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DavidsonNews.net: Norfolk Southern Says Red Line May Not Be Feasible On Its Track

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The Red Line Regional Rail Project is facing another major roadblock this week: Norfolk Southern Corp., which owns the tracks it would run on, is balking at the idea of commuter and freight rail operating on the same line. In a meeting with N.C. Department of Transportation officials Jan. 11 - the first between the DOT and Norfolk Southern since planning for the rail was revived last year - company officials raised a long list of questions. And in a followup letter to the DOT's top Red Line official, the company's passenger policy director expressed "fundamental" concerns over the feasibility of the Red Line project. (See the text of the letter below.) In the letter to North Carolina Deputy Secretary for Transit Paul Morris, Norfolk Southern's John V. Edwards said: "Norfolk Southern is concerned that the proposed Red Line project may now be fundamentally incompatible with Norfolk Southern's potential future use of the line and our ability to grow our business in North Carolina." Norfolk Southern said public statements about its support for the project are inaccurate, and that even if all its concerns were addressed, it does not believe the Red Line can built in the time frame that the DOT and Charlotte transportation officials envision. The company also raised questions about how rail and freight trains would share the track and said it would require the commuter line to have a half-billion dollars in liability coverage before it would allow a commuter line to operate. The proposed Red Line project would upgrade 25 miles of Norfolk Southern tracks from Charlotte to Mooresville for both commuter rail service and improved freight service. Consultants for the N.C. DOT say the line would cost $452 million (in 2018 dollars). Financing would be shared by the state and Charlotte Area Transit System (25 percent each) and by area towns and county governments (50 percent). The consultants' financing plans call for paying for the towns' share by dedicating a portion increased tax revenues generated by higher property values along the line and by voluntary fees paid by commercial property owners along the line. While area towns and county governments are currently debating and dissecting the financial plan, Norfolk Southern's concerns are more basic, focusing on whether commuter and freight rail can co-exist and suggesting it does not want to share its tracks. Norfolk Southern's negative response comes at the start of what state and local officials have been hoping will be several months of negotiations to allow the line to proceed. Asked about the rail company's role in the project during a public hearing at Davidson Town Hall Tuesday night, DOT consultants Mark Briggs and Katherine Henderson said they had been asked to refer all questions to Mr. Morris. In an email early Wednesday, Mr. Morris said DOT officials view the letter as an "initial listing of concerns" after their first meeting with Norfolk Southern. "In our view the letter is consistent with other statements at an initial stage of discussions with a railroad," he said. "It should not be construed to represent anything more or less than what is stated, including a final conclusion of position," Mr. Morris said. "We have a good working relationship with them and look forward to holding ongoing discussions," he said. "We are confident opportunities exist to satisfactorily address and resolve concerns so as to keep the project on its course toward implementation." But he acknowledged that the negotiations are critical to the project's success: "The O Line is Norfolk Southern's railroad and as such, any future allowance they may grant to operate passenger service on it will be solely at their discretion." WOODS: 'RIGHT WHERE WE NEED TO BE' Davidson Mayor John Woods, who chairs the Metropolitan Transit Commission's Red Line Task Force, said after Tuesday's hearing that discussions with Norfolk Southern are still in the early stages. "The negotiations are right where they need to be at this point in time. We're only at a very initial discussion," he said. "The really good news is that NC DOT is managing the negotiations with Norfolk Southern. I would be much more concerned if we were trying to negotiate that relationship," Mayor Woods told DavidsonNews.net. Mayor Jeff Tarte of Cornelius said he thinks there's still hope for the project, despite Norfolk Southern's negative stance. "However, if Norfolk Southern states they will not allow passenger traffic on their lines under any condition, then it is dead," Mayor Tarte. He noted that the rail company's latest letter is "not a deal breaker yet," thought it does mean project supporters need to do more work. Mayor Tarte agreed with Mayor Woods that it's still early, and the negotiations will move on from here. "This feels like playing Texas Hold'em. There are going to be negotiations. Do you slow play? Bluff?" He said Red Line project supporters need to do their homework and go back to Norfolk Southern, rather than fold. PROJECT DERAILED? But Red Line skeptics see Norfolk Southern's questions as fodder for their campaign to halt the project. "Utterly unbelievable," Cornelius Commissioner Dave Gilroy said Tuesday after seeing the letter. "The Iredell County (Commission) chairman's descriptions of all this as 'cockamamie,' 'insane' and a 'fairy tale' are proving even more accurate," Mr. Gilroy said. "NC DOT should be utterly ashamed for this waste of time and money." Mr. Gilroy said transit planners should work on widening I-77 and developing a 21st century rapid bus transit system instead of focusing on rail. He said he's hoping to get three votes on the Cornelius Town Board to call off the town's current study of the rail line, called the Cornelius Rail Task