Owners on-board with railroad improvements
Railroad in Tulare County may be getting back on track.
Last month, the new owners of Exeter-based San Joaquin Valley Railroad met with shippers and receivers along the remaining lines from Strathmore north to Dinuba. Members of the Tulare County Association of Government’s Rail Advisory Committee were also to get their first impression of the Genesee & Wyoming, Inc. (GWI).
“I thought it went very well,” said Pam Kimball, TCAG’s representative for the City of Lindsay. “They want to try and build the business and increase carloads not abandon tracks.”
Tom Sparks, Chair of Rail Advisory Committee, said GWI’s purchase of RailAmerica, the previous ownership of the San Joaquin Valley Railroad, was approved by the Surface Transportation Board in December.
“They see an advantage in being located halfway between the commercial centers in San Francisco and Los Angeles,” Sparks said. “About 40% of the company’s interested in locating in the Valley have listed rail access as a requirement. With the air quality and the amount of trucks going up and down 99, rail is extremely viable in the Valley.”
Sparks said GWI painted a picture of optimism about making the 9-mile short-haul line profitable between Exeter and Dinuba. Sparks said the largest supplier of cattle feed on the line, Richard Best Transfer in Ivanhoe, is interested in adding carloads of cattle feed in the Central Valley by as much as 50%.
“He is a major part of the supply chain of getting feed to cattle in the Valley,” Sparks said.
Sparks said now that the railroad is interested in increasing business on the tracks, the next hurdle is upgrading the lines to get railroad up to speed in the Valley. Sparks said about 70 miles of track need improvements, including a 20-mile stretch from Ivanhoe to Dinuba which needs an estimated $2 million in upgrades. Sparks said most short-haul railroads would like to operate their trains up to 40 miles per hour between stops, but that section of track requires engines to go as slow as 5 mph.
“In some areas, someone has to get out of the engine and walk ahead to check the tracks,” Sparks said.
The good news is Tulare County already has the money. Last September, the Tulare County Board of Supervisors announced it had been approved for a $1.5 million Congestiona Mitigatio Air Quality grant to cover about two-thirds of the costs of the needed upgrades. The grant would replace 13,300 railroad ties and resurfacing of the rails with ballast along the 9 miles of track.
“That would be phase one of a five-step project to upgrade the lines,” Sparks said. “But it requires a public-private partnership with the railroad. GWI seems interested in possibly pursuing that.”
Sparks said the second phase of upgrades to the Exeter-Dinuba railway would be to upgrade the outdated 70-pound rail to the modern standard of 110-115-pound rail and repair trestles and culverts crossing creeks and wash out areas.
Genesee & Wyoming Inc. (GWI) announced in July it would acquire RailAmerica for $27.50 per share in cash. The U.S. Surface Transportation Board approved the sale on Dec. 20, 2012. GWI took control of RailAmerica’s railroad holdings. RailAmerica, Inc. owns and operates short line and regional freight railroads in North America, operating a portfolio of 45 individual railroads with approximately 7,500 miles of track in 28 U.S. states and three Canadian provinces. including the Exeter-based San Joaquin Valley Railroad which operates the short-line railway from Strathmore to Dinuba.
RailAmerica abandoned the east side railway from Strathmore south to the county line in 2008 and attempted to close the section from Exeter to Dinuba as well. SJVR’s eastern line reconnects with the western line in Exeter and then splits off to service Ivanhoe and Dinuba to the north and Visalia and Goshen to the west. The SJVR operates 417 miles of track in Southern California. SJVR interchanges with the Union Pacific Railroad at Fresno, Goshen Junction and Bakersfield and the Burlington Northern Santa Fe at Fresno and Bakersfield.
TCAG’s efforts to preserve the railway have failed, mostly due to RailAmerica’s lack of interest in investing in upgrades. The last deal between TCAG and RailAmerica fell through in October 2011, when the company reneged on a promise to cover a quarter of the cost to upgrade the railway.
Rail America attempted to abandon the 9-mile stretch of railway from Strathmore to Exeter in 2008 but was denied Surface Transportation Board (STB) citing SJVR’s own evidence that Tulare Frozen Food (TFF) in Lindsay had increased its traffic on the Line dramatically since 2005. In addition, TFF provided evidence that there would be a substantial increase in traffic once its new storage facility is completed. However, the high cost of continuing rail service through SJVR was a contributing factor that led to TFF’s closure in July 2011.
The only segment of track that SJVR has been successful in abandoning was a 30-mile segment from Strathmore to the Tulare-Kern county line, known as Jovista. SJVR discontinued service on the line on Sept. 15, 2008. The tracks have since been pulled out and sold for scrap.
Regardless of past plans of abandonment, GWI seems prime to revitalize the track or at least work with TCAG to upgrade the lines in an effort to operate them, according to statements regarding the acquisition of RailAmerica.
“RailAmerica didn’t want to put any money into the lines,” Sparks said. “They wanted to let them deteriorate and then sell them for scrap. GWI is really out there to get new business.”