Iowa Pacific out as Texas State operator

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RUSK, Texas — The Western Group will take over operations at the Texas State Railroad, members of the Texas State Railroad Authority board of directors announced at their meeting on Wednesday.

Several weeks prior, the authority's board had announced its intention to part ways with Iowa Pacific, the Chicago-based company that has managed railroad operations on the property since 2012. The Board received several responses to its request for proposals. Of the companies that responded, the Western Group board members scored it highest. The Western Group is based in Ogden, Utah, and manages operations at the Verde Canyon railroad in Arizona.

“I’m just glad that the rail authority has the confidence in us to meet the challenge of making Texas’ designated railroad become America’s destination railroad,” David L. Durbano, president and CEO of the Western Group, said in a news release.

Western Group executives intend to continue the freight operations Iowa Pacific introduced on the property.

Authority Chairman Bob Goldsberry says board members also wanted to ensure that railroad's current staff members retain their positions after the transition. The Texas State Railroad made headlines in January, when Iowa Pacific abruptly laid off most of the workers without warning or explanation. The majority were hired back ahead of the season’s first train operating in March, but authority officials began seeking a different operator soon after. The Western Group locked in a first-place score in board members' rankings partly because Western Group managers intend to retain the railroad’s current employees.

Goldberry says that most of the equipment at the Texas State Railroad will remain on the grounds. Most of the rolling stock and motive power, including the two stations, and two operational and three in-storage steam locomotives, still belongs to the State of Texas. Iowa Pacific has already moved most of its equipment off of the grounds.

The Western Group and authority officials are working out a five-year operating contract. The Western Group has offered $150,000 towards the contract and then $50,000 a year beginning in 2018, as well as yet-to-be determined payments on loans taken out to repair the right-of-way. Iowa Pacific will continue to manage the property until their contract expires in the summer.

“We’re happy that the railroad is still operating,” Goldsberry says. “We had good companies submit requests, and it appears that we’ll be able to continue operating for a long time.”

NEWSWIRETrains News Wire

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