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USDOT Announces $31.4M Loan to Upgrade Critical Rail Lines in California

MENDOCINO COUNTY, CA — The U.S. Department of Transportation (USDOT) announces that its Build America Bureau (Bureau) provided a $31.4 million Railroad Rehabilitation and Improvement Financing (RRIF) loan to the Sierra Northern Railway (SNR) and Mendocino Railway (MRY) to expand and rehabilitate rail infrastructure in the Central Valley and Mendocino County, California. By providing RRIF and Transportation Infrastructure Finance and Innovation Act loans, the Bureau helps communities expedite infrastructure projects and reduce project costs.

“USDOT is pleased to support this important project in California that will increase safety, reduce harmful greenhouse gas emissions, and improve freight service benefitting the entire region,” Deputy Secretary Polly Trottenberg said. “The Biden-Harris Administration is committed to investing in clean transportation and enhancing supply chains.”

The loan finances nearly 100 percent of the planned improvements, including the SNR expansion of 6.7 miles of Oakdale Branch track for engine and carriage storage; and the MRY rehabilitation of Noyo Canyon Tunnel No. 1, 27 bridges, and 40 miles of track.

“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,” said Morteza Farajian, Ph.D., Build America Bureau Executive Director. “We are pleased that a short-line railroad has been able to take advantage of our low-interest financing and deliver improvements that might not have been possible otherwise.”

The project should be complete in 2027 and will provide many benefits to the community, including:

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  • Increased safety, operating capacity, efficiency
  • Reduction of derailments and grade-crossing incidents
  • Reduced congestion and air pollution on local roads and highways

“We appreciate the Bureau and all their hard work helping us with the RRIF loan,” said Kennan H. Beard III, Sierra Northern Railway President. “This project will provide the region with new construction jobs and greatly benefit the Central Valley.”

“The RRIF loan helps enhance our freight and passenger services in Mendocino County by providing additional jobs, improving safety, lowering emissions, and advancing our regional transportation options,” said Robert Jason Pinoli, Mendocino Railway President.

The RRIF program maintains a $7 billion set-aside to support small railroads like SNR and MRY. This is the Bureau’s first loan to a short-line railroad since it was created in 2016.

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