WSDOT manager says PCC Railroad progressing
Operator, state each reject purchase proposals
COLUMBIA BASIN — Monday marked the date a response was requested for the latest offer in the continuing saga of a rail line marked as important by area shippers to move their product.
The state made an offer in May to Kansas-based Watco Companies, Inc., to purchase the last of three sections of the Palouse River and Coulee City (PCC) Railroad but Watco senior vice president Mark Blazer informed the negotiating team later that month his company did not accept the state's offer for the purchase of the 108-mile CW Branch line, which runs between Coulee City and Cheney. Watco also did not accept the state's offer for operating rights for the lines, spur tracks and right of way, according to an e-mail from the state's Office of Financial Management and Department of Transportation to interested recipients and stakeholders June 14.
According to the e-mail, Blazer didn't make a counter offer, but proposed that CW line customers make a minimum commitment of 3,180 carloads per year, and said Watco would be willing to work to reach an agreement to remove their embargo and restore service with reduced or removed surcharges by Aug. 7, with service to last for one year, if the state agreed to forgive Watco's outstanding loan of $442,000 and reimburse the company approximately $450,000 to upgrade the track and waive all state-mandated crossing, signing and other costs by May 31.
The company also asked that customers on the railroad's P&L line make a minimum commitment of 1,539 carloads per year, and the state forgive Watco's outstanding loan and funds track upgrades. Under these conditions Watco would be willing to reach an agreement to offer reduced or removed surcharges for one year. The P&L line runs north and south between Marshall and Pullman, and a third line, the PV Hooper line, links Hooper, Winona, Thornton, Colfax and Pullman.
The state responded last week with a rejection of the proposal, and offered in response an interim operating agreement, asking that PCC end the embargo and resume operations by Aug. 7, operating regular service for a period of one year, with PCC charging Burlington Northern Santa Fe Railway tariff rates with no additional charges.
The state would forgive the $442,000 loan, make and pay for necessary repairs of the CW line and be responsible for determining the necessary work and having the work performed in consultation with the PCC. Minimum carloads for the P&L line would be 1,250, and 2,600 on the CW line.
The second part of the state's offer is a purchase agreement in which Watco would agree to the sale of the PCC rail property, including the CW branch, and operating rights and related rail property for the P&L branch and the PV Hooper branch within the state.
The state received another response from Watco Monday rejecting its latest offer.
"Some things we are getting closer on, and some things are still a ways apart, but I think it's a positive direction," said Scott Witt, Washington State Department of Transportation freight multimodal program and policy manager. "We hope to consider their response and we're looking at some options at this point. At this point, I think we're starting to move forward a little bit, so I was encouraged by their response."
Witt said he thought Watco's willingness to consider some things will result in a shared feeling of willingness all around, and gave the negotiations a "little better tone." Prior to the response, Witt said they had been "fairly stressed," but he had hopes that the state and Watco were getting closer to an understanding.
The state Legislature agreed in 2003 to buy and renovate the sections of the PCC Railroad from Watco Companies, Inc.
In November 2004, the state paid $6.5 million to buy the P&L branch and the PV Hooper branch.
But the state failed to purchase the CW branch. Watco and the WSDOT had a verbal agreement on the sale of the branch, but no signed agreement. Watco closed the line down in November 2005.