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Kansas & Oklahoma Railroad Inc. (K&O) recently filed a notice of exemption with Surface Transportation Board to lease 27 track miles between Newton and McPherson, Kan., from Union Pacific Railroad.


"We want to lease the line because the UP has considered abandoning it," says Ed McKechnie, director of government affairs for holding company The Watco Cos., which owns and operates 920-mile K&O. "[And] we move significant traffic over this line via trackage rights with the Burlington Northern Santa Fe."


Because the short line's projected annual revenue would exceed $5 million, STB required K&O to notify all labor unions representing the line's workers and the employees themselves about the transaction.


K&O and UP expect to close the lease deal soon.


— Jeff Stagl