The latest goings-on regarding the Kellar Branch involves the cost to make the embattled rail line operational again. As reported in a previous post, the City contends that it would be too expensive now to make the Kellar Branch operable, originally claiming that it would cost over $2 million to make the necessary upgrades. Then, just a few days later, they claimed it would only cost $50,000.
Well, now they say, in a Surface Transportation Board (STB) filing on August 16, that what they really meant to say was $500,000, not $50,000. That was a typo — a typo it took them apparently 14 days (August 2-16) to discover. Oops! Then, in the very next breath, they say “On August 4, 2006, Central Railgroup Construction Services, LLC provided a more detailed estimate of the cost of that rehabilitation in the amount of $546,705.”
Ah, okay, let me see if I’ve got this straight now. It’s not $2 million, or $50,000, or $500,000. Those figures were all wrong. The real figure is $546,705. Okay, got it.
It seems the city can’t quite make up their minds how much it costs, frankly. There was no source given for the original estimate of $50,000 (or $500,000, if you believe it was a typo). Yet two days later, they received an exact quote for roughly the same amount. What a coincidence! And just where did that figure come from?
The last figure comes from a company called “Central Railgroup Construction Services, LLC.” According to the State of Illinois LLC file, that company was established on August 2, 2006, and lists the same address and agent as Central Illinois Railroad Holdings, LLC, which just acquired CIRY. On August 4, this brand new company was able, based on their two-days worth of experience, to estimate how much it would cost to rehabilitate the Kellar Branch. And, by jove, it’s right around $500,000, the new and improved, if unverified, estimate from the city.
Meanwhile, Pioneer Railcorp, which has been in business considerably longer than two days and has extensive experience actually running trains successfully over the Kellar Branch, has estimated it would only cost a little under $10,000 to rehab the line, and they’re willing to do that out of their own pocket.
Furthermore, the rail line was operable when Pioneer was forced off the line, and the contract between the City of Peoria and Central Illinois Railroad (CIRY), specifically stated (at 3.4):
DOT [parent company of CIRY] shall assume responsibility for all maintenance of tracks, crossing protection, and roadbed including weed, brush, snow and ice control thereon, all drainage control maintenance, and all weed and brush control on the remainder of the right-of-way, following the guidelines set forth by the Federal Railroad Administration (FRA).
That contract didn’t expire until 60 days after the ciy completed the western spur. The western spur was just completed in March of this year, meaning the contract expired in May. Thus, CIRY (through its shell company Central Railgroup Construction Services) essentially admits that they broke their contract to keep the line maintained.
We already knew that CIRY broke their contract to provide service over the Kellar Branch by never delivering one shipment successfully over the line. The only time they even attempted it, they were so inept that they lost control of the train and endangered the lives of Peoria citizens.
And the City, which promised Carver Lumber they would take legal action against CIRY if they broke their contract, never so much as filed a complaint against CIRY. Never. Now, their continuous unverified cost estimates to repair the Kellar Branch is just the latest in a series of obfuscations and fabrications by the city to dupe the STB into killing the Kellar Branch, regardless of the money lost, assets destroyed, or businesses ruined.
Call your council members and demand they stop wasting our money and sell the Kellar Branch to Pioneer Railcorp.
exaggerations, fabrications and outright lies. What a civics lesson for the City’s school children.
Do I smell official misconduct charges coming? Couldn’t get that lucky.
So, why can’t there be 2 lines serving the Pioneer Park area? The city should sell the Kellar branch for the current $500,000 offer and let it be both a rail line and a trail and keep the western spur as well. Let competition decide.
I agree. However, I can tell you that the western spur will not be profitable unless the shipper is using Union Pacific (UP). Right now, the only shipper on the line doesn’t use UP at all. So, in the short run, unless/until more businesses move into that area, the Kellar Branch is going to be the cheaper option for Carver Lumber. Even in the long run, the Kellar Branch still has all the advantages — it has neutral access to eight carriers, including UP. The western spur only has access to UP. So, I doubt CIRY could make a profit only operating the western spur.
Chris and others…
I think that it’s safe to say that Pioneer’s and CIRY’s figures are for two different things. Pioneer’s figure of about $10,000 is for the minimum that it would take to restore service to the line, which includes mainly brushcutting and some minor repairs to the track itself. The line is in poor condition but with trains restricted to 10mph, that doesn’t matter too much at this time (besides, without actually having been used for the past year, the track itself, save for some crossties, will not deteriorate much).
The City and CIRY have made the assumption in the past that an extensive rehab is necessary. That’s where the original $2 million figure came in. What was done to a stretch of the line north of Pioneer Parkway is probably what the city and CIRY had in mind (besides brushcutting) and they saw no reason to do so since the western spur had been placed into service, knowing how well that has worked 🙂
COMPETITION: “competition” in regards to Carver Lumber and potential customers located at Pioneer Park would be available not by allowing two separate operators – one using the Kellar Branch and one using the western spur. Since Union Pacific will not allow a shortline operator use of their mainline between Pioneer Jct. and Peoria, “competition” can only exist through use of the Kellar Branch because of the connection to the Tazewell & Peoria RR near Spring St. The TZPR is a traditional terminal and switching railroad and treats its eight connecting railroads equally; competition is available for rail shipments originating on or destined to those railroads.
No railroad is created equal and “competition” between any two of these eight railroads is less important than the fact that neutral connections with all eight exist via the Kellar Branch (thus, shippers on the Kellar Branch are not captive to one line-haul railroad). There are no, nor is there the potential for, captive rail shipments on the Branch itself and most rail movements tend to be at least several hundred miles in length, thus the advantage of having neutral connections to eight other railroads kicks in.
The railroad providing service to Pioneer Park customers should use the Kellar Branch instead of the western spur. The western spur could still be used to gain access to Growth Cell two and it is likely that the connection the city has already spent $2 million to build will soon become useless since Carver Lumber’s financial situation is precarious and will in time force the company to go out of business. The $2 million connection will pay off if the Kellar Branch is restored to service and new rail users are lured to Growth Cell Two.
New business that could be gained once the Kellar Branch’s future is assured (without which few if any businesses will invest in rail facilities or expansion) includes aggregates for an online ready mix concrete plant, newsprint for the Journal Star (don’t laugh), rail-to-truck and truck-to-rail transloading at Peoria Heights, furniture to Cohen’s Furniture, California wine for a local wine and spirits distributor (transloading will be necessary as this firm doesn’t have a rail siding) and perhaps a new owner of the Peoria Plastics building. Several potential rail users (warehouse, light industrial, agricultural, etc.) could find room in Growth Cell Two.
All of this is possible, and all the more likely if the Kellar Branch is leased long term or sold to a private operator.