Leaders discuss rail authority
Published 12:00 am Friday, October 22, 2010
NATCHEZ — Thirty-two higher-ups from governments and businesses with a stake in the railroad’s future met Thursday to solidify a mission to keep the Natchez line.
Attorney Walter Brown distributed copies of a joint resolution at the meeting, which Natchez, Inc. hosted at the Natchez Convention Center, to allow representatives from seven counties to sign to demonstrate their unity on the matter.
The resolutions declared support and commitment to “take such action in a unified manner to ensure the continued existence of a rail service between Natchez and Brookhaven.”
Brown said the purpose of signing the resolutions was to establish a symbolic objective, as well as to help gain federal grant funding in the event of forming a railroad authority.
The president and vice president of A&K Railroad Materials. Inc. created Natchez Railway, LLC, which bought the railroad fron Canadian National in 2008. A&K is the nation’s leading supplier of new and used railroad materials to short line railroads.
Natchez Railway Vice President Michael Van Wagenen, who is also an attorney and vice president of A&K, has said the company has no formal plans to scrap or sell the 66-mile railroad from Natchez to Brookhaven.
Van Wagenen said the purchasing contract for the railroad included a clause saying the rail line must stay operational for a minimum of two years, which expires next summer.
Van Wagenen has said he would not necessarily commit to operating the rail for 25 years, but the railroad’s future depends on its success.
Port Director Anthony Hauer, however, said Natchez Railway’s $3,000 rate for cars to pass between Brookhaven and Natchez does not demonstrate a competitive business model.
“That’s highway robbery,” Hauer said.
Michael Robbins, a railroad operator from Arkansas, attended the meeting in Natchez.
Robbins said the average rate for cars to use a railroad is $800, which can go up or down depending on several factors including whether the cars contain hazardous material. Robbins said $3,000 is a very high rate.
Robbins said he has been in contact with Natchez, Inc. members and is keeping his eye on the situation because he is interested in operating the railroad if local governments get together and buy it.
Robbins said he has also made himself available to Natchez, Inc. members as an information source on the workings of the railroad industry.
American Railcar Industries Inc., a rail car service company in Bude employing approximately 100 people, is the railroad’s biggest client.
When Natchez Railway bought the rail, however, Van Wagenen issued a $500 tariff on all cars that are serviced at ARI.
In April, Natchez Railway raised the tariff to $700.
ARI Plant Manager John Ward said he has attempted to contact Natchez Railway officials to discuss the potential profit to be gained from storage cars.
He said his plan could make as much as $1.3 million per year.
Ward said he has tried unsuccessfully to discuss his ideas for profitability with Natchez Railway representatives on six separate occasions in September and December of 2009 and April, May, June and August in 2010.
Thursday’s meeting was partially to establish a plan for possibly creating a railroad authority to purchase the rail in the event that Natchez Railway files a petition to abandon the track.
Brown said showing a determination to keep the rail in Natchez from both government leaders and private businesses was also a key component of the unification effort.
Demonstrating in writing a commitment from seven counties and businesses such as Rentech and ARI might also be helpful in attaining federal aid or grants to create an railroad authority, Brown said.
Natchez, Inc., chair Sue Stedman said Natchez, Inc. is monitoring the railroad commission’s website in order to have the opportunity to petition the railway’s abandonment before the time expires.
Government leaders from Adams, Lincoln, Franklin counties and Concordia Parish attended the meeting.