The state has reached an agreement to purchase 233 miles of track in Aroostook and Penobscot counties from the Montreal, Maine and Atlantic Railway, Gov. John Baldacci’s office is reporting today.

The owners of the railroad had begun the process to abandon the line, which would have cut off rail service to northern Maine and hurt important industries throughout Maine. More than 25 businesses in the area rely on the rail link, and an estimated 750-1,000 jobs could have been threatened or put at risk if the tracks were abandoned.

The agreement concludes more than a year of negotiations between the state and the railway. It calls for a purchase price of $20.1 million in cash for the rail line from Millinocket to Madawaska and branch lines to Caribou, Presque Isle, Easton, Houlton and Limestone.

The state will receive title to the line, free of any liens, along with overhead traffic rights to move freight over certain lines that MMA is retaining. These trackage rights will allow a new operator to connect with the Canadian National line at Van Buren and the Eastern Maine Railway in Brownville Junction. MMA will provide any needed interchange infrastructure and track at these interchange locations for the new operator.

Funding for the purchase includes: $7 million from a June 2010 bond, $4 million from a November 2009 bond that is being repurposed, $7 million from state reserve accounts, $1.1 million from rail balances from canceled projects, and $1 million from a major shipper on the line.

“This agreement will ensure that northern Maine continues to have access to rail service,” Baldacci said. “Improved rail connections are critical to Maine’s economy, and this line particularly will help to protect thousands of jobs and major employers in Aroostook and Penobscot counties.”

In addition, Maine was notified last Friday that the state will receive $10,546,436 in federal funds for track improvements that will allow trains to move faster and provide more reliable service to Maine shippers who do business in a very competitive environment.

As the sale is finalized, MaineDOT will issue a Request for Proposals to solicit a private rail operator to provide service over the lines being purchased.



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