Colorado signs 25-year deal for Moffat Tunnel, the first in 100 years, setting stage for expanded mountain train service
Colorado has finalized a landmark agreement with Union Pacific Railroad that modernizes a century-old lease for the Moffat Tunnel, setting the stage for expanded mountain passenger rail service and long-term freight access through the Rocky Mountains.
Gov. Jared Polis and Union Pacific President Beth Whited on Monday celebrated the new public-private partnership, which includes:
- 25-year lease for the Moffat Tunnel
- Passenger rail access agreement
- The purchase of a freight line that opens the door to future transit development to connect Denver to several mountain communities
The Moffat Tunnel, completed in 1928, is a 6.2-mile-long rail tunnel that cuts through the Continental Divide at over 9,200 feet above sea level. It's the highest operating railroad tunnel in the country.
The original tunnel project was itself a historic collaboration between private investors and several Colorado counties to keep Denver competitive after the first transcontinental railroad bypassed the state in favor of Wyoming.
The deal marks the first new lease agreement for the tunnel since 1926.
"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, assure continued freight movement through the Continental Divide, and unlock access to the Burnham Yard," Polis said in a statement. "Moffat Tunnel represents an important part of Colorado's history, as well as a bright part of our future."
The state's 25-year access agreement allows for up to three daily round trips, totaling more than 500,000 train miles annually for the planned Colorado Mountain Rail service. The new line is expected to begin year-round daily service to Granby by 2026, with later expansions to additional mountain communities.
"Mountain rail service will soon run year-round from Denver Union Station to Winter Park, to Fraser, to Granby, Steamboat Springs, Craig and Hayden, a corridor renowned for its scenery and beauty," Polis said.
Union Pacific, which held the original lease set to expire in 2025, hailed the outcome.
"Union Pacific is proud of the hard work and spirit of collaboration that went into this agreement with the State of Colorado," Whited said. "We came together as true partners and the result is an agreement that benefits the citizens of Colorado and the businesses and people who rely upon Union Pacific to deliver the goods and material vital to today's economy."
As part of the deal, the state purchased the Burnham Lead, a short freight easement that unlocks access to the Burnham Yard near downtown Denver -- a key site for potential transit-oriented development.
Demand for passenger rail has grown significantly in recent years. The state's popular Winter Park Express -- operated in partnership with Amtrak -- saw ridership surge 153% last season, with over 44,000 trips booked, state officials said.
With the new agreements in place, Colorado officials say they are laying the foundation for future phases of mountain rail travel, while preserving critical freight movement through the region.