WASHINGTON — Maryland’s entire congressional delegation has written to CSX Transportation CEO E. Hunter Harrison, asking him to explain the railroad’s decision to drop out of a partnership to raise clearances in the Howard Street Tunnel.On Nov. 1, in response to media inquiries, CSX confirmed that it no longer considered the long-sought tunnel project in Baltimore a priority. The tunnel is a barrier to double-stack service to and from the Port of Baltimore, as well as on CSX’s Interstate 95 Corridor linking New Jersey and Florida.
CSX had sought – and won – state and federal political support for a jointly funded $425 million clearance project. The state and CSX had committed nearly two-thirds of the money and had applied for a $155-million federal grant.
“The long-term, bipartisan, state, federal and local financial support for this project is a reflection of the importance we have all placed on the need for these improvements,” the delegation wrote to Harrison. “We seek to understand how a project that has been a top priority for CSX, multiple local, state, and federal representatives and the business community for many years — to the exclusion of other local needs and projects — is suddenly no longer of importance to CSX.”
Harrison was invited to a meeting on Capitol Hill in Washington, along with officials from Maryland and the Port of Baltimore.
The Port of Baltimore can handle the larger container ships that can take advantage of the expanded Panama Canal. But officials fear the port will be left behind East Coast competitors without access to double-stack rail service.
CSX did not immediately respond to an email request for comment regarding the letter.
Late on Wednesday, CSX responded to concerns raised by Maryland Gov. Larry Hogan.
“Given the operating changes that CSX’s new leadership team has made over the last several months, and upon an updated evaluation, we determined that the Howard Street Tunnel project proposal no longer justifies the level of investment required from CSX and our public partners at this time,” spokesman Christopher Smith says.
“Intermodal is an important part of CSX’s business and we are committed to supporting the freight rail needs of our customers and the Port of Baltimore through frequent, reliable, on-dock service. This business decision is in no way a reflection on the leadership of Gov. Hogan, who has supported this initiative to the greatest degree possible on behalf of the businesses and citizens of Maryland. CSX appreciates the partnership we have developed with the State and we look forward to continuing the dialogue with our partners about our new operating plan.”
The text of the delegation’s letter to Harrison is below:
Mr. E. Hunter Harrison
President and Chief Executive Officer
CSX Transportation, Inc.
500 Water Street
Jacksonville, FL 32202
We invite you to join us for an in-depth discussion on Capitol Hill to explain why the CSX Corporation intends to cancel the Howard Street Tunnel infrastructure improvement project. We will invite representatives from the State of Maryland and Baltimore City to join us at the meeting.
The Port of Baltimore is one of the only East Coast ports that can accommodate the Panamax ships moving through the newly widened Panama Canal. With freight volumes expected to increase dramatically over the coming decades, it is critical that necessary infrastructure and safety improvements are made to protect the public and prevent a rail bottleneck that impacts the movement of commercial goods up and down the East Coast and from Baltimore to Ohio.
The long-term, bipartisan, state, federal and local financial support for this project is a reflection of the importance we have all placed on the need for these improvements.
We seek to understand how a project that has been a top priority for CSX, multiple local, state and federal representatives and the business community for many years — to the exclusion of other local needs and projects — is suddenly no longer of importance to CSX. Please be prepared to provide an overview of changes you have made to CSX operations in the State of Maryland, what changes you will implement in the near future, what, if any, assistance you anticipate requesting from state, local and federal governments regarding these changes and any other federal issues that are important to CSX such as limiting truck trailer size, federal tax issues and other priority public-private rail improvement projects around the nation.
Our staff will follow up with your office to schedule a meeting in the very near future. We look forward to a fruitful and candid discussion.
Sincerely,
Chris Van Hollen
U.S. Senator
Benjamin L. Cardin
U.S. Senator
Steny H. Hoyer
Member of Congress
Elijah E. Cummings
Member of Congress
C.A. Dutch Ruppersberger
Member of Congress
John P. Sarbanes
Member of Congress
Andy Harris, M.D.
