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Union Pacific Railroad buys rail line from state of Oklahoma

Union Pacific Railroad's purchase of a rail line from the state of Oklahoma completes a lease-purchase agreement signed 30 years ago. The rail line runs mostly along U.S. 81 from the Kansas line to the Texas border.
BY MICHAEL MCNUTT Published: October 9, 2012

Union Pacific Railroad has acquired ownership of a rail line that slices across Oklahoma from Kansas to Texas 30 years after state officials preserved the line by buying it from a bankrupt rail company.

Union Pacific and state officials signed documents during Monday's state Transportation Commission meeting that transfer 351 miles of rail line — most of which runs parallel to U.S. 81 — to the railroad company. Tony Love, assistant vice president of real estate for Union Pacific, praised state officials for “having the foresight to preserve these lines.”

The agreement was written 30 years ago when the Chicago, Rock Island and Pacific Railroad Co. filed for bankruptcy, placing the critical line that linked Texas and Kansas through Oklahoma in jeopardy.

The state of Oklahoma bought 351 miles of track, which runs through Enid, El Reno, Oklahoma City, Chickasha and Duncan. The state also bought a spur that connects Oklahoma City to El Reno, as well as ones that run from the main line near Chickasha to Lawton and from Waurika to Walters.

The railroad tracks were operated by the Oklahoma-Kansas-Texas Railroad Co., according to the agreement signed Nov. 1, 1982. Union Pacific acquired the tracks after several mergers and recently finished paying $35 million plus accrued interest for the rail line.

“This type of agreement was unique, but we felt it was critical that we preserve the rail corridors and work toward getting them back in the hands of private industry,” state Transportation Secretary Gary Ridley said.

“Sometimes government does not do good at something. We mess up from time to time, and we don't do what we should do,” he said. “But sometimes we do the right thing, and sometimes things go well, especially when we can include the private sector in part of our decision-making process and move forward. This is a prime example of that.”

Love said it would be cost-prohibitive to buy the land for the line today.

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