WILLIAM Brandt, the federal court-appointed trustee in the San Luis & Rio Grande Railroad Chapter 11 bankruptcy, says he has “several strong letters of intent” from companies looking to purchase the freight rail line.
The key word in any transaction to bring the SLRG out of bankruptcy is “freight.”
Brandt said vetting each interested party for their ability to run a freight railroad will be the key to the transaction and determining a suitable buyer for the historic railroad.
“We’ve done some studies on what would have to happen if the railroad were to shut down,” Brandt said in addressing a question from Alamosa Citizen on the future of the railroad. He said it would take 24,000 additional truck trips over U.S. 160 and La Veta Pass to cover for the amount of freight that comes in via the railroad.
Chew on that for a bit.
With the trucking industry, like every other business, hurting to attract drivers, the question became how the San Luis & Rio Grande Railroad and its ability to haul freight over La Veta Pass and into the Valley could be in a stronger position coming out of bankruptcy to grow its freight business.
Brandt, in his capacity as the railroad’s trustee, has maintained throughout the bankruptcy that any buyer first has to commit running the San Luis & Rio Grande Railroad as a freight line. He said that will be the basis on which bids are evaluated.
The railroad currently has about a dozen freight customers.
If, once the freight business and freight customers are established and well-maintained, then a new owner could look at other ways to use the rail line. The problem, he said, with the past owner and why the railroad ended up in bankruptcy was the move to add a tourist line with a destination to the top of La Veta Pass for concerts and lunches.
He said the freight business of the railroad got neglected in that set up, which is why freight has to be the number one priority for any new owner under the governance of the railroad by the Federal Railroad Administration.
The U.S. Federal Bankruptcy Court in Denver where the San Luis & Rio Grande Railroad Chapter 11 bankruptcy is filed has upcoming July dates to hear about potential financing and then bids Brandt has secured for the railroad.
PHOTO CREDIT: Jason Cary for San Luis & Rio Grande Railroad