GREENWICH, Conn. – Genesee & Wyoming Inc. (GWI) (NYSE: GWR) announced today that it has signed a 15-year agreement with The Burlington Northern and Santa Fe Railway Company (BNSF) to lease a 76-mile rail line between the cities of Salem and Eugene, Oregon. The rail line is contiguous with GWI’s Portland & Western railroad and increases the size of the Company’s Oregon Region to 523 miles.
GWI expects that the new rail line will add approximately 20,000 carloads of traffic per year, including paper, lumber and agricultural products. The line is also expected to enhance GWI’s Oregon operations through more efficient routing of existing traffic.
The agreement also provides for upgrading about 20 miles of the line south of Salem by 2006.
Planned upgrades include heavier rail that will allow GWI to increase speeds, reduce car cycle times and improve overall service levels to rail customers. BNSF will provide the rail for the project, and GWI will provide the other material. Other details of the lease agreement were not disclosed.
Mortimer B. Fuller, III, Chairman and CEO of GWI, commented, “We are pleased to be selected by BNSF to lease this property. The addition of the line is a good illustration of our strategy of building regional rail systems. We entered Oregon in 1993, and this transaction represents our fourth acquisition in the region. Our Oregon revenue base has now grown to approximately $28 million. In conjunction with our Class I partners, we look forward to further building our traffic in the Pacific Northwest.”
Pete Rickershauser, BNSF’s vice president, Network Development, stated that “Shortline operators can provide valuable and efficient service that supports our carload growth strategy. They feed us traffic through service offerings closely tailored to the needs of our shippers located on their lines. We have found the Portland & Western and other GWI properties to be innovative, nimble, and responsive service providers, and we look forward to working with them to maximize the value of this line to our customers and to BNSF. Combining GWI’s extended Oregon network with BNSF’s extensive route network should provide enhanced opportunity for superior rail service products which will bring freight back to the railroads.”
GWI is a leading operator of shortline and regional freight railroads in the United States, Canada, Mexico, Australia and Bolivia, and provides freight car switching and related services to industrial companies that have extensive railroad facilities within their complexes. The Company operates in five countries on three continents over more than 8,000 miles of owned and leased track. It also operates over an additional 3,000 miles under track access arrangements.
