CSX to invest $40M in local rail infrastructure

CSX Corp. plans to spend $40 million to connect its Northeast Jacksonville rail spur to its main line along U.S. 1 so that trains going to and from new container terminals being built or planned don't have to travel through town to its Westside rail yard.

The bypass initiative is linked to the Jacksonville Port Authority's plans to develop an intermodal container transfer facility on the Northside to receive containers from the soon-to-open TraPac Inc. terminal at Dames Point and a proposed Hanjin Shipping Co. Ltd. terminal nearby. Combined, the two terminals are projected to have a capacity of 1.8 million 20-foot-equivalent units of containerized cargo a year.

CSX (NYSE: CSX) would expect to generate at least two trains a day of about 280 containers each to make a North Main Street bypass economically viable, said Chief Commercial Officer Clarence Gooden, who announced the initiative Monday during a news conference at the authority's Blount Island Marine Terminal.

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"Jacksonville lends itself to being one of the first ports of call on the East Coast" for ships coming through the Panama Canal, Gooden said. "Having our interests aligned -- CSX, the port, city and state -- we'll all move in the right direction."

The announcement was heralded by public officials, including Mayor John Peyton, City Council President Daniel Davis and U.S. Rep. Corrine Brown. Getting as many containers off the road as possible is vital to striking a balance between economic development and quality of life, Peyton said.

Besides an ICTF, CSX's plan depends to some degree on the Florida Legislature approving a plan to buy 61 miles of CSX track in Central Florida for a commuter rail system. CSX plans to use some of the money from selling that line to fund the bypass line, Gooden said.

If the Legislature approves the deal, the sale could close in the fall and the company could have the project going within 18 months, Gooden said. If the sale doesn't go through, CSX's plans would be slowed.

In any event, CSX would not proceed with construction until it is assured the plans for an ICTF are progressing, Gooden said. "We'd like to move in parallel with that."

But CSX will work on acquiring right of way as soon as possible, he said, so that it's ready whenever the port authority is.

For the authority's part, it has received about 15 to 20 responses to a request for interest in investing in port-related infrastructure, including an ICTF, Chief Financial Officer Ron Baker said. From there, the authority will hold public meetings, issue a request for proposal and choose strategic partners.

"The goal," Baker said, "is moving large volumes of containers on rail."