A push by local freight shippers and Oregon's congressional delegation to get federal regulatory backing for a new rail service provider for the Siskiyou Summit has encountered a challenge.

A push by local freight shippers and Oregon's congressional delegation to get federal regulatory backing for a new rail service provider for the Siskiyou Summit has encountered a challenge.

A Dec. 16 letter from Oregon politicians urged the federal Surface Transportation Board to take action on the Coos-Siskiyou Shippers Coalition's nine-month-old request to oust incumbent Central Oregon & Pacific Railroad's (CORP) control of the Siskiyou Summit line. Two years ago, CORP virtually eliminated southbound service between Ashland and Weed, Calif., and sliced northbound service from five or six days a week to two. Shippers say that has forced them to use trucks and driven up their costs.

The letter, signed by Sens. Ron Wyden and Jeff Merkley and Rep. Peter DeFazio, had scarcely been circulated when a California group asked the transportation panel to leave the matter unresolved until it could complete its own negotiations.

The group, the Siskiyou Regional Railroad Authority, hopes to acquire 90 of the 218 miles of rail line between Weed and Eugene.

If the California group's request for the STB to defer action is approved, the local shippers' push for an alternative rail provider is likely to remain unanswered in the near future.

"I'm afraid the risk is real," coalition spokesman Bob Ragon said Wednesday. "It's a perfect excuse for them not to deal with it and for them to let it lay there on their desk."

The Coos-Siskiyou Shippers Coalition wants the West Texas & Lubbock Railway and Yreka Western to operate on the Siskiyou Summit line.

The Siskiyou Regional Railroad Authority is a joint effort of the California cities of Montague and Weed.

SRRA has moved forward on two fronts, lining up the agreements to operate the lines and gaining political and community support for its effort, said John Hammond, the group's president as well as the mayor of Montague.

The authority has a signed memorandum of understanding with Union Pacific to acquire the rail line and to provide common carrier service with a shortline operator. SRRA would temporarily lease the line until the acquisition is completed.

"It is our understanding that (Union Pacific) is working with CORP to provide assignment of the current lease to the SRRA," Hammond wrote in his letter asking STB Chairman Daniel Elliott III to delay action on the matter. "SRRA is of the opinion that this negotiated transaction provides the best long term option for both current and future shippers on the line."

The part of the Siskiyou Summit line, also known as the Black Butte Branch line, that SRRA hopes runs between Weed and Bellevue, just south of Ashland.

"There has been a petition before the STB for a year and a half, requesting alternative service," Hammond said Wednesday. "We believe SRRA can provide an alternative to the alternative service."

The attorney for the shipper's coalition wrote the STB Tuesday, noting he was not a sent a copy of the SRRA's letter and further that SRRA did not speak for the petitioners.

"Contrary to the position expressed," Chicago attorney Thomas F. McFarland wrote, "(the) petitioners respectfully request the Board move forward to decision."

Siskiyou Regional Rail Authority needs $16 million to acquire the right-of-way, Hammond said. A key component is a request for $3.5 million grant from Connect Oregon 3.

"We're also applying for a federal grant with a loan program to do precisely what we are doing — purchasing and improvement of infrastructure," he said.

The shipper's coalition, however, is skeptical that such a project could receive Connect Oregon 3 transportation funds.

"It all depends on them getting funding from some source to buy the line and we think that's problematic for them," Ragon said. "The agreed purchase price is $16 million and on top of that most of the track is in California. We think that might be a problem. We have requested a meeting with the mayors of Montague and Weed to clear the air and make sure we aren't working at cross purposes. Our elected officials were really confused when immediately after they wrote a letter it was countermanded by a group from Northern California."

Hammond said it was unfortunate an adversarial climate has developed.

"It's not from the SRRA, but from a few members of the Siskiyou Coalition," the mayor said. "Our effort is very inclusive and will lead to a broader base for economic development."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.