MMA To File 241 Mile Abandonment With STB

I don't think they can abandon the CP line, at least not for a while. As I understand it part of the deal they made for taking state and federal funds was that they promised to keep the line open for at least 10 more years or something like that. Can anyone confirm this? Let's review the public investment made in the MMA:

1. FRA RRIF Loan $34M
2. Canadian grant $6M
3. Quebec grant $4M (part of #2)
4. Ongoing MDOT capital grants, about $1M/year for last 7 years (this was a prerequisite of MMA's purchase of Iron Road)
Total = $51 million

add to that their new requests:
5. $17M for track purchase
6. $6M for rehab (deferred maint.)
7. $2.5M for annual maint.

Total = $74M plus $3.5M a year ongoing from MDOT. Does anyone else think it is a bad idea to keep throwing money at this company? Why on earth would they abandon the CP line if every politician in ME and QC is lining up to give them more $$. The sad reality of the current economy is that they probably need the line sale with the state to go through so they can make their RRIF loan payments.

Interesting! I didn't realize their hand was so deep in the till. NYC, are these public records accessible on-line?

How about a TIGER grant?

http://www.rtands.com/newsflash/colorad ... grant.html

PBM

The RRIF grant is on their and the FRA website. The Canadian stuff is out there in a press release. The MDOT stuff is from their website. These only have the high level details. I don't have a detailed description of the terms and condtions, but the RRIF web pages have some of the strings attached listed.

Unfortunately you just cant get blood from a stone. The little freight traffic in Maine is drying up. The Millinocket and East Millinocket paper milles were 40% of MM&As traffic, Millinocket is closed, East Millinocket is at reduced capacity. The future is not bright. Lets see if the State comes to the rescue. The abandonment process could take three years. Without rail service northern Maine will remain a backwater.

Without rail service northern Maine will remain a backwater.

Remain is the operative word. What's the County going to do WITH continued rail service?

Here's an editorial from the Bangor Daily News yesterday... http://www.bangordailynews.com/detail/117131.html

I'm trying to get a handle on what MMA is actually handling, etc. MMA has handled ~40,000 carloads/yr on average since 2003. Traffic levels are now down about 40% on a YOY basis, so that puts current levels at about 24,000 carloads/yr, or about 2,000/mo. MMA claims to serve 300 customers... not sure how that is counted, but my estimates: about 20% of total volume is Fraser business; I'm assuming that not much else gets interchanged with CN, so that's about 20 loads/day (in-out) on a 5-day/wk basis over St Leonard. E Millinocket provides ~30% of volume, or 30 loads/day; 5% local oil, or about 5 carloads/day; 15% overhead business Between Montreal and NBSR; 10% other Maine (received propane, veg oil, forwarded OSB); 20% non-Maine (traffic handled west of Lennoxville, PQ). Further, I'm guessing MMA "CP" trains are running about ~75 cars/train and MMA interchanges about 20 cars/wk with PAR. Does this all sound about right?

The MM&A is very dependent upon the forest products industry. With the building industry on its knees and newspaper readership seriously in decline (along with phone books going the way of the Dodo bird), I would think the next few years do not look bright for any uptick in business. It is amazing they have held on like they have.

A representative of Maine's trucking industry says that any effort by the state to buy the financially troubled raiload line that serves northern Maine would amount to an unfair government subsidy for a business that's never been profitable. But lawmakers in Aroostook County say they aren't willing to stand by and watch a major lifeline to the region's economy become derailed.

Read more at: http://www.mpbn.net/News/MaineNews/tabi ... fault.aspx

The trucker's comments aren't exactly filled with truths, but I'd like to know one thing: how the hell did MMA come to value the property in question at $17 million? If it's valued at scrap, the steel is probably worth ~$9 million max in place, and land (at ~$500/acre, assuming it's all owned and not easement) is an additional $1 million. Scrap ties, etc... add another $1 million for giggles. That gets you to $11 million. Now, if you value it for the income potential for its business/business potential... let's say in the best of times you could net $500k/yr on that line. Add a multiplier of 3 and that brings you to $1.5 million. So... for a start, it's worth more dead than alive, and even if the state was to pay scrap value, MMA is trying to overcharge the state by over 50%. So how much did they pay for the whole kit and kaboodle (including the CP line) in 2002?

representative of Maine's trucking industry says that any effort by the state to buy the financially troubled raiload line that serves northern Maine would amount to an unfair government subsidy

Well at least I just had my first good laugh for the day.... pull---eeease. Does this trucking representative think the trucking companies are paying that guy driving the snowplow or paving the road with their own manpower on the weekends or something? Compare with the money spent on Maine's highways each year I'm sure the money involved in the MMA trackage is like a raindrop in the Penobscot.

So...It seems to me that if anyone finds this pending abandonment as a shock they have not been watching they direction of the political winds here in Maine. So here come the Obamha bucks. Millions upon millions of proposed rail upgrades all over the southern half of Maine. Senator Diamond from Windham pushing for one of the largest programs that he has worked so hard for....the return of the Mountain Division. Some say 20 to 43 million dollars. Wow. Being pro rail I find that to be wonderful....well almost. If it just had a few customers and maybe if I knew for sure that it was not going to be Pan Am as the operator. So politics being politics I can just see the deligation from the northern end of the state having their little dinner somewhere in Bangor....Maybe Jonney B's family place.... thinking "why didn't we have a shovel ready project in place for the MMA and The County?" Hmmmm ...so as politicians do, if they can't come up with something the only thing to do would be to stage a crisis and come up with a plan to fix it. It would'nt be right that all that money went to southern Maine. The true welfare is needed up north. So timing being everything MMA says certainly we are in big trouble and without a piece of the pie we might have to leave and tear out all the rail for the scrap price and to sell all of our waterfront lands as well. So...now you know the rest of the story. I think to be fair Maine should go ahead and buy the rail in question even at the cost of losing the funding for the Mountain Division. Then the State, being the new owner, should award the operating rights to another company as the MMA says it is a loser and to help the good people of the north some other company should have a go at it and see if they can make it on there own. Then MMA can take the money and invest in the long rumored west end to Syracuse with the US portion of the west end being run by the Finger Lakes RR.........but that's another story for other forums.

Railcar you bring up an interesting point that is mildly off topic. Assuming this does happen and the MMA lines are purchased for a cool $20 Million, what do you think the MMA would do with that money? Maybe focus on Westward expansion? CSX montreal secondary might be a good choice. Maybe put money into the existing tracks instead? You can only do so much with 20 Million but that would help the MMA get out of the red.

How about paying down the the friggin' $34 million FRA loan before pursuing more pipe dreams? Especially considering the ex-CP line is "profitable."

Paying off debts before making new purchases? Come now; that's not the way we do things in America.