January 16, 2013

Two sides see differently on what should happen to Myrtle Beach area railroad

The owner of Conway-based Carolina Southern Railroad said he should be included in a two-state discussion about how to get the short line up and running, but the chairman of the committee said its members aren’t inclined to do so.

The owner of Conway-based Carolina Southern Railroad said he should be included in a two-state discussion about how to get the short line up and running, but the chairman of the committee said its members aren’t inclined to do so.

“There just isn’t a lot of support for the Pippins,” committee chairman Doug Wendel said Wednesday afternoon of the family that owns the railroad.

Wendel’s statement was in response to a statement by Ken Pippin, family member and chief administrative officer of the railroad, saying that if the committee formed last fall is serious about getting the line back in operation, the owners should be included in discussions.

“They don’t know enough about us to know that we’re still operating and we’re still serving customers,” Pippin said.

The committee was formed to see if it could find a resolution to the railroad ceasing operations along most of its line on June 10. The owners voluntarily shut down the railroad after federal railroad inspectors found problems in six of the line’s 187 bridges.

At the time, Pippin said he expected the railroad to be back in service within a week, but a follow-up inspection found more bridge problems and the railroad has not run since.

The shutdown has forced some Carolina Southern customers in Horry County, such as Conway-based Metglas, to make alternate arrangements to get raw materials. Metglas, for instance, is now having the materials shipped to the Georgetown port and trucked from there to the plant in the Atlantic Center.

Three other Horry companies, Pippin said, are having materials brought by rail to Carolina Southern’s track in Mullins and are trucking it from there.

Pippin took exception to Wendel telling the executive committee of the Myrtle Beach Regional Economic Development Corp. that the Pippins have abandoned the line, but Wendel defended his characterization in a follow-up conversation.

“The facts speak for themselves,” said Wendel, who said that the railroad has not operated in more than 20 months.

Pippin said federal grants are available that would fund the needed repairs if the state or county would apply for them. He said that the N.C. Department of Transportation has given the railroad $350,000 that Carolina Southern will match to fund improvements on the company’s line there.

The committee includes representatives from Columbus County, N.C., and Horry and Marion counties, the three served by Carolina Southern.

“He keeps thinking someone is going to ride in on a white horse to save him,” Wendel characterized Pippin’s attitude that either the federal or state governments would fund the needed improvements.

Pippin said that unlike North Carolina and other states, South Carolina has no department set up to assist those that operate railroads in its state boundaries. If it did, he said that money to assist short lines such as his could be readily available.

Sen. Ray Cleary, R-Murrells Inlet, said that last year, he arranged for the state to give Horry County the money to lend to Carolina Southern for the repairs. Cleary said that the deal was structured so that the county would be fully repaid by the state if Carolina Southern defaulted on the loan.

Cleary also said that in his nine years in the General Assembly, he has steered state government into developing a rail plan and to have the Department of Transportation designated as the oversight agency for freight railroads. Prior to that, Cleary said the state had oversight for passenger service only.

He said that the state now can seek federal funding for freight rail improvements and that a bill he will introduce this year will create a specific process for doing so.

He said that he won’t involve himself in the disagreement between Carolina Southern’s owners and other Horry County interests. The fact is that the Pippins are the owners of the railroad and the county and EDC must deal with them unless a new owner is found. Cleary doubted that a new owner would be found considering the investment he or she would have to make in the line just to get it running.

Wendel said the fact is that the onus for the improvements is on Carolina Southern. If Pippin is expecting support from local governments and the local business community, he’s not likely to get it.

“It’s his responsibility to do the repairs,” Wendel said.

The Pippins were asked not to attend the organizational meeting of the two-state committee, but were invited to the second meeting. Pippin said the dialogue then was mostly an education on the railroad for committee members. Wendel said Pippin told the committee at that time that he doesn’t have the money to make the repairs.

Pippin said he would need about $2 million to make the bridge repairs. He said banks won’t lend him the money to do them because he doesn’t have the revenue to guarantee repayment. He said his willingness to put the railroad and personal property up as collateral wouldn’t sway the decision.

Wendel said the railroad is essential to the economic development of Horry County.

“There’s a lot of land along that line that manufacturers would be interested in if [the railroad] were up and running,” Pippin told members of the EDC executive committee.

He said the two-state committee has talked with several entities that were interested in purchasing the railroad, but added that it’s not his job to act as an intermediary between Carolina Southern and possible buyers.

Pippin said that he has been approached by a number of potential buyers over the years, but that none recently have said they were referred to him by the committee.

He downplayed information from the EDC meeting, insisting that “there’s a considerable amount of inaccurate information from that group.”

He also said that dealing with governments can be baffling.

“When you’re dealing with the government,” he said, “a lot of times the logical mind is no benefit to you.”

Wendel said that a continued impasse over the state of the railroad could result in a complaint to the federal Surface Transportation Board. He said that the board could force dissolution of the Pippins’ interest in the line because it is not operational and the owners say they don’t have the assets to get it running.

Despite all that has or has not gone on concerning the current state of the railroad, Wendel said all have the same goal: to get the railroad operational.

“I want Ken to be successful,” he said, “I want the users to have access, I want to be able to sell it [as a reason companies should locate manufacturing facilities in Horry County].”

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