Eastern Railroad Discussion > Iron Road and VT line sale.

Though nothing difinitive yet, several rumors circulating about Iron Road seeking to sell its Vermont line from Newport, VT south to Wells River, I'd also imagine the state lease to White River Jct. is included in this. My question is: given the lack of traffic on this line what might the realistic (not appraised) market value be? Iron Road might be willing to let it go at a deep discount. And to my knowlege--Fiber Optic cable has not been laid adjacent to the ROW, this might be worth more than the line itself.

FYI ET..there is no "Rumor"..this is fact. The entire Iron Road system is for sale..in pieces or as a whole intergrated system. The Wells River - WRJ section is property of the State of Vermont. As far as the value of it, it depends entirely on the operator and the potential viability of the line. It's viability greatly depends on who you talk to. I CAN tell you this. The State of Vermont values the entire corridor..Newport-WRJ, and views it as a viable operation. As a matter of fact, reliable sources (state of Vermont) indicate that the state may very well end up with the Newport-Wells River segment, and appoint an operator.In addition to this, it is interesting to note that the state was fully supportive of Iron Road's business plan to develop business on the line, beginning with the McCain traffic. Obviously, this is old news and new management at Iron Road has an entirely different agenda..primarily to make the operation appear as attractive as possible for potential buyers.Non french fry traffic to WRJ is growing (slowly)..lumber, citrus pulp, grain and other items. It will be very interesting to see how this pans out.

Assuming non-rumor issues are coorect, and indeed a sale is in the offing there is rail banking money available and generally I've found states pay fair market value for lines which they acquire. In this case, fair market value is probally more money than this line is worth. (Taxpayers lose). To the question of traffic, the French Fry express is now handed to Guilford at Northern Maine Junction apparantly, logistics has been cited as the reason Iron Road did not keep this train in service.

One area that could have been investigated towards the viability of the Iron Road Newport to WRJ line is/was an Intermodal terminal, similar to what was done on the St. Lawrence & Atlantic (SLR) at Auburn, Maine. To my knowlege the closest Intermodal terminal to the described line is on CSX at Springfield, Mass. Given the amt. of cross-border trucking that is done I-91 this might have been an anchor source of traffic for this line. And questions of viability and sale of the line might not have to be asked at this point.

Part of the "vision" and business plan of Iron Road included substantial container traffic which called Montreal, to move to a CSX connection around Palmer..or potentially Springfield, in addition to other substantial bridge traffic now moving via truck. These were containers now moving via truck. Why these things failed to develop in time is an interesting question. Prior to the WR-WRJ segment falling into state hands, Iron Road was searching for a large parcel of land in the Ryegate area. Then it was St. J. At the time, a facility similar to Lewiston was in the works. Obviously the heart of the operation (Maine) became priority.

With regard to the fries, yes logistics..and money. With the speeds on the WR-WRJ segment, coupled with a tough winter and the need to keep the trailers fueled and running, not to mention the need to flag all crossings south of Wells River, well it just cost too much to operate. The decision to re-route the service via Guilford was probably the best thing for the NVR, and a sound business decision.

"Fair Market Value" is what someone is actually willing to pay for it.
When RailTex was buying up shortlines in Eastern Canada, one of their representatives was quoted as saying, "We'll only pay scrap value for these lines". In other words, they would pay the seller the net ammount that could be realized by abandonning and scrapping the line. The advantage for the seller is that they may still get some traffic if someone else operates the shortline.

I'm sure that Class 1's selling lines evaluate potential buyers carefully, and don't just sell to the highest bidder. After all, they want the line haul for that traffic, they just don't want the headaches that go with dealing with customers.

When fair market value is calculated, I think values other than railroad transportation is considered. In this case, as has been previously reported there are certain parcels of real estate adjacent to the ROW, owned by the railroad that are considered valuable for development. Iron Road has made the statement that it will not sell these parcels as "they are tied up in numerous mortagages." (Their words not mine). And will be sold along with the rest of the rail property. This seems kind of strange because as recently as last year the Central Vermont railway (CV) finally sold the rest of its non-rail real estate holdings in Vermont from its line that it sold years ago to RailTex.