SecProbe.io

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Postal Code 20549-0305

								February 4, 2005

via facsimile and U.S. mail

J. Michael Carr
Chief Executive Officer and President
Pioneer Railcorp
1318 South Johanson Road
Peoria, Illinois  61607

Re:  	Pioneer Railcorp
	Schedule 13E-3 filed November 9, 2004, as amended January 11,
2005
	File no. 5-47260

	Preliminary Schedule 14A filed November 9, 2004, as amended
January 11, 2005
	File no. 1-12072

	Form 10-KSB for the fiscal year ended December 31, 2003
	File no. 1-12072
	Filed March 18, 2003

Dear Mr. Carr:

	We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Summary Term Sheet, page 7
1. See the second to last bullet point on page 8.  Revise the
fairness determination of the board of directors to address each
group of unaffiliated shareholders.
2. Also, in the summary term sheet, please provide the fairness
determination of each filing person.
3. Revise the summary term sheet to highlight the information in
response to comment 19 and the document to provide further
information regarding what shareholders need to do to have their
ownership status from street to record, including timing concerns.

Preliminary Proxy Materials

Special Factors, page 12

Background of the Merger Proposal, page 12
4. You frequently refer to incurring significant costs as a result
of
the Sarbanes-Oxley Act and that these costs were a significant
factor
in your decision to privatize.  Please quantify, to the extent
practicable, the significant costs to which you refer and also
disclose the specific "cost savings and benefits of proceeding
with
the going private transaction" as discussed by management on June
28,
2004 and September 20, 2004.
5. We note your response to our prior comment 23, but reissue that
comment, in part.  Revise the fairness section to clarify what
consideration the board and each filing person gave to the fact
that
the merger structure would allow you to cash out the warrant
holder
and how it was fair to each group of unaffiliated security
holders.
6. Please provide a more specific narrative on the discussions
Donnelly Penman had with key management key members.  For example,
you should provide the material aspects of the discussions
relating
to the bullet points you list on page 15.

Structure of the Merger, page 17
7. We note the revised disclosure in response to comment 27.  Also
disclose these figures on a per share basis. In addition, it is
unclear why you based these amounts on beneficial ownership.
Please
advise.

Financial Fairness, page 20
8. We note your response to comment 32.  With a view toward
clarified
disclosure, tell us how Donnelly was able to identify specific
growth
opportunities.  For example did members of management provide them
with information regarding particular aspects of potential growth
or
changes in subsidiary operations?  If so, it appears this should
be
disclosed.

Recommendation of our board of directors, page 22
9. We note your response to our prior comment 36, but reissue the
comment because we do not see disclosure addressing what
consideration each filing person gave to the fact that management
and
the board, rather than the special committee, determined the
structure of and procedural safeguards necessary for the
transaction.
10. We note your response to our prior comment 37 and the
disclosure
you added to address the procedural safeguard found in Item
1014(d).
Please revise to specifically address the procedural safeguard
found
in Item 1014(d).

Interests of Certain Persons in the Merger, page 29
11. We note your response to prior comment 42.  Revise to clarify
that each of the interests you disclose are based on beneficial
ownership.  Also revise to disclose how the actual or economic
interests will change.

Position of the Company`s Largest Shareholder, Guy Brenkman, as to
the Fairness of the Merger, page 29
12. Mr. Brenkman has not provided a fairness determination as to
each
group of unaffiliated holders since it appears that Mr. Brenkman`s
statements broadly relate to "shareholders who are not affiliated
with Pioneer."  Please further revise to have Mr. Brenkman state
his
belief as to the procedural and substantive fairness to each group
of
unaffiliated shareholders.  See Item 8 to Schedule 13E-3 and Q&A
No.
5 of Exchange Act Release No. 34-17719 (April 13, 1981).

Financing of the Merger, page 30
13. We note your disclosure regarding the financing and that you
have
filed "Form of Loan Documents" as Exhibit 4 to your Schedule 13E-
3.
Please advise us supplementally why you believe financing is
assured.
If you have a commitment letter, please file it as an exhibit to
your
Schedule 13E-3.   If financing is not assured, please disclose
that.
Refer to prior comments 16 and 43.
14. Since your disclosure currently indicates that you have no
arrangements in place in the event that your primary financing
plans
fall through, please confirm to us whether there are any
foreseeable
conditions or uncertainties known to you that would result in the
failure to finance the merger.

