Turning up steam for expansion Maryland Midland hopes for Baltimore, Hagerstown rail link

Long-term approach

Short-line railroads may benefit from Conrail breakup

August 02, 1998|By Donna R. Engle | Donna R. Engle,SUN STAFF

The division of Conrail routes between CSX and Norfolk Southern may help a small, Carroll County-based railroad that has had its nose pressed to the window, watching the giants split the spoils.

Federal rail regulators have approved a plan to divide Conrail Corp.'s routes between CSX Corp. and Norfolk Southern Corp., ending 22 years of a federally created rail monopoly in the Northeast and leaving the eastern United States with two major railroads.

The Surface Transportation Board's approval of the division of Conrail lines may indirectly help Paul D. Denton, president of Maryland Midland Railway Co., in his quest for access to lucrative rail interchanges in Baltimore and Hagerstown.

Maryland Midland is one of six short-line Maryland railroads, all dwarfed by CSX. The Union Bridge-based MMID moves 7,000 cars a year over 65 miles of track between Glyndon and Highfield. The Conrail division involved 10,500 miles of track. CSX operates across 18,500 miles of track in 20 states and Ontario, Canada.

Denton wants to buy, lease or pay tolls to use 17 miles of track between Highfield and Hagerstown, giving MMID direct access to an east-west rail route interchange -- the equivalent of a hub airport. He seeks similar rights to use 25 miles of track between Glyndon and Baltimore.

The access "has enormous meaning for the short-line regional community," Denton said. "With our joining Baltimore, we could provide the middle link between Canton [Railroad] and the Winchester & Western," he said. The Winchester & Western operates between Hagerstown and Virginia.

First, however, Denton has to convince CSX, which owns the tracks, that it would be a good idea to hand over a source of income to the smaller competitor.

Denton's quest may not be as hopeless as it sounds. David Ganovski, manager of freight service for the state Mass Transit Administration, explained that after a major merger, railroads traditionally reassess traffic flows.

He said another factor that could help MMID is the Surface Transportation Board's interest in boosting rail competition. The federal regulators have asked two rail industry groups, the American Short Line Railroad Association and Regional Railroads America, to look at ways to increase competition.

Denton's plan for MMID is long term. As CSX shifts its interest to the Northeast, "some routes they now operate could become less significant to them, which, if it happens, would allow us to advance our proposal to them," he said.

The additional access would put MMID into a growth spurt. Denton has said access to Baltimore would allow him to add 50 workers to the current staff of 33 and buy as many as 15 locomotives and 400 rail cars. It would also allow him to open an excursion line to replace the popular EnterTRAINment Line, an independent excursion train that operated over MMID tracks. The EnterTRAINment Line closed in 1995, owing more than $500,000 to creditors.

Denton said the access he seeks would allow the short lines to compete with the trucking industry in hauling aggregates -- slag and cement, sand and stone -- "which move in huge volumes. One million tons a year is not unusual." He said big rail corporations like CSX usually can't compete with truckers' prices for short hauls of items like aggregates.

CSX is "willing to entertain a proposal, but there would have to be some financially sound business arrangement," said CSX spokesman Rob Gould.

MMID trains coming to Baltimore would have to use the single-track Howard Street tunnel, "one of our most heavily traveled routes," Gould said. He said CSX would expect MMID to share the cost of widening the tunnel to accommodate two tracks; he didn't have a cost estimate.

Opening access to Hagerstown would give a competitor the right to travel a main CSX route, Gould said. "If you're Giant Food, you're not going to allow anyone to sell food in your store without charging them," he said.

CSX spent $5 billion to acquire Conrail lines and merge them into CSX lines, Gould said. "Just because we purchased Conrail, that doesn't mean we're not going to be using our existing lines," he said.

Denton said MMID would contribute to the cost of widening the Howard Street tunnel, but he wants to see support from the state, which has an interest in enlarging the tunnel.

Maryland's failure to finance the tunnel project hurts the Port of Baltimore, because double-stacked carloads can't get through the tunnel, he said.

The MMID president points to Pennsylvania, which spent state money to improve tunnels from Philadelphia to Pittsburgh, luring business to its port. "Here we are at Baltimore -- ships going to Philadelphia don't do us any good," Denton said. "If the state can put $220 million into a football stadium, they ought to be able to afford something for economic development."

Pub Date: 8/02/98

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