After the council voted to table the Kellar Branch resolution at tonight’s meeting, I talked to Mike Carr, President of Pioneer Railcorp. I found out that Central Illinois Railroad (CIRY) has been unresponsive to Pioneer’s numerous attempts to contact them and work out an operating arrangement.
In its recent decision to let Pioneer back on the Kellar Branch, the Surface Transportation Board directed the two rail carriers “to negotiate joint operating protocols.” In other words, work together in operating the line.
Carr told me that CIRY’s lawyer said they won’t let Pioneer on the line until Pioneer has an operating contract with the city. The funny thing is, CIRY doesn’t have an agreement with the city either. So that’s a rather hypocritical stance to take. And Pioneer has long argued that their operating agreement with Peoria is still in force, although the city maintains that it expired on its own terms in 2004.
However, there’s nothing that says Pioneer has to get CIRY’s permission to service the line; the STB’s decision gives Pioneer immediate access. Since CIRY isn’t servicing anyone to the north anyway, perhaps “negotiat[ing] joint protocols” is unnecessary.
Should have edited…
The problem with having two railroads authorized to operate on the Kellar Branch is that conflict could arise where both railroads interchange with the Tazewell & Peoria RR (between Caroline and Spring Streets).
When Pioneer operated the line, they delivered cars to customers within 24 hours of receiving them, save for an intervening weekend. CIRY pretty much operates the south end on Tuesday and Thursday.
CIRY’s cars for O’Brien Steel may be parked for days, and will probably be blocking any cars bound for Carver Lumber (which, theoretically, Pioneer would serve if and when they resume operations) that may arrive a day or two later.
There should be just one railroad operating this unsignaled, low traffic density branchline – Pioneer.
C. J., please delete my first comment, if it’s not inconvenient.
I was looking at the congested area at the lower end of the Kellar yesterday and trying to figure out how it would work with two railroads. It would be particularly crowded and unworkable if PIRY was to receive a long string of storage cars and CIRY wasn’t there to clear O’brien cars out of the way.
David:
Got to love your approach…..keep pimping for Pioneer 🙂
I say we should auction the rights to operate on the “low traffic density” rail line and see how much it is worth to both parties. They’ve been dying for years to provide service over it so obviously they feel there is money to be made here……let’s see what the City’s cut will be.
Peo Proud, caught your typo,
And yes, I’m pumping for Pioneer 🙂
Peo Proud: Didn’t Pioneer already make an offer? I don’t recall seeing CIRY make any counter-offer. Would an auction result in a higher or lower price than Pioneer’s offer? And what is it worth that Pioneer would get the trail done? Would CIRY be willing to do that too?
David: Funny, no typo though.
Karie: Yes they made one. And I think an auction or bidding process will give us a better offer. A condition of it could be that the selected firm must cooperate/partially fund the development of the rail.
I’ll believe their offer (and any offer made by any firm) when it is in writing and a legal document. Till then they are just blowing their horn.
PEO PROUD: “A condition of it could be that the selected firm must cooperate/partially fund the development of the RAIL.”
I think that’s what Pioneer had planned all along…plus help out with the TRAIL. 🙂
Or is that just another typo, PEO PROUD?
Let’s see what the attitude of the railroaders is when they are made to pay the city a hefty fee for using the rails. That is coming shortly with the approval of the Federal people. Then we will see who is serious and who is playing games.
You could just as easily say “Let’s see what the attitude of the trail users is if they have to pay a hefty fee to use the trail” Good thing the park district can provide it for “free”….
Why is it that everyone is so worried about the railroad paying hefty fees to the city to use the rail when they don’t ask the same from trucks that use the streets that we pay for? Also, since the city as owner of the rail is responsible for the crossings, who is going to take care of that and what would it cost? I say trade off the maintenance of the crossings for use of the rail. No money exchanged and no one is shortchanged. As for bidding on the rail, STB has made its ruling and that stands at that. The only change will be if one of the parties decides to drop out. And if memory serves me Pioneer did put in writing their offer of $750,000 for the line, and still offered to assist with building the trail. No such offer has come verbally or in writing from CIRY.
Peo Proud, the city is allowed to collect a fee for use of the tracks, and I don’t have a problem with that as long as it’s reasonable and doesn’t lead to another drawn-out STB battle to set the rate. If the city tries to set a high rate in hopes of making rail service unprofitable, that tack won’t work because the rate will just get appealed to the STB, the city would lose, and the taxpayers would just be stuck with more lawyer bills for nothing.
I think it would be better for all parties if they would just work together directly to come to an equitable arrangement.
To add to C. J.’s comments, the City of Peoria has no problem “subsidizing” the western branch. They offered to lease it to Central Illinois Railroad for $1 a year vs. $200,000 for the Kellar Branch.
The city of Peoria, not the railroad(s), is to blame as to why an agreement has not been reached.
David:
Yes — that second one was a typo. What I get for leaving messages at odd hours.
