Yesterday, Genesee & Wyoming Inc. (GWI) announced that subsidiary Huron Central Railway Inc. (HCRY) will discontinue operations by October’s end. The shutdown will eliminate 45 jobs.
The economic downturn has caused HCRY’s traffic to decline substantially during the past 12 months and the railroad “is not economically viable to operate for the long term,” GWI officials said in a prepared statement. Last year, the short line handled about 16,000 carloads, generated $7.4 million in revenue and incurred a $2.1 million operating loss.
Since 1997, HCRY has operated a 173-mile line from Sudbury to Sault Ste. Marie, Ontario, under a lease agreement with Canadian Pacific. The Class I and short line are working with customers to “effect an orderly cessation of operations,” GWI said.
HCRY will cease operations between McKerrow and Sault Ste. Marie on Aug. 15, and between Sudbury, McKerrow and Espanola on Oct. 31.
Since 2006, HCRY has requested funding from Ontario to help fund infrastructure improvements. Earlier this year, GWI officials said they would close the line between Sault Ste. Marie and Sudbury if the short line didn’t obtain provincial funding for badly needed track upgrades.
GWI expects to record after-tax charges up to $5.3 million in the second quarter to reflect an asset write-down of about $7.1 million and shutdown costs ranging from $400,000 to $1.9 million. The company owns and operates 63 regionals and short lines in the United States, Canada, Australia and the Netherlands, and owns a minority interest in a Bolivian railroad.
Source: Progressive Railroading Daily News
