Watco Cos., based in Pittsburg, Kan., last month asked the Surface Transportation Board to allow it to operate 123 miles of railroad owned by Norfolk Southern Corp., according to a written statement issued by Watco this morning.

In December 2007, the Surface Transportation Board denied a request by Watco to form a joint venture with Norfolk Southern to operate 300 miles of Michigan railroad, including the line between Ypsilanti and Kalamazoo used by Amtrak passenger trains.

Community leaders and politicians across southern Michigan rallied against the proposed deal at the time, fearing it might harm high-speed passenger rail service between Detroit and Chicago.

In this new, proposed deal, Watco would form a subsidiary company, The Grand Elk Railroad, to ship freight between Grand Rapids and Elkhart, Ind.

"The Grand Elk will help the area's economy by providing freight service to customers at various locations," Watco said in its statement. "As part of this transaction, the Grand Elk will be investing significant resources in improving the railroad. Currently, speeds on portions of the railroad have dropped to 10 mph and the Grand Elk Railroad will be inserting ties and working on the line to bring the speed up to 25 mph from Elkhart to Grand Rapids."

The Grand Elk would serve 55 customers and move an estimated 22,000 annual car loads of automotive parts, plastics, metals, lumber and aggregates, it said.

The company would be based in Kalamazoo at the Botsford Yard on Mill Street and employ 54 workers, Watco said.

It did not disclose lease terms. A call to company spokesman Ed McKechnie was not immediately returned.

Watco said it expects the regulatory process to last 60 days, and, if approved, The Grand Elk could begin operations in March 2009.

(The preceding article by Alex Nixon was published December 3, 2008, by The Kalamazoo Gazette.)