Bond bill to fund studies for rail project
Published: May 3,2013
The bond bill Gov. Phil Bryant signed April 25 may help a rail project in East Mississippi.
The $196 million bill has in it $1 million to support the East Mississippi Intermodal Rail Corridor, which would develop 56 miles of railroad that would offer continuous rail service along the state’s eastern border. It would connect to state ports along the Gulf Coast.
The Rail Authority of East Mississippi, made up of five counties and the Jackson County Port Authority, has been working on the project since its formation in 2009. Since then, the group has paid for feasibility studies aimed at determining the financial justification for developing the project. Additional funding has been provided by the Economic Development Administration, USDA Rural Development and the Pat Harrison Waterway District.
A preliminary market analysis done by Mississippi State and the University of Southern Mississippi found that there is sufficient demand for the rail, and that it can cover its operating costs. Existing businesses will benefit, the analysis said. Wood chips and pellets used for power generation in Europe would be the principal driver of the rail traffic, the report said. The line would carry about 15,000 rail cars annually for the purpose of transporting forest products. The report said the East Mississippi woodbasket carries “enormous volume” with demand growing with the specter of biomass companies locating in the region.
The line’s secondary market would include access to stone and aggregates for regional construction projects. Grain, chemicals and metals for metal fabrication could drive another 1,000 cars annually, the analysis found. The analysis was paid for by a grant from the U.S. Economic Development Administration.
Several wood pellet mills have already started production or announced intentions to locate in Southeast Mississippi. Those industries typically prefer freight rail over truck transportation, because it’s cheaper.
The latest funding will pay for an environmental impact analysis and other pre-construction steps, said Geoffrey Clark, RAEM’s executive director. Clark said if the analysis finds no negative impact, the project be eligible for a low-interest construction loan through the Federal Railroad Administration.
Clark said the original Gulf Mobile & Ohio Railroad ran from Mobile, Ala., through Mississippi, as it headed north to Chicago. Southeast Mississippi timber was a major customer of the line. The former GM&O is now owned and operated by several different carriers between Waynesboro and the Mississippi-Tennessee state line, but the segment between Waynesboro and Mobile was abandoned in the 1980s.
“Counties in our region should have worked harder to market and keep the line open, as other parts of the state did. With our workforce and resources, we can attract substantial manufacturing opportunities – opportunities that we need for creating jobs and marketing our timber and other resources. But, we need through-rail service to realize our full potential,” Clark said.
The project has been hampered the past couple years by lack of funding. The Authority has applied for several grants through federal transportation agencies, but has been denied for most of them. Pleas for state funding had gone unheard until this year. Legislation lawmakers passed during the 2012 session made the project eligible for state transportation money that had been reserved only for active railroads and not potential projects.
Clark said last year the Authority needs about $3 million to complete prep work on the rail before construction can start. When RAEM was formed in 2009, the six member counties committed $650,000 to get the project off the ground. The Authority was in line for a $1 million appropriation as part of a U.S. Senate transportation bill in 2010, but that fell through after Republicans enacted a moratorium on earmarks.
Until the bond money, the project had been funded only by local sources.
To sign up for Mississippi Business Daily Updates, click here.
Top Posts & Pages
- JOSH MABUS — Inbound marketing is fueled by wishful thinking
- (UPDATE) Prison won’t interrupt ex-prison chief’s retirement cash flow
- Kemper plant employee gag order continued
- 2014 a good year for filmmaking in Mississippi
- Nehi Bottling Company has been a Cleveland fixture for 85 years
- MARTIN WILLOUGHBY — Doug Dale’s self-awareness helps lift him to top of his game
- WRESTLING SUCCESS — Ted DiBiase Jr. leaves ring to become entrepreneur
- (UPDATED — BREAKING NEWS) American Specialty Alloys won’t locate $1.2B mill in Mississippi
- ASA postmortem: industrial recruiting is a constant cycle of death and life