Davenport’s Cemex withdraws opposition

Davenport’s Cemex withdraws opposition
Published: 31 December 2009

Cemex, once the largest hauler of freight on the county’s 32-mile Union Pacific railroad, has withdrawn its opposition to a new railroad company managing the line. In a letter sent to federal regulators this week, attorneys for Cemex ask that their petition to halt the lease to Woodland-based Sierra Northern Railway be voided. The cement company, which runs the now-closed plant in Davenport, had worried that the new rail operator was not sufficiently committed to freight service, which the company relies on to ship coal into the county and cement out.
Cemex officials did not return numerous phone calls from the Sentinel newspaper this week. But the filing submitted to the federal Surface Transportation Board on Monday said Cemex had learned Sierra Northern would miss out on a $100,000 tax break if the transfer of management didn’t go through; the company didn’t want to disqualify the new operator from the funds.

"While there are still many unanswered questions, Cemex does not wish to stand in the way of this tax credit," wrote attorney Sandra Brown with Thompson Hine LLP. in Washington, D.C.
Sierra Northern is scheduled to take over the line on Thursday. Sierra Northern President Dave Magaw, though, told the Sentinel last week that he had every intention of accommodating freight trains. Magaw said he hopes his company will continue to operate the line even if Union Pacific sells it to Santa Cruz County’s transportation agency, a deal scheduled for later this year.

Cemex suspended operations at its Davenport plant and the train service to and from the facility in March because of the weak global demand for cement. The company has remained mum about when and if they will reopen the plant. Only a couple of freight trains now run on the line each week.