State to pay $20.1M for rail lines
The state has reached an agreement with Montreal Maine & Atlantic Railway to buy 233 miles of railroad track in Aroostook and Penobscot counties for $20.1 million in cash.
MM&A announced earlier this year it would abandon the lines, saying it was losing money operating them, and prompting the state to seek a purchase of the lines, which run from Millinocket to Madawaska and branch off to Caribou, Presque Isle, Houlton and Limestone. The state will receive the title to the line and rights to move freight over certain lines that MM&A is retaining, according to a press release from Gov. John Baldacci's office. Once the sale is finalized, the state will issue a request for proposals to find a private rail operator to provide service on the lines.
Funding for the purchase includes $7 million from a bond approved by voters in June, $7 million from state reserve accounts, $4 million from a November 2009 bond, $1.1 million from rail balances for canceled projects and $1 million from a major shipper on the line. On Friday, the state learned it will receive a $10.5 million TIGER II grant from the federal government for track improvements.
More than 25 businesses rely on the rail lines and an estimated 1,000 jobs could have been affected if they had been abandoned, according to the release.
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