Oklahoma DOT seeks buyers, operators for two state-owned lines

By Jeff Stagl, Managing Editor

The Oklahoma Department of Transportation (ODOT) has issued a request for proposals to seek buyers or operators for two state-owned rail routes: the Cowboy Substation and Blackwell Northern lines. Proposals are due Aug. 17.

The 22-mile Cowboy Substation Line runs between Pawnee Junction and Stillwater, Okla. In 1998, the state of Oklahoma purchased the route from BNSF Railway Co. as part of an asset preservation effort to save as many rail lines as possible from being abandoned and dismantled after several Class Is went bankrupt or merged.

ODOT then sought short-line operators to lease the line to keep it operational and eventually entered into a lease agreement with Stillwater Central Railroad Inc. The department amended the agreement with Stillwater Central — which is owned by Watco Cos. LLC — in January 2013, and the pact is scheduled to expire on Dec. 31, 2017, unless it's terminated earlier or extended.

The 17-mile Blackwell Northern Line runs between Hunnewell, Kan., and Blackwell, Okla. The Blackwell Industrial Authority (BIA) and ODOT acquired the line from Central Kansas Railway LLC in 1997. ODOT then entered into a lease agreement with the South Kansas and Oklahoma Railroad Inc., which in 2002 subsequently assigned all of its lease and operating rights to Blackwell & Northern Railway Co. Inc. (BNGR).

In December 2010, ODOT, BIA and BNGR renewed the lease agreement, which expired in November 2015. Owned by US Rail Partners Ltd., BNGR continues to operate the line under the terms of the expired pact, currently using the route primarily for rail-car storage.