Red Coat Road and Rail, the short-line rail company that operates on the Pangman-to-Assiniboia rail line, had a strong year in 2002, despite the tough circumstances facing agriculture last year.

According to figures released at Red Coat's annual shareholder meeting held late in 2002, the community-based company was able to not only pay direct and indirect taxes to the communities they're located in, but were able to have a net income of just over $35,000, said Ogema-area producer and company director Lonny McKague.

The road-and-rail company completed its fourth year of operation, which primarily provides farmers with the opportunity to ship their grain via producer cars, and also serves seven elevators in six towns which are now privately owned by community or individual owners.

In listing the tax benefits to the communities along the rail line, McKague noted the following was paid: Pangman received taxes of $2,300; Ogema, $4,300; the RM of Bengough, $2,300; RM of Norton, $16,317; RM of Key West, $39,513; and the RM of Excel, $63,339.

In addition, the seven elevators in the six towns were all formerly owned by the Saskatchewan Wheat Pool, and all would have been closed down if the short-line rail line was not present. McKague estimated a total of $250,000 has been retained for the tax base of the municipalities along the line due to Red Coat's existence.

The net income for 2001-02 after expenses, taxes and depreciation was $35,792, while the total income over expenses was $79,000.

In addition, said McKague, in the past three and a half years Red Coat has paid $140,000 in interest charges to a local financial institution, and their debt has been reduced by about $200,000 in principle, which shareholders indicated they were very happy about. McKague noted the company is about four years into a 15-year financing agreement.

While the shareholders were happy with the monies paid onto the debt, they decided no dividends will be paid out to shareholders until the long-term debt has been reduced to a more manageable level, he said.

The rail line is valued at around $1.4 million, which is about $300,000 more than they paid for the line. McKague said they recently received a report that actually puts the value of their line even higher, but this new value won't be released at this time.

While none of the elevators are owned by Red Coat Road and Rail, they all have individual marketing agreements with the short-line to use their rail line, including some of the elevators which are used to load producer cars.

Producers are using Red Coat's line to fill producer cars and are finding it's a "win-win" situation, benefitting both Red Coat and themselves.

One of the most significant ongoing expenses for Red Coat is its yearly maintenance and service bill, which amounts to close to $90,000 a year. Most of that goes to Southern Rail based in Avonlea, as they do track maintenance and provide the train engine pulling power needed on the line.

While getting their own engine might be a possibility far down the road, right now this agreement is "mutually beneficial" for both Red Coat and Southern Rail, said McKague.

"The two short-lines have a lot in common, but we're independent as businesses," he added.