History

The Division manages approximately 530 miles of state-owned rail lines.

These lines represent a portion of the trackage that was purchased between the mid-1970s and mid-1980s in response to the Federal government's attempt to restructure bankrupt railroads in the northeast and midwest regions of the country.

The lines proposed for abandonment - which represented over 35 percent of Michigan's total freight network at that time - were concentrated in rural parts of the state. State leaders were concerned that losing rail service would have had serious economic consequences, not only in the areas immediately impacted but statewide as well. After considerable study and analysis, MDOT opted to purchase approximately 900 of the 1100 miles proposed for abandonment.

Most of the lines were in serious disrepair. MDOT contracted with private railroad operators to provide service to shippers and began an intensive effort to rehabilitate the lines to a more reasonable and sustainable operating condition.

Over time, it became apparent that some of the lines were not in fact essential parts of the state's transportation system. Several lines, or portions of lines, have since been abandoned - many becoming recreational trails in the process. Two lines have been successfully returned to the private sector.

In 1998, the state Legislature enacted a law mandating that MDOT divest itself of four specific rail lines. The objective is to return commercially-viable rail operations to the private sector. As directed by statute, we are pursuing divestiture through a competitive proposal process - seeking the private sector bidder who exhibits the best combination of purchase price and potential for providing long-term, continuous, efficient and reliable rail service.

We have completed the process for one line (Lenawee County Rail System) and are in negotiations for the second (Hillsdale County Rail System). The remaining two segments, the Vassar Area System and the Ann Arbor and Northwest Michigan System, will be offered at a later date. The Lake State System is not subject to divestiture. For the lines that remain under state ownership, the Program is responsible for various property management functions.

The contract operators are responsible for actually providing the service to rail users, meeting all federal regulatory requirements and for basic, day-to-day maintenance activities.