NC Railroad needs its funds for improvements, says company president
SALISBURY — If Rowan County had a soundtrack, the rumble of trains would run throughout it.
Ten times as many trains roll along the Greensboro-to-Charlotte rail corridor each day as those that use tracks east of Greensboro, according to Scott Saylor, president of the N.C. Railroad Co.
“You are the I-85 of the East Coast,” Saylor says.
Whichever corridor trains travel in the state, down east or in the Piedmont, they use tracks owned by the N.C. Railroad Co. — and therefore by the state — and leased to Norfolk Southern for $14.5 million a year.
The revenue stream has caught the attention of lawmakers.
State Sen. Fletcher Hartsell of Concord filed a bill last month that would require the railroad to turn 25 percent of its trackage fees over to the state’s General Fund each year as a dividend, starting with a $15.5 million payment for past years.
The bill also would require the N.C. Railroad Co. to set strategic objectives, create a performance management system, produce detailed financial reporting, have two directors who are also on the state transportation board and sell 14 pieces of property valued at about $6 million and turn the money over to the state.
At least, Saylor says, it doesn’t call for selling the railroad.
Saylor was in Salisbury on Wednesday to share a press release about a project the N.C. Railroad Co. recently helped fund — and to raise awareness of what his organization does.
Most North Carolina residents know very little about the N.C. Railroad, if they are aware of it at all. The state created the entity in 1849, more than 150 years ago, to build a railroad from Goldsboro to Charlotte. Now it owns a 317-mile corridor that stretches from Morehead City to Charlotte, carrying 50-60 freight trains and 10 passenger trains daily.
While the tracks are owned by the public, the N.C. Railroad Co. is private — the oldest private company in the state — and works with the Department of Transportation on planning, maintaining and expanding the tracks.
Recently Saylor signed a $3 million check to pay the railroad’s share of a $4.5 million track realignment just north of the Yadkin River. Funds from the federal American Recovery and Reinvestment Act cover the rest of the project, which dovetails with the N.C. Department of Transportation’s replacement of the Yadkin River Bridge, a $185 million project.
The track realignment is one of several capital investment projects on the Railroad Co.’s to-do list. Through 2017, the company has committed more than $95 million toward improving railroad crossings, adding passing sidings, building pedestrian underpasses and double-tracking a large part of the corridor, including the most heavily used Thomasville-to-Charlotte portion that goes through Salisbury and Rowan County.
The Department of Transportation has received $300 million in stimulus money to make high-speed rail possible between Raleigh and Charlotte by installing double tracks, adding bridges and other safety features. The N.C. Railroad has committed a $31 million match.
Though the N.C. Railroad Co. has not taken an official position against Hartsell’s bill, Saylor said paying the dividend could jeopardize some of those projects.
“Our board has said if the legislature is going to divert some of the revenues ... our hope is that it would be devoted to economic development or transportation.”
That is what the Railroad Co. uses the funds for, he said.
“The railroad is about economic development,” he said. “The synergy with the General Assembly has always been job creation and building the value of the railroad and to create new jobs.”
Hartsell’s bill was the result of a legislative staff report spurred by talk of selling the railroad to raise capital for the state. The staff did not recommend selling the railroad, but it did conclude that the state should receive dividends.
Saylor said the railroad already has plans for those funds.
“We are concerned that there are needs that ... may need to be deferred or can’t be met,” he said.
Saylor said the legislative report could be more complete regarding what the railroad does with its money.
“What the staff missed is that all our capital generated under the new agreement is being re-invested in infrastructure,” he said. The legislature stopped collecting dividends from the railroad around 2005 and told railroad officials to spend the money on improvements — which Saylor said is what the state had been doing with the dividends anyway.
“We’re trying to build for the future. That’s the goal,” he said. “And these projects can’t happen overnight. Because they require so much lead time, it’s real important for us to know what our capital availability is going to be.”