(The Hattiesburg American published the following story by Janet Braswell on its website on October 9.)
HATTIESBURG, Miss. — An agreement between the Port of Gulfport and Kansas City Southern Railroad nullifies a 2001 plan for the state to buy the aging line and create a container cargo rail hub in Hattiesburg.
The Legislature authorized selling $40 million in bonds to buy the 68 miles of track between Hattiesburg and the port and to upgrade the dilapidated rails that can’t handle container traffic.
But the port authority and the railroad agreed two months ago to work together on joint marketing projects and start separate capital improvement and maintenance programs to increase traffic to the port by 8 percent annually.
The agreement was signed Aug. 8, but legislators and economic development leaders in the Hattiesburg area weren’t told about it.
“I want to find out what’s going on,” said Sen. Tom King, R-Petal, who strongly supported the bond plan. “I was right there leading the charge for this because I thought it was a real economic development tool for the southern part of the state.”
Port director Don Allee was out of the country last week and no one else at the port could talk about the agreement, executive assistant Kim Purchner said.
“Kansas City Southern Railway has agreed to spend $6.5 million on rail and bridge improvements instead of selling the line to the state,” said J. Stephen Hale, director of the Mississippi Development Authority, in a prepared statement. “The Mississippi Development Authority recognizes the economic impact of the Mississippi State Port Authority at Gulfport and is committed to working with both the port and Kansas City Southern Railway Co. to improve the delivery system and assist the new and expanded facilities in the State of Mississippi.”
It was unclear whether the development authority can use some of the bond money, must pay for its part of the project from existing funds or must ask for additional funding from the 2004 Legislature. Hale was unavailable for clarification.
The 2001 legislation authorized the sale of bonds only when an agreement to buy the rail line had been reached, and the bonds have not been sold.
“The deal would have to be out there for the bond sale to proceed,” King said.
The bond legislation gave the port and the development authorities responsibility for negotiating the purchase from Kansas City Southern. It did not require the state to keep supporters informed of the progress of negotiations.
“The Area Development Partnership was surprised by this move and are trying to get a briefing from the port commission,” said Gray Swoope, president of the ADP.
The five-year agreement calls for the port and the railroad to participate in joint marketing opportunities and to initiate separate five-year capital improvements.
“The memorandum of understanding makes it unnecessary to sell the line,” said railroad corporate communications director Doniele Kane. “It’s a five-year commitment between the line, the port and the state to make improvements to increase traffic on that line.”
She couldn’t provide details, such as when work would begin on the tracks.
It’s too early to tell if the agreement will achieve the results that supporters hoped to realize if the state had purchased and upgraded the railroad, said Sen. Billy Hewes, R-Gulfport.
“Kansas City Southern has made it clear that it’s unwilling to sell the line but they’d like to engage in a more active role in the conditioning and use of this line,” he said. “It is highly necessary that this rail line continues to be improved. All ports are dependent on truck and rail traffic for ingress and egress. The more opportunity we have the better off we are.”