Iowa Pacific has implemented a multi-faceted way to run its railroad on the 187-mile route that it has operated between Southaven and Canton since last August.
“Iowa Pacific has brought a whole new approach to developing business,” North Central Mississippi Railroad Authority (NCMRRA) President Pablo Diaz said Friday. It has included re-establishing relationships with former rail shipping customers and seeking new shippers along the segment of the old IC line between Southaven and Grenada. Iowa Pacific (IP), operating its Mississippi line as Grenada Railway, has also utilized much of its sidetrack, renting rail storage service to the nation’s larger rail lines for their unused cars.
At the same time IP and contract crews are also working on rail maintenance — from replacing bridges, track and foundation to reopening the south segment of the route — from Grenada south to Canton.
Diaz and Larry Hart, Chairman of the NCMRRA Executive Board, spoke to the annual NCMRRA board of directors meeting in Grenada Friday. NCMRRA Executive Committee Treasurer Sonny Simmons also presented the annual financial report.
NCMRRA was created as a non-profit organization from the eight counties served along the 187-mile route. Following the rail line’s 2009 purchase by a rail salvage company, government and business leaders — fearing that salvage company would soon abandon the line — organized to develop an alternate strategy. Their fears were further substantiated in 2011 when the rail operator announced intentions to abandon the south segment of track.
Successful legislative lobbying efforts from the eight counties prompted the legislature in 2015 to allow NCMRRA to issue $30 million in bonds to purchase the railroad from the salvage company; the Mississippi Development Authority provided an additional $13 million loan to complete the $43 million purchase price. NCMRRA consummated the purchase last summer and immediately leased its operation to Iowa Pacific, a rail company that had proved itself successful with short line railroad around the country.
Iowa Pacific’s lease payments now service the bond debt. IP is also obligated by its contract to reopen the Grenada-to-Canton segment within two years.
“Iowa Pacific has already paid over a $1 million toward bond debt retirement,” Hart said, speaking to the directors selected from the eight counties and from municipalities along the rail route. Hart said the railroad had found a “tremendous revenue stream from storing rail cars.” The rental service has become “a huge part of us trying to pay for this railroad.”
Hart also cited the revenue stream created by the Polar Express Train Ride in Batesville that sold over 58,000 tickets in November and December.
“That’s unheard of in the U.S. for these type trains,” Hart said. He said that the dates of the dinner train originally proposed in February are yet to be determined by IP.
IP has recently negotiated an interchange agreement with Canadian National (CN) at its south terminus in Canton, Hart said. The agreement is similar to the interchange agreement with CN at its north terminus and will allow the Grenada Railway to connect on both ends once the Grenada to Canton segment is reopened.
The CN main line between Memphis and Jackson has been closed three times this spring, Hart said, making the Grenada Railway look like an auxiliary alternative. “They are beginning to give us an ear,” he said.
IP has spent “hundreds of thousands” working on the south segment right-of-way and track in an effort to bring it back into service. “They had let the south end go for four years,” the NCMRRA executive board chairman said.
“Our first goal is to get it up to 10 miles-per-hour,” he said. “It’s not as horrible as you might think,” he added. Bridges, including the Coldwater River bridge on the north segment, need repair and replacement, but even those are not as bad as the operator originally feared, Hart said.
Since Grenada Railway began operating in August, a Kosciusko steel manufacturer has started trucking its product to Grenada for transshipment by rail, Hart said. In Yalobusha County, over the old Mississippi Central section of the line leading to Coffeeville, rail cars have rolled for the first time in years as Grenada Railway crews have moved them — albeit slowly — there for rental storage.
IP President Ed Ellis has even talked with officials from Bruce’s Weyerhaeuser forest products plant. Rails have been removed from the former connection between Coffeeville and Bruce, but “at least you own the real estate,” Hart said, if the forest products manufacturer’s shipping needs justified replacing the rails to reopen the line. He cited the same advantage when discussing the line that runs east from the main Grenada Railway line between Durant and Goodman at what is known as “Aberdeen Junction.”
Diaz said that several companies, “counties away” from Grenada are already hauling their freight there by truck to load onto rail cars. He encouraged the NCMRRA directors to help make the shipping option known in their counties and in adjacent counties.
“They could save a lot of money by carrying here by truck and then transloading,” Diaz said.
“We didn’t just save a railroad,” Diaz said. “We brought expanded economic opportunity to the region.”