STB filing: Railroad revenue not important in reaching a decision

sjones@thesunnews.comFebruary 12, 2014 

Carolina Southern Railroad has been unable to provide service because funds haven't been available to repair some of its bridges, such as the one shown in this 2011 file photo, to satisfy safety standards.

FILE PHOTO — The Sun News Buy Photo

The attorney for the owner of Carolina Southern Railroad said he isn’t surprised that a filing this week at the U.S. Surface Transportation Board avoids the question of whether the railroad had the revenue to make bridge repairs.

The filing is the opening statement in the STB process of those who want the railroad to be operational, and they indicated in the filing that revenue is irrelevant. It’s been 2 1/2 years since Carolina Southern served customers in Horry and Marion counties and Columbus County, N.C., the filing notes, and by this time service should have been restored or owner Ken Pippin should have applied to abandon the line.

Carolina Southern will have the opportunity to answer the plaintiffs’ filing, which Tommy Brittain, Pippin’s attorney in Myrtle Beach, said likely will contain information about the prohibitive cost of the repairs. Brittain will not be writing the answer as Pippin has hired an attorney who specializes in actions before the STB.

The plaintiffs will then have the opportunity to rebut Carolina Southern’s answer.

All is to be filed with the STB by the end of March, and it is uncertain how long it could be before a ruling is issued.

Either side may appeal the ruling to federal district court.

The railroad ceased operations in August 2011 after federal bridge inspectors found problems along the line that needed to be fixed before trains could cross the bridges. Two attempts to get federal grants to pay for the repairs have failed, and Pippin said the railroad doesn’t have the estimated $2 million to do the work.

The absence of operations left customers along the line, primarily in Horry and Columbus counties having to find alternate ways to get supplies in and products out. Metglas in Horry County, for instance, says in the filing that the lack of rail service cost it more than $1 million additional in transportation in 2011 and 2012.

The filing says that Carolina Southern’s situation doesn’t meet any of the criteria for it not to have served customers for this period of time. It urges the STB not to let the railroad off the hook if it pleads that a lack of money is the reason the bridges haven’t been repaired.

It wants the STB to order Carolina Southern to fix the bridges or to sell out.

Pippin has said he’s been trying to sell the railroad, but Brittain said Tuesday afternoon that potential buyers have dropped out of the picture.

But, he added, “I don’t think what’s going on right now has anything to do with what the railroad is worth or if anybody is interested in buying it.”

Rather, he said it’s about restoring operations along the railroad’s approximately 100-mile route in South Carolina and North Carolina.

Brittain said he’ll propose a solution that could do just that at a two-state railroad committee meeting Thursday in Loris.

He’s on the agenda to update information on the sale of the railroad, and he said that he’ll propose that Pippin abandon the 26 miles of track between Tabor City, N.C., and Horry County-owned track in Conway. The money from the sale could pay to fix the bridges, he said.

The idea has been floated before, and Doug Wendel, co-chairman of the committee, said then that he did not think it’s a solution.

“It may not be perfect on all sides,” Brittain acknowledged.

Henry Lowenstein, a consultant for the committee, said in his testimony that was part of this week’s filing that the railroad could expect to haul about 2,000 carloads of freight a year if it resumed operations. He said by telephone that he is not allowed to comment on his testimony, but wrote in a 2010 report that 2,000 carloads a year would make the railroad financially viable.

In his testimony, Lowenstein said there is a potential for additional railroad business by hauling agricultural supplies and products and in offering passenger service from the Amtrak station in Florence to Myrtle Beach.

The final 14.1 miles of that journey would be over track that’s owned by Horry County. Earlier this year, Carolina Southern was declared in default of an agreement to lease the track because it hadn’t paid for three years. Recently, the railroad filed with the STB to abandon its right to operate on the county-owned track.

Lowenstein said in his testimony in the filing that while the potential exists for a viable railroad, at least some of the potential customers don’t want to deal with Pippin because of bad experiences doing so.

Brittain said he had no knowledge of harsh feelings about Pippin.

Brittain said that there was an initial flurry of interest from potential buyers when Pippin first announced his willingness to sell the line.

“There are conversations taking place with representatives of the state,” he said.

The state owns Palmetto Railways, which serves the port of Charleston.

It paid for an appraisal of Carolina Southern, but refuses to divulge the findings.

Contact STEVE JONES at 444-1765.

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