforts to acquire the line and preserve rail service. But five days ago, the state and MMA notified the STB that their negotiations are at an impasse, so the board will proceed with plans to hold a public hearing on the case.

I somehow suspect the "impasse" may well be due to a condition that a new operator be granted trackage rights to access another railroad for interchange.

^either that, the realization by Railworld that MMA may not be the de facto operator (or may even not be in the running), or the purchase price is not enough to satisfy Railworld's definition of a "successful bailout". Really they'd not be in much of a position to find issue though, as they will still be the orginating or terminating carrier for much of the traffic and can grab both that and the line-haul revenue on the ex CP without having to move the traffic through the void in the middle.

ShortlinesUSA wrote:I somehow suspect the "impasse" may well be due to a condition that a new operator be granted trackage rights to access another railroad for interchange.

Bingo!

Sooner or later the business up there will pick up and when it does, the MMA doesn't want to have to bid against other carriers to handle it. The state is really calling the MMA's bluff on this whole situation, as on the surface they are saying that they want to abandon the line and don't want anything to do with it; yet when the state comes in to bail the line out, they are insisting that they control all the traffic. I think the MMA was gambling that the state would just fix the line for them for free and now it's blowing up in their face and they are starting to look pretty foolish. If they had any brains they would have abandoned the old CP line to Montreal and concentrated their efforts on the old BAR, where there is at least SOME traffic and which would still allow them to connect with the PAR, CN and NBSR. It doesn't take a rocket scientist to figure out that the old CP is an utter and complete dog. The CP couldn't make it work and since giving it up, it has been the downfall of the BAR, Iron Roads and now the MMA. Too many empty and not nearly enough profitable bridge traffic.

I could just imagine what the (already bad) economics of the ex-CP line will turn into if the state (correctly) maintains its backbone and forces the issue of access rights. After being relegated to the status of a bridge carrier (and suffering the resultant reduction in pricing power) on all that ex-BAR traffic, the MMA's downward spiral will probably just accelerate.

Another thing that has hurt the MMA is the fact that Pan Am now connects directly with both the NS and CSXT, so on traffic to and from Saint John that originates or terminates on those two roads, PAR definately has the upper hand now as the MMA has to go through the CP to reach those two.