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UP considering sale of Tennessee Pass route NEWSWIRE

By Justin Franz | November 19, 2019

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UP_TennesseePass_Lassen
UP_TennesseePass_Lassen
A Royal Gorge Route passenger train operates through its namesake canyon, at the eastern end of the former Rio Grande Tennessee Pass route, in October 2019. While this section of the line has been sold to a short line, Union Pacific is considering an offer for the remainder of the now-dormant Tennessee Pass line.
TRAINS: David Lassen

OMAHA — Union Pacific is looking at selling its former Denver & Rio Grande Western route over Tennessee Pass in Colorado.

Last week, a Delaware-based limited liability company offered $10 million for the iconic route between Dotsero and Parkdale, Colo., as well as trackage rights into Pueblo. A spokesperson for UP confirmed on Monday that the railroad had been approached about selling the line.

“Union Pacific believes there could be business opportunities for the Tennessee Pass [route] in the future,” spokesperson Kristen South tells Trains News Wire. “We have received offers and are open to considering a deal that is mutually beneficial.”

Tennessee Pass was one of two main lines the D&RGW maintained over the Continental Divide. The 223-mile Tennessee Pass Subdivision between Pueblo and Dotsero featured 3% grades and most trains required helpers to get over the pass. UP took over the combined Rio Grande-Southern Pacific system in 1996 and a year later ceased regular service over the pass. The east end of the railroad, from Pueblo to Parkdale, was later sold to a short line, Rock & Rail, but UP maintains trackage rights. The Royal Gorge Route Railroad also operates excursions out of Cañon City.

While the railroad between Pueblo and Parkdale remains active, the 170 miles between Parkdale and Dotsero over Tennessee Pass have sat mostly unused, with the exception of the occasional movement of stored cars on either end of the line [See: “Tennessee Pass line sees freight traffic — for one day,” Trains News Wire, Feb. 26, 2019].

In the late 1990s, UP considered abandoning the line between Dotsero and Parkdale but later reversed that decision and decided to keep it for possible future use.

On Nov. 14, an attorney representing Colorado Pacific Railroad LLC sent a letter to UP offering to purchase the Tennessee Pass Subdivision. In 2018, Colorado Pacific purchased the former Missouri Pacific Towner Line in eastern Colorado and has since leased it to the Kansas & Oklahoma Railroad, a Watco short line. The letter notes that operations between Towner and NA Junction are expected to “commence shortly” following state approval.

In the letter to UP, the representative of the railroad writes, “[Colorado Pacific Railroad] proposes to restore the Tennessee Pass line to service, thus providing an alternative to using the Moffat tunnel and routing freight rail traffic through Denver.”

The attorney representing the Colorado Pacific declined to comment.

20 thoughts on “UP considering sale of Tennessee Pass route NEWSWIRE

  1. There is existing business between Gypsum and Dotsero and as mentioned the potential at Climax needs to be considered. My sole other comment would be that the potential buyer sounds like a scrapper not to mention the $$$$$ potential in the Minturn yard land.

  2. So would Watco end up also taking over Rock & Rail? Also, any immediate service to Climax would have to be via transload, as the DRGW through Leadville is now a paved trail. Plenty of sidings up there, for example at Minturn and Pando for storage or even, if possible, transload. (I lived in Leadville for a year about a decade ago).

  3. The buyer Colorado Pacific is Watco affiliated. They saved the Towner line (Ex MoPac east of Pueblo) from being scrapped by V&S. To my knowledge, their track record has demonstrated they are in the operating business and not the scrapping business.
    The low offer is probably because of the high cost of refurbishment and capital that will take. Should be interesting to see how this plays out.

  4. I did a bit more research and indeed they are the group that saved the Towner Line. I wouldn’t be surprised to see some behind the scenes financing help on this. Agreed that it will be interesting to see how UP reacts.

  5. My understanding is that they are not WATCO affiliated. Colorado Pacific awarded the operating rights to K&O on the Towner Line. To date I don’t believe any traffic has moved yet over that piece of railroad. At least it didn’t appear to be as of a few weeks ago.

  6. In 2014 the Moffatt would have had more traffic than now, but those state planning documents will always tout the viability of an asset.

