Rail company plans major hub at Hagerstown

January 09, 1997


Staff Writer

ANNAPOLIS - A Maryland short-line railway announced expansion plans Thursday that include making Hagerstown its hub between the Port of Baltimore and the Midwest.

"For Hagerstown, this would be a shot in the arm akin to the development of penicillin," said Paul D. Denton, president of Maryland Midland Railway, a 17-year-old company based in Union Bridge, Md.

Under the plan, Maryland Midland would purchase 17 miles of track in Washington County, from Highfield to Hagerstown, from CSX Corp. Another 25 miles of rail rights would be purchased near Baltimore, extending the company's current 65 miles of track from the port to Hagerstown.


In Hagerstown, trains would be able to link up with other rail lines, including the Wheeling and Lake Erie Railway, which has formed an alliance with Maryland Midland and has access to Pittsburgh, Cleveland, and areas in the Midwest.

The plan would increase employment, earnings and tax revenue, both locally and throughout the state, particularly in the manufacturing industry, according to an analysis of the plan by the Regional Economic Studies Institute at Towson State University. Maryland Midland paid for the analysis.

"The impact of the proposal is quite significant," said Michael Conte, an economist and director of the institute.

The company unveiled its proposal to a special House of Delegates committee investigating railroad mergers.

"The Maryland Midland offer sounds very interesting and very viable for us in Western Maryland," said Del. Sue Hecht, D-Frederick/Washington, who heard the presentation but is not a member of the committee.

"How could you not be excited as a Western Maryland delegate to hear that kind of offer?" she said.

The announcement comes amid talk of a proposed merger of railroad giants CSX and Conrail Inc., both of which serve Hagerstown.

The deal would create a railroad powerhouse serving the eastern half of the United States from Chicago and New Orleans to Boston, New York and Miami.

The merger has been challenged by Norfolk Southern Corp., another potential Conrail suitor. All three railroads converge in Hagerstown, as does Wheeling and Lake Erie and another smaller line, Winchester and Western.

A CSX-Conrail merger requires the approval of the national Surface Transportation Board. That's where Maryland Midland is hoping to find leverage in its bid for the CSX track, particularly among some state lawmakers leery of a potential CSX-Conrail monopoly at the Baltimore port.

Denton is hoping the state will convince CSX to sell his company the track it needs in exchange for the state's support for a CSX-Conrail merger. The move would promote competition and keep freight-hauling prices in check, Denton said.

Maryland Midland's proposal also would give Norfolk Southern, which has a hub in Hagerstown, access to its Hagerstown-to-Baltimore line, he said.

Denton said his company already has raised $1.5 million and has lined up a consortium of banks to lend the rest of the money needed. He said that with the regulatory requirements, it would take about a year for the deal to go through.

"We can do it. We will do it. But we need your help," he told the committee.

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