Stephen Estes remembers when freight from the Sebago Lake region was delivered to market over the Mountain Division rail line.

Lumber, grain and wood shavings were just a few of the products that local businesses shipped from small enclaves like Steep Falls, Hiram and Fryeburg to large markets in Portland, Boston and beyond, said Estes, owner of P.Y. Estes & Sons, a quarry operation in Baldwin.

“They were all active when the rail went offline. I can’t help but think they could come back and do some business,” said Estes, who hopes the state can return rail service to the region and give companies another shipping option.

In mid-May, the state purchased a 5.2-mile section of the Mountain Division Rail Line running from Westbrook to South Windham from PanAm Railways, formerly known as Guilford Rail.

The state now owns or has access to the entire 50-mile line, which connects to North Conway, N.H., and can begin researching more closely the opportunites presented by the rail line. While freight service may be feasible in the near future, commuter service seems more likely to be a long-term project.

The reintroduction of rail service between Portland and Fryeburg, via Windham and the Lakes Region, depends in large part on the interest of large scale customers and the future price of fuel, said Nate Moulton of the Maine Department of Transportation.

The Mountain Division line, with all but the Portland-to-Westbrook section out of service since 1984, will require an investment of around $20 million. The repair would make the line suitable for freight and excursion passenger service, Moulton said. The timber cross ties are in poor shape along most of the line, and track would have to be laid in the Westbrook-to-Windham section.

“The goal of the state is to get it back in service and get trucks off the roads,” he said. The state paid $805,000 for the final section of the rail line, funding that was approved in a statewide bond referendum held last year. The state spent around $1 million for the Windham-to-Fryeburg section in 1997.

A repaired rail line greatly interests Estes, who would like to ship material from his quarry to bigger markets in Massachusetts, Connecticut and Rhode Island, where it cannot be practically shipped by truck. He also thinks it would help out other businesses along the way.

“I think the rail line is just a great opportunity for economic development in this area,” he said.

Larry Seidl of Seidl Trucking agrees.

“Most successful areas use all of their assets,” said Seidl, who is also president of the Baldwin Business Association. “We have not been developing our assets.”

High fuel costs are not going away, said Seidl, so the appeal of rail service will continue to grow. If just a couple of companies come to the area because of rail, it will be good for the region, he said.

“A factory or two along this rail line is all it will take,” said Seidl.

The state will likely seek federal funds to begin the rail repair and bring the Mountain Division line up to standard. But at some point a carrier would have to come forward to operate and maintain the line, Moulton said.

“If you are going to interest any of them, it has to be a money-making proposition,” he said.

A Department of Transportation study presented in December found that the most likely use for a Mountain Division line freight service would be to ship aggregates, such as sand and gravel, from businesses near the line, which runs from Portland to Windham, along the west side of Sebago Lake, then northwest to Fryeburg.

For the rail service to be viable, one or two large scale users would have to first sign-on to ship along the line, Moulton said.

“You really need one or two big customers to get it going, then you can add the smaller guys along the line,” he said.

According to the study, that could be difficult. Of the two dozen businesses who were identified as likely shippers and interviewed, most were interested in the prospect of rail service. But many noted that they did not ship in sufficient amounts to use rail, or could not live with the inconsistent delivery times of rail.

With the entire line now secure, Moulton said the state needs to revisit the potential customers and, after presenting concrete costs and times, find who is really interested. The state, and potential rail customers and carriers, have to continually compare the costs of shipping on road versus rail, he said. As diesel prices, now at around $4.70 a gallon, continue to rise, rail service becomes more attractive, he said.

Regardless of the initial interest, if the rail line is re-established, entrepreneurs will come forward and use it once it is in place, Estes said. Business owners who realize how to take advantage of the opportunity will be successful, he said.

“We can go and try to find markets and see if we can make them work,” said Estes.

While leisurely, sightseeing-centric excursion service may be possible with the same repair that is required for freight service, commuter trains along the Mountain Division line are not likely for years, Moulton said. To bring the rail to commuter-speed standards from Portland to Fryeburg, the cost would likely be around $42 million, double that which is needed for freight service.

Passenger service of the kind that can be useful to commuters would likely be completed in stages, Moulton said, and would likely have to be subsidized. Demand would likely depend on whether the price of fuel continues to rise, making auto travel less appealing, he said.

From Windham’s perspective, commuter service should be developed sooner rather than later, said Keith Luke, the town’s economic development director.

Luke, a proponent of public transportation, said the state should be looking to Massachusett’s North Shore as an example. There, in the Boston suburbs, development has occurred near the areas that feature commuter rail stations, Luke said.

Freight service will not help nearby communities a great deal, Luke said. If the state wants to realize great dividends from rail development, it should make the large investment now, and watch as commuters find the service. Fast passenger service would be popular, and as popularity increases, the areas around stations would develop, as would complementary services, he said.

“Passenger has to be the focus, and speed is important,” said Luke.