Indiana Northeastern is working on upgrading its track in Steuben County so it can haul larger cars with 75-car runs and at faster speeds. Other than areas where track improvement have been made, Indiana Northeastern’s rail meets top tier requirements outside of Steuben County.
It needs funding to accelerate the 13.3-mile project at certain locations in Steuben County. Last fall, track was upgraded in the Angola area.
The project is estimated at $5 million. Of that, Indiana Northeastern would put up $2 million, the county $1.25 million and The Andersons Inc., a large agri-business company, has pledged $1.75 million in the form of a no-interest loan.
“This upgrade helps our company, it keeps Andersons and it helps a lot of other entities,” said Gale Schultz, president of Indiana Northeastern.
Commissioners did not take any action on the request made Monday, though members did seem favorable. Steuben County Council members will hear a presentation on the loan next Tuesday.
Indiana Northeastern officials have worked for years to get the track improvement funded through grants and federal transportation funds with limited success.
The railroad company has been working with an Indiana Department of Transportation grant program that has allowed it to do some upgrades annually. Under the program in place it would take another six or seven years to complete the upgrade.
Because The Andersons is having difficulty from a competitive standpoint, it is requiring larger cars and longer trains in order to hold its cost down and remain viable at its Reading, Mich., plant.
If the track is not upgraded soon, the Reading plant could be closed. And with Andersons being the largest customer for Indiana Northeastern, the viability of the railroad is at stake, said Dave Koenig, executive director of the Steuben County Economic Development Corp.
Currently there are 15 companies that have requested information about Steuben County industrial expansions this year that have wanted to know if rail was an option for shipping. Of those 15, eight want it as an option and four would require it, Koenig said.
“It would be detrimental not to have (rail) as an option,” Koenig said.
Schultz said Indiana Northeastern has looked at federal programs but they were ruled out because the land the railroad owns would have to be turned over to a government entity and federal programs tend to be drawn out over time.
The loan from Major Moves, money the county received as its take from legislation that led to the lease of the Indiana Toll Road to a private entity for $3.8 billion in 2006, would be paid off over 10 years. The county’s proceeds from the lease was about $33 million.
County attorney Don Stuckey said there are problems with county government loaning money in Indiana, but a mechanism probably could be worked out to make the project happen.
Indiana Northeastern is headquartered in South Milford and has operations offices in Hillsdale, Mich. Indiana Northeastern’s track covers about 130 miles across northeast Indiana, northwest Ohio and southern lower Michigan. Most of the company’s traffic interchanges with Norfolk Southern at Montpelier, Ohio.
The Andersons is a conglomerate of agribusinesses that provide products such as grain and plant nutrients as well as rail car leasing and repair, industrial products formulation, turf products, retailing and most recently, ethanol operations, the company’s website says.