Freedom Rail shares excitement over NETEX line with board

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  • Freedom Rail Mike Salek speaks to the NETEX board/ Staff photo by Taylor Nye
    Freedom Rail Mike Salek speaks to the NETEX board/ Staff photo by Taylor Nye
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New operator will not be 'dragged into drama' over Mt. Pleasant corridor

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The Northeast Texas Rural Rail Transportation District (NETEX) has officially terminated their agreement with Blacklands Railroad and entered into an agreement with Freedom Rail Group, effectively switching their rail operator as of July 1. 

Freedom Rail Group appeared before the NETEX Board at the Hopkins County Civic Center on July 9 to answer questions about the transition and confirm an operating agreement. 

Freedom Rail was previously chosen unanimously by the board on May 29 after a search by a smaller committee from among the NETEX members selected them out of five total proposals.

FUNDING
According to Freedom proprietor Mike Salek in May, the group proposed a $12 to $15 million investment through a combination of personal monies and grant funds in the rail to bring the line up to Federal Railroad Administration Class I standard and later Class II.  

Salek updated the board in July that the terms reached by Freedom and NETEX in the operating agreement is that the sum of personal monies Freedom will invest in the rail line totals 50% of their gross income per year. 

According to figures provided by Blacklands to NETEX, the Surface Transportation Board and the News-Telegram, the net income from the 88.6 miles which NETEX oversees is negative $200,000 per year. 

However, according to Freedom, they have high hopes for the economic outlook of the rail line. 

“I really see the opportunities for the counties,” Salek said. “We want to make connections so you can get cars to other lines and have a little bit more price leverage and a wider stand on your products.” 

Salek and senior vice president Jeffrey Lederer said they also hope to expand the business of rail by one day opening a shop to do custom rehabs and paint jobs on defunct locomotives, which is already one of Freedom’s specialties. Freedom suggested building a shop on land already owned by NETEX.   

Freedom asked for permission, and the board unanimously authorized, Freedom to begin preparations of grant writing to pursue a $2 million U.S. Economic Development Administration grant in NETEX’s name. 

Shipper Brad Johnson of Northeast Texas Farmers Co-Op called the transition between operators “truly impressive in words and actions.” Shipper David Stevenson of Custom Commodities said Freedom Rail “took a lot of anxiety out of the transition.” 

TRACK REPAIR AND QUALITY IMPROVEMENT

“The target is that two years from now, they [Freedom Rail] will achieve solid Class I status without exception for the entire track, and then in five years they will achieve Class II,” Lee told the board. “There are key performance indicators in here they are committing to on a regular basis.”

Freedom has already made their first track repairs, Salek and Lederer said. 

“The KCS interchange by [Northeast Texas Farmer’s Co-Op] was in bad shape, it was actually floating. It wasn’t actually attached to the ties at all,” Salek noted. “You could barely get a locomotive in there. So we’ve already fixed that.”

Salek said the first track inspection is scheduled for the week of July 20. 

“We will put together a program for us on how to achieve that Class I standard in the most efficient way,” Salek said. “We don’t think we’re going to start in Mount Pleasant and work our way all the way to Greenville. We’ll be doing it in patches to achieve Class I first, and then we’ll reevaluate to see what we have to do to get to Class II.”  

GENERAL BUSINESS

Freedom is currently headquartered in temporary job trailers at approximately 620 Church Street in Sulphur Springs. The land for the site was donated by Custom Commodities of Gilmer, and the city of Sulphur Springs will allow the company to remain on the land for a year until they can find a more permanent location, Salek said. 

While citizens may have previously seen Freedom’s characteristic red, white and blue locomotives in Oklahoma, they are not likely to see them locally, at least for a little while, Salek said. 

“The locomotives are getting rehabbed and refurbished and fresh paint on them, so we’re hoping [to receive them] December,” Salek noted. “We’ve got one locomotive that came up out of Beaumont leased, and the other came from somewhere in Kentucky.” Freedom’s temporary engines are green, he said.  

MOUNT PLEASANT INTERCHANGE

A concern of the NETEX board was the 7.9-mile interchange at Mount Pleasant/ Winfield, currently directly leased from Union Pacific by Blacklands Railroad. 

In February 2020, NETEX filed with the STB (Surface Transportation Board) stating Blacklands is “predatory” and has a “scheme” to use the 7.9-mile stretch of track at Mount Pleasant for “potential market power abuse.” The STB found NETEX’s claims “not persuasive” in their response. 

According to Salek, Freedom intends to maintain NETEX’s shipping corridor. 

“BLR… is going to still be there doing whatever they’re trying to do in Winfield… but your trackage rights are unimpeded,” Salek noted. “We’ve already let everybody know that mysterious maintenance issues come popping up, or if we run up on a dead locomotive, we’re going to scream from the mountain high.”

“We’re not just going to go home and wait,” Salek said. “Our goal is to serve the customers and not get dragged into drama. If we are impeded beyond reason, FRA (Federal Railroad Administration), STB and everybody will be notified.”