Member of Congress
John K. Delaney
Member of Congress
Anthony G. Brown
Member of Congress
Jamie Raskin
Member of Congress
Ira Silverman hit the nail on the head. Without double-stacks in the Howard Street tunnel, the money spent by the state of Maryland on this project thus far will ironically benefit a port in Virginia.
From the wording of CSX, it sounds like they may still want the project to move forward, but want the gov to chip in a higher amount of money to do so. I wouldnt blame CSX for this. If the customer wants to improve Rail service so THEIR port can be competitive with other ports, let them pay for the upgrades to the access tunnel. It would be no different than a line side customer deciding to add additional capacity in the former of extra Rail leads. The railroad pays for the mainline, and everything beyond the turnout is the customers responsibility.
Recon’, The State, and the Feds might ‘sell’ some of their equity in this this Project to EHH? Revenue could be more than enough to make him ‘comfortable’ in his retirement?
Stuart, you are thinking od the Washington DC project.
I thought the first phase of this project was to create a new double stack tunnel and then rebuild the existing old tunnel to be double stack height. I think the new tunnel is already complete. Is this correct or is that another CSX project?
EHH is a bottom liner, quick return on investment, not looking at the future, get the money and run, manager. He wants to show a high stock price, high dividends, huge profit margins, but not provide quality service…or safety, for that matter. It is what he and his investor and hedge fund friends can get now, before he disappears. There is no future in CSX with him at the helm, only the present. Customers and safety be damned; investors to be made wealthy quickly and then sell before all the crashes from lack of maintenance of track, engines, and cars and to the profits when lack of customers who will have disappeared.
Nationalize the line, build it out as planned and CSX can pay market rates to access it or run whatever trains they will still be running post-EHH around it.
maybe CSX searching for a better deal?
What is not mentioned here is that the state of Maryland contributed to providing double-stack clearances across the state of Maryland. It was envisioned that the Port of Baltimore would benefit from this. But without the tunnel expansion the only benefit is for traffic taking a right turn at Washington and going to Portsmouth. So basically Maryland gets nothing in exchange for its investment. This might not have happened if previous efforts to develop an intermodal Facility South of the tunnel had come to fruition. But politics shot down at least three different locations.
Ira Silverman great points.
The biggest RR nixing in the vital BosWash corridor since Christie shot down ARC.
Yes, Claes, good suggestion.
I like Claes Jonasson’s idea below!
Sounds like the CSX decision has plenty of potential to seriously embarrass a bunch of politicians who listened to the pitch from the previous management and supported the tunnel project. Current management can expect to be asked how they plan to deliver all the benefits promised for the regional economy without actually rebuilding the tunnel. CSX cannot walk away from the commitments just because they have new management.
When a politician uses political capital to help a business and then gets hung out to dry you can be sure there will be consequences. CSX Board members should know better than to let this happen.
I like to think outside the box. If you are a railroad where you’ve got both federal and state money committed to fix a problem to compete with trucks in an I-95 competitive situation, why are you suddenly saying “no”? Maybe there are alternative uses planned for that corridor that haven’t been announced. Railroads are transportation companies as we think of them, but they are also real estate companies. Remember the talk a few months ago about the Hyperloop, a high tech vacuum tube for passengers between Washington and New York? It would need a right of way for construction, and putting together a string of real estate in that area would be both difficult and expensive. Enter CSX with just what’s needed. Why spend the $145 million on a tunnel that you plan to sell? CSX is also in the process of buying back $1.5 billion of its own stock, so why announce a potential sale that could drive up the price until that’s done? The more shares that are bought back at a lower price, the bigger the piece of the pie is for the remaining shareholders as they would own a greater percentage of the company.
It’s all about the money. Funnel money to the executives and they don’t care what freight goes where. As long as they cash in. Don’t you get it?
The requested meeting between Harrison and his CSX entourage and the legislators should create banner headlines. It also may generate a great deal of acrimony. Hopefully, it will be fully reported.