Why Has the
Commission Given Sierra Railroad Nearly Free Use of a $500,000 Locomotive ($2
per Passenger for Unlimited Mileage)?
Do These Payments
Even Cover the Payments on the Money the Commission Borrowed?
ARTICLE TOPICS:
Why the #18 When
Experts Say It Won't Work?
The Price is Right? Was There a
Valuation or Appraisal of the #18?
Do the "Rent" Payments Equal
the $20,000/year the Commission Pays for the Locomotive?
Was the
#18 Lease Agreement Bid Competitively?
When Will the #18
Come Home to Nevada? |
MCCLOUD #18 LOCOMOTIVE -- SOME
BACKGROUND...
A couple years ago the Nevada Commission to Reconstruct
the Virginia and Truckee Railway took out a loan to buy the McCloud #18 steam
locomotive. They were not allowed to use project funds to buy equipment, just
to construct the railroad tracks, so they took a loan. Admittedly it's a pretty
good interest rate, 4.2%.
But wait, this locomotive was never delivered
to Nevada! It's currently being operated on the Sierra Railroad tourist lines.
Sierra Railroad is likely closing a sale to Patriot Rail, and their future as
the V&T Operator is unclear. So what are the terms of the contract between
Sierra and the Commission?
WILL IT WORK?
I know very little about
operating a steam locomotive up steep hills around tight curves. Of course, Ron
Allen doesn't know much either!
Leaving me and Ron Allen aside, many
people who know their stuff, including some current steam locomotive engineers,
say that the #18 is not an appropriate locomotive for the steep grades and
sharp turns on the V&T tracks. Nuff said on that...
A CONTRACT WITH
NO LIMITS AND NO EXPIRATION DATE
The lease agreement between Sierra
Railroad and the Nevada Commission to Reconstruct the Virginia and Truckee
Railway is a strange beast! It asks that Sierra Railroad pay up to $3000 per
year to insure the locomotive. It also calls for a $2 per passenger payment
from Sierra for trains where the $18 is included.
According to the best
information I can get, this means Sierra pays the Commission one or two-hundred
dollars every month during the operating season. There are no limits as to
location, distance, time used or minimum passenger counts. This means that you
and I could ride the #18 to San Diego and back, and only owe the Commission
$4.
Further, the only expiration in the contact is when the "fully
reconstructed (railroad) reaches Carson City." That's it, no dates, just a
vague clause. In Phase 2C which starts construction soon, the tracks will reach
Carson City. Will this trigger an expiration of the lease? Probably
not.
CONTRACT NOT COMPETITIVELY BID
Because of the artificially
low dollar amounts involved in the #18 lease, the contract may indeed have been
exempt from a competitive bid process. If the contract reflected the fair
market value of a locomotive lease, it would have been subject to bidding. I'm
sure the Gray's REAL Virginia and Truckee Railroad would have been happy to
caretake a locomotive in exchange for $2 per passenger per trip. In that case
the locomotive would have been used locally, and since the V&TRR tracks are
much shorter than Sierra's, there would have been much less wear and tear on
the locomotive. |