The Montreal, Maine and Atlantic Railway, formerly known as the Bangor and Aroostook, operates nearly 750 miles of rail line in Maine, Vermont, Quebec and New Brunswick. The problem, however, involves the 230 or so miles that operate from Millinocket up into Madawaska and Houlton.

"I would says it's been in decline for some time, and the recession of 2009 made it substiantially worse," says Robert Grindrod, President and CEO of MMA Railway.  Grindrod says the biggest problem has been a marked decline in demand for forest products.

"The principal traffic on the line we're seeking to abandon is lumber and other forest products, and I would say that demand for those products have been in decline in the Maine market, that is, Maine origins to other locations, since about the second half of 2006," Grindrod says.

The MMA initiated the abandonment filing back in August, but left open the hope that another rail company -- or possibly the state of Maine -- might come foward with an offer to buy the lines in question for a going price of over $20 million.

"We are looking and talking actively with the state of Maine," he says. "They are the only other party that has contacted us thus far."

The prospects for a solution to the MMA's problem, according to one rail industry observer, are not good.  "Grim, the situation is looking grim," says Chop Hardenbergh, editor of Atlantic Northeast Rails and Ports, an industry newsletter based in Yarmouth which first reported on the railroad's plans to file for abandonment.

"The state has no money," Hardenbergh says. "Other outside railroads are probably not interested because it's a money-losing proposition. So our only hope is federal stimulus funding."

In fact, MMA Railway officials say the state has applied for so-called federal TIGER grants to fund the purchase of the rail line, as well as a number of other projects.

But MMA Railway Board Chair Ed Burkhardt says there are some $58 billion in applications for a fund that totals just $1.5 billion. And he says the state of Maine hasn't made the railway purchase a priority.

"My eyes roll when I see some of the other requests that were made," he says. "I think this is pretty vital that rail service be kept to the majority of Aroostook County, but they didn't prioritize this, so the chance of getting the stimulus money isn't good."

State transportation officials could not be reached for comment on the holiday, but have said in the past that while the state is dedicated to preserving important rail lines, the economics have to make sense. The state already owns about 320-miles of rail lines. Only about 80 are in active service, the remaining 240-miles are being preserved for future rail use.

The co-chair of the Legislature's Transportation Commitee says it's unlikely that the state will buy the MMA's problem lines in northern Maine.  "The state is not in a position to lay out money to buy a railroad at this particular point," says Ed Mazurek, a Democrat from Rockland, which is at one end of the passenger line that now runs up the coast from Brunswick.

Mazurek says the next step should be to strenghten and expand those passenger connections in Maine. "The priorities right now would be to keep the Downeaster running because that's a very successful operation," he says.  "And then there's also the priority to run a line from Portland and Brunswick, so then you can go from Rockland all the way to Boston and beyond. And then there's the western lines, the mountain division is being looked at, so the MMA is in a tough situation."

Barring a viable suitor to take over the lines, Atlantic Northeast Rails and Ports editor Chop Hardenbergh says he only sees only one saviour, and that would come in the form of a marked increase in the price of deisel fuel.

"When the price of deisel was up over $5, the railroads were getting phone calls from people they heard from before, because the trucking price had gone so high, but it needs to come back to that and much more in order to make this viable," he says.

But the MMA's Robert Grindrod says it'll take more than higher diesel prices to make the northern Maine lines profitable.  "No I don't think so, I think what has to go way up is the demand for lumber and other services and other commodities like oriented strandboard, which is manufactured up there, and I would say until such time as there is an increase in demand in the housing market, I think there will be a problem up there."

The deadline for the U.S. Department of Transporation to announce the winners of the TIGER grant awards is February 17.