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Historic Railroad Transition to Occur June 1 - Critical Freight Transportation Services to Continue
5/20/2009 1:00:00 AM
PHILLIPSBURG, Kan. (May 21, 2009) – The Mid-States Port Authority (MSPA) will officially hand off the Kyle Railroad (KYLE) to KYLE and its parent company RailAmerica on June 1. The transfer of ownership has been more than 25 years in the making.
KYLE’s rail lines were once part of the larger Rock Island Railroad. When Rock Island shut down in the early 1970s, local residents and businesses feared that more than 400 miles of track would be abandoned and a critical service to farmers, businesses and communities in the region would be lost. To ensure the continued operation of the line, in 1984 fourteen Kansas, Nebraska and Colorado counties partnered to form the MSPA to acquire a portion of the bankrupt Rock Island Railroad. Local port authorities such as the MSPA were authorized by the 1969 Kansas Port Authorities Act, which was originally intended to enable cities and counties to take advantage of federal funding to improve local airport and water-port facilities. It was eventually amended to include railroad facilities.
On April 30, 1984, the Federal Railroad Administration (FRA) agreed to loan the MSPA $18 million to purchase the Rock Island Railroad line. That same day, MSPA and KYLE entered into a long-term lease-purchase agreement whereby KYLE would operate the line and pay monthly rental fees enabling the MSPA to pay off its debt to the FRA. KYLE was granted the option to purchase the railroad line for a nominal sum on June 1, 2009, the end of the 25-year agreement.
“The MSPA understood the importance of freight-rail transportation to the region’s economy,” said Todd Bjornstad, KYLE’s general manager. “They also understood the power of public-private partnerships to foster private enterprise for the benefit of the broader community. The MSPA’s visionary work will benefit local farmers, businesses and communities for generations to come.”
“The transition should be completely seamless,” continued Bjornstad. “We are heavily invested in this railroad and have every intention of continuing our maintenance and enhancement projects and sustaining the high level of customer service we’ve established throughout the years.”
KYLE and RailAmerica representatives will honor the MSPA at a dinner on June 17, celebrating the official hand-off of the rail line and recognizing the authority’s role in ensuring the long-term health of freight-rail transportation in the region. Representatives will pay a special tribute to MSPA founding members Dwain Compton, John Golden, Doyle Rahjes and Denis Sweat.
KYLE 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 – BNSF and Union Pacific. Agricultural products make up approximately 90 percent of KYLE’s annual shipments. In 2008, KYLE moved more than 20,000 cars over its tracks.
KYLE currently invests more than $2 million per year to maintain and improve the line’s infrastructure. The railroad employs 60 Kansas residents and serves 35 customers, including Scoular Grain, Tamko Building Products, Frontier Ag, Agmark, Northern Sun, Midway Coop and Prairie Horizon Agri-Energy. In addition to the railroad, RailAmerica operates one of the company’s five Transportation Logistics Centers (TLCs) at KYLE’s headquarters in Phillipsburg, Kan. The TLC administers customer service, operations support and revenue processes for nine RailAmerica railroads.
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 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 CONTACTS
Michelle King
michelle.king@railamerica.com
Office: 904.645.6200
Cell: 904.654.2772