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KDOT's Shortline Railroad Program on Track

September 13, 1999 (Release 99-192)
FOR IMMEDIATE RELEASE
News Contact: Marty Matthews, (785) 296-3585

KDOT's Shortline Railroad Program on Track

The Kansas Department of Transportation (KDOT) has another component of the Comprehensive Transportation Program up and running at full steam. The department's rail affairs section has approved $2.7 million in low-interest loans to six shortline railroads for six track rehabilitation projects.

The Comprehensive Transportation Program, approved by the 1999 Kansas Legislature, created the Rail Service Improvement Fund and authorized its funding at $3 million for eight years. This fund makes available to shortline railroads operating in Kansas low-interest loans (1 to 3 percent) to be used primarily for track rehabilitation projects. The loans are for a ten-year term and are available for up to 70 percent of project costs, with the railroad providing the remaining 30 percent.

"This loan program is good for everybody concerned. It not only benefits the shortline railroad operators, but many of the state's farmers who are the primary shippers on these lines," said E. Dean Carlson, Kansas Secretary of Transportation. "It pays off for everybody in the state in a different way as well. By making sure rail shipping is available, it reduces the need for further truck usage of our highway system and the ensuing wear and tear."

The loans do come with strings attached. The railroad operator must guarantee that it will not abandon the line for at least ten years and that it will maintain certain standards on the line during that time period.

The projects that received loans were chosen from 11 projects that were submitted by shortline railroads and cover a diverse area of the state. KDOT staff did a cost-benefit analysis of each request in determining which projects to approve. The operators given the loans and the amount of the loan are listed below.

South Kansas and Oklahoma Railroad $586,190.50
Kansas Southwestern Railyway (OmniTrax) $452,270.70
Central Kansas Railway (OmniTrax): $646,100.00
Nebraska Kansas Colorado RailNet $442,361.50
Kyle Railroad Company $386,002.40
Johnson County Industrial Railroad (Johnson Co. Airport) Commission) CCountyAirport)JOCOIndustriaCommission)
$210,000.00

Approximately $2.2 million in project requests could not be met this fiscal year. They will be considered for funding next year. Interest earned on the loans remains with the fund and will be used to make further loans. KDOT anticipates that the Rail Service Improvement Fund will become self-sustaining at the end of the eight-year funding period specified in the legislation.