Montana state support of branchlines

[arbfbe]

Montana legislators have sheparded legislation to support local entities in efforts to acquire local branch lines in danger of being abandoned. This is not a program like Iowa where the state acquires the lines to lease them out but the program will supply seed money which must be repaid. After all, it is a Republican program and pretty radical for Montana Republicans at that.

http://www.greatfallstribune.com/apps/pbcs.dll/article?AID=/20050416/NEWS05/504160322&SearchID=73205542611677

[Kozzie]

Is this a relatively new thing? Or has government at the state level been involved in supporting regional/local railroads before, in other parts of the U.S?

Dave

[bobwilcox]

QUOTE: Originally posted by Kozzie

Is this a relatively new thing? Or has government at the state level been involved in supporting regional/local railroads before, in other parts of the U.S?

Dave

State and local governments started these type of programs about 25 years ago. When the Milwaukee went under in the early 1980s the state of South Dakota bought their lines in the state and had the BN operate them under a lease.

[CSSHEGEWISCH]

So the farmers who complain about rates will get an opportunity to put their money where their mouth is. I would venture to say that the State of Montana is going to be left holding the bag and the title to a lot of branches when the new owner-operators of these lines find out what's actually involved in running a railroad and default on their loans when they can't get the costs down.

[daveklepper]

Depends. Maybe it will work out well for everyone involved. Some of these programs have been successful. Wasn't Conrail just like this but on a much bigger scale? And wasn't it successful?

[gabe]

QUOTE: Originally posted by CSSHEGEWISCH

So the farmers who complain about rates will get an opportunity to put their money where their mouth is. I would venture to say that the State of Montana is going to be left holding the bag and the title to a lot of branches when the new owner-operators of these lines find out what's actually involved in running a railroad and default on their loans when they can't get the costs down.

Not necessarily. I don't think any of the lines that are subject to State purchase will be taking the grain to tidewater.

Gabe

[Anonymous]

I agree with CSSHEGEWISCH on this one. The branch lines are superfluous, branch line operations do not conform to the trend of terminal consolidation for unit train loading, and the State will end up spending more in this venture than if they just spent more money on the roads that feed the unit train terminals. Plus, the captive rate problem will still be the overriding problem for these guys, and this venture will not ameliorate that ongoing situation.