ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, October 18, 1996 TAG: 9610180047
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Norfolk Southern Corp. has threatened to stop operating trains on the track it leases from North Carolina Railroad Co. if the federal Surface Transportation Board grants a request by NCRR to raise Norfolk Southern's rent.
NCRR owns tracks that span North Carolina between Morehead City and Charlotte, but operates no trains of its own. The company, which is 75 percent owned by the state of North Carolina, has leased the track to NS or its predecessor companies for more than 100 years.
NS said Thursday it has asked the Surface Transportation Board to impose the terms and conditions of a lease that NCRR's board of directors and shareholders approved last year.
A federal judge overturned that lease in July on the grounds that a quorum of private shareholders was not present when the lease was voted on in December.
Last month, NS said it had quit paying the $680,000 a month required by the new lease because of the ruling. NS said with the new lease overturned, the old rent - $600,000 a year - applied.
Because the old lease is in effect, NS has overpaid NCRR by more than $17 million, NS said. NS had paid rent retroactive to the Jan. 1, 1995, start of the new lease.
Although it wants the federal agency to impose the terms of the new lease, NS said it will resist an effort by NCRR to have the agency increase the amount of the rent.
If the government lets the NCRR raise the rent above the amount in the new lease, NS said it will probably stop using all or part of the NCRR lines.
If the traffic is rerouted, some of it might pass through Roanoke, NS spokesman Bob Auman confirmed.
LENGTH: Short : 40 linesby CNB