Link to referenced article:
[www.theworldlink.com]

In case the link doesn't work, here's the text:

Collapsed railroad tunnel costly for local lumber operations

By Elise Hamner, City Editor
Wednesday, December 27, 2006 1:12 PM PST

If fall's slumping housing market weren't bad enough, three Coos County lumber mills have another barrier to business. There's no railroad service.

The Central Oregon & Pacific Railroad has been unable to reopen its short line heading south out of Florence to Coquille due to a collapsed tunnel. After four weeks of working to remove massive boulders, CORP told its customers last week it wouldn't be able to reopen the rail line by Dec. 22 as planned.

Now, the target date is Jan. 8.
Advertisement

The closure has forced the Coos Bay-area Southport Forest Products and Georgia-Pacific mills to move lumber exclusively by more expensive semi-trucks. Coquille's Roseburg Forest Products now is loading plywood onto semis, trucking it to Dillard, offloading and reloading onto railcars. That increases damage to the wood. Home Depot is its largest customer, and orders have slowed.

“We're losing money. We sell in carlot loads,” said Hank Snow, Roseburg's vice president of human resources.

Rail is the cheapest way to ship. A railcar holds the equivalent of 2.5 truckloads of plywood. So far, Snow said, his company hasn't curtailed operations for its 336 Coquille employees, but “it'll get there if we keep building inventory.”

The collapse

CORP's problems with the tunnel apparently started in November. The company had hired engineers to inspect the tunnel off Canary Road near Florence, said John Bullion, the railroad's assistant general manager. They recommended doing maintenance on the structure held up by rotting wooden timbers. CORP brought in a crew to work days and sent trains through at night. But then a 35- to 40-foot section of the tunnel collapsed.

The railroad pulled workers from California to help with repairs, keeping crews attacking in two shifts on the tunnel's south end. Another crew worked in from the north, drilling and grouting in bolts to stabilize the ground. Workers are shoring up the tunnel with steel arches, then digging out the 300 to 500 yards of muck.

“Unfortunately it's a slow process,” Bullion said.

And dangerous.

And while mills might be lamenting their losses, Bullion said money's flowing fast out of the railroad's accounts, too. Workers had completed two-thirds of the tunnel maintenance project prior to the cave in. He estimated that the current repairs alone will add another $1.1 million to the costs.

“We're spending money because we're not open and we're losing money because we're not moving freight,” he said.

Political pressure

While the tracks are privately owned, G-P at least has been ringing phones all the way up to the governor's office. On Friday, the company's Portland-based lobbyist also called up Rep. Arnie Roblan, D-Coos Bay, and suggested that if times get too tough, G-P's Coos Bay mill, which employs 140 people, may cut operations. Two-thirds of that company's lumber heads out on rail.

“Telling me that it's a possibility that they could shut down gets my attention,” Roblan said.

But, he said, there's nothing he can do to speed up repairs.

A G-P spokesman at company headquarters in Atlanta downplayed mill closure concerns.

“I think that's speculative,” James Malone said, but added later, “The longer this process goes on, the harder it is to run this operation.”

The Coos Bay mill is a topnotch facility, he said, and it needs to be operating efficiently; hence the phone calls to public officials.

A lot of people in Oregon probably assume railroads fall under some state jurisdiction, since they are part of the statewide transportation system. The state does have oversight when it comes to ensuring railroads, trestles and tunnels are safe, said Kelly Taylor, the administrator of the Oregon Rail Division. But she doesn't tell private companies how to do their work.

“There aren't state funds - or federal funds for that matter - to help a railroad like this when they get in a pinch,” she said.

There are funds for airports and other transportation modes, but not rail.

Oregon actually has a state statute in place to do that, with the State Railroad Rehabilitation Fund.

“Nobody's ever put a dime into it,” she said of the Legislature.

Big bucks

This year's been a tough one stormwise for the state's beleaguered shortlines. The Mount Hood line, with companies specializing in passenger train services, is closed. Part of the mountain slid away.

“The tracks and ties are hanging there like some jungle bridge,” Taylor said.

Shortlines struggle to come up with the money for such massive repairs. CORP spent $18 million to repair an arson-damaged tunnel on its busy line through Ashland. Insurance only covered $10 million of the bill, Taylor said.

For the Coos Bay line, the three mills are the biggest customers, but American Bridge at Reedsport and some other small companies rely on rail, too. Leading up to the tunnel cave-in, CORP was moving an average of 78 railcars per week, almost entirely lumber, along with bridge materials and propane. For American Bridge, 95 percent of its materials come in by rail, and the week of Jan. 8, it's due to ship out 19-plus-foot-tall bascule girders to Wisconsin.

Economic engine?

When the Legislature convenes in January, lawmakers likely are going to hear from railroads. Roseburg's Snow, for one, thinks the Coos Bay line deserves a lot more attention.

“I think you're going to be the next large port on the West Coast.”

There was good news out this morning, with the U.S. government reporting the “serious slump in housing” could be ending. New home sales rose in November, and there were fewer homes on the market, according to The Associated Press.

Snow's company may see that upturn, but that won't solve the long-term problems with the viability of the Coos Bay rail line.

“Somehow someone's going to have to step up and take responsibility for the repairs on that railroad,” he said.