Colorado’s Mountain Rail Project is moving forward, after Gov. Jared Polis officially recognized the state’s partnership with Union Pacific Railroad at a signing celebration at the Governor’s Residence in Denver.

On Monday, May 5, Gov. Polis signed an agreement with Union Pacific president Beth Whited for the railroad to continue operating the Moffat Tunnel for another 25 years.

This event has a special significance for Grand County where the west portal of the tunnel emerges near Winter Park Resort. The Colorado Department of Transportation plans to utilize the tunnel to extend the mountain passenger rail from Denver all the way to Craig in Moffat County.

“This agreement begins a new era of partnership between the State of Colorado and Union Pacific that will expand passenger rail into our beautiful Rocky Mountains,” stated Polis in a news release. “With this work, we are showing the country a new model for pursuing passenger rail through collaboration with the railroad.”

What does the lease entail?

In December 2024, Union Pacific renewed its lease to continue operating the tunnel for the next 25 years. The tunnel is owned by the state of Colorado. Gov. Polis highlighted this recent lease agreement in at the May 5 celebration.

The tunnel lease stretches back nearly 100 years, to the time it was first bored through the Continental Divide. The 6.2-mile passage allows trains to travel between the Western Slope and Front Range. 

Under the 1926 lease, the railroad paid $12,000 per year to the state for use of the tunnel. Now, instead of paying yearly, Union Pacific will allow the state to use its tracks for free for the mountain passenger rail project. In other circumstances, Union Pacific may have charged a fee for that access.

The state will be able to use Union Pacific’s tracks for up to three round trips per day for the mountain rail.

How does this relate to the Mountain Rail Project?

Gov. Polis has long been an advocate for CDOT’s Colorado Mountain Rail. This line could potentially include stops in incorporated Grand County towns, from new to existing stations.

“When this daily train service begins connecting Denver to Winter Park, Granby, Steamboat Springs, and on to Craig it will undoubtedly be one of the most beautiful train rides in the country, if not the world, and provide a safe, affordable alternative to being stuck in traffic,” stated Lisa Kaufmann, the governor’s senior strategic advisor, in the release.  

Also as part of the 25-year lease agreement, Union Pacific will be in charge of collection of all hazardous materials, spill mitigation and fire prevention. The railroad company’s operation of the tunnel hasn’t been without environmental controversy, including a wastewater spill in July 2023 that impacted the Fraser River.

Grand County water quality specialists have also expressed concerns with continued impacts to the Fraser from polluted tunnel discharge.

Although environmental impacts caused by railroads remain a reality, the Moffat Tunnel remains the only rail connection between the mountains and the Front Range — and possibly a better option for commuters.

“Today’s agreement will offer residents and visitors throughout Colorado new opportunities and choices to get where they’re going,” stated CDOT Chief of Staff Sally Chafee in the release. “More passenger rail trips between the Front Range and mountain communities in Winter Park, Granby, and beyond will offer an option in addition to the drive over Berthoud Pass.”  

Amtrak currently runs the California Zephyr on this Union Pacific line, and well as the popular Winter Park Ski Train, which connects Denver to Winter Park Resort. According to the governor’s office, the ski train saw a 153% increase in ridership for the 2024-25 season, compared to the previous season.

Elliott Wenzler contributed reporting to this article regarding lease negotiations.