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

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February 14, 2001 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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