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11/14/2006



Rail News: Rail Industry Trends

Wheeling & Lake Erie lands second RRIF loan


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The Wheeling & Lake Erie Railway Co. (W&LE) has landed its second Railroad Rehabilitation and Improvement Financing (RRIF) program loan and the third loan issued by the Federal Railroad Administration (FRA) this year.

Earlier this month, the 840-mile regional obtained a $14 million RRIF loan, the proceeds of which will help fund a recent freight-car purchase and future locomotive acquisitions, says W&LE Vice President and Chief Financial Officer Mike Mokodean.

In summer, W&LE purchased 150 multi-purpose hoppers from FreightCar America Inc. — the railroad’s first-ever new cars. Delivered in late July, the 110-ton steel hoppers carry coal, aggregates, limestone and taconite pellets.

Currently, W&LE is analyzing the used locomotive market and determining how many units the railroad would need to acquire, says Mokodean.

In 2004, the regional obtained a $25 million RRIF loan to help offset the cost of rehabilitating track to handle 286,000-pound cars.

Last month, the FRA approved a $25.5 million RRIF loan for Iowa Northern Railway Co. to upgrade track and facilities associated with ethanol traffic; in February, the administration issued a $9.35 million loan to Iowa Interstate Railroad Ltd. to purchase 22 GP-38-2 locomotives from GATX Rail.

During fiscal-year 2006, the FRA has approved seven RRIF loans, most of which still must be formally executed by negotiating and signing closing documents, says FRA spokesman Warren Flatau, adding that the administration anticipates approving several more loans during the next few months. Under the program, the FRA is authorized to provide $35 billion (including $7 billion set aside for regionals and short lines) in direct loans or loan guarantees to eligible railroads, state and local governments, and government-sponsored authorities to acquire, develop, improve or rehabilitate intermodal or rail facilities.

— Jeff Stagl