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The Paducah & Louisville Railway Inc. (PAL) plans to lease 124.5 track miles from CSX Transportation and create a new short line subsidiary to operate the line between Evansville, Ind., and Okawville, Ill. PAL recently filed exemption notices with the Surface Transportation Board seeking approvals for the transactions.

The line — which includes CSXT’s Mt. Vernon Branch — would be operated by Evansville Western Railway Inc. (EVWR), a new Class III carrier. Four Rivers Transportation Inc., the holding company parent of 265-mile Class II PAL, would own and control both EVWR and the regional.

Under terms of the CSXT deal, PAL would lease the line for 20 years and retain an option for a five-year extension.