Passenger Trains > SMART poised to take over North Bay freight operations

SMART poised to take control of North Bay freight hauling, expanding beyond passenger service
KEVIN FIXLER
THE PRESS DEMOCRAT
 May 19, 2020 

A multimillion-dollar deal is in place to have SMART take over North Bay freight rail by buying out the region’s lone hauler, a move that would hand SMART unified control of the local track system and make it one of a small group of agencies nationwide that controls both passenger and commercial shipping service.


 Under the proposed deal, Northwestern Pacific Railroad Co. would sell its track rights and equipment for $4 million, and the state would kick in almost $4 million more to repay debt owed to the company by a financially troubled state agency that oversees North Coast commercial rail operations.

 Funding for SMART’s purchase would come from a 2018 bill authored by state Sen. Mike McGuire, D-Healdsburg. The law spurred negotiations for the takeover while also initiating the dissolution of the North Coast Railroad Authority, the Ukiah-based freight rail overseer that has racked up as much as $12 million in debt over its 31-year existence.


 If approved by the Sonoma-Marin Area Rail Transit board Wednesday and authorized by Gov. Gavin Newsom by the June 1 deadline, the deal would make SMART one of the small number of U.S. passenger systems — perhaps fewer than two dozen — that also own or operate freight service. It would also unify ownership of the rail line from Larkspur to north of Cloverdale under SMART, which controls all but the northernmost 21 miles, from downtown Healdsburg to the county line.


 “It’s a major policy decision,” said Farhad Mansourian, SMART’s general manager. “It’s a milestone for SMART to make, which will give us additional responsibility, but will also provide an additional opportunity. And it provides for full control of our right of way and our destiny becomes entirely on our own board.”


 The proposed expansion into freight rail comes at an especially precarious financial time for SMART, which lost its bid in March for early renewal of its quarter-cent sales tax and is now seeking ways to slash at least $6 million, or about 15%, from its annual budget. Cuts in passenger service appear likely even as SMART braces for other short- and long-term hits to its revenue, with a precipitous drop in fare box receipts amid the pandemic shutdown — ridership is down 90% — and a projected 20% decline through June in sales tax returns that cover most operational costs.


 The SMART board endorsed McGuire’s 2018 bill, and since its approval board members at meetings have discussed off-hand the expansion into freight, but the matter has only been brought up for a full, agendized discussion behind closed doors.


  The move comes with a host of unanswered questions that raise the prospect for SMART of renewed scrutiny given its struggles to build out the 70-mile line promised to voters in 2008 and sustain passenger service that began in August 2017.


 “The agency hasn’t indicated a great deal of competence over a passenger rail system,” said Mike Arnold, a Novato economist and frequent SMART critic who helped organize opposition to the recent sales tax measure. “This whole freight thing could unwind on them and really hurt them, because it will come at the cost of passenger service if it does. If they don’t perform due diligence, then they’re not doing their job.”


 SMART officials say expanding into freight rail could diversify the agency’s business and boost revenues with a separate income stream tied to shipping bulk goods. If the deal is approved, NWP Co. would maintain freight operations in the interim while SMART plots a course for commercial hauling. The agency would hire a consultant to help decide whether to operate freight service on its own or outsource it through a lease agreement.


Full story:
https://www.pressdemocrat.com/news/10965450-181/smart-poised-to-take-control



Edited 1 time(s). Last edit at 05/20/20 16:26 by GenePoon.

up till now, seems SMART has been anti-freight service, wanting  to rip out sidings, rather than promote freight service.   And I see there's a "proclaimed expert" (nut), who is screaming that freight service hurts passenger service, which is crap.

Otoh..there seems to be some talk here of having freight as another revenue stream.  That would be good, if they hire someone who knows what they are doing in the freight dept...

IMHO

pdt Wrote:
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> IMHO

Not only your opinion...mine is similar.

It probably represents the end of 150 years of freight railroading in the area.

SMART management, being oriented toward taxation and subsidy as a means of finance, has shown a lack of comprehension of, and even hostility toward, the freight railroad business...indeed, at times, of the entire concept of making a profit by generating revenue in excess of the cost of providing the service.

The ownership of Northwestern Pacific Railroad Co., could be viewing the $4 million offer as a windfall.  The operation has been marginal for a long time, partially because SMART has refused to allow access to shippers and consignees, cutting off spurs, industrial leads and team tracks that NWP could have used to help attract business.


 

With the current state of the State Budget I wouldn't bet on getting 4 cents from the state right now.
And if the SMART board has half a brain they shouldn't expect any money from the state for the next couple of years at best.

Who is the owner of the line between Ignacio Junction and Napa Junction?

DFWJIM Wrote:
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> Who is the owner of the line between Ignacio
> Junction and Napa Junction?
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Union Pacific sold the NWP and the Napa Jct.-Schellville portion of the former SP Schellville Branch to North Coast Railroad Authority; and when SMART was founded, it became SMART property.

The article states that there are probably fewer than two dozen instances of a passenger carrier also being responsible for freight service. I'm trying to think of more than one - that example being the Long Island Rail Road, which contracts with New York & Atlantic to provide freight service to shippers on LIRR lines. In all other cases, freight service is operated by freight companies exercising trackage rights that are legacies from prior common-carrier ownership of the tracks.