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Wednesday, March 10, 2010

Spurned operator to bid again on P&N Railroad

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A short-line railroad operator that lost a bid last year to operate the restored Piedmont & Northern Railroad in Gaston County, N.C., is back with another proposal, the Gaston Gazette reports. Bill Gray, president of Carolina Central Railway, could not come to terms with transportation officials on a lease agreement last year. But Gray said he plans to bid again on the state's latest request to find a long-term operator for the P&N Railroad.

The state terminated negotiations with Gray in November and selected an interim operator in early January. The deadline for proposals from operators interested in a long-term lease is April 21, said Jim Westmoreland, the state's deputy secretary of transit.

"He has the ability and the right to submit a proposal," Westmoreland said.

Westmoreland said the department has received inquiries from interested operators, but no finalized proposals yet. Interim operator Carolina Coastal Railway Inc., a Pennsylvania-based short line, has a 180-day lease on the line and could bid for the long-term lease. The shortline operator already provides shortline service on a 142-mile line between Raleigh and Plymouth and a 17-mile line between Belhaven and Pinetown.

Gray, who has led the push to restore and reactivate the P&N Railroad since July 2007, said his second proposal could be denied just like the first, but he hopes the state will not "overlook the work we've done and the amount of business we've tried to stimulate in the region."

"If we don't respond, we certainly aren't in the running," Gray said. "We've invested a great deal of work in this process and we can hit the ground running faster than anybody out there."

But Gray still maintains that the terms proposed by the state in last year's negotiations would make it impossible for him or any other operator to run a profitable business on the P&N Railroad. But transportation officials have said they offered favorable terms to Gray.

"I don't see any way - unless they (North Carolina Department of Transportation officials) change their view of the world - that anybody will be able to operate that railroad," Gray said.

The first four miles of track between Gastonia and Ranlo are ready for service. The second phase of the project, restoring the line to Mount Holly, is scheduled to be completed a year from now. The restored P&N Railroad, originally built in 1911 by James B. Duke, will offer connections to two Class 1 operators - Norfolk Southern in Gastonia and CSX Transportation in Mount Holly. CSXT still owns and operates freight service on a portion of the P&N Railroad between Mount Holly and uptown Charlotte.

The state hopes to sign an agreement with a long-term operator within 60 days of the April deadline for proposals, Westmoreland said. Two local representatives have been appointed to the selection team, including Donny Hicks, executive director of the Gaston County Economic Development Commission, and Mike Holder, the NCDOT's division engineer over Alexander, Catawba, Cleveland, Gaston, Iredell and Lincoln counties.

The rail division purchased the idle portion of the P&N Railroad in 1991 to preserve it for future transportation use. Although it would not be covered in the initial lease agreement, local leaders have expressed an interest in seeing passenger service eventually restored on the railroad.

Hicks told the EDC's board of directors that the state is meeting next month to discuss the possibility of restoring a spur that runs from the Mount Holly junction to downtown Belmont for freight traffic or a trolley serving Belmont Abbey. Three or four national operators with previous success reviving abandoned railroads could submit proposals, Hicks said.

Frank Matthews, a retired Belk executive, told fellow EDC board members that dropping Gray's bid seemed unfair because Gray initiated and led efforts to restore the railroad.

"It seems to me that it's unfair that he's been put in the caboose of the train," Matthews said. "The man comes in, found an uncut diamond, polished it up and now everybody wants a piece of it."

Winters said Gray was instrumental to the project, but the restoration is being funded by the state and county taxpayers. And Gray did have an exclusive opportunity to negotiate a lease agreement. If Gray doesn't have the best proposal, perhaps the state should consider other offers, Winters said.