AN American rail company has bought a majority share of a troubled North East tourist railway. Iowa Pacific Holdings, which operates 700 miles of track in the USA, has taken a 75% stake in Weardale Railway.
The move follows negotiations with previous owners the London-based ECT Group over the railway’s 18-mile stretch of track between Bishop Auckland and Eastgate, County Durham.
The announcement is the latest development in the chequered history of Weardale Railway, which currently runs trains on a six mile stretch of the line – between Wolsingham and Stanhope.
A joint statement, which was released yesterday by the American company and ECT, said: “Iowa Pacific Holdings and ECT Group announced today that the rail holdings of ECT have been transferred to British American Railway Services, Ltd, a new company established in the UK by Iowa Pacific.
“ECT is also transferring its 75% interest in Weardale Railway.
“Iowa Pacific is a privately-owned company that owns and operates six short railways in the United States.
It has 700 miles of track, 180 employees, and a current annual turnover topping $40m.
ECT Group chief executive Anna Whitty said: “ECT is delighted to have found a new home for its rail businesses, with an organisation that supports the values of community rail and has the skills and resources to provide them with a sustainable future.”
Iowa Pacific president Ed Ellis said yesterday: “We believe in the community rail model and look forward to developing freight, tourist and passenger services, and to sustained, profitable growth. In addition, we are excited about the support from other stakeholders at the Weardale Railway, who are making it a vital attraction in the community.”
Weardale Railway was putting on trains daily during the six week summer holidays.
Volunteers from the Weardale Railway Trust run it day-to-day and trust chairman Ian Gardner said last night: “The trust look forward to working with Ed Ellis, president of Iowa Pacific, and his team, in driving the project forward by getting the line open to Bishop Auckland and reconnected to the main line – as well as developing the services we can offer to our visitors.”
The six-mile stretch of line was reopened in August last year. This came 20 months after a 2004 relaunch failed and £900,000 was left owing to 104 creditors, many of which were small local firms.
ECT invested £100,000 for its 75% stake once the administrator had secured a company voluntary arrangement paying creditors 22p in the pound.
Coming out of the CVA enabled the Weardale Railway to secure the line’s freehold from Network Rail.
Six months ago ECT disclosed that during 2007, a full year of normal operations which had included some use of steam haulage, the railway had attracted only 10,000 visitors – but it needed 35,000 visitors to break even.
It was losing an average £10,000 per month.