Oregon transportation officials are being urged to proceed cautiously with funding for intermodal facilities in the Willamette and Treasure valleys due to economic obstacles facing both projects.

Two years ago, Oregon lawmakers authorized spending $51 million for the two facilities, where containers of farm goods would be loaded from trucks onto railcars to ease highway congestion.

The proposed intermodal facility in Nyssa, Ore., is intended to allow farmers to save on transportation costs by shipping onions from the Treasure Valley by rail rather than trucking them to a more distant intermodal yard in Eastern Washington.

Competing sites in Millersburg and Brooks in the Willamette Valley both aim to give agricultural exporters a new way to get their products to marine ports along Washington’s Puget Sound by rail while avoiding traffic in Portland, Ore.

The Oregon Transportation Commission is expected to decide whether to fund the $26 million Treasure Valley facility and whether to award $25 million to either the site in Millersburg or Brooks on March 21.

However, experts warned the commission during a Feb. 21 meeting that all three proposals would have to overcome serious hurdles to become self-sustaining operations in the long term.

Business Oregon, the state’s economic development agency, refrained from recommending the intermodal facilities for funding until the proponents address a “common set of identified deficiencies,” said Chris Harder, the agency’s director.

“Our determination is further information is necessary for the department to make a recommendation to move forward any of the three projects,” Harder said.

Specifically, Harder said the “deficiencies” include “overly optimistic” projections of container volume moving through the facilities and insufficient commitments from railroads regarding available service and rates.

Matthew Garrett, director of the Oregon Department of Transportation, said he recommends the commission advance the Treasure Valley and Millersburg projects in an “incremental manner” with “off-ramps” for cutting off public funds if applicants can’t meet the necessary goals.

The onus is on project applicants to resolve these concerns, Garrett said. “It’s not a punt or a pivot. It’s a direct engagement from the project sponsors that there are unanswered questions and they should be the ones to answer those questions.”

An analysis by the Tioga transportation consulting firm found that volumes at the Treasure Valley facility are likely to be lower than proponents expect and the site will have less reliable rail service than the intermodal yard in Eastern Washington.

As for the rival Willamette Valley proposals, Tioga determined that neither is far enough from marine ports to economically spread the costs of building and operating an intermodal terminal.

“We don’t think either proposal can succeed on a standalone basis,” said Dan Smith, Tioga’s principal. “There’s nothing either team can do to change the fundamental economics.”

Even so, Tioga recommends funding the site in Millersburg over Brooks because its proponents have secured the cooperation of Northwest Container Services, an intermodal operator in Portland that already works with Puget Sound marine ports and is effectively subsidized by ocean carriers.

Smith said the Millersburg site must still conquer formidable problems but is “a few yards ahead in a long race.”

“This doesn’t make any of this easy,” he said. “It does give Millersburg a slight head start, we think.”

At the conclusion of the hearing, Tammy Baney, the commission’s chair, directed ODOT officials to develop a “matrix” outlining which questions have been answered or remain outstanding for the three projects.

“We need to make the right decision with the right information,” Baney said.