Pro Forma Effect of the Merger, page 37
15. The weighted average shares outstanding of 4,005,102 presented
in
the selected pro forma financial data table do not agree with the
weighted average shares of 4,047,523 included in footnote (D) of
the
pro forma consolidated income statements for the year ended and
nine
months ended December 31, 2003 (page 51) and September 31, 2004
(page
52), respectively.  Please revise your filing to correct this
discrepancy.  In addition, please set forth the weighted average
number of shares used to compute the per share data on the face of
the pro forma income statements in accordance with Rule 11-
02(b)(7)
of Regulation S-X.

Voting Securities and Principal Holders thereof, page 42
16. Please revise the table to calculate beneficial ownership as
set
forth in Rule 13d-3(d)(1)(i). ("Any securities not outstanding
which
are subject to options, warrants, rights or conversion privileges
shall be deemed to be outstanding for purposes of computing the
percentage of outstanding securities of the class owned by such
person, but shall not deemed to be outstanding for the purpose of
computing the percentage of the class by any other person.")
Also,
clarify in the footnotes that all stock options will continue to
be
outstanding after the merger.  Finally revise the table to include
all shares beneficially owned as determined by Rule 13d-3.
Disclaimers of beneficial ownership do not affect this amount.
Revise throughout the document to reflect correct beneficial
ownership.

Selected Historical Financial Data, page 45
17. The notes payable amount of $281,000 as of September 30, 2004
does not agree with the notes payable amount of $218,000 presented
on
the face of the pro forma consolidated balance sheet on page 48.
Please revise your filing to correct this transposition.

Pro Forma Consolidated Income Statements, page 51
18. We note your response to prior comment number 51 and pro forma
adjustment (A) of $150,000 giving effect for the estimated cost
savings from no longer being a public company.  In addition to
being
directly attributable to the merger and having a continuing
impact,
the pro forma adjustments must also be factually supportable.  In
this regard, please expand your footnote to specifically disclose
the
type and amount of the costs that you no longer expect to incur as
a
result of the going private transaction.  Your revised footnote
should also include the calculation of how you arrived at the pro
forma adjustment of $150,000 and basis for the amounts included in
the adjustment.
19. Further, we note the pro forma adjustment (A) for both your
pro
forma consolidated income statements for the year ended and nine
months ended December 31, 2003 and September 30, 2004,
respectively,
is estimated at $150,000.  We would expect the estimated amount
for
the nine-months ended September 30, 2004 to be less than or
prorated
accordingly based upon the amount estimated for the year ended
December 31, 2003.  Please advise or revise your pro forma
adjustment
on pages 51 and 52, accordingly.

Other
20. Please note that we do not have a record of any
acknowledgements
electronically filed as correspondence on Edgar.  As you know, you
are required to submit related correspondence and supplemental
information on Edgar pursuant to Regulation S-T.  Please refer to
Rule 101 of Regulation S-T.

In connection with responding to our comments, please provide, in
writing, a statement from each filing person acknowledging that:

* the filing person is responsible for the adequacy and accuracy
of
the disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the filing person may not assert staff comments as a defense in
any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.

Closing Comments

	Please file an amended Schedule 13E-3 and Schedule 14A in
response to these comments.  Mark the amendments so that the
revisions, including those made not in response to staff comment,
are
clear and distinguishable from the text of earlier submissions.
See
Rule 310 of Regulation S-T.  In addition, please furnish a cover
letter that keys your responses to our comments and provide any
supplemental information we requested.  This comment letter should
be
filed on EDGAR as correspondence.  If you believe complying with a
comment is not appropriate, tell us why in your letter.  You
should
be aware that we might have additional comments based on your
responses.

 	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

	Please direct any questions regarding the accounting comments
to
Jean Yu, Staff Accountant, at (202) 824-5421, or in her absence,
to
Linda Cvrkel, Branch Chief - Accountant, at (202) 942-1936.  For
questions on other comments, please contact Johanna Vega Losert,
Attorney-Advisor, at (202) 942-2931, or Susan Guerrier, Attorney-
Advisor at (202) 942-1965.   You may also reach me at (202) 942-
2920.

							Sincerely,

							Michael Pressman
							Special Counsel
							Office of Mergers and
Acquisitions

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Pioneer Railcorp
February 4, 2005
Page 6

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405

         DIVISION OF
CORPORATION FINANCE

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