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(The following story by Eric Anderson appeared on the Albany Times-Union website on February 27, 2009.)

MECHANICVILLE, N.Y. — Federal regulators are expected to give their approval within weeks to a $140 million rail project that includes a $40 million intermodal yard in Mechanicville.

The project, first announced in July, was delayed last fall when the federal Surface Transportation Board said it would require an environmental assessment of the plans.

Concerns included additional truck traffic that would be generated, protection of wetlands, and bright lights spilling over into adjacent residential areas.

The two railroads involved in the joint venture, Norfolk Southern and Pan Am Railways, have agreed to a series of conditions placed on the project.

David Fink, president of Pan Am, said Thursday he’d like to see construction work begin in April.

The entire project, which includes improvements to the rail line between Mechanicville and Ayer, Mass., as well as connecting tracks extending into Connecticut, New Hampshire and Vermont, is expected to take three years to complete, Fink said.

Work on the Mechanicville intermodal yard will take this year and part of next, he added.

A new entity, Pan Am Southern, will operate what is being called the Patriot Corridor, moving freight, including automobiles, between New York and eastern New England.

New York is contributing $3 million toward the cost of the Mechanicville “logistics center,” as the new yard is being called.

Much of the yard will be in the town of Halfmoon, with some of it in the town of Stillwater, as well as the city of Mechanicville.

The 80-acre facility will be built on the site of railyards formerly operated by Boston & Maine Railroad. The yard is expected to employ 35 to 40 people initially.

Truck trailers would arrive on ralroad flatcars and then be hitched to truck tractors for local delivery, helping to remove as many as 35,000 trucks from the highways annually by 2015, according to railroad projections.

The move will give Norfolk Southern direct access to markets in eastern New York and New England, helping it compete directly with CSX Transportation, which has yards in Selkirk.

Fink said he doesn’t expect the current economic slowdown to have any impact on the project timetable.

A spokesman for the Surface Transportation Board said a decision is expected soon.

Rudy Husband, a spokesman for Norfolk Southern, said the delays had raised concerns about getting the project under way.

“We remain hopeful that a favorable STB ruling is imminent and we will be able to proceed quickly with the joint venture, which includes the construction of the Mechanicville terminal,” Husband said.