FORT WORTH – Analysts and industry observers suspected that BNSF Railway had to pay a pretty penny to buy out Montana Rail Link’s long-term lease on the former Northern Pacific main line.
It turns out they were right.
BNSF’s financial report suggests the railroad paid MRL around $2 billion to tear up the lease well before it was scheduled to expire in 2047. That’s right in line with independent analyst Anthony B. Hatch’s $2 billion estimate. Other analysts and observers who spoke with Trains News Wire arrived at the same figure, citing the valuations of recent rail acquisitions.
BNSF’s 2021 financial statement lists $2.664 billion in payments to joint facility partners and service providers, up from $568 million in 2020.
A BNSF spokesman confirms that the MRL buyout is included in the $2.6 billion figure. But the nearly $2.1 billion gap between 2020 and 2021 can’t be solely attributed to MRL, BNSF says, because it includes payments made to all partners and service providers.
It’s impossible to zero in on an exact figure: BNSF financial statements from prior years did not break out payments to joint facility partners, making it difficult to know how much the payments typically vary from year to year.
MRL announced on Jan. 10 that it was terminating its lease with BNSF and that the Class I railroad would resume operations and maintenance of the former NP main line. No timetable was given for the transfer, and terms of the deal between BNSF and MRL owner The Washington Cos. were not disclosed.
The railroads plan to negotiate labor agreements with MRL employees before seeking Surface Transportation Board approval. BNSF has pledged to retain all MRL employees.
Montana Rail Link began operations on Oct. 31, 1987 under a 60-year lease from Burlington Northern. BN had excess capacity across Montana, favored the parallel former Great Northern main line, and was saddled with antiquated labor contracts and a poisonous union-management relationship. So BN unloaded the 590-mile former Northern Pacific between Jones Junction, Mont., and Sandpoint, Idaho.
BNSF had sought to undo the lease over the years.
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