STB: CORP Must Sell Line

WASHINGTON – The Surface Transportation Board has ordered the Central Oregon & Pacific Railroad Inc. (CORP) to sell a 111-mile railroad line running from Danebo, Ore., to Cordes, Ore., to The Oregon International Port of Coos Bay.

In a separate decision, the Board granted CORP authority to abandon a 94-mile segment of the Line in the event that a sale of the Line is not completed.

In reaching its decision, the STB found that the Line meets  the five “public convenience and necessity” criteria for a forced sale  under the “feeder line” provision of the agency’s statute enabling  shippers and communities to acquire rail lines where inadequate service is  alleged.  The STB also found that the Port is financially responsible as a governmental entity and thus eligible to purchase the Line.

The Board ordered CORP to sell the Line to the Port at a price to be determined by the agency after it reviews further filings from the Port  and CORP regarding the value of the Line’s steel.  Those filings are due by Nov. 7, and the STB said it expects to issue a decision promptly thereafter.

When a selling price is stipulated by the agency, the Port must decide whether to accept the terms of sale established by the Board’s decision.  Additionally, the Port, or its chosen operator, will be required to offer employment on a priority basis to qualified CORP employees who previously worked on the Line.

The western 94 miles of the Line are the subject of a CORP application for authority to abandon and discontinue service over that portion of the Line. The STB granted this authority in a separate decision. The STB approved the application based on a finding that CORP’s financial loss operating the western segment  warranted approval, but ordered that CORP must not abandon the western segment unless and until the feeder line ends without a sale.

The STB also conditioned its grant of authority by directing CORP to comply with employee-protective and various environmental conditions and to ensure that the abandonment will not create stranded segments of rail line.  CORP may, however, discontinue service over the segment, effective Nov. 30.