Archive for Saturday, May 30, 2009

Port authority transfers Kansas rail ownership

May 30, 2009


— A regional coalition that formed 25 years ago to save railroad service across 14 counties in northern Kansas is preparing to transfer ownership of more than 400 miles of short-line track to a Florida company that has been operating the railroad.

The Mid-States Port Authority was formed in the early 1980s to keep the rail service from folding after the Rock Island Railroad went bankrupt. Mid-States paid $19 million for the tracks — $1 million in private funds and $18 million from a loan obtained from the Federal Railroad Administration — on April 30, 1984.

On the same day, Mid-States entered into a lease-to-purchase agreement with Kyle Railroad, which is owned by Florida-based RailAmerica, to operate the tracks.

Under that deal, Kyle had the option to buy the rail line for a nominal sum on June 1, 2009, which is Monday.

“It was probably the greatest economic endeavor in the state of Kansas in the 1980s,” said Goodland resident John Golden, who has been chairman of Mid-States since 1987 and one of the authority’s founding members.

The railroad is important to both shippers and local governments in the northern part of the state. According to Kyle Railroad’s Web site, in 2007 the service moved more than 21,000 cars loaded with wheat, soybeans, milo, alcohols and asphalt along its 600 miles of track from north-central Kansas to eastern Colorado.

Kyle general manager Todd Bjornstad said the transition in ownership is expected to go smoothly because the amount of time Kyle, now with headquarters in Phillipsburg, has been operating Mid-States’ tracks.


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