Alain Ouellette, of the Northern Maine Development Commission, at the 2012 National Rural Transportation Conference.
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The “why”, “when” and the “how”…
Alain Ouellette, NMDC
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Thank you for this opportunity to share with you our story about what a couple of folks have coined “the Green Phoenix”. If you read the article on page 36 of a guide developed by the MDOT, Connecting the DOT’s”, and you see the photo that appears at the end of the article, you’ll have an idea of why it was called such. I first have to begin with a disclaimer. The fellow on our NMDC staff who coordinated most of the activities for this project is Denis Berube. As he once said, “This darn thing took nearly 2 years of my life but I am proud of what we were able to pull off…” Denis is now employed by a major forest land owner and is happy to be part of the success this effort has generated for the timber industry which is really where Denis’s heart was…and is. I must also recognize Dave Cole, the then Commissioner of the MDOT who at times would walk out of our mtgs shaking his head wondering how this would all work out. And finally I have to recognize Nate Moulton, head of Maine’s Rail Division of the MDOT. Without his commitment and perseverance this entire project could have easily failed at many important junctures.
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First a brief commercial about who we are…Northern Maine Development Commission (NMDC) is a membership organization comprised of participating communities and counties in the Aroostook Washington Economic Development District. ��We provide federal and state services at the regional and local levels. NMDC also provides management and support for Aroostook County Tourism (ACT), Aroostook Municipal Association (AMA), Aroostook Partnership for Progress (APP), Leaders Encouraging Aroostook Development (LEAD), Northern Maine Finance Corp. (NMFC), and the Aroostook/Washington County Local Workforce Investment Board to name a few.
•1995-2002: Iron Road Railways (Paper & Wood Products)•2003-2011: Montreal Maine & Atlantic
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On January 14, 2011 Maine bought 233 miles of RR and on June 14, 2011, the Maine Northern Railway was officially launched as the operator for the new state-owned rail. Maine Northern is one of three rail companies owned by Irving Transportation Services. But I’ getting ahead of myself a bit here so let’s move on for now…
Some Facts
• Abandonment process August 14th 2009
•233 official miles, up to ~280 including spurs
•80%-90% of the volume shipped is Forest products in various forms
•Note: County had already lost +160 miles between BAR & AVRR (ATV Trails)
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Materials shipped to and from our region are in large volumes of bulk commodities Forest Products include -Round Wood Logs -Finished Lumber -Paper -Pulp Chips -Engineered Wood Products Fuel & Propane Cooking Oil (Potato Processing) for our food processors and Agricultural Chemicals (Pesticides, Herbicides, Fertilizers) for our farming community
Affected businesses:
Fraser Paper (Twin Rivers)Fraser TimberIrving Woodlands LLCPortage Wood ProductsMcCain FoodsDead River OilMPGCavendish Agri-ServicesMaine Public ServiceHuber Engineered WoodsLew RiouxColumbia Forest ProductsLouisiana PacificTate & LyleDomtarOld Town Fuel & Fiber
PIICFRGLane ConstructionMoose River LumberMaine Woods Co,One SteelGardner Chip PlantSeven Islands
1726 jobs threatened in “The County”766 direct + 960 indirect
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Some of the names here should be familiar to some of you however the number at the bottom of my slide was the most telling threat. Using a nationally recognized economic modeling tool developed by a company called Vital Economy, we projected that the elimination of 1,726 jobs in Aroostook County would have translated into a loss of over $73,500,000 in annual direct earnings for the County , a $116,500,000 loss in our region’s GDP, resulting in a total combined loss of regional economic output of over $340,000,000. With a total workforce of only 78,000, that represented a massive impact for our region…and a call to arms…
Immediate Involvement by NMDCContacts initiated to assess shipper concerns
Fall-Winter 2009
• Meetings in DC
• State hires Railroad Industries Inc.
