State willing to help city gain terminal

Glendening wants suggestions on cutting rail-shipping costs

He seeks `do-able list'

Maersk, Sea-Land eye Northeast for new marine facility


April 02, 1999|By Robert Little | Robert Little,SUN STAFF

Gov. Parris N. Glendening has offered to discuss whatever "reasonable action" the state can take to cut rail-shipping costs at the port of Baltimore, saying he doesn't want the city's railroads to stymie efforts to lure a large new marine terminal to Baltimore.

Glendening did not specify what might be considered reasonable, but a spokesman said he is willing to offer financial assistance from the state for "specific, realizable, affordable" projects that would help Baltimore win the new port facility.

"We're not asking them for a wish list, we're asking them for a do-able list that helps us win that business," said Mike Morrill, Glendening's director of communications.

The move came one day after the head of CSX Corp., the largest railroad on the East Coast, said Baltimore's rail lines are inadequate for the marine terminal that shipping giants Maersk Inc. and Sea-Land Service Inc. want to build in the Northeast. The two shipping lines are focusing their search on Baltimore and New York, and are expected to make a decision soon.

However, in letters mailed yesterday to CSX Chairman John W. Snow and Norfolk Southern Corp. Chairman David R. Goode, Glendening said he thinks Baltimore's rail problems are its only potential disadvantage over New York.

"If the cost associated with rail movement between Baltimore and New York is a deciding factor favoring New York, then we feel it incumbent upon us to consider what, if any, steps can be taken to offset this disadvantage," Glendening wrote.

"We ask -- what reasonable action can the State of Maryland undertake that will directly offset this disadvantage?"

The Maryland Port Administration has offered to build Maersk and Sea-Land a 330-acre facility at the Dundalk Marine Terminal with new cranes and office facilities, and to dredge and reconstruct its piers. State officials won't discuss the project's cost, but it is expected to be $200 million or more -- financed, at least in part, by a 25-year lease from the shipping lines.

Negotiations with the city's two railroads have emerged as a thorny component of efforts to win a deal that would triple the amount of container cargo shipped through Baltimore.

The shipping lines have demanded a port served by two railroads, but the Dundalk terminal is served only by Norfolk Southern. The Norfolk, Va.-based railroad has reportedly agreed to share the terminal with CSX for concessions that are still being negotiated.

But Wednesday, CSX Chairman Snow suggested that his railroad's tracks in Baltimore are too crowded and lack the necessary height clearance to handle the increase in cargo. CSX owns Sea-Land, so Snow could have the power to remove Baltimore from consideration for the new port.

While Snow did not say how much improvements to the tracks would cost, he said he would expect the state to pay for them. Snow was traveling yesterday and unavailable for comment. A spokesman said Glendening's letter had been received, but that Snow had not yet read it.

The tracks that CSX owns in Baltimore once belonged to the long-defunct Baltimore & Ohio Railroad. Their primary deficiency is the Howard Street Tunnel, a milelong stretch beneath the city that is too low to accommodate cargo containers stacked two high.

Raising the clearance in the Howard Street Tunnel could cost $60 million or more. CSX also has claimed it needs a third track on its commuter-clogged route between Baltimore and Washington. No estimated costs of that project were available.

While state officials won't discuss the details of their negotiations to attract the mega-port, they have said publicly they believe CSX and Norfolk Southern have enough capacity on the rail lines to handle the increased business at a reasonable cost.

Two years ago, CSX claimed to have adequate capacity in Baltimore when the railroad sought to acquire half of Conrail Inc., though a Maersk/Sea-Land terminal could increase business on those tracks.

In his letters, Glendening made clear that he considers rail access Baltimore's only conceivable disadvantage over ports in New York and New Jersey. Baltimore's shipping channels are 50 feet deep, compared with 40 feet in New York, and the city's lease rates and labor costs are generally considered favorable.

"There's no question in my mind that Baltimore has put the superior proposal on the table," Glendening wrote.

Pub Date: 4/02/99

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