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Yesterday, RailAmerica Inc. announced plans to appeal a Feb. 11 Surface Transportation Board decision that set terms for the sale of Toledo, Peoria & Western Railway Corp.'s (TP&W) La Harpe-to-Hollis, Ill., line to Keokuk Junction Railway Co. (KJRY).

The decision requires TP&W — which is owned by RailAmerica — to sell the 76-mile line per KJRY's feeder-line application and for a price of $4.2 million. The sale will result in a "book loss" of $800,000 in the first quarter, RailAmerica officials said in a prepared statement.

"We will appeal this decision based upon our belief that the $4.2 million sale price does not properly reflect the line's value and provides inadequate compensation to RailAmerica," said Chief Executive Officer Charles Swinburn.

In April 2003, the 38-mile KJRY reached an agreement with TP&W to acquire and operate the line — which has been in place since the late 1860s and includes a Union Pacific Railroad interchange in Hollis — but the parties failed to settle on terms. In January 2001, the 290-mile TP&W temporarily sold the line and diverted traffic to other lines. The short line hasn't moved any traffic on the line since October 2002.

Owned and operated by Pioneer Railcorp, KJRY plans to restore traffic to pre-January 2001 levels (or about 7,500 carloads annually) by moving freight currently shipped by truck, especially grain.