Texas railroad authority to negotiate operator contract with The Western Group

The Texas State Railroad Authority last week elected to enter contract negotiations with The Western Group to serve as the new operator of the 25-mile Texas State Railroad.

In August 2012, American Heritage Railways sold the Texas State Railroad to Iowa Pacific Holdings LLC, which maintained scenic rail operations under a state contract and later opened mainline track in Palestine to provide freight services. However, Iowa Pacific owes the railroad $1.9 million, and in December was given 120 days to comply with the terms of its contract, according to a report by the Palestine Herald-Press.

The authority opted to seek a new operator and recently received proposals from several qualified firms. Through a scoring process, the authority determined The Western Group submitted the optimal proposal. The Western Group owns several short lines — including the Cimarron Valley, Clarkdale Arizona Eastern, Oregon Eastern and Verde Canyon railroads — as well as Southwestern Railcar Services and The Western Railroad Builders.

Under the direction of Chief Operating Officer Bruce Carswell and Vice President of Marketing Teresa Propeck, The Western Group has formulated a plan to address the Texas State Railroad’s busy summer season, including new rolling stock and depot upgrades, and expanded statewide and national marketing exposure, company officials said in a press release.

In addition to generating more scenic rail revenue, “bolstering the freight business is part of our strategy for [its] growth,” said Carswell.

Aside from workers involved in the initial startup, The Western Group plans to retain most Texas State Railroad employees, and build its workforce with local labor and expertise, company officials said.