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Iowa Interstate picks up pieces

By Laura Botting, Dispatch/Argus Staff writer

The Iowa Interstate Railroad has been "working on the railroad" since its 1984 buyout of the bankrupt Rock Island Railroad.

These days, it seems that the railroad finally is beginning to see the light at the end of its 552 mile-track that spans from Council Bluffs to Chicago.

"We have been in a survival mode for years working out of the bankruptcy," said Doug Christy, president of the Iowa Interstate Railroad. "We are profitable now."

At the time of the takeover, the Iowa Department of Transportation predicted it would take several years to get a profitable trend going.

Mr. Christy sees the railroad's current growth track as a transition from its prior "survival" mode it entertained during its bumpy and difficult start.

The former Rock Island Railroad tracks that run between Council Bluffs and Davenport were completed in the late 1860s. The railroad flourished for a century but its trains came to a halt in 1980 when the bankrupt Rock Island stopped operating. To help fill the void left by the absent railroad, other companies provided temporary rail service.

In 1984, Iowa Interstate and its real estate partner, Heartland Rail Corporation, a conglomerate of shippers, faced strong opposition from competing railroad and trucking interests. Competitors battled the award of a $15 million state loan to Heartland Rail. Eventually, Heartland Rail purchased the former Rock Island Line for $31 million and leased it to Iowa Interstate.

Backed by Iowa government and business leaders interested in the railroad's success, Iowa Interstate strived to perform in its uphill climb. In 1984, when the Iowa Interstate began running its trains, the industry began to see evidence of the Rock Island rail's capable replacement. It began winning back the business of shippers who had switched to truck transportation during the gap in service.

The railroad has 25 diesel locomotives, 500 rail cars and 1,000 truck trailers and containers for piggyback shipments. Its 175 employees are nearly all former Rock Island Railroad workers. Most of the work force is non-union and most of its trains operate with two-man crews.

In 1991, 20 percent of the Heartland Rail Corp. was purchased from the Railroad Development Corporation, a railroad management firm.

The biggest debt facing the railroad is the $15 million Heartland loan from the Iowa Railway Finance Authority. To insure its profitable future, the Iowa Interstate is focused on bolstering its revenues by providing top-notch service to shippers.

By showing a profit, Mr. Christy said, the railroad is able to put money back into its infrastructure making it a "better, sounder safer railroad," he said.

To Mr. Christy, that's one of the keys to increasing business with its customers, and to bringing in new customers.

Recently, the Iowa Interstate was distinguished in a nine-state study for its convenient route through major population cities along the interstate.

"It has been ID'd as a preferred passenger route," said Mr. Christy. "We are the only railroad that runs along the interstate. That's put us on the map recently."

Copyright 1999, Moline Dispatch Publishing Co.