submitted to the SEC, Doc. 33388
VERIFIED STATEMENT OF D. MICHAEL MOHAN IV. SERVICE BENEFITS OF THE ACQUISITION A. Operations Overview The blocking and train operations plans described in the Operating Plan are intended to raise service reliability on the consolidated system to levels provided on the NS system today and will create an efficient and customer-oriented operation. Under the Plan, train operations are divided into six distinct networks: * General merchandise * Automotive * Coal * Other bulk * Intermodal * Triple Crown Services Each of these service networks was designed starting with three key factors: * What are the service and efficiency requirements of each movement; * How much traffic volume is projected; and * What routes and terminals are available to handle the projected traffic? The goal was to find the right combination of routes, terminals, blocking and train schedules to best meet the specific service and cost requirements of each movement. For some commodities, speed of movement is critical; for others, the lowest possible cost is important. In almost all cases reliability is essential. To achieve these goals, new blocking strategies and train operation plans were developed for each of the six networks. The key organizing principles for each of the networks are as follows: 1. The General Manifest Network Northeast-Midwest/Western Connections Current Conrail operating practice is to concentrate classification activity at four major hump yards: Selkirk, NY, Elkhart, IN, Avon (Indianapolis) IN, and Conway (Pittsburgh) PA. Although there are numerous classification yards of all sizes on the Conrail system, these are the major hubs. In the base period, most westbound carload traffic was classified at two of these terminals, depending upon traffic origin and destination, creating large blocks but slowing transit times. While this may produce an efficient train operation suited to Conrail's current needs, NS believes it preferable from a service reliability and speed standpoint to minimize the amount of traffic which must be processed twice at major classification facilities. At major classification terminals, where many connections must be made and where congestion can frequently occur, overall service reliability can suffer. This diminution of reliability has an effect not only on customer satisfaction but on equipment utilization as well. In order to eliminate this double processing, the blocking and train operation plan presented for general manifest traffic in the Operating Plan concentrates classification activity at Conrail's Conway (Pittsburgh) Yard, for traffic moving to and from East Coast points and the Kansas City gateway in particular. Conway will also become the classification hub for traffic moving to Southwestern points via interchange with the Union Pacific ("UP") system at Sidney, IL. Other westbound traffic blocked at Conway will move generally to NS's flat switching yard at Decatur, IL. Decatur is a focal point for NS operations, where traffic can be efficiently concentrated from Detroit and the upper Midwest and then distributed to the Kansas City gateway, or to the St. Louis gateway. Decatur is not a hump yard, and the Operating Plan specifically contemplates assembling blocks from trains arriving from the different routes on close connections. Traffic volumes developed indicate that block size will be sufficient to generate trains from Decatur that can be operated as far west as Barstow, CA on BNSF and North Platte, NE on the UP without additional intermediate classification. This operation will further a number of objectives, including the improvement of service reliability. First, extra processing at major hump yards is eliminated. Second, shippers are afforded access to the service-efficient Kansas City gateway. Third, traffic moving from Detroit and the upper Midwest can be consolidated with traffic originating in