Wednesday, November 04, 2009

As work proceeds, P&N lacks an operator, necessary funding

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As work proceeds, P&N lacks an operator, necessary funding | Railway Track & Structures

Work crews with heavy equipment were busy Nov. 3 repairing the historic Piedmont & Northern Railroad off of Ozark Avenue in Gastonia, but while the restoration of the rail line is moving ahead, the project's bottom line still has obstacles to overcome, according to the Gaston Gazette.

The N.C. Department of Transportation has yet to agree on the terms of a lease with Carolina Central Railway, a company hoping to operate and maintain the P&N line. At the same time, the state is looking for federal grants needed to complete the multi-million dollar project. The state "never did have money from the get go to do it," said Patrick Simmons, director of the DOT's Rail Division.

Meanwhile, an ethanol plant that was considering a site on the P&N line in Ranlo probably won't come to Gaston County now, officials said.

Bill Gray, president of Carolina Central Railroad, has lead an effort to revive the state-owned P&N Railroad in Gaston County for more than two years, gaining support from county commissioners and the state legislature. But thus far, Gray said the lease arrangements proposed by the state DOT have been unrealistic.

"No acceptable lease has been forthcoming from DOT that would allow the opening of the railroad," Gray said. "At least two customers have walked away because of the slow response from DOT in finalizing a lease."

Gray met with DOT officials on Nov. 2 and he is scheduled to submit a final proposal to the state this week. According to Simmons, the department has offered Gray lease arrangements that are consistent with industry norms.

The P&N, which runs 23 miles from Gastonia to Charlotte, has been out of service since the 1980s. Gray and several area leaders want to reopen it so Gaston County companies could transport freight from local sites to the Norfolk Southern line in Gastonia or the CSX Transportation line in Mount Holly. And though it is not part of immediate plans, some advocates hope for restored commuter rail service to Charlotte on the P&N.

Simmons said the state planned to open a four-mile stretch between Gastonia and Ranlo by Oct. 1 to serve the ethanol plant and was on track to meet that deadline. Then, the ethanol producer selected a different site, but Simmons said he doesn't know the reasoning behind that decision.

"It was a business decision on behalf of a third party," Simmons said. "We've tried earnestly to engage with Mr. Gray on negotiations. We want to have a bona fide business operating the railroad, a business that can sustain itself and be good for North Carolina."

At a recent meeting, Gaston County Commissioner Joe Carpenter said the segment to Ranlo wouldn't open before Dec. 1. On Nov. 2, Gray said he was told that the line would not be finished to Mount Holly for another year. Gray, who has been working directly with potential customers, estimates that restored freight service in Gaston County would create 500 direct jobs and additional spin off investment, but delays could cost the county certain opportunities, he said.

Interest in economic development opportunities associated with the P&N Railroad has grown since last year, when the legislature allocated $5 million to restore the rail line with a $500,000 match from Gaston County, Simmons said.

However, the legislature did not appropriate additional funding for the project, ordering the department to pay for the work from its existing budget. And the county's portion of the funding is contingent upon a signed lease agreement with an operator. Despite funding issues, Simmons said transportation officials are fully committed to the project's eventual success.

If the state does not reach an agreement with Gray, Simmons said there would be other operators interested in leasing the restored line.

"We feel very strongly that we've held up our end of the bargain," Simmons said. "We want it to be successful. That's why we acquired it in the first place."

Sen. David Hoyle said the state owes Gray a debt of gratitude for his leadership on this project and he's asked transportation officials to make the lease as palatable as possible. Hoyle said he isn't familiar with the economics of a shortline railroad, but transportation officials have assured him that the terms of the proposed agreement with Gray are favorable.

But Hoyle said his primary concern is job creation. If Gray walks away, transportation officials must find someone to operate the P&N in his place so Gaston County doesn't lose new jobs, Hoyle said.

"If I can help anybody on the line that has opportunities and can bring in jobs, I'm 150 percent for it," Hoyle said. "If Gray goes away and they can't find anybody to operate it and we lose jobs, I would be livid."

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