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Fellow Steam Patrons and Railroad Fans

Personal letter from Mr. Allen C Harper,Chairmen and Chief Executive Officer of AHR


August 9, 2012

Fellow Steam Patrons and Railroad Fans,

Nothing has been more disappointing to me than to have the Great Smoky Mountains Railroad without steam engine operations over the last few years.  This has occurred, not due to the lack of desire, but to pure economics.  Two in house and one totally independent assessment was made regarding the cost and time required to repair and make fully operational the engines, number 1702 and 722, which we own and are on site.  The estimated cost is $700,000 each for a total of $1,400,000.  Time needed to repair each is 18 months with a full working crew and certain component parts to an outside contractor.  With all the capital priorities such funds and labor have not been available and using commercially borrowed money is not economically feasible. 

Many options and alternatives have been and are being explored to return steam service to GSMR.  The two engines we own cannot be given away or donated because they are included as security for current financing, set in place for the financial stability of the railroad.  Various not-for-profit foundations have looked into partnering in the cost of rebuilding one or both engines, but none have gone so far as to make a financial commitment.  One group did negotiate with us and agreed to do #722 only to inform us that they did not have the resources they earlier claimed to have. 

At this time, we have been approached by a local government entity that has expressed a desire to work with us, and have low interest rate funds that can be loaned to the engine rebuilding project.  The amount they have offered is helpful, but less than 50% of what is needed.  We are searching to see if other funds can be located to combine with that offer.  These efforts just started and time will tell if that approach is possible. 

In the mean time I bought a steam engine consist in Maine with the intent to move it to GSMR.  The original cost estimate to move the equipment was $300,000.  Now that price has risen to nearly $450,000. With what I paid for the consist and the cost of the move I am re-evaluating what I might do.  It may be wiser to sell the Maine consist, borrow money from local government, and rebuild one of my engines here at GSMR.  I have to make a final decision soon on this approach. 

As I work on restoring steam engine service to GSMR with equipment I own I am, while in the interim, looking into leasing a steam engine for the railroad to provide limited steam engine rides during the peak months of June, July, and August for the years 2013 and 2014.  Hopefully we will have a permanent solution before such a lease runs its course.  I have some leads on rentable engines and I want to execute a lease in the next 90 days.

Over the last 15 years I have been dedicated to the preservation of history particularly that of railroads.  I have committed millions of dollars, the majority of my net worth, to this effort.  Some of my work has been good and some I wish I had done differently.  Overall I am proud of what I have accomplished for the Scenic Historic Railroad Industry.  Where I have erred, I accept constructive criticism gladly and will try to improve. 

Engines #722 and #1702 have not been one of my great successes.  I took advice from “experts” who said I could have them both running for less than $400,000. I allowed them take them apart and they then raised their estimates to excess of $650,000 each, and when I questioned their skills, the “experts” were gone.  I should have gotten second and third opinions before I let them dismantle the locomotives, my mistake.  I have anguished over this deeply.  Further, I have not properly cared for the pieces as well as I should.  I will do what I can to make amends for that problem.

There are some people who may criticize what I have done at GSMR or even the Durango and Silverton Narrow Gauge Railroad.  Unfortunately, the vast majority of such criticism is baseless, and their comments show a lack of any knowledge what so ever on the operation of a Scenic Historic Railroad.  Their threats to picket the railroad, to use social media to hurt the business, and some comments about stealing the engines are insane.  Help fund history and put some loose ill-conceived words into true presentation.  Personal attacks on me, when you do not know me personally, and know nothing of what I do, only show a lack of objectivity.

There are several things I will make clear:

1.       Engines #722 and # 1702 are not for sale and never have been.

2.       I have never quoted anyone a price on either engine.

3.       My intention is to restore both engines at the earliest possible time when funding is feasible. 

4.       I have instructed GSMR employees to catalogue all parts and properly store or cover with tarps immediately.

5.       I am seeking restoration funding from all possible sources.

6.       I will not do any financing that could hurt the current successful operations of GSMR or damage its stability in the long term.

7.       I am, at this very moment, working to negotiate a lease for two years on a steam locomotive to use at GSMR during peak season months and sincerely hope I can complete such a deal. 

I think the above fairly states my feelings, my plans for GSMR, my effort to restore Steam Engines #722 and #1702, and the dedication I have to the preservation of history.  I am happy to communicate with anyone personally who wants to help in a positive and constructive way. 

 

Best Wishes,

Allen C. Harper

Chairman and Chief Executive Officer 

American Heritage Railways

970-259-6505

alharper@durangotrain.com 

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