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Boom and bypass scenarios should be considered, officials say

Would mega-rail merger help Mississippi’s rural economy?

Rail activity in Mississippi has increased since the merger of Illinois Central and Canadian National and a proposed Amtrak route between Meridian and Vicksburg holds economic potential. But ask about the impact of the proposed merger between Canadian National and Burlington Northern Santa Fe and responses vary.

“The rail mergers that have occurred recently have been great for rail in Mississippi,” said Jay Moon, deputy director of the Mississippi Department of Economic and Community Development. “ When Illinois Central merged with Canadian National, it created the NAFTA railway, connecting all major markets in Canada, moving down to the central part of the U.S. and into Mexico. Jackson, one of the major hubs along that rail system, is in a very, very favorable position. Fifteen years ago, rail wasn’t looked at necessarily as one of the choice areas of moving products, unless it involved moving very heavy objects. But more and more products are moving by rail all of the time and we’re very well positioned to take advantage of the movement.”

AMTRAK EXPANSION COULD SPARK DEVELOPMENT IN STATE

A proposed Amtrak route from Meridian to Dallas/Ft. Worth, Texas, would include stops in Jackson and Vicksburg, said Central District Transportation Commissioner Dick Hall.

“The rail would have to be upgraded, but I understand there is a financial arrangement underway that may make that happen and the railroads may have a way to finance that,” Hall said. “I suggested to the Legislature that a bill be introduced, which it was, for a $100-million bond issue to create a pool of money which railroads could borrow against and make these kinds of improvements. There were questions, such as ‘why go through the state?’ But the state can get money cheaper. It’s a financial tool to allow railroads to borrow money at a less expensive rate without having to go on the open market. We do all sorts of financial arrangements to bring industry to the state, but for some reason the Legislature wouldn’t do it for the railroad industry and it didn’t pass. Since that time, other financial arrangements are being made to upgrade the track from Meridian to Vicksburg, so Amtrak can proceed with their plans. I’m optimistic that will happen.”

Rail in other areas of the state needs to be upgraded so Mississippi can be competitive, Hall said.

“The track between Hattiesburg and Gulfport must be upgraded considerably and will cost a lot of money, but Gulfport’s not going to be competitive unless it does,” he said. “We’ve got to have a new Pearl River bridge crossing for the railroad, and even with all that track that blocks traffic now, traffic would increase 55% in a short time. That interchange, some of I-20, has to be rebuilt to accommodate all of this and would be a major infrastructure improvement.”

HIGH-SPEED RAIL FACES OBSTACLES

Mississippi is part of an interstate coalition studying a high-speed rail from Jacksonville, Fla. to Houston, Hall said.

“It would run through Mobile, Biloxi and New Orleans,” Hall said. “Right now, there’s no way to put a high-speed rail along existing track that parallels Highway 90 on the Gulf Coast. More than 70 railroad crossings are located along that stretch. A high-speed rail needs to be moved north of I-10 because of what we want to do with it. We can take the existing rail and build a new limited access highway where travelers could get on in Biloxi and get off in Gulfport, or a point or two in between. Right now, it’s just a conception. There’s nothing on a piece of paper.”

The project would cost billions to complete, Hall said.

“If we wait 10 to 15 years, with real estate prices along the Coast going up, we’ll sit here dragging up the rear end of the economy like we have for the last 100 years,” he said.

MERGER PROS AND CONS

In 1998, Canadian National merged with Illinois Central to create one of the few railroads that stretched from coast to coast and from Canada to Mexico. Canadian National operates the largest rail network in Canada, with 16,000 route miles in Canadian provinces and 15 U.S. states with 16,500 active locomotives and 66,000 active freight cars, employing 23,500 people in Canada and in the U.S. Included in Canadian National’s list of key cities are Memphis and Jackson, with connections between the two, much of which runs through the Delta.

Before a proposed merger between Canadian National and Burlington Northern Santa Fe Corporation, one that would have created North America’s single largest railroad, could be consummated, the railroads were slapped with a 15-month moratorium on rail merger activity. BNSF operates one of the largest rail systems in North America with more than 34,000 route miles of track in 28 states and two Canadian provinces, operates an average of 1,300 freight trains per day and serves all major ports on the West Coast and the Gulf of Mexico, with a payroll of approximately 43,000 people.

“The proposed merger could open rails and provide economic boosts to rural towns that need it,” said Hall. “That’s one story. But there are those that tell you if the merger happens, Mississippi will be bypassed. As far as the merger, I’m not going to worry about that one way or another. We have to be ready for whatever happens.”

The Illinois Central and Canadian National merger has been beneficial for the state, said Moon. “The other, we’ll have to wait and see. We’re waiting to see more specifics on the proposed merger before we make a comment whether it’s good or bad for Mississippi. We need more detailed information on what they’re proposing to do. We reserve judgment on that.”

Native Mississippian Wayne O. Burkes, vice chairman of the U.S. Surface Transportation Board, said the small railroad is “absolutely crucial to the economic well-being of rural towns,” but added that the state could suffer in the deal.

Canadian National issued a statement that Mississippi is one of two states that would benefit the most from the merger.

“Some people will be very opposed while others see the merger as a great opportunity,” said Alan Hammons, president of Hammons & Associates Inc. in Greenwood.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.

About Lynne W. Jeter

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