Railway VP: No sale is pending

Published 12:00 am Saturday, July 17, 2010

NATCHEZ — Those who have been workin’ on the railroad issue in Natchez can feel safe — for now.

Natchez Railway, LLC Vice President Michael Van Wagenen says there are no formal plans to scrap or sell the 66-mile railroad from Natchez to Brookhaven.

“We’re not at that point. We can’t say we guarantee we will operate for the next 25 years. It will certainly depend on success,” he said.

Van Wagenen said he is willing to receive help or ideas from local community leaders about operating the railroad and welcomes their support.

Natchez, Inc. Chairwoman Sue Stedman said she sent a letter to Van Wagenen on behalf of Natchez, Inc., to suggest opening communications between local people and himself regarding the future of the railroad.

“We see things happening that we don’t really understand. We want to be prepared. But we certainly want to work with Mr. Van Wagenen any way we can,” Stedman said.

Van Wagenen said he has not received the letter. He has been away from his Salt Lake City office for approximately a week and will return Monday.

Van Wagenen said business for Natchez Railway has not been profitable. In addition, repairs need to be made to the track, but he said the company will continue to operate in hopes business will improve.

Van Wagenen said if the railway remains unprofitable, the company would consider subsidizing it through local government or selling it if given a good offer.

Van Wagenen said if Natchez Railway ever decided to salvage the railroad for its parts, federal regulations prevent them from abandoning it without giving another buyer a chance to operate it.

“Railroad operators must file a petition to be able to abandon a railroad line. Part of that process would be giving notice that anybody can buy that railroad and continue operating it if they want to,” Van Wagenen said.

“Nobody has to be really concerned at this point because nobody can take (the track) up without (a federal) process,” he said.

If Natchez Railway files for petition to abandon the track, Stedman said local officials would do what they can to save it.

She said certain companies exist to operate railroads for hire. If Natchez, Inc. or another local government agency were to purchase the railroad in the future, they could hire a company with experience to operate the rail.

“I’m glad to hear (Natchez Railway) intends to continue to operate it. But if they are not, we want to try to make plans to secure the line and be able to operate it. We do not want to lose our railroad.”

Van Wagenen also addressed area businesses that depend on the railroad.

American Railcar Industries, Inc., a rail car service company in Bude employing approximately 100 people, is the railroad’s biggest client.

However, when Natchez Railway bought the rail, Van Wagenen issued a $500 tariff on all cars that are serviced at ARI.

In April, Natchez Railway raised the tariff to $700.

“It’s just about economics,” Van Wagenen said of the tariff.

Van Wagenen said the rail’s previous operator, Canadian National, did not charge ARI a tariff because the companies had an agreement with each other.

Van Wagenen said he hopes the introduction of new industries, such as Rentech, Inc., will turn profits.

Natchez Railway has two employees located in Natchez, three in Grenada, and three in Salt Lake City, which include Van Wagenen and two assistants.

Van Wagenen said daily operations are mostly run out of the office in Grenada. The office also operates Grenada Railway, LLC, which was purchased in the same manner as the Natchez rail last summer.

Van Wagenen said he has met with state and local community leaders to boost business. He said he has also met with shippers on the line about the possibility of moving any truck traffic to the railroad.

Port Director Anthony Hauer said there is simply not much demand for business on the railroad.

“I don’t know that efforts to increase activity is even legitimate in any capacity, if there’s nothing on there, there is not much you can do about it,” Hauer said.