• Interviews between RII and shippers
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The Immediate Involvement by NMDC began with the identification of all the shippers in the region to form a private sector coalition in support of the restoration of rail. The response was extraordinary. In the fall and winter of 2009 we held meetings in Washington DC with Transp. Chair Oberstar, the Federal Railroad Administration, members of our congressional delegation, and select shippers. During that same period, the MDOT hired Railroad Industries Inc., to measure the business case & viability of the line. Once again, our responsibility was to conduct Interviews at NMDC between RII and the shippers
Winter/Spring 2010
-State bills worked on in Augusta
-MM&A
-Railroad Industries Inc Report released:
“…the line is viable, but it will need work…”
-the role of Maine’s Congressional Delegation…
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Throughout the winter of 2010 we worked with our legislative delegation on a number of critical legislative documents And it was at about that time that MM&A officially announced their intent to file for abandonment. On the heals of the announcement, the Railroad Industries Inc Report was also released: “…the Line is viable, but it will need work…” Senator Collins secured a meeting in Bangor, Maine between Federal Railroad Administration, USDOT & Shippers in Bangor. The Issues were clearly articulated by the Shippers, and as a result the FRA pledged their assistance to secure a future for our rail system -I should note it was Very rare that the Surface Transportation Board endorsed such a field hearing which was granted at the request of Senators Collins, Snowe, Congressman Michaud & shippers. These were truly the nail biting moments for a number of us…
Spring/Summer 2010
• MM&A officially files for the abandonment
• $18 million dollar bond to purchase the rails passes
•NMDC Shipper Meetings
•-10.5 million TIGER II application filed by MDOT
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NMDC hosted shipper meetings with MDOT to re-affirm level of support. There was a strong and resonating response once again and we believe this was a pivotal moment where the winds began to shift in our favor. Additional mtgs were held at NMDC to collect and codify the concerns of the shippers. In late summer, an $18 million dollar bond was approved to purchase the rails. $7 million in new bonding authority. $7 million came from a re-allocation of from previous projects scheduled for MM&A activity but were redirected, along with $4 million from the state’s rainy day fund As I mentioned, Governor Baldacci established an oversight Task Force made up of the congressional delegation, state highway and economic development Commissioners along with a number of private companies. -Throughout this time, NMDC’s role was to schedule and hold shipper’s meetings and maintain steady communications to the business community - We ended the summer with a filing of a $10.5 million TIGER II application which was submitted by MDOT on behalf of all the parties.
Summer-Fall-Winter 2010• STB hearing
•Negotiations …
•Deal reached for 20.1 million, 18 million bond, 1 million private + loan “clawback”
•STB abandonment is dropped
•Filing of $10.5 million TIGER II grant successful
-Deal signed January 2011 under new State administration
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As anticipated, the Surface Transportation Board hearing held in Presque Isle generated strong attendance by the affected parties. The STB was officially requested to rule on trackage rights on both ends still owned by MM&A which would grant a new operator access to the lines at both ends of the rail corridor. This was very controversial to the rail industry because frankly, to our knowledge this had never happened before. We entered into a very long stint of negotiations between MDOT and MM&A, during which requests for extensions were made and granted by STB. There were numerous close calls because the challenges and objections made by MM&A agreement generated a high degree of frustration…A purchase deal was reached for $20.1 million which represented the $18 million bond, a $1 million private commitment, along with a $1MM loan claw-back Having finally reached an agreement, the STB abandonment process was dropped. Had we not been successful, the only course of action would have been to sell off the steel as scrap metal…and did I mention the loss of over 1,700 jobs. A $10.5 million TIGER II grant was awarded and used to repair and rehabilitate the rail system.
2011 and to date…•Request for Proposals for Operator
•TIGER funds are obligated
•Respondents
Rail AmericaEastern Maine RailwaysPatriot RailMyles GroupPan Am
•Final selection was EMR
•Average speed from 15-35mph
•100 cpw to 300cpw…
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In late 2011 a Request for Proposals was advertized for a new operator and a selection committee was created While the TIGER (Transportation Investment Generating Economic Recovery) funds were obligated but for those among you who remember, federal cutbacks proposed at the time would have effectively cancelled the project. We were successful in the fact that the schedule as well as the commitment had by then already been made and so we were ensured the funding would be in place. Respondents were Rail America Eastern Maine Railways Patriot Rail Myles Group Pan Am Final selection was Eastern Maine Railway because * their plan that was offered was without a doubt the most comprehensive * their familiarity with the region, and * the company’s financial stability
“We are NOT going to lose this rail!”Ryan Bushey, Louisiana Pacific
“Engage our shippers and keep them involved throughout the process”
Robert Clark, Executive Director, NMDC
“Begin your background work early…”
Dave Cole, Commissioner MDOT
Don’t let the bastards get you down…”Nate Moulton, MDOT Rail Program
