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Colorado got taken in dealings with UP

Letter by Hugh K. Wilson

Transportation – January 1998 – Colorado Central Magazine

Colorado got taken in dealing with UP


Contrary to the article by John C. Dill, the state’s Director of Economic Development, in the Nov. 30 Denver Post, Colorado got almost nothing in terms of concessions from the Union Pacific from its merger with the Southern Pacific. In fact, Colorado is the only state that will lose a substantial portion of its rail lines to abandonment as a result of the UP-SP combination.

The 1,800 jobs that the Union Pacific committed to preserve would exist regardless of the agreement with the state. Most of these positions are train-operating personnel that are needed to run the remaining trains that operate on UP lines within Colorado. In reality, Colorado lost large number of jobs that were transferred to Omaha, Neb., the Union Pacific’s headquarters.

As for preserving competition, the state did nothing. Colorado could have filed against the UP/SP merger with the federal Surface Transportation Board, insisting on the preservation of rail competition in the Central Corridor.

In fact, the Montana Rail Link offered to buy the old Missouri Pacific rail line from Kansas City to Pueblo and the former Rio Grande System from Denver and Pueblo west to Salt Lake. From Salt Lake they sought trackage rights to the West Coast and to southern Montana to connect with their existing system.

If the Montana Rail Link proposal had been approved, it would have provided Colorado and the Central corridor with a viable competitor to the Union Pacific. Instead the state endorsed the merger, 350 miles of track will be lost to abandonment, and Colorado consumers will pay higher prices for goods due to the lack of rail competition.

The state agreement did not delay the abandonment of any of the rail lines. The Union Pacific could not have abandoned the Tennessee Pass line any sooner than it did as it was not able to shift train operations to southern Wyoming until late in 1997. The agreement with the State delayed nothing.

Further, by allowing the Union Pacific to determine whom a qualified buyer may be for the 350 miles of track slated for abandonment represents an absolute conflict of interest. The UP will not select any company that may attempt to piece together a rail network that would provide the Union Pacific with any type of competition in the Central Corridor.

While the preservation of abandon railed corridors is important, very few have ever been restored to operating rail lines. That is why it is essential that the threatened 350 miles of track be preserved as an operating rail line, not just as right-of-way.

What Colorado should demand from the Union Pacific is a donation to the state of the right-of-way, track, and structures of all 350 miles of railroad that are slated for abandonment. Then the state could lease these lines to private shoreline rail operators.

Nearby states such as Kansas, Oklahoma, and South Dakota own thousands of miles of rail lines that were once slated for abandonment. These states lease their lines to private short-line operators who provide rail transportation to communities that otherwise would have lost all service.

They also provide competition to the larger railroads. Requiring the UP to donate these lines intact (keeping the rails in place) would be a small price for the Union Pacific to pay for its near monopoly on rail traffic in Colorado. It would also be the first true concession to the state for its approval of the UP-SP merger. Otherwise Colorado’s agreement with the UP is essentially worthless.

Hugh K. Wilson, treasurer

Colorado Rail Passenger Association