**KEOKUK JUNCTION RAILWAY CO.**

# 1318 S. JOHANSON ROAD

PEORIA, ILLINOIS 61607

\(309\) 697-1400

June 3, 2005

Melvin F. Clemens, Jr.,

Director, Office of Compliance and Enforcement

Surface Transportation Board

1925 K Street, N.W.

Washington, D.C. 20423

RE: Docket No. FD 34335 -- *Keokuk Junction Railway Co. -- Feeder
Railroad Development Application -- Line of Toledo, Peoria & Western
Railway Corporation between LaHarpe and Hollis, Illinois.*

Dear Director Clemens:

On May 17, 2005 Toledo, Peoria & Western Railway Corporation ("TP&W")
sent you a letter requesting mediation of certain alleged issues
surrounding the trackage rights agreement covering TP&W's operations to
and from the Mapleton Industrial Spur. At this time, Keokuk Junction
Railway Co. ("KJRY") does not believe mediation is required.
Furthermore, there are several statements in TP&W's May 17 letter that
require clarification, or are simply incorrect.

I would like to first clarify the statement that "KJRY has not returned
an executed copy of the agreement." The fact is that TP&W executed and
faxed the Board-approved agreement to KJRY under protest and only after
the closing of the transaction. Despite the fact that TP&W failed to
meet the Board's requirement of negotiating in good faith and accepting
the agreement prior to closing, KJRY nonetheless honored the agreement
and continues to do so today. Frankly, KJRY expected to receive the
"hard copies" of the signed agreement for KJRY's execution rather than
facsimile versions of the signature pages and requested more than once
that original documents be sent. At one point TP&W implied that it had
sent those copies, but then stated they did not intend to send the hard
copies because they viewed the agreement as an "interim" agreement. Now,
having failed to send "'hard copies" to KJRY, it wants to criticize KJRY
for not returning executed copies to it. KJRY stands willing and able to
send an executed copy to TP&W as soon as TP&W sends its original "hard
copies" of the agreement to KJRY. Of course TP&W won't do so because it
wants to better the Board-approved agreement with unilateral concessions
from KJRY, before doing so.does not believe the Board approved agreement
is satisfactory to them. To criticize KJRY for not executing the
agreement when TP&W has refused to do so itself is absurd. Nonetheless,
KJRY has been and will continue to operate as if the agreement is were
in full force and effect.

As with its refusal to comply with the Board's order to either accept or
reject the approved trackage rights agreement, TP&W has also failed to
comply with the Board's order to forward documents to KJRY within 90
days. In fact, although TP&W has repeatedly told KJRY they have agreed
on the language of an assignment agreement and had only to "find whose
desk the agreement is on," tto date, KJRY has not received the
assignment agreement. Nor has KJRY received any of the contracts to be
assigned, valuation maps, or other documents that the Board ordered TP&W
to produce. TP&W has not responded to KJRY's requests for revisions in
the proposed deeds, and, has refused to discuss the various real estate
issues. Thus, it is TP&W that who is being uncooperative, not KJRY, and
it is TP&W that who is in blatant violation of the Board's order, not
KJRY.

Indeed, KJRY has sentd more than one list of closing issues to be
resolved, and has left numerous voice mail and e-mail messages with TP&W
attorneys asking for a time at which the parties could discuss those
issues. TP&W has yet to even offer a time .

KJRY went so far as t attempt to use the Seventh Circuit mediation
attorney (who was discussing the TP&W's pending appeal of the Board's
decision) to initiate a discussion of the outstanding issues. TP&W again
refused to enter into any discussions, apparently deliberately waiting
so that TP&W could later write to you and claim intransigence. If TP&W
were truly interested in resolving these issues, they would have
responded to the numerous e-mails, phone calls, and attempts by KJRY to
initiate discussions. The fact that TP&W did none of those things is
telling.

Meanwhile, KJRY continues to honor the trackage rights agreement.
Traffic is moving, without any significant problems. Operating personnel
have a good working relationship, and customers are being served. KJRY
and TP&W have even concluded an interchange agreement.

KJRY is not opposed to ultimately mediating outstanding issues, but it
is unwilling to do so until such time as TP&W complies with the Board's
order to turn over documents related to the LiIne, which TP&W is now
almost four weeks delinquent in doing, and sends KJRY a "hard copy" of
the executed trackage rights agreement. Until these basic Board- ordered
actions are undertaken, KJRY believes that any meaningful mediation must
wait. Finally, In fact, for there to be any true mediation, such a
process must encompass all outstanding issues, not just the trackage
rights agreement.

Sincerely yours,

![](media/image1.png){width="1.801388888888889in"
height="0.5847222222222223in"}

Daniel A. LaKemper,

General Counsel.