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Infrastructure Improvements to Continue on Kyle Railroad
12/17/2008 1:00:00 AM
As the nation’s economic woes deepen, the railroad reaffirms its commitment to enhancing rail freight services in Kansas
PHILLIPSBURG, Kan. (Dec. 18, 2008) – As the nation’s economy continues its downward spiral, more and more companies are projecting decreases in capital spending next year. However, a Kansas business that is vital to the region’s economy is bucking the trend, with plans to continue its capital investments despite the economic downturn. The Kyle Railroad, headquartered in Phillipsburg, Kan., has routinely invested more than $2 million per year in infrastructure improvements and maintains that it will continue its maintenance and enhancement projects to preserve the health of the railroad long-term.
“Short lines must invest heavily in repairing and maintaining track, even during difficult economic times,” said Todd Bjornstad, the Kyle’s general manager. “To ensure the health of the Kyle long-term, we must continue to improve its infrastructure and physical plant (the ties and track). Short-line railroads are vital to Kansas, especially to farmers and grain elevators in small towns that depend on short lines to move grain to market.”
The Kyle Railroad is a short-line railroad that runs from north-central Kansas into eastern Colorado over 510 miles of track. The railroad offers interchanges with two Class I carriers – Burlington Northern Santa Fe (BNSF) and Union Pacific (UP). Approximately 90 percent of Kyle’s annual shipments support agricultural product moves. In 2007, the Kyle moved more than 21,000 cars over its tracks. RailAmerica, Inc., one of the nation’s leading short-line and regional railroad operators, owns the Kyle.
In November, federal lawmakers extended a tax credit to encourage rural railroads to invest in track improvements. The legislation provides a 50-cent on the dollar tax credit through December 2009 when railroad infrastructure investments are made. Rep. Jerry Moran (R-KS), author of the tax credit bill, said the measure was important because short lines are a vital form of transportation in Kansas and rural America. While big railroads like BNSF and UP serve most of eastern Kansas, the rest of the state relies on short-line railroads.
“The tax credit is extremely valuable for short-line railroads, and Kansas rail customers benefit greatly as well,” said Bjornstad. “For shippers, rehabilitated and upgraded short-line track means lower costs, more flexible local service and a greatly expanded market reach for local products. Having rail transportation as a shipping alternative keeps transportation costs competitive.”
“The argument for investing in Kansas’s short-line railroads is strong,” Bjornstad continued. He cites a 2002 study by the Kansas Department of Transportation and Kansas State University, “Impact of Kansas Grain Transportation on Kansas Highway Damage Costs,” that estimated the short-line rail system saves the state of Kansas $49.5 million in pavement damage costs annually. Of those cost savings, 37 percent – or $18.3 million – was attributed to the Kyle Railroad.
“Short-line railroads are the driveways linking customers to the large Class I railroad superhighways, and take the equivalent of nearly 33 million truckloads off our nation’s crowded roadways,” said Bjornstad. “We’re committed to investing in the Kyle to ensure its health for many years to come.”
About The Kyle Railroad
The Kyle Railroad began in February 1982 over a former Rock Island Railroad line from Belleville, Kan., to Limon, Colo. The railroad currently operates 510 miles of track, including 337 miles under lease from the Mid States Port Authority and 173 miles under lease from UP. Major commodities moving on the Kyle include wheat, soybeans, milo maize, alcohols, siding asphalt and roofing granules. Last year the Kyle Railroad transported 13,000 carloads of Kansas grain.
About RailAmerica, Inc.
RailAmerica is a leading owner and operator of North American regional and short-line railroads. Headquartered in Jacksonville, Fla., the company operates 40 railroads in 27 states and three Canadian provinces, with more than 8,000 miles of track. For more information, visit www.railamerica.com.
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MEDIA CONTACT
Michelle King
michelle.king@railamerica.com
Office: 904.645.6200
Cell: 904.654.2772