The recession has scuttled many plans for commercial and residential projects in Southern Arizona, and it has now claimed another victim — the proposed Union Pacific switching yard near Picacho Peak.

Tom Lange, Union Pacific's director of corporate communications, said the project "is on indefinite hold for now" because of the downturned economic climate.

"We've put the project on hold because we don't have the volume of traffic to be able to move forward with it," Lange said. "With the economy as it is, we aren't able to invest the same amount of money in new projects as we have in previous years."

Lange pointed out Union Pacific had invested $3.1 billion in new projects in 2007 and 2008, a figure that declined to $2.6 billion this year.

According to Union Pacific records, it has more than 1,430 employees in Arizona and in 2008 spent more than $204 million in the state on purchases and payroll.

As part of a strategy to improve network efficiency, Union Pacific is in the process of adding a second main line within its existing right of way to complement the single rail line that runs through Pima and Pinal counties. Construction of the second main line track is expected to be completed by 2013.

Besides the second main line, Union Pacific also decided to increase its terminal capacity in Arizona, which led to a decision to shift core operations from Tucson to a centrally located rail facility in the Tucson-Pinal County-Phoenix region. Union Pacific chose a location in Red Rock, north of Interstate 10 and west of Pinal County's Park Link Road.

Union Pacific originally sought approval of the Arizona State Land Department to purchase 1,463 acres for the switching yard, and received the support of the Pinal County Board of Supervisors. However, after complaints from area residents that the switching yard would cause air and water pollution, the railroad reduced the size of its land application to approximately 900 acres.

The Arizona State Land Department has not yet moved the acreage requested by Union Pacific to public auction. Proceeds from the sale of state land benefit Arizona's trust fund for public schools, universities and other public institutions.

Switching yard opponents claim the location of the switching yard near a landmark such as Picacho Peak would have a negative effect on the area's wildlife, and also diminish the number of tourists who visit nearby Picacho Peak State Park.

Lange maintained that the railroad still plans to go forward with the switching yard project, but could not give a timetable for action.

"We plan to eventually move forward with this project, but will have to wait until we have the resources to invest in it," Lange said.

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