State of Maine Purchases MM&A Trackage

Anyone have insight as to when the state will award operating rights to MMA's successor?

I checked the state's website, and they don't even have a request for proposal out for a new operator yet. Also, though the news reports made it sound like the deal is final, I don't believe the actual ink has hit the paper to make the deal official. MMA will be the interim operator during the RFP process, so I believe you'll be seeing MMA on the affected lines at least until spring at this point.

And wouldn't you know, I checked the site a couple of days too early. From yesterday's Progressive Railroading, the state just put out the RFP (which would indicate the deal is officially signed) and bids are due January 19th. I would still figure April at the earliest for a new operator to give all the affected parties time to be ready to potentially change operators. There is still, of course, a chance that MMA will wind up being the contract operator but it appears pretty unlikely at this point.

http://www.progressiverailroading.com/p ... p?id=25287

Thanks for the heads up, Mike. An initial reaction:

The RFP gave a little further insight into the line's traffic base. Alarmingly (for a prospective short line operator), nearly a third of the traffic would be Twin Rivers overhead business to Madawaska... traffic that would likely move under MMA trackage rights with the short line making a paltry $91 per car. A second third is low revenue pulpwood/logs/wood chips. Which leaves about 25 percent being desirable high revenue traffic and the remaining 10 percent being lower margin, but acceptable traffic. I'd guestimate that, after overhead trackage rights fees, a short line would make in the neighborhood of between $6.5 million (at current traffic levels) and $8 million (at the RFP's stated upside). And based on the RFP and past MDOT practice, the state will be looking for a cut of the revenue, say 5-10 percent, to offset their investment cost.

Once the $10 million TIGER track rehab grant is expended, the operator will be expected to maintain the line in like condition. A track-expert colleague suggested a track maintenance rule-of-thumb of no less that $25K per mile (but actual would likely higher). This equates to no less than $5.8 million, or 80 percent of a median revenue estimate. I'd guess fuel would be ~10 percent of revenue... car costs 5 percent. Then you gotta secure locomotives, pay crews, run back office administrative activities... yikes! I could imagine only two companies considering submission of a bid: MMA and NBSR. MMA as it feeds their system, and NBSR as it feeds the Irving parent company activities. And whoever gets it is likely going to come back to the well for operating/track maintenance subsidies.

Some crazy language in there regarding state indemnification, liability coverage, and state approval being required for all subcontractors...

Anyone else give it a once-over?

I agree with your read, Cowford. It's a tough sell, at best...unless the operator has some other motivation for operating the lines. That could be Irving ensuring rail transportation for its interests, or someone that sees potential to connect with other portions of their or a class 1's system to improve things. Really, the only operator other than MMA that makes much sense to me is NBSR. However, it is not uncommon for operators to bid on contracts with the hope or expectation that there is more money to be had along the way, either through further grants on trackwork or other negotiated add-ons.

One thing I would say about your numbers above on traffic, the overhead traffic to Madawaska is already gone, at least for now. Twin Rivers is trucking their product over the river into Canada and transloading on a siding along the CN main. This could be a potentially temporary situation while CN, MMA, and Twin Rivers negotiate a new transportation agreement, but it still shows how little the Twin Rivers traffic should be relied upon when factoring the economics of traffic on the north end. Yikes!

In addition to paper, the RFP lists Fraser traffic as "starch, talc and clay." Has the inbound also been routed around MMA? I'm in total agreement with the tenuous nature of TR traffic... I'd think that most, if not all of this traffic could be routed via CN without difficulty. The only saving grace is that it would only generate ~$250-300,000/yr in trackage rights revenue for the short line.

In today's Portland Press Herald:

Portland Press Herald wrote:The Federal Railroad Administration has cleared all legal hurdles for the state to take ownership of 233 miles of rail in northern Maine.

Read more at: http://www.pressherald.com/news/Maine-c ... rail-.html

Snip from the article:

"For more than a century, the Montreal, Maine & Atlantic Railway has carried products in and out of northern Maine."

SO, who can provide those vintage MMA steam era shots I've never seen???

ShortlinesUSA wrote:Snip from the article:

"For more than a century, the Montreal, Maine & Atlantic Railway has carried products in and out of northern Maine."

SO, who can provide those vintage MMA steam era shots I've never seen???

I believe you should start w/ Morning Sun Books' "Montreal, Maine & Atlantic In Color: Volume 2"
Let me know when you find it...

(all the reporter needed was two words - the "route of" the Montreal, Maine & Atlantic Railway - to be at least technically correct)