Logistics mogul John D. Moran Jr. is upping the ante in a bid to get into the railroad business.
Moran, the president of Watsontown-based Moran Industries, previously offered $12.5 million to buy the assets of the SEDA-Council of Governments Joint Rail Authority.
The assets include about 200 miles of track, engine houses and land in eight counties. The authority contracts with the private North Shore Railroad to provide rail service on five short lines in those counties.
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SUN-GAZETTE FILE PHOTO
A railroad worker watches as a locomotive couples with several cars after delivering a railroad car
to Moran Industry in September 2009.
Moran now is offering $30 million to the authority's member counties for those assets as well as the right to be the short line rail operator.
By law, commissioners from all eight counties must agree to the sale.
"Making an offer that incorporates both (assets and operator rights) promotes the best long-term economic interest of the residents of the member counties," Moran said.
He questioned the validity of a no-bid contract between the authority and the North Shore Railroad and cited a state attorney general investigation into the awarding of the contract.
"I think it would be in the best interest of all parties concerned that the operating agreement be terminated and the railroad, in its entirety, be privatized," he said. "This will allow all parties to put these questions and concerns behind them."
The authority produced a letter from the attorney general stating the office had no plans to pursue the matter, but Moran said the letter in no way clears the authority of wrongdoing regarding the no-bid contract, nor does it mean the issue is dead.
He added that the authority is competing with the private sector and contributing nothing to member counties.
Lycoming County Commissioners Jeff C. Wheeland and Ernie Larson Wednesday said they were unaware of the offer and had yet to be contacted by Moran regarding it.
Moran spokesman John Haynes said the offers were sent by mail and should soon be received by the commissioners.
Wheeland is not in favor of dissolving the authority. Keeping rail lines under public ownership will ensure all industries have access to them, he said.
"I would be concerned about our legacy industries that use rail service," Wheeland said. "My biggest fear would be a (private owner) shutting down what they would consider an unprofitable route."
Wheeland said that even if he was in favor of selling authority assets, questions need to be answered before he would consider doing it.
"I would need to see an appraisal of what the rail system is worth before I even consider an offer," he said.
Larson said he believes the public-private partnership between the authority and the North Shore Railroad works well. Counties benefit from the partnership through economic development created by the short lines.
"It works," Wheeland said of the arrangement. "Does it need to be tweaked? Does the contract (with the North Shore Railroad) need to be renegotiated in the future? I'd say yes. Now, with the Marcellus Shale boom and industries related to natural gas that are using rail, it is more profitable. (The contract) is definitely going to have to be reviewed in the future."