  7. Here’s an old release from CDOT

    A report released by the Colorado Department of Transportation on September 4, 2014 stated the following about the line:

    “…The Tennessee Pass line has been identified as significant to CDOT because of its potential to carry both passengers and freight, and because it is the only existing trans-mountain alternative in Colorado to the Moffat Tunnel line, which often runs near capacity. The Tennessee Pass Line may be able to be used as an alternate route as trans-mountain rail demand grows due to increased development on the Western Slope or if the Moffat Tunnel were damaged or closed for any reason. Such an event would have a significant impact on Colorado, particularly on the Western Slope, since the railroads would be forced to move freight through Wyoming. The Royal Gorge Route Railroad currently offers scenic, tourist rail trips on 12 miles of the Tennessee Pass Line west of Cañon City. No freight has been shipped on the Tennessee Pass Line since 1997, but in relatively recent (2011) conversations with the UP, there was no indication that UP would abandon this line in the near future. There have been no changes since.”

    This shows how out of touch CDOT is with the Moffat Line. In 2014 the line was not near capacity. I guess they forgot the Overland route further north where most traffic was diverted when UP merged SP. The only business opportunity is car storage, unless a mine activation or play is in the works around the pass area that’s conducive to short line operation..

  8. Sadly there is little traffic over the Moffat: a UP local, a BNSF trackage rights thru train, and dwindling coal trains. The 2 molybdenum mines ship concentrate by 1 ton bags and have not used the rail transload in years.

  9. From a railfan perspective, this sounds great. I wonder, however, if this line could ever be profitable. The on-line business had pretty much dried up before the line was mothballed. Perhaps if UP would agree to route a certain percentage of their freight through this line.

  10. “Canon City” does not have a “y”. The word “canon” is from the Spanish.

    Could the Martin Marietta quarry at Parkdale ship aggregates west if the line does open again?

  11. If the Climax molybdenum mine in Leadville were to resume shipping ore by rail, that could help make the line profitable. I understand it is producing ore again after being shut down for years due to low molybdenum prices.

  12. And much of that is because the UP fails to build business along the route and lacks the desire to even do so. Grand Junction receives a manifest multiple times a week via UP. BNSF also runs crude trains and Frac Sand trains. The growth in oil production (especially around the Uintah basin) is only supposed to trend upwards. A private firm is even potentially building a new railroad into the basin via the existing route. UP presently routes through traffic over the Overland, this will grow with another operator in the mix which markets the route properly (as a through route and not just as a coal branch with sparse local service options).

  13. Bank the line. Give UP/BNSF rights in the event of a disaster or other national emergency. Hire Herzog or Loram to perform adequate maintenance. Lease it to a short line operator for any local service needs/snow removal.

  14. However this plays out, keep the government out of it. Immediate help for the railroads would be to eliminate all property taxes (same for farms and any other productive enterprise). Don’t believe anything government or the greens say about infrastructure. They want it removed in order to return the U.S. to the dark ages. The ultimate goal is to reduce the world population to 500 million. Only a few will be in control; the rest will be slaves. If you think I’m crazy or a conspiracy theorist, I don’t care.

  15. Is this line intact (e.g., ROW intact, rails in place, operable at least to the point where an inspection car can get from end to end) between Pueblo and Dotsero? I looked at it with Google Earth and it is indicating that there are several cuts in the line including rails lifted in the general vicinity of Texas Creek (Pueblo end) and just south of Granite (Dotsero end).

    What is the story here? An intact line is worth far more than a bunch of disconnected pieces.

    The above comments are genetic in nature and do not form the basis for an attorney/client relationship. They do not constitute legal advice. I am not your attorney. But you see, these people, like Lenny Bruce, J. Edgar Hoover, and Jonas Salk, thrive on segregation, violence, and disease. Thus the purity they espouse a need for, they simply feed upon. You mean? Yes. Without polio Salk is a pus.

  16. If Buffet were interested in the Tennessee Pas line, he would already have it. What is 10 million when you have 125 billion in cash?

  17. Anna, a co-worker told me Google Earth images can be “fractured”, based on angle, shadows, sunlight, giving the visual impression of missing trackage. I tend to believe my co-worker buddy is correct. I checked on a former Mopac abandoned line in Kansas recently. Some spots appear to be trackless, and the track is still there. One portion where the track is still there looks trackless, at least to my vision. Last info I saw was the Tennessee Pass line is intact from Pueblo to where it joins the Moffat line close to Glenwood Springs, but that may have changed. Regardless, the TP line in the hands of BNSF would be a grave mistake by UP. BNSF has the chops to make it work, whereas UP never tried. Espee was running 20 to 25 trains a day on the Mopac line from Pueblo to Kansas City, most of which came off or went through Tennessee Pass, when the UP/Espee merger was approved. UP has shown no interest, until now, of selling. You would think they have heard from BNSF, an outfit with the fortitude to make it all work. BNSF would then have a way to get to the Bay area with traffic from the mid-South and midwest which now goes by the Transcon or UP’s Overland Route. Never underestimate BNSF. This recent change of heart by UP will be interesting to follow.

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