Natchez Railway, A&K are separate groups

Published 12:00 am Saturday, July 17, 2010

NATCHEZ — Natchez Railway, LLC Vice President Michael Van Wagenen wants Natchezians to know A&K Railroad Materials, Inc., the nation’s leading supplier of new and used railroad materials to short line railroads, “has no ownership, is not a parent company…(and) has no financial interest” in Natchez Railway.

But both companies involve a lot of the same people.

Van Wagenen said he is also general counsel of A&K and deals with other administrative details. According to the company’s Web site, he is also an A&K vice president.

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Van Wagenen said his office is based in an A&K office building in Salt Lake City.

Van Wagenen said Kern Schumacher, the chairman of A&K, purchased the Natchez railroad with personal accounts and created Natchez Railway with intentions to operate the railway.

Schumacher works out of Lake Tahoe, Nev.

A&K President Rhonda Nicoloff is also a small owner in Natchez Railway, Van Wagenen said.

He said The Democrat’s May 17 report that Natchez officials met with A&K officials to discuss the railroad’s future was false.

“It was an error on the part of the reporter. A&K was never involved. It’s similar people involved,” Van Wagenen said.

Van Wagenen said purchasing the railroad is one of Schumacher’s numerous business ventures separate from A&K.

“Sometimes we buy railroads for sale. (We) saw some potential and that’s why we bought it,” Van Wagenen said.

Van Wagenen is also the vice president of V&S Railway, LLC, which operates two short line railroads in Kansas and one in Colorado.

Van Wagenen said the railroads in Kansas are profitable, and the railroad in Colorado “is not doing a lot (of business).”

Van Wagenen said in a June 2009 news release, “First, let us put everyone at ease and dispel some misconceptions about Grenada Railway & Natchez Railway. These railroad companies are not subsidiaries of A&K Railroad Materials, Inc. … These railroad companies do share common ownership with A&K, but each are separate and independent business units. Our intent in purchasing these lines from Canadian National is not to abandon these lines and salvage the rail and other materials, but rather we plan to do the exact opposite. … We intend to turn each line into a profitable and healthy railroad for many years to come.”

Van Wagenen said when Natchez Railway bought the railroad from Canadian National last year, the contract included a clause saying the rail line must stay operational for a minimum of two years.

He said he thinks CN included the clause to ease the public’s concern about the possibility of A&K abandoning the rail and scrapping its parts.

Van Wagenen said CN officials petitioned to abandon the railroad five years ago, before Gov. Haley Barbour convinced them not to, which might have contributed to the precautions CN took in the contract.

However, Van Wagenen said the clause might have increased the public’s concern by giving the impression Natchez Railway planned to scrap the railroad after two years — which he said is not the case.