Norfolk Southern in sound position if talks begin over rail transit in its freight corridor in Clayton County

By David Pendered

Norfolk Southern appears to be in a solid negotiating position as advocates of Clayton County’s potential transit system prepare to ask the company to allow MARTA to operate passenger trains on Norfolk Southern’s freight tracks.

Norfolk Southern is developing a $2.5 billion project to improve its freight system along a route that passes through metro Atlanta and could affect MARTA's plans to put passenger trains on Norfolk Southern tracks in Clayton County. Credit: Norfolk Southern

Norfolk Southern is developing a $2.5 billion project to improve its freight system along a route that passes through metro Atlanta and could affect MARTA’s plans to put passenger trains on Norfolk Southern tracks in Clayton County. For a larger version, click on the image. Credit: Norfolk Southern

A MARTA study shows that $185 million could be saved if Norfolk Southern allows use of its freight line for passenger rail service. Norfolk Southern has sent a letter to MARTA that raised a red flag over the notion that passenger service could begin in seven years at the price contemplated in the MARTA study.

The issue will come to a head if Clayton County voters approve in November a 1 percent transit tax. Clayton’s Board of Commissioners voted Saturday to place the referendum on the ballot. A feasibility study conducted by MARTA shows rail passenger service to Lovejoy could begin in 2021.

Norfolk Southern has made clear for years the value it places on its freight lines in metro Atlanta. The company reiterated its position in a two-page letter dated June 24 and sent MARTA CEO Rich Krisak.

In February, in an annual filing with the Securities and Exchange Commission, Norfolk Southern reported that the Clayton County corridor is part of the sixth busiest route in Norfolk Southern’s national system.

This corridor links Chicago with Macon. It was listed second to only the New York/Chicago route in the company’s annual 10-K filing with the SEC. The report also illustrated why Norfolk Southern is one of the largest transport companies in the nation.

Norfolk Southern provided this list of its busiest freight corridors in a report to the federal Securities and Exchange Commission. Credit: sec.gov

Norfolk Southern provided this list of its busiest freight corridors in a report to the federal Securities and Exchange Commission. Credit: sec.gov

Norfolk Southern owns 28,201 miles of track and operates an additional 7,918 miles of track. The total mileage in Norfolk Southern’s system totals 36,119 miles, according to the 10-K statement.

In addition to the importance of the Clayton County corridor, metro Atlanta is an integral part of the company’s growth strategy.

Norfolk Southern is building a $2.5 billion project to improve the freight system along a 2,500-mile stretch that spans 11 states, and passes through Atlanta. The Obama administration is backing this project with money from the TIGER Stimulus Program, the same funding source that’s helping to pay for construction of the Atlanta Streetcar.

According to the Norfolk Southern website, the expanded Crescent Corridor intends to provide, “one of the fastest, most direct routes from the southeast to the northeast, with convenient connections to Mexico and Los Angeles.”

The project already includes $309 million in public financing, and $315 million in private financing from Norfolk Southern, according to the company’s 10-K statement filed Feb. 14 with the SEC for the fiscal year ending Dec. 31, 2013.

Finally, the company’s bottom line appears strong.

Norfolk Southern’s value has more than doubled in the past five years, from $13.65 billion to $32.15 billion on July 3, according to ychart.com.

Incidentally, Tom Bell is a director of Norfolk Southern’s board and chairs the board’s Finance Committee. Bell now chairs Mesa Capital Partners LLC, and he’s a former chair/CEO of Cousins Properties and Young and Rubicam Inc., and a former chair of the Metro Atlanta Chamber.

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

2 replies
  1. writes_of_weigh says:

    One wonders if Tom Bell knew W. Graham Claytor, Jr., former Southern Railway chief counsel(to D. W. Brosnan), former President, Southern Railway(a Norfolk Southern component railroad), former Secretary of the U.S. Navy, and last but not least, a former Amtrak President. One wonders if the two, or others, “positioned” themselves to profit from “deals” directly damaging to Georgia’s passenger and freight rail operational future(s)(in the 1970’s, and 80’s) which have cost the taxpayers, untold hundreds of millions of dollars by legal manipulation of (then)regulated passenger rail operations(anyone remember the Nancy Hanks or the Man ‘O War operated by NS(SOUTHERN Rwy) subsidiary Central of Georgia. C of GA?), yes,THAT railroad which “joined” Amtrak, only to discontinue multiple passenger trains and routes serving Atlanta(and Clayton County) from the likes of Macon and Columbus. The City of Miami, which at Amtrak’s inception, linked Albany, Georgia to Columbus Georgia, “lost” it’s passenger rail service(s), too. Mr. Friedman, an NS “big wig”, who has already nixed(in HIS mind at least) use of NS tracks to access the proposed “gulch” MMPT in downtown Atlanta by passenger/transit trains, now is deriding use of former Central of Georgia tracks through Clayton County, for heavy rail transit/commuter/intercity trains operated by Amtrak, into Atlanta, which Amtrak COULD operate, as it accepted Central of Georgia as a member railroad upon creation by Congress in 1970. Going this route(literally and figuratively) would recoup SOME of those hundred$ of million$. Just a thought, and a wink of a green light to innovation. SOUTHERN(rwy) SERVED THE SOUTH! NS? Nah.Report

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