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Parties agree on depot rail service

May 03, 1999|By DON AINES

CHAMBERSBURG, Pa. - Agreements on rail service for Letterkenny Army Depot and the Cumberland Valley Business Park will take effect later this month, according to a member of the Franklin County General Authority.

The board of directors for the authority, formed to manage sewer, water and rail service on the depot, on Monday authorized the authority to enter into agreements with the Army and Beth Intermodal, a "short-line" operator and subsidiary of Bethlehem Steel, according to Utilities Program Manager Judy Chambers.

The agreements are aimed at providing continuing rail service to the Army and to tenants at the business park, which is being developed on 1,500 acres the Army is turning over to the Letterkenny Industrial Development Authority.

Chambers said Beth Intermodal will operate rail service within the depot and business park. The Army will make two locomotives and its engine house available to the authority.

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Beth Intermodal will deal directly with the Army and business park tenants, Chambers said. The company will be responsible for moving freight cars to and from the point where the CSX line joins with the depot rail system.

"They can help customers develop rail shipping relationships," Chambers said about Beth Intermodal and present and future tenants at the business park.

Under the 15-year contract between the general authority and Beth Intermodal, the authority will be paid a per-car handling fee. Chambers said the figure will be about $40 per car.

"The Army is buying days of service for rail," Chambers said. The Army moves 50 to 75 cars a year, primarily for its ammunition storage mission.

The Army's five-year contract with the general authority is for 52 days of service a year. The Army will pay the general authority, which in turn will reimburse Beth Intermodal.

"This is a relatively risk-free contract for the general authority," Chambers said. Beth Intermodal will have a guaranteed income from the Army and will be paid by business park customers.

Chambers said the authority's fixed costs will be about $25,000 a year.

She said many of the warehouses being turned over to the development authority have rail access. Railroad lines also pass through open land, including portions of the 283-acre Keystone Opportunity Zone, where businesses will be exempt from some state and local taxes through 2011 if they locate there.

There are about 54 miles of track inside the depot, although some sections are not in use. There are 24.4 miles of track in the business park area, about 15 of which are active, according to Letterkenny Industrial Development Authority spokeswoman Deb Garvin.

Rail safety at the depot is a concern, Chambers said. With Coffey Avenue and other routes set to become public roads, there are a number of at-grade crossings on the depot.

Beth Intermodal will use flagmen while moving cars, but Chambers said the authority will try and get funding for lights and gates at the crossings in the future.

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