
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, September 24, 1993                   TAG: 9309240047
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Journal of Commerce
DATELINE: WASHINGTON                                LENGTH: Medium

FLOOD TAB A BIG ONE

The nation's railroads are getting back to speed after coping with this summer's massive flooding in the Midwest, but they face up to $300 million in damage and loss, industry leaders said Thursday.

Edwin L. Harper, president and chief executive officer of the Association of American Railroads, told a House Energy and Commerce Committee subcommittee that the bill for physical damage alone - track replacement, locomotive and freight car repairs, bridge repairs and rebuilding, and signal and switch replacement - will exceed $130 million.

The cost of detouring nearly 3,000 trains during the flooding was about $51 million, he said. In addition, "although we do not have a method to calculate the cost of business interruptions and lost revenue on an industrywide basis, our discussions with affected railroads suggest that the cost may be as high as $100 million," pushing the total cost to the railroad industry into the $300 million realm.

Federal assistance to the industry is $21 million so far, and that is being distributed rapidly, said Sally Hill Cooper, the Federal Railroad Administration's associate administrator for policy.

Congress made that money available - with $11 million earmarked for short-line or regional railroads - under the agency's rail freight assistance program in a supplemental assistance bill enacted last month.

"To date we have received applications from the states of Iowa, Minnesota, Missouri and South Dakota for assistance," she said.

Missouri's grant of nearly $640,000 was approved within two days, she said, and provided funding for expenses incurred by the Gateway Western Railway, perhaps the hardest-hit regional carrier.

This week, grants totaling about $1 million for Iowa and $1.1 million for Missouri were approved. The Minnesota grant will be processed this week and South Dakota's will be completed next week, said Cooper.

All major railroads have resumed service over the affected routes, but some regional and short-line operators are having trouble resuming operations.

Harper estimated that except for Gateway Western, the rail system will "return to normal" in about two weeks.

"It is clear the cost of repairing the damages and the economic losses caused by the flood will exceed $10 million," said J. Reilly McCarren, president of Gateway Western. "This is extremely significant, and potentially fatal, for a company with only $31 million in revenue already burdened with a heavy debt load."

William E. Loftus, president of the American Short Line Railroad Association, said a recent survey of the 13 short-line and regional railroads showed it will cost nearly $20 million to repair track and other equipment and the lines will lose another $11 million this year in revenue.

by CNB