Re: re: Siskiyou Line Economics
Author: SP5103
Date: 09-23-2008 - 09:35
Few people (including customers and most government agencies) understand how expensive it is to operate even a small railroad. Now doubt CORP will insist on a "fair value" lease even though they will benefit from moving traffic they walked away from. Timber Products was moving veneer off the YW to their plywood plant somewhere further up towards the middle of the line, and Roseburg was transferring logs between their mills. Skyrocketing diesel prices favor rail over trucks, but basing any business plan primarily on wood products in the western U.S. (especially in this market) is a problem.
Bottom line -
1. CORP and WT&L/YW have to reach a financially viable and reasonable agreement (or have one imposed by the STB)
2. There has to be enough traffic at a competitive price to pay the bills
3. Mother nature and the tunnels have to behave
Normally the state would be supporting something like this, but unfortunately California has no money, and Oregon has its hands full with the Coos Bay line, POTB and some other lines. There is a good chance that this will fall apart regardless, the line is worth more as scrap right now than any possible return on investment from future expected traffic.