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It's back to the drawing board for the Central Oregon & Pacific Railroad (CORP). On April 9, officials at the 440-mile RailAmerica Inc.-owned short line sent a letter to Oregon Gov. Ted Kulongoski proposing to establish a railroad/state joint venture that would own, reopen and operate the 65-mile Coos Bay line between Vaughan and North Bend. Earlier this week, the governor rejected the offer.

CORP closed the Coos Bay line last fall because of safety concerns. RailAmerica and CORP officials since have sought public funds to upgrade and reopen the line.

State officials believe RailAmerica should reopen the line on its own, while RailAmerica and CORP executives believe the joint venture would preserve service for the line's shippers and give the state an equity share in the Coos Bay line.

"Our proposal would ... provide the shippers on that line and the state with the ability to share in any economic prosperity that may develop as a result of a viable rail service," said CORP President Bob Jones in a prepared statement.

Under CORP's joint venture proposal, the state and short line would have held a half ownership interest in the line. CORP would have contributed the line and all revenue generated by freight and other non-freight sources. The state would have contributed the funds necessary to restore the line to a safe operating condition, and facilitated ongoing freight operations. The joint venture would have hired CORP as the line's operator, and all profits would have been shared equally by the state and short line.

"Our desire has always been to restore the line and to continue to provide rail service to the Coos Bay shippers and to the Port of Coos Bay," said Jones.

The short line welcomes other proposals from interested stakeholders, CORP said.