From the NCRA's September 06 Strategic Plan:

Estimates of the revenues and the number of clientele that would use the line south
of Willits, as well as north when the entire line is open.

Response: The Operator’s assessment of the half dozen former rail shippers who
remain on the Russian River Division of the NWP Line is that they will produce some
1,800-2,000 carloads annually in a full year of normal operations, after those rail
customers’ confidence in the continuing service of NWP Co. has been restored. The
Operator projects that this volume of traffic would generate annual revenue in Year
2, the second full year of operations, of $1,134,000, and that a modest profit would
result.

It is the Operator’s experience that the start-up of a new rail carrier is both slow and
costly. Because re-starting operations on the NWP Line will be occurring for the
second time with the third operator in a decade, the Operator expects that volume
and revenues will increase slowly until NWP Co. gains credibility as an effective
Operator that will stay in business. For this reason, the Operator estimates that in the
first year of operations, NWP Co. will achieve a total carload volume of only about
one-half of the 1,800-2,000 potential carloads that will be realized in Year 2; that
volume of 900-1,000 carloads is projected to generate estimated revenue of only
$579,000 in Year 1, and would produce an operating loss for NWP Co.

It is the Operator’s opinion that the most likely near-term addition to the traffic base
of the Russian River Division is the movement of Sonoma County solid waste. The
Operator’s assessment of the Sonoma County Report on the volume and revenue
potential of that traffic is that its projections of about 4,056 carloads generating
revenue of $2,023,000 annually are reasonable. When that amount of additional
revenue is included with the traditional rail customers’ revenue, the Operator projects
total revenue of $3,157,000 in Year 3, and a profit that is large enough to assure the
financial viability of the Russian River Division from Windsor to Lombard.

So far as the Eel River Division’s traditional rail traffic base and revenues are
concerned, the extent and permanency of traffic erosion away from the NWP Line
during the decade that it has been closed is unknown to all parties. However, what is
known is that some important shippers on the NWP Line north of Willits are no longer
in business and that others have substituted truck or barge service for rail service or
concentrated their marketing efforts toward geographic areas that are not well suited
to rail transportation.

It is the Operator’s opinion that the best near-term prospect for additional traffic
located on the Eel River Division is the Island Mountain aggregate. As demonstrated
by its inclusion in NWP Co.’s management structure, Evergreen Natural Resources
(ENR) will be a full participant in NWP’s efforts to attract that traffic. At present, ENR
is actively involved in the permitting process for developing a prime-grade aggregate
quarry that would have a minimum production rate of six million tons per year,
although that rate would be substantially increased in order to provide aggregate for
the large highway and levee construction projects contemplated by the proposed
“Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006.”
Clearly, the movement of Island Mountain aggregate, which NWP Co. and ENR are
both committed to achieve, would generate a substantial annual traffic volume with
railroad revenues that the Operator has estimated would be at last $30 million per
year.

A second potential rail market located on the Eel River Division would be from the
development and use of the Port of Humboldt Bay’s capacity for handling both bulk
commodities and containers in order to provide relief to other, increasingly congested
California ports. Because of the large traffic volumes that would be generated by the Port,
the availability of continuing rail service over the entire NWP Line would be
required for the realization of the increased traffic volume and revenues. NCRA has
estimated that this increased traffic could be as much as $130 million per year, if the
NWP Line were rebuilt to Class 2/3 standards and is operating efficiently.

It is the Operator’s opinion that the realization of either or both of these traffic
opportunities on the Eel River Division would enable NWP Co. to operate the entire
NWP Line efficiently, profitably, reliably and safely thereby ensuring its long term
financial stability and viability.