The Delmarva Peninsula is about to get a new railroad.
Rail Services Associates, of Hammonsport, N.Y., has reached tentve agreements with authorities in Virginia and Maryland to takeover inprofitable branch lines on the Delawate-Maryland-Virginia peninsula for one year, starting April 1.
The Western New York State firm currently operates the 34-mile Bath & Hammondsport short line railroad and provides consulting services for short line operations. If first-year Delmarva operations succeed, subsequent management contracts will be approved.
In less than 30 days, Rail Services must established a new company that is expected to assume management of the following rail operations.
The Virginia portion of the Delmarva main line from Pocomoke, md., to Cape Charles, Va., a distance of 63.5 miles.
A freight car ferry across the lower Chesapeake Bay between Cape Charles and Little Creek, Va., 26 miles.
A 7-mile stretch of track from Little Creek to Norfolk.
Four branch lines in Maryland, covering 150 miles, from Cambridge to Seaford, Del., Salisbury to Herbron;Centrevile-Chestertown; and a branch to Easton.
All of these rail lines previously were owned by the bankrupt Penn Central and since last April 1 service over the routes has been provided by Consolidated Rail Corp., with subsidy aid from the federal government.
Last month, the Accomack-Northampton transportation district commission on the eastern shore of Virginia decided to drop ConRail because total federal subsidies end March 31 and the new Philadelphia railroad increased the total subsidy required. Under Virginia law, the state cannot provide any such subsidy and local authorities have to provide the funds.
Although Maryland law permits subsidies, the new rail operating firms has proposed a level of costs below those required by ConRail, which was established by the federal government to supplant most bankrupt railroads. The ConRail law also established a program of federal state subsidies for unprofitable branch lines, with the U.S. share declining to 90 per cent after the first year.
J.A. Hannold of Rail Services, who also is vice president and general manager of Bath & Hammondsport, said in an interview yesterday that no name for the new railroad has been selected to date. An initial office will be set up in Cape Charles, he added.
A "goodly sum" will be spent on marketing and sales promotion aimed at increased freight volume along the Delmarva lines, according to Hannold. His firm is one several which conducted negotiations on the Delmarva lines with state and local officials.
Final negotiations on levels of subsidy remain to be completed but state officials and Hannold said they expect no difficulties. The only difficulty could involve negotiations with ConRail on how to share freight revenues fron the Maryland branch lines, Hannold added.
Hannold said the new Eastern Shore railroad will employ about 100 workers but most - if not all - of the employess will be non-union members. The jobs of ConRail's current union employess are protected under federal law and they will be offered work elsewhere in the large company.
Ironically, it was intransigence by some union leaders that blocked an earlier agreement by Southern Railroad to take over the entire Delmarva line formerly owned by the Penn Central. Southern demanded that the unions accept that company's contracts, which to the then-existing Penney contracts.