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OmniTRAX Inc. April 2 agreed to sell 890-mile Central Kansas Railway (CKR) to Watco Companies Inc., a Pittsburg, Kan.-based transportation company that currently owns seven short lines operating in eight states.
Under the purchase agreement, subject to Surface Transportation Board approval, Watco would merge CKR’s operations with the company’s 286-mile South Kansas and Oklahoma Railroad Inc. (SKOL).
Watco officials earlier this year approached OmniTRAX about buying CKR; OmniTRAX previously had no intention of selling any of its short-line holdings, says OmniTRAX spokeswoman Genevieve Young. OmniTRAX, which has owned CKR since 1992, still would own and operate 11 short lines in the central and eastern U.S. and Canada.
"CKR made more sense to them in terms of a better approach for their railroad and a way to improve operations," she says.
OmniTRAX has no other short-line sale plans: "In fact, we plan on expanding in Canada," says Young, referring to the company’s CanRail West Inc. short-line initiative to obtain running rights on Canadian National Railway Co.’s and Canadian Pacific Railway’s western Canadian grain lines, and its Hudson Bay Railway Co.’s more recent Canadian Transportation Agency application to obtain running rights on CN’s 1,500 track miles in Saskatchewan and Manitoba.
Watco and OmniTRAX plan to close CKR’s sale May 31, with SKOL assuming the short line’s operations June 1.
"We’re looking forward to learning more about the specific needs of our new customers," said Rick Webb, Watco president and chief executive officer, in a prepared statement. "We’re going to bring some new synergies of our company to central and western Kansas."
— Jeff Stagl