Oklahoma selects Watco's Stillwater Central to negotiate purchase of state-owned line

Watco Transportation Services' Stillwater Central Railroad L.L.C. (SLWC) has won the opportunity to purchase a 97.5-mile stretch of track between Del City and Sapulpa from the state of Oklahoma.

Known as the Sooner Sub, the line was acquired by the Oklahoma Department of Transportation (ODOT) from BNSF Railway Co. in 1998. The award is a culmination of a 180-day process the state began last year to sell the line. In February, ODOT short-listed Watco and BNSF as the approved bidders to negotiate a sale.

"We are extremely pleased with the state’s decision to sell the Sooner Sub to the Stillwater Central Railroad. The support we have had from our customers and interchange partners throughout this entire process was extremely humbling," said Watco Cos. L.L.C. Chief Commercial Officer Ed McKechnie in a press release. "Our proposal to the state was based on the value we add for our customers through competition, as well as the growth we anticipate for the state. We also have a unique knowledge of the line as we have been the operator, in partnership with the state, for the past 16 years."

SLWC issued a $75 million proposal and promised additional financial commitments for enhanced rail access to energy infrastructure in Cushing, track improvements from Class 2 to Class 3 standards within the next seven years and the development of a six-month trial passenger-rail service within five years, ODOT officials said. The railroad expects to complete the sale contract by July, they said.

"Stillwater Central Railroad submitted a plan that best meets the policy objectives of the state," said Oklahoma Secretary and Executive Director of Commerce Larry Parman, who spoke on behalf of the Sooner Sub Selection Committee. "This was an extremely competitive process that required very careful consideration for the long-term benefits."

With the purchase of the Sooner Sub, SLWC will maintain its 275-mile Oklahoma network that currently runs from Duke through Lawton, Oklahoma City and Stroud, ending near Tulsa in Sapulpa. Trackage rights through Tulsa enable SLWC to interchange traffic with its sister railroad, the South Kansas and Oklahoma Railroad. The short line also operates a separate line running from Stillwater to Pawnee.

SLWC interchanges with BNSF, Union Pacific Railroad, Kansas City Southern Railway Co., Arkansas-Oklahoma Railroad Co., Farmrail System Inc. and the South Kansas & Oklahoma Railroad.