RailAmerica to "Dispose" of E&N Railway

E

ENR3870

New Member
Apr 1, 2003
74
0
6
41
Sooke, BC, Canada
www.geocities.com
RailAmerica has annouced they are shutting down the Esquimalt and Nanaimo Railway in early 2005 due to continued loss of freight traffic. The E&N has been experiencing a decline in freight traffic since they lost the Port Alberni Pulp Mill in late 2001. This does not mean that the E&N will be abandoned, as RailAmerica may be able to find a buyer for the E&N.

RailAmerica to Take Impairment Charge in the Third Quarter


BOCA RATON, Fla.--(BUSINESS WIRE)--Sept. 30, 2004--RailAmerica, Inc. (NYSE:RRA), announced today that it will take a pre-tax non-cash charge of approximately $12 million to $13 million, ($7 million to $9 million after-tax) in the third quarter of 2004 due to its decision to dispose of its E&N Railway in British Columbia, Canada.

RailAmerica purchased the 181 mile E&N Railway in 1999 from Canadian Pacific for $11 million. The Company is currently reviewing several alternatives for disposing of the railroad.

"We continually review the performance and capital needs of each of our 46 railroads," said Charles Swinburn, Chief Executive Officer of RailAmerica. "The E&N Railway has been experiencing declining carloads over the past two years and is no longer viable. We are evaluating our options for dealing with the property, and expect to dispose of it during the first half of 2005."


2004061820444219412.jpg
 
I think Norske would ship with RailAmerica again if CP was gone. CP forces RailAmerica to interchange with them at Vancouver, after cars are interchanged with CP, they are left in Coquitlam for weeks on end. With CP out of the picture, RailAmerica could rebuild the spur into Norske's Crofton Mill, and not only end up with two pulp mills as customers, but they'd have a direct barge connection to BNSF in the USA which is the reason Norske Canada has stopped shipping with the E&N. Norske doesn't want its product sitting in Coquitlam for weeks.

If the E&N could interchange with BNSF it would save three or four days, making the railroad more appealing than truck. Product for the Port Alberni Mill is still brought over to Vancouver Island by rail, to the Crofton Mill where it's unloaded to truck, the trucks take it to Port Alberni and back to Crofton where the product is loaded back onto railcars.
 
Matthyro said:
Sounds like a lot of political wrangling going on. To bad it's the railroad and it's employees that suffer. Hope it gets resolved soon.
Click to expand...


Not to mention the taxpayers who have to pay for all those trucks using the road. And yes, truckers do pay taxes on the highways but not nearly as much as the railroad pays for its infrastructure.
 
You must log in or register to reply here.
Top Bottom