SURFACE TRANSPORTATION BOARD ORDERS SALE OF 111-MILE CENTRAL OREGON & PACIFIC RAIL LINE TO PORT OF COOS BAY, GRANTS RAIL-LINE ABANDONMENT WITH CONDITIONS

[STBNews@xxxxxxxxxxx]

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>From the Surface Transportation Board, Washington, D.C.
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The Surface Transportation Board announced today that it has ordered the
Central Oregon & Pacific Railroad Inc. (CORP) to sell a 111-mile railroad
line running from Danebo, OR to Cordes, OR ("the Line") to The Oregon
International Port of Coos Bay (the Port). 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 in Oregon International Port of Coos Bay—Feeder
 Line Application—Coos Bay Line of the Central Oregon & Pacific Railroad,
 Inc., STB Finance Docket No. 35160, the Board 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 Board 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 November 7, 2008, and the Board 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 Board granted this authority in a separate decision issued
 today in Central Oregon & Pacific Railroad, Inc.—Abandonment and
 Discontinuance of Service—in Coos, Douglas, and Lane Counties, OR, STB
 Docket No. AB-515 (Sub-No. 2).  The Board 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 proceeding in STB Finance Docket
 No. 35160 ends without a sale.  The Board 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 November 30, 2008.


 The Board issued its decisions in STB Finance Docket No. 35160(
 http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/39410?OpenDocument
 )
  and in [<a
 href="http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/39439?OpenDocument";>STB
 Docket No. AB-515 (Sub-No. 2)</a>] today, October 31, 2008.  Those
 decisions are available for viewing and downloading via the Board's Web
 site at http://www.stb.dot.gov, under "E-Library," then under "Decisions &
 Notices," beneath the date "10/31/08."


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