The Washington State Department of Transportation (WSDOT) announced today that it is terminating an operating lease with Eastern Washington Gateway Railroad (EWG), the railroad company responsible for operating the CW Branch of the state-owned Palouse River and Coulee City (PCC) Rail System.
"The decision to terminate the lease was difficult. The EWG provided good service and excellent communication with the shippers," said Scott Witt, State Rail and Marine Director. "Unfortunately, the EWG encountered unexpected set-backs and costs, and has not been able to meet some of the maintenance and tie replacement requirements of the operating lease."
WSDOT, with help from the PCC Rail Authority, will develop a transition plan while a Request for Proposal process moves forward to secure a new operator.
The PCC rail system provides local rail service to grain shippers and other businesses, mostly in agricultural areas of Eastern Washington. 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.