Construction will start next year on the $71.4 million railroad project that the feds authorized for Northwest Indiana in early 2010, state transportation officials said Monday.

The project, which is supposed to relieve congestion in a bottleneck from Porter County to the Indiana/Illinois state line, is paid solely by stimulus funding. It's expected to create about 700 jobs each year for two years.

"Right now, they're still working on the final details of the agreement between Norfolk Southern, Amtrak and the Federal Railroad Administration. They're meeting every week to two weeks and hope to have it finalized by the end of the year," Jim Pinkerton, a spokesman for the Indiana Department of Transportation, said. "Once the agreement is finalized, they'll go ahead and authorize the final design work to go ahead. That'll probably take place in first quarter of 2011. The project will be under way during the 2011 construction season."

The Northwest Indiana plan will reduce train delays by 11.6 minutes per 100 train miles, according to one study, and make it easier for freight trains to pass. The project includes relocation, reconfiguration and addition of high-speed crossovers and improving the signal system at seven locations in Gary, Burns Harbor, Porter and Whiting.

An alliance of Indiana steel workers and environmentalists touted such rail projects at a teleconference with reporters Monday. According to a new report by the BlueGreen Alliance, economic models estimate about 7,800 "green" jobs are created for every $1 billion of freight rail capital investment.

"We need immediate job growth in this country and freight rail is one of the things we can look to ... to create more jobs quicker," Tom Conway, regional program manager of the BlueGreen Alliance, said.

Each $1 billion of investment can also create between 12,300 and 26,600 total jobs throughout the economy -- much-needed jobs in Northwest Indiana, the group said.

"The belief is that ... every job you create in manufacturing creates three to five more other jobs," Robin Rich, a spokeswoman for the United Steelworkers, said. "We think it's worth it."

At least 940 steel workers in Northwest Indiana produce products related to rail, Rich said: Workers at ASF-Keystone in Hammond, at the ArcelorMittal Gary and Burns Harbor plate mills and at ATI Casting Service in LaPorte.

"This is a very important way for us to move forward in both reducing our impact on the environment and also to reduce our dependence on foreign oil," Bowden Quinn, conservation program coordinator with the Sierra Club Hoosier Chapter, said. "We're spending $1 billion a day on foreign oil. Transportation is responsible for two-thirds of that. It's important for both national security reasons and the environment."

Quinn said the advantage of a passenger/freight rail combination is that private companies and the public can share the cost of expansions.

"We really hope we can form a kind of public/private partnership with improving freight rail and improving passenger rail, especially with high speed rail," he said.

John Parsons, spokesman for the Northern Indiana Commuter Transportation District, which runs the South Shore Railroad, said high-speed rail isn't being considered for the South Shore.

"Our current maximum speed is 71 miles per hour," he said. "The key to much of this is whether the freight believes they have additional capacity they can provide. In most cases, they'd say they'd need additional capacity."

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