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Bankrupt railroad's locomotives auctioned off

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MILO, Maine (AP) — Dozens of locomotives once owned by the railroad responsible for last year's deadly oil train derailment in Quebec have been sold at auction, with about $1 million of the proceeds going to a bank.

Thirty-five locomotives sold for anywhere from $10,000 to $15,000 to upward of $200,000 apiece on Tuesday, said auctioneer Adam Jokisch, who declined to provide an auction total. Most of the locomotives were owned by Montreal, Maine & Atlantic Railways, which went bankrupt after a runaway oil train exploded and killed 47 people in Lac Megantic, Quebec. Seven others were affiliated with the railroad's corporate parent, Rail World Inc.

The auction will help pay back $3.7 million owed to Maine-based Bangor Savings Bank, which had liens on 24 of the locomotives.

John Giles, CEO of Central Maine and Quebec Railway, which has assumed the bankrupt railroad's operations, said his focus is boosting the speed on 450 miles of track that's plagued by mandated speed reductions.

The successor railroad, which plans to spend $10 million on rail improvements over the next two years, has brought in tens of thousands of railroad ties and expects to take delivery of miles and miles of track within 10 days as part of its ongoing rehabilitation aimed at getting freight trains rolling at 25 mph, Giles said.

The company is doing well as it attempts to lure back customers, and traffic levels are already at 40 percent to 50 percent of what they were a couple of years ago under Montreal, Maine & Atlantic, he said.

"There are a lot of people who want us to succeed, and there are a lot of people whose businesses would be improved if they had reliable and economical rail transportation," he said.

Next month, Giles and senior leaders will be piling into a recreation vehicle to drive the entire 450-mile length of rail to meet with municipal and business leaders as part of the rebuilding effort.

As for the locomotives, they remain at a rail yard in Milo for the time being.

The auction originally was supposed to include the lead locomotive from the train that derailed, but that vehicle was pulled from the auction at the request of law enforcement authorities in Canada.

The locomotives, some of which weren't operational, were forfeited by a subsidiary of New York-based Fortress Investment Group, which bid $14.25 million for the railroad. The value of the sale grew to $15.85 million when Fortress forfeited the locomotives, which at the time were said to be worth $1.6 million.

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