Force. "The idea that these fundamental Norfolk Southern issues were not worked out in advance of launching this intensive lobbying with the municipalities is yet more evidence of the absurdity of NC DOT's initiative," he said. Mayors Tarte and Woods both said they believe the DOT did not approach Norfolk Southern sooner because it did not have a plan to present. The Red Line Task Force unveiled that plan only in December. Said Mayor Woods: "We had to put together a plan," he said. "Going to them before we had a draft plan would be premature." NORFOLK SOUTHERN LETTER Following is the letter dated Jan. 16, 2012, to NC DOT Deputy Secretary Paul Morris from John V. Edwards, general director for passenger policy at Norfolk Southern, in Norfolk, Va.: Dear Paul: Thanks for making time for Durwood Laughinghouse and myself to meet with you in Raleigh this past Wednesday to discuss the proposed Red Line commuter rail project. I am following up with a letter in order to clarify one item and to further outline Norfolk Southern's concerns regarding that proposed project. Right up front, though, I need to reiterate what I said at that meeting at this time, Norfolk Southern has not determined that its concerns regarding the proposed Red Line project can be resolved. Our meeting on January 11, 2011 was the first substantive discussion with Norfolk Southern since the project "died in late 2008 , as you so aptly put it. Norfolk Southern now has a clearer understanding of the current NCDOT concept for use of the 0 Line, which is owned and operated as part of Norfolk Southern's freight rail system, as a commuter rail corridor dubbed the "Red Line." As I explained in our meeting, Norfolk Southern is concerned that the proposed Red Line project may now be fundamentally incompatible with Norfolk Southern's potential future use of the line and our ability to grow our business in North Carolina. Among the major concerns are the following, each of which were touched upon in our meeting: Current publicity and discussions indicate that Norfolk Southern has agreed to, endorsed, or otherwise has consented to the proposed Red Line project, which is simply not the case. There has been a significant change in the use of the North Carolina mainline between Charlotte and Raleigh that may require the 0 Line to be used as an alternative through freight route. Norfolk Southern generally no longer provides for exclusive freight or passenger windows. Norfolk Southern requires $500 million in liability protection for any passenger entity operating on its lines. Norfolk Southern generally designs, builds, maintains and dispatches its own lines, which may be inconsistent with the Red Line so-called "DBOM" (design, build, operate and maintain) proposal. The environmental review of the Red Line project has expired and would need to be performed anew. Previous discussions concerning needed infrastructure, maintenance, signalization and other payments are outdated, particularly in light of the significant infrastructure modifications and traffic increases anticipated for the North Carolina Railroad and the likely tax treatment of any infrastructure construction and payments to Norfolk Southern arising from the modification to the Red Line project funding sources. Any desire to get the proposed Red Line project up and running, if it were deemed acceptable to Norfolk Southern, could not be accomplished within the time frame that is currently being publicly advocated. Norfolk Southern has not previously contracted with a North Carolina joint powers authority, so there may be additional concerns regarding liability, limited life, recourse, and other issues that have yet to be identified. I also want to clear up one potential item of confusion. In our meeting, you mentioned an abandoned section of track, which caused me some confusion. I now believe that the abandoned section of track that you were speaking of has no relationship to the initial Red Line project from Charlotte to Mooresville. Instead, I believe (and here I ask you to confirm or clarify as appropriate), you were referring to a second phase of the Red Line project. That second phase would extend the Red Line from Mooresville to Statesville over a partially abandoned portion of the 0 Line right of way. As you may know, there has been significant development on that right of way which could make the reacquisition and use of that line very expensive. As a result, I had thought your reference to a second phase involved the use of the Norfolk Southern L Line between Mooresville and Barber Junction and the Norfolk Southern S Line to reach Statesville. Although neither of these alternatives are the subject of discussions with Norfolk Southern at this time, I want you to know that Norfolk Southern would have significant concerns regarding a proposal to use either alternative. As we delve deeper into the proposal, I am sure that Norfolk Southern will have additional thoughts and questions. I do not want to leave you with the idea that the above represents a comprehensive list of concerns, or that this is a negotiation about payments to Norfolk Southern. Our issues with the Red Line project are fundamental, and the specific concerns were only the ones that we had an pportunity to discuss in the short time we had. You have promised to send to me additional materials for Norfolk Southern review, and I look forward to receiving them. As we discussed, I do not know if the proposed Red Line project is feasible on Norfolk Southern right-of-way, but together we can explore that question. Sincerely, John V. Edwards cc: John Woods, Red Line Task Force Durwood Laughinghouse, Norfolk Southern Katherine Henderson, KKH Consulting RELATED COVERAGE AND LINKS See previous coverage of the Red Line project on DavidsonNews.net. See information, presentations, questions and answers and other project information on RedLineRegionalRail.org, the project website.