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Heritage Railroad chairman: Watco sale likely, $5.4M bridge grant uncertain
Summary
Gordon Fee told Oak Ridge council the Heritage Railroad handles about 130 cars a year, that Energy Solutions is negotiating a sale of railroad operations to Watco Holdings LLC with a hoped-for February closing, and that a $5.4 million federal/state bridge grant remains in negotiation and uncertain because of federal delays.
Gordon Fee, chairman of the Oak Ridge Heritage Railroad Authority, briefed the council on operations and a pending change of operator, saying traffic on the short line has been steady at about 130 railcars a year and that two customers—Farmall and Energy Solutions—account for most of the activity.
“We're running about a 130 cars a year,” Fee said, describing steady annual traffic and noting Farmall moves about 45 cars annually to a Powell plant and that Energy Solutions handles radioactive-material shipments. Fee said the authority has upgraded track over two decades and is nearing tie replacement and other maintenance needs.
Fee also told the council a $5.4 million federal/state grant announced in 2023 to rebuild four bridges on the line is still unsettled because negotiations with the Federal Railroad Administration are “sort of stale” amid federal turmoil; he said the authority is positioned to take the funds should they become available.
The most immediate change, Fee said, is a pending sale of Energy Solutions’ railroad operations to Watco Holdings LLC, a privately held short-line holding company that operates dozens of lines nationwide. “They hope to close the sale in February,” Fee said, while cautioning that multiple approvals remain because the line is publicly owned.
Fee said Watco would initially staff the operation with a three-person operating crew, provide engineering and day-to-day operations, and keep Energy Solutions’ intermodal transfer station and a small set of cars used for radioactive materials in place. He said the Southern Appalachian Railroad Museum—whose volunteers restore historic railcars—has limited revenue and the museum’s future operations remain unresolved under new ownership.
Why it matters: a private operator could change day-to-day service and management of the short line while the bridge grant and infrastructure needs will affect the authority’s ability to maintain safe operations and support local industry. Council members asked about passenger service and museum use; Fee said none of Watco’s 47 U.S. short lines are passenger operations and that the company had not yet made decisions regarding the museum.
What’s next: Fee said the authority is monitoring FRA negotiations on the bridge grant and will keep the council updated as Watco’s negotiations proceed and permits are sought.
