Board Approves Sooner Sub Sale to Passenger-Friendly Company

May 5, 2014

Passengers waiting to board a demo train last winter at Sapulpa
Credit Eastern Flyer

The Oklahoma Transportation Commission voted unanimously this afternoon to sell the Sooner Sub Rail Line to the Stillwater Central Railroad. SLWC is considered a passenger rail–friendly company.

The motion to divest the 97.5 miles of track was made by District 2 Commissioner David Burrage.

SLWC offered the state $75 million for the line and wrote an additional $104 million in improvements into its bid, including $2.2 million for passenger rail implementation.

SLWC operated the track last winter with Iowa Pacific Railway to provide demonstration  passenger service between the Tulsa and Oklahoma City metros.

CEO Rick Webb said he's encouraged by last year's trial run.

"Those trial programs sold out in seven days without any advertisement, so we'll be coordinating over the next 60 days when we want to get that started," Webb said. "We anticipate getting that started I believe sometime in the fall."

The company faces a $2.8 million fine if it doesn't attempt passenger rail service within five years of purchasing the line. According to the state's request for proposals, any pilot program for passenger rail must offer service at least once a day, five days a week for six months. If SLWC doesn't offer regular passenger service after 10 years, the state may reclaim that easement.

Projects SLWC plans for the Sooner Sub include building a rail spur in Cushing and upgrading the tracks from class two to class three under Federal Railroad Administration definitions within seven years. The maximum speed on class two tracks is 25 mph for freight trains and 30 mph for passenger trains; on class three tracks, it's 40 mph and 60 mph.

The transportation commission voted after spending more than an hour hearing the recommendation of the state's selection committee, which is made up of the heads of five state agencies. Committee chair and Secretary of Commerce Larry Parnam told the commission the legislative intent is for the Sooner Sub to be privately held and generate tax revenue rather than publicly held and be leased.

The committee scored SLWC's bid more than twice as high as Warren Buffett–owned BNSF's. BNSF offered $25 million for the line and $30 million in capital improvements, along with upgrading the tracks to class three within five years.

State Rep. Richard Morrissette attempted an 11th hour intervention before the commission, saying the people of Oklahoma don't want the state to sell an appreciating asset.

"If you keep it and you lease it and put provisions in the lease that mandate passenger rail, then you control the outcomes, not the other way around," Morrissette told the transportation commission.

Closing is expected within 60 days, but Gov. Mary Fallin does have veto power over the board's action.