The Washington State Department of Transportation (WSDOT) announced today that it successfully completed negotiations with the Eastern Washington Gateway Railroad (EWG), allowing the EWG to continue operating the CW Branch (Cheney to Coulee City) of the state-owned PCC Rail System.
The PCC rail system provides local rail service to grain shippers and other businesses, mostly in agricultural areas of Eastern Washington.
In December 2008, WSDOT became concerned about EWG's financial condition and issued a Notice of Termination of EWG's operating lease in early March. Despite the termination notice, WSDOT and EWG continued to discuss solutions.
WSDOT rescinded the Notice of Termination pursuant to the new agreement. However, the new agreement sets financial and operational benchmarks that EWG must meet in order to keep operating so that further difficulties can be avoided. The first set of benchmarks must be met by April 6, and others must be met on an ongoing basis throughout 2009.
"Everyone is hopeful that EWG will be able to continue to provide the excellent service it is known for, and also to meet its obligations," said WSDOT Rail and Marine Division Director Scott Witt. Witt also thanked the PCC Rail Authority and the shippers along the CW Branch for their support of the process that led to the agreement.
WSDOT began acquiring PCC Railroad assets in 2004 to provide an opportunity to create a viable railroad system able to serve Washington shippers. The state-owned rail line offers lower shipping costs; preserves jobs at rail-dependent industries; and minimizes the added wear and tear on state roadways caused each year by thousands of heavy truckloads.
WSDOT purchased the rights of way and rail in the P&L Branch and PV Hooper Branch of the PCC in November 2004. Purchase of the CW Branch (Cheney to Coulee City) and the remaining rights in the other two branches was completed in May 2007.
EWG was selected in May 2007 to operate the Branch through a competitive request for proposal process. Watco operates the PV Hooper Branch and the Washington & Idaho Railway operates the P&L Branch.
In spring 2008, The PCC Rail Authority was formed to assist WSDOT in administering the business and economic development portions of the operating lease entered into with EWG.
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