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State, Union Pacific strike new deal for Moffat Tunnel putting passengers first
The state of Colorado on Monday announced a new 25-year lease deal with Union Pacific Railroad for the state-owned Moffat Tunnel connecting the state’s Front Range with the Western Slope.
As revealed by Real Vail in 2023, UP has been paying the state $12,000 a year to use the 6.2-mile Moffat Tunnel – a 99-year deal set to expire next month. The Nebraska-based railroad giant also pays to maintain, operate and insure the tunnel, which is the highest in the United States at 9,239 feet in elevation. It has been the site of costly environmental issues in recent years.
The new, shorter deal, which kicks in May 1 of next year, “sets the stage for increased access to UP’s tracks for Mountain Rail passenger service” by allowing the state up to three free roundtrip train routes per day on the UP-owned Central Corridor rail line between Denver and Grand Junction. In exchange, UP will no longer pay an annual fee to the state.
While those terms were not included in the state press release on the deal Monday (see below), the following was first reported by the Sky-Hi News in Granby, one of the towns along the rail line:
“The framework announced Monday says the state can use Union Pacific’s tracks for up to three round trips per day. The number of trips allowed per day does not include already-existing routes, like the Amtrak Winter Park Express and the Amtrak California Zephyr.”
The federal passenger rail service Amtrak uses the Moffat Tunnel on a daily basis with the California Zephyr traveling between Chicago and the Bay Area. The Winter Park Express is a seasonal ski train the state is looking to expand on to Steamboat. Also run by Amtrak, it currently delivers skiers to Winter Park Ski Area at the western end of the Moffat Tunnel.
The state’s Mountain Rail concept — linking Craig to Denver, with housing hubs in Hayden, Craig, Granby and Kremmling connecting workers to the resorts of Steamboat and Winter Park – is currently in the midst of a service development plan (SDP) process expected to wrap up next month. Mountain Rail, which could also include a rail connection to the Yampa Valley Airport in Hayden — where many Steamboat skiers fly in during the winter – has yet to determine an operator. But Amtrak and other private railroad companies are reportedly in the running.
Passenger rail operators, just like freight companies, must pay to use the tracks owned and operated by railroad companies. UP owns both the active and inactive rail lines in Eagle County.
State Sen. Dylan Roberts, a former Avon resident from Steamboat, said Mountain Rail is critical to the state proving the viability of passenger rail on Colorado’s Western Slope as an alternative to congested and frequently closed (due to weather) mountain highways. The Polis administration has put a major emphasis on bus and rail service to enhance transportation in Colorado. Roberts added he sees the potential for passenger rail stops in western Eagle County.
Currently, both the California Zephyr and the seasonal (and privately owned and operated) Rocky Mountaineer, use the Central Corridor (or Moffat Line) between Denver and Grand Junction, passing through Bond and Dotsero in Eagle County without stopping locally. Mountain Rail would also pass through Bond before heading north to Steamboat, with no planned stops.
A local advocacy group called the Western Rail Coalition has formed to urge the state to conduct an SDP for a possible passenger rail line on the inactive UP tracks between Leadville and the Eagle County Regional Airport, connecting on to Glenwood Springs on the active Central Corridor line. The group is also pushing for daily trains between Grand Junction and Denver.
A Colorado Department of Transportation spokesman declined to comment on Western Rail Coalitions efforts to expand passenger service planning beyond the Mountain Rail concept.
Rio Grande Pacific (RGP), a Texas-based short line operator, holds a lease with UP for passenger service between Sage (right by the Eagle County airport) and Parkdale (just west of the Royal Gorge) on the inactive Tennessee Pass Line that runs through Avon at the base of Beaver Creek, past Ski Cooper on Tennessee Pass and through Leadville. RGP is no longer involved in the Uinta Basin Railway project in Utah that could quadruple oil train traffic on the Central Corridor line between Grand Junction and Denver.
Here’s the press release from the state on the new Moffat Tunnel lease deal.
Today, Governor Polis, his administration, and Union Pacific reached an agreement on a new 25-year lease of the Moffat and binding MOU in exchange for a 25-year access agreement, which sets the stage for increased access to UP’s tracks for Mountain Rail passenger service. This lease and access agreement will be executed on May 1, 2025, replacing the previous 99-year lease on the tunnel. Today the Polis Administration and Union Pacific also signed a four-month Moffat Tunnel lease extension prior to the long-term lease being executed on May 1.
“Today marks a major milestone in negotiations between the State of Colorado and Union Pacific for a new modern 25-year lease of the Moffat Tunnel and a 25-year access agreement. This is a big step forward in making Mountain Rail from Denver to Craig a reality. Passenger Rail on this corridor will relieve traffic to one of Colorado’s iconic mountain communities and provide safe, reliable, affordable transportation options for tourists and skiers as well as workers traveling along the corridor. This historic agreement is an important step to protect continuous freight operations and finally deliver on the promise of passenger rail to Coloradans and I thank Union Pacific for its partnership,” said Governor Polis.
The 100-year-old, 6.2-mile-long Moffat Tunnel cuts through the Continental Divide at 9,239 feet above sea level. Created to provide an important east-to-west connection from Denver to the West coast for commerce, the Moffat Tunnel helped Denver become a center of commerce and growth in the Rockies. Today in addition to its storied history, the Moffat Tunnel represents a lynchpin of the Mountain Rail Project to connect Coloradans and visitors from Denver Union Station through Rollingsville, to Winter Park, Granby, Steamboat Springs, Craig, and Hayden.
“Colorado built the Moffat Tunnel almost 100 years ago to connect people and freight on the West Slope and Front Range. Through this Agreement, we are making sure the Moffat Tunnel moves passengers and goods into the future. We need alternatives to I-70 and the high mountain passes, and Moffat Tunnel and Union Pacific’s line provides that whether you’re traveling with kids or freight,” said John Putnam, the Governor’s Chief Negotiator for Moffat Tunnel.
“The Moffat Tunnel put Denver at the center of commerce for the Rocky Mountain West 100 years ago, it’s foundational to how Colorado developed and it has proven to be just as important to our future and The Polis administration‘s vision for a sustainable future. It’s an honor to help with this effort,” said Lisa Kaufmann, Senior Strategic Advisor to the Governor.
“The historic Moffat Tunnel has been part of the joint Union Pacific and Colorado rail network for nearly 100 years, connecting local, regional and national customers in Colorado to each other and the world. We’re excited about the opportunity this renewed lease gives us to continue to serve our customers, while strengthening our partnership with the State of Colorado. It’s a great example of what is possible when we work together,” Union Pacific President Beth Whited said.
The tunnel cuts through the Continental Divide at 9,239 feet above sea level. It was constructed by the Denver & Salt Lake Railway – Union Pacific’s predecessor – and created to provide an important east-to-west commercial connection from Denver to the West Coast.
There is still more work ahead to execute this important partnership and today marks an important step forward for Colorado’s future.
David O. Williams
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