Friday, April 17, 2009

STB OKs short line spur to Indiana coal mine

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Short line Indiana Rail Road has been granted approval by the Surface Transportation Board to begin construction on a five-mail rail extension to serve Bear Run coal mine, located in Indiana’s Sullivan County. STB ruled that the proposed extension is a spur, exempting Indiana Rail Road from a more lengthy review process.

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"The issue presented here is whether INRD's proposed track construction involves the construction of a 'spur' or, alternatively, a 'line of railroad,'” STB said. "The board does not exercise licensing authority 'over construction, acquisition, operation, abandonment, or discontinuance of spur tracks.' The determination of whether a particular track segment is a 'railroad line' requiring board authorization or an exempt spur turns on the intended use of the track segment. Exempt spurs are 'commonly constructed either to improve the facilities required by shippers already served by the carrier or to supply the facilities to others, who, being within the same territory and similarly situated, are entitled to like service from the carrier,'" the board quoted from federal statute.

"The intent of the proposed track is to improve the facilities required by Peabody, an existing shipper whose Farmersburg mine is already being served by INRD," STB continued. "The track will not invade the territory of another railroad because the closest track already in service is a CSXT main line 6.2 miles west of Bear Run pit. Furthermore, INRD has historically served the area that the proposed track will occupy, and the track will serve only Peabody."

Peabody last month that it had lined up long-term supply contracts for 90 million tons of coal from Bear Run. Peabody said that it will begin production in the second half of 2009 and increase production thereafter.

Indiana Rail Road will invest $17 million initially to construct the line, with an additional $5 million to be invested during the next two years. 

Last month, Indiana Rail Road President and CEO Thomas G. Hoback stated, “Peabody’s investment is one of the most significant industrial developments in Indiana in this decade, and it is the largest single new business opportunity ever awarded to the Indiana Rail Road Company. We project that it will increase our current coal transportation volumes by more than 30%. We value the confidence shown by Peabody, a global leader, in our ability to provide world-class service.”

The regional railroad, based in Indianapolis, operates a 500-mile route system based primarily in Indiana and Illinois, with terminals in Chicago, Indianapolis, Terre Haute, Ind., and Louisville, Ky.