Short-line railroad operator RailAmerica Inc said its unit RaiLink Canada signed a five-year deal with Canadian Pacific Railway to operate a portion of the Ottawa Valley Railway (OVRR) line.

RailAmerica, which operates 7,300 miles of track in 27 U.S. states and three Canadian provinces, expects the agreement to result in a positive contribution to net income.

In December 2009, RailAmerica had terminated its lease with rail-road operator Canadian Pacific on the OVRR, which primarily transports pulp, paper and allied products.

RailAmerica will adjust historical financial statements to reflect OVRR as a continuing operation, the company said.

For the January-June period, the effect of this adjustment was $0.7 million of income, previously reported in discontinued operations, it said. RailAmerica had reported net loss of $6.7 million for the six-month period. (Reuters)