CrowleyMcFarland_dh.doc

March 9, 2000

VIA FED EX

Thomas D. Crowley
L.E. Peabody & Associates, Inc
1501 Duke Street, Suite 200
Alexandria, VA 22314

Thomas F. McFarland, Jr.
McFarland & Herman
20 North Wacker Drive, Suite 1330
Chicago, IL 60606-2902

Re: Shipper Data for the Camas Prairie Grangeville Line

Dear Tom & Tom:

Attached for your information are some surveys that we have received from shippers regarding their projected car traffic for the forecast year. I have not received the car survey forms from the three grain shippers: Lewiston Grain Growers (LGG), Columbia Grain, and Union Warehouse & Supply.

In a conversation that I had yesterday with Ken Blakeman at LGG, he indicated that his company was interested in doing as much as possible to maintain rail service. It has approximately seven elevators on the Camas Prairie that have rail loading facilities. In 1999, LGG shipped two 75-unit trains of grain to the Coast via UP. For the 75-unit trains, they can load about 40 cars at their large Craigmont facility and two other sidings in Craigmont, load more cars at Culdesac, and load cars at Grangeville and Ferdinand. He indicated that Camas Prairie moves about 30 cars at a time “downhill” giving Camas Prairie’s engine braking limitations. He indicated that it takes approximately three days to spot, load, pull, and combine the unit train at about $250 per car. He also said that they would be shipping another 75-unit train next Wednesday when Joe, Dick and I are inspecting the track and structures.

Other than receiving John Heffner’s telephone call saying that he would pass my questions onto the Railroad, I have not received any of the requested material or answers to my questions in the March 2, 2000, letter. One of the things that John Heffner did tell me is that interline revenue is on a per car basis from BN&UP. He indicated that there is a per car revenue allowance from the Class I roads plus an additional rate. He also indicated that for each dollar in expenses that the Camas Prairie was only receiving about $.33. As soon as I receive the other materials or answers to my questions, I will forward them to you.

One of the things that the Camas Prairie’s General Manager, Kevin Spradlin mentioned to me is that the three counties that the Grangeville line traverses produces approximately 14 million bushels of wheat but the Railroad only transported about 3 million bushels. His implication was that grain producers could ship a lot more by rail. However, given the availability of barge transportation at Lewiston, once growers put grain on trucks for transportation, the usual practice may be to truck the grain 35 miles (from Lewiston to Craigmont) and load onto a river barge. In addition, much of these three counties are not served or in close proximity to the rail line.

Kevin also told me that trains operate approximately three times per week. On Monday, the train crew moves from Spalding to Grangeville and then on Tuesday returns to Spalding. In my conversation with him on February 3, 2000, he indicated the following track sizes:

TRACK SIZE MILES 72#
85#
90#
100#
112#
115# 13.0
12.0
34.0
1.5
6.0
1.0
67.5
As I have already indicated to Tom McFarland, I am going to hold an informal meeting with shippers and local government officials Wednesday, March 15, 2000 at Craigmont.

Finally, how does the “balancing” of 49 U.S.C. § 10903(d) work between a “losing” line and adverse rural impact? If we can show that the mill closure would result in a loss of 60% of local jobs, would the STB examine whether Camas Prairie was making money on its other subdivisions and possibly deny abandonment? If so, do we need to request expense and revenue data for the CP as a whole?

Sincerely yours,

Donald L. Howell, II
Deputy Attorney General

Enclosures

cc: Ron Law
Thomas D. Crowley
Thomas F. McFarland, Jr.
March 9, 2000
Page 2