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Earlier this week, the Washington State Department of Transportation (WSDOT) announced it’s terminating an operating lease with the Eastern Washington Gateway Railroad Co. (EWG). The short line operates the CW Branch of the state-owned Palouse River and Coulee City (PCC) rail system, which provides local rail service to grain shippers and other businesses primarily in eastern Washington.

The department and PCC Rail Authority — which was formed last year to help WSDOT administer the business and economic development portions of the operating lease — will develop a transition plan while a request for proposals process advances to secure a new operator.

“The EWG provided good service and excellent communication with the shippers,” said Scott Witt, state rail and marine director, in a prepared statement. “Unfortunately, the EWG encountered unexpected set-backs and costs, and has not been able to meet some of the maintenance and tie replacement requirements of the operating lease.”

WSDOT began to acquire PCC assets in 2004 to establish viable rail service for shippers. The department purchased the rights of way and rail for the P&L and PV Hooper branches in November 2004, and obtained the CW Branch and remaining rights to the other two branches in May 2007. WSDOT then selected EWG to operate the CW Branch. The Watco Cos. Inc. operates the PV Hooper Branch and Washington & Idaho Railway operates the P&L Branch.