CJ: I don’t think the fee should be based at a level to make rail unprofitable. However, it should be at a level to cover costs associated with maintenance and a reasonable return on investment.
I just want to see if Pioneer (or CIRY for that matter) are willing to put up the money to back up their words. Or — perhaps there is a third firm out there that may have an interest. For all the moaning about government subsidies to private firms, rail supporters are willing to carve out that industry for support to the exclusion of other industries.
I’m really fine with the decision that was reached(though I would have preferred to see a dedicated trail since I don’t believe that the particular segment of rail under discussion is critical to our future economic development opportunities or to the health of a particular firm) and feel that a reasonable co-use plan can be developed. I think both sides engaged in a lot of hot air and rhetoric and that neither sides position will prove to be 100% accurate.
Peo Proud,
Pioneer Railcorp performed all track and crossing maintenance out of their own pocket when they ran the Kellar Branch (February 1998 to August 2005). They say it was a profitable operation, which means that despite taking on all of those costs, the railroad managed to do what predecessor Peoria & Pekin Union did not.
Pioneer is serious about their offer, and they first approached the city about buying it in 1986.
If the City cared about money, they would sell the line to Pioneer. This “fee” stuff is all about retaliation and running up exorbitant costs to the railroads, and yes, it’s all
subject to STB oversight. When will the City figure out it doesn’t regulate railroads. The federal government does?
Finally, any fee for rail users definitely should be matched by a fee for trail users. Since the trail is going to have so many thousands of users, it should be a big money-maker for the City.
But the difference Mr. Mouse is that the rail is in essence a “private” good and the trail is a “public” good. Very basic concepts of economics and they are typically financed and treated much differently.
Trail users are paying for the rail indirectly through their taxes. Rail users are not paying taxes to support the rail – but the public is.
I have no problem with the City selling the rail – but let’s not just hand it off to Pioneer. Do it competitively – let’s see how well the market works.
Does the city have the right to sell the improvements to the land *(which I hope they own)to individuals? If they do I will buy a couple of rails and ties for my garden project.
How do you figure that the public is paying taxes for the rail? The freight rails get no subsidies and they do pay taxes that subsidize other entities and some of that is trail grants and park district taxes. Show me where the taxpayer is paying for freight rail.
Peo Proud,
Let’s cease with the generalities. Name a specific “subsidy” being provided by the City of Peoria to railroads operating on the Kellar Branch since purchase in 1984.
I can promise we’ll shoot it full of holes.
Last item before we hear about the subsidy. The City of Peoria received a State/Federal Grant to purchase the Kellar Branch AND the Railroad property along the Riverfront that was subject to the bankrupcy back in the early 80’s. No local tax dollars were part of the purchase………….. let the subsidy discussion begin.
I’m sure a lot of people would dispute that the trail is a “public” good (I would suggest it’s a public liability), or that rail is a “private” one (according to law, transportation is a public service, the private airlines get all kinds of subsidies), but the “auction” would potentially interject another entity into this issue. Isn’t two railroads enough? Or did you forget that the auction “winner” would have to get authority from the STB, and that action would not ipso facto, effect the authority of CIRY or PIRY? So then there could be 3 railroads operating on the line. Who would that benefit?? When are the anti-rail people going to allow reality to intrude on their demands?
Transportation maybe public service but freight hauling is not. Same as semi-tractor trailers is not public service but private entities.
Despite CJ’s blog being WELL known for trail discussion, the trailheads don’t show their “faces” here.
COWARDS!
Jail time.
Railroads, and motor carriers have common carrier obligations, so they do perform a public service, however, since both were deregulated in 1980, they can charge what they want for that service. Most freight moves under confidential contracts, anyway.
Railroads, with miniscule exception, pay hefty taxes to Uncle Sam, yet do not receive subsidies. Motor carriers, in contrast, pay taxes but use federally-funded highways to handle freight tendered to them – a clear subsidy.
If motor carriers had to build their own highways, they would not exist.
It’s ironic isn’t it? Truckers get indirect federal subsidies, yet shippers pay more for using that form of transportation, than unsubsidized railroads! (NOTE: use of railroads vs. motor carriers factors more than cost in many cases).
Despite the disparity, railroads survived the dark days of the 1960’s and 1970’s due to their inherent efficiency.
My only quibble with your comparison David is that Rairoads cannot charge whatever they want. If the shipper believes the rate is “unreasonable” it can file a complaint with the STB, and the STB has the power to reduce the rate, as it recently did with “fuel surcharges”. Railroads are still a regulated industry, the regulation is just not as smothering as it once was.
Mouse, this is true and most railroads charge what the traffic will bear. By line, product, area and several other considerations. They usually aren’t stupid enough to price themselves out of the market, that doesn’t benefit them in the least. And main line rails are different than short line rails in freight rates. This is why the Kellar Branch to the river is cheaper than UP on the Western Connection.
The latest issue of TRAINS (January 2008) states that no shipper has ever been successful at trying to get rate relief. (Are fuel surcharges under a different formula?).