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Port of Whitman County Seeks Grant for Rail Work by William L. Spence Lewiston Tribune, November 28, 2011

COLFAX - The Port of Whitman County has applied for a $5.9 million federal infrastructure grant, hoping to leverage a $16 million private investment near Rosalia.

The grant would be used to rehabilitate a 29-mile section of the P&L shortline railroad between McCoy, just east of Rosalia, and the main Burlington Northern-Santa Fe line at Marshall.

Cooperative Agricultural Producers (Co-Ag), a regional grain co-op, wants to build a $16.4 million shuttle train loading facility at McCoy. The project should help its members get better prices for their grain and help maintain the economic viability of the entire P&L line.

Also called unit or efficiency trains, 110-car shuttle trains are the preferred method for shipping grain because they can be loaded faster and because railroad operators don't lose time handling and consolidating smaller numbers of cars into a single trainload. Because of these advantages they have a lower rate structure, meaning Co-Ag wouldn't pay as much to ship grain and its members could receive a slightly higher per-bushel price.

The port infrastructure grant would be used to replace 57,000 railroad ties and upgrade several bridges along the Marshall-McCoy section, enabling it to handle the heavy, 286,000-pound rail cars used in shuttle trains.

"Some of the steel rails (on the P&L line) were put down in 1906. It's really light weight. The fact that it's operating at all is amazing," said Laura Kingman, marketing and communications manager for the Washington Department of Transportation's freight rail office.

The state actually owns the P&L line, as well as two other shortline railways in eastern Washington. It contracts with private companies to operate them.

The state purchased the three lines in 2004 and 2007 for $17.1 million. The combined system includes almost 300 miles of rail in Whitman, Spokane, Grant and Lincoln counties and ships about 20 percent of Washington's entire wheat crop.

The previous owner deferred maintenance on the system for years before the state acquired it, in part because of insufficient revenue. A 2003 engineering survey indicated at least $31 million would be needed just to keep it operating at a basic level. The cost of upgrading all three branch lines to the 286,000-pound standard was estimated at $99 million.

Since then, the Legislature has appropriated about $10 million to pay for the most critical repairs.

Joe Poire, executive director of the Port of Whitman, said the port's primary interest in applying for the grant is to maintain rail as a viable transportation option for farmers and businesses in Whitman County. The port commissioners believe a "multi-modal" freight system, which includes rail, barge and highway trucking, is vital for the region because it helps increase competition and keeps overall costs down.

"That's at the pinnacle of our mission and priorities," Poire said. "We've been advocating for eight years now to get the state to purchase (this rail system) and keep it alive, rather than having it tore out."

The port talks with lawmakers every year about the need for infrastructure funding, he said, but that's a hard sell given the state's ongoing budget woes. Consequently, when an outside funding opportunity like this federal grant comes along, the port doesn't hesitate to apply - particularly when the application can be tied to a significant private investment.

Co-Ag's McCoy facility would include several new grain storage tanks, an office and 11,500 feet of new track laid in a tear-shaped configuration. The project could handle more than 16 million bushels per year, increasing the shipping volume along the P&L line from about 1,450 cars per year to 4,400 or more.

The grant application indicates the P&L - which runs from Marshall through Rosalia and Palouse to Pullman and on into Idaho - doesn't generate enough revenue right now to cover normal maintenance and upkeep costs.

If the Co-Ag facility is built, however, the increased volume "will bring revenues necessary for this line to become a self-sustaining asset for the state."

A cost-benefit analysis included with the grant application suggests the Co-Ag project would generate about $5.1 million in annual benefits, primarily through reduced transportation costs for farmers, and because there would be less road damage since the grain wouldn't have to be trucked down to barges on the Snake River.

A major assumption of the analysis, however, is the train loading facility won't be built if the grant application is denied - something Co-Ag General Manager Jackie Tee disputes.

"We would probably still proceed with it," she said. "I assume our rate structure would have to go up to pay for the (rail line) improvements, but the improvements have to be made. If we can't get the grant we would have to prioritize which bridges need improvements and schedule them in over time. With the grant we could do all the improvements in one project."

Tee said Co-Ag considered building the loading facility along the BNSF line, which would preclude the need to upgrade the P&L. But that would mean trucking 16 million bushels to a more distant facility, she said.

"There would be a huge cost to doing that," Tee said, whereas McCoy "is located right in the heart of the production area."

Poire said the port should hear sometime after January whether its grant application is successful. Co-Ag already has a conditional-use permit from Whitman County to build the train loading facility.

On the Net: The entire grant application and related materials can be found at www.portwhitman.com/tigergrant.php