Bridge panel bows up to rate challenge|[4/13/06]
Published 12:00 am Thursday, April 13, 2006
Attorney directed to make clear charges for passing cars.
Any move resulting from Kansas City Southern’s joint venture with Norfolk Southern Corporation that would jeopardize higher per-car rates for rail cars crossing the U.S. 80 bridge will be challenged, bridge commissioners agreed Wednesday.
Four members of the five-member commission, plus superintendent Herman Smith, emerged from a brief discussion on the subject in closed session and voted unanimously to direct their attorney, Bobby Bailess, to write a letter to KCS.
Specifics were not given, but Smith indicated the letter will emphasize that no lease exists because the $14 per-car rate that the commission has been billing has not been paid since that rate was adopted in September.
On most invoices since then, KCS has paid the previous rate of $4 per car for the first 125,000 cars per year and $3.75 for each car after that.
Commissioners indicated that a new joint venture announced in February between KCS and Norfolk Southern Corporation would make that partnership the new rights-holder to the lease. The letter, commissioners said, would make the board’s stance – that there is no lease – clearer.
The two rail companies entered the agreement aiming to perform improvements to a 320-mile stretch of rail line between Shreveport and Meridian, called the Meridian Speedway.
According to company releases, KCS will contribute its rail line to the joint venture for a 70 percent interest, while NS will invest cash for a 30 percent interest. KCS will operate the line and provide service enhancements to NS, which will be the sole provider of intermodal transportation services over the line.
As for the $14 per car lease rate, that remains less than the $19 per car rate recommended to the commission in a 2004 report by HNTB, a construction and architecture services company. The cost to KCS for usage of the railway on the bridge would more than double under either rate.
Warren County has owned the bridge for about 50 years and supervisors appoint five people to manage its operations. The privately built crossing has income from the railroad and utility companies, which is spent on maintenance and repairs. In other business, the commission: