DOT awards $31.4 million loan to two California rail systems

The U.S. Department of Transportation has provided a $31.4 million loan to two California rail systems to expand and rehabilitate infrastructure in the Central Valley and Mendocino County. The loan comes from the DOT’s Build America Bureau, which oversees long-term financing for rail and road infrastructure projects.

The co-applicants received a Railroad Rehabilitation and Improvement Financing (RRIF) loan for the Northern Railway (SNR) and Mendocino Railway (MRY).

The loan will cover almost all project costs for both railroads, which will include rehabilitating the partially collapsed Tunnel No. 1 on the MRY and other sections of existing track. Extensive preventative maintenance is also planned, including:

Rehabilitating 27 MRY bridges and 40 miles of track.
Increasing the safety, operating capacity and efficiency of both railroads.

“Sierra’s and Mendocino’s RRIF loan will help modernize the rail line, which will greatly enhance existing freight service and make the railroad more attractive to new freight customers.” Build America Bureau Executive Director Morteza Farajian said in a statement.

The RRIF is a $7 billion program for small rail lines like SNR and MRY. This is the Build America Bureau’s first loan to a short-line, Class III railroad since it was established in 2016. The project is projected to wrap up by 2027, officials say.

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