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Yesterday, Genesee & Wyoming Inc. announced newly formed subsidiary the Tazewell & Peoria Railroad Inc. (T&P) signed a 20-year agreement to lease the assets of terminal railroad Peoria and Pekin Union Railway Co. (PPU), which is owned by Norfolk Southern Railway, Union Pacific Railroad and the Illinois Central Railroad Co. (IC). The lease contains provisions for automatic five-year renewals, and adjustable payments based on certain inflation and customer shipment levels.

PPU's 20-mile system is contiguous with GWI subsidiary Illinois & Midland Railroad — which is based in Springfield, Ill. — and PPU's customer base of grain, steel and machinery traffic will help T&P generate $10 million in annual revenue, GWI officials said in a prepared statement.

"We believe that our operating efficiencies and service commitment will ensure that this terminal railroad remains a competitive transportation hub in the greater Peoria railroad system," said GWI Chairman and Chief Executive Officer Mortimer Fuller.

Pending regulatory approval and other closing conditions, the transaction will close and T&P will begin operations in the fourth quarter.

PPU provides switching service for NS, UP, IC owner Canadian National Railway Co., Burlington Northern Santa Fe, Toledo, Peoria and Western Railroad Co., Iowa Interstate Ltd., Pioneer Industrial Railroad Co., and Illinois & Midland.

Meanwhile, GWI also announced yesterday that subsidiary Golden Isles Terminal Railroad Inc. (GITM) acquired the Savannah Wharf branch line in Savannah, Ga., from CSX Transportation.

GITM acquired 6.5 track miles and related assets, and a 20-year lease of the line's real estate. The 33-mile short line expects to annually switch about 4,500 cars on the Savannah Wharf branch.

Operated by GWI's Rail Link subsidiary, GITM currently operates an intermodal facility and a railroad serving the Georgia Port Authority in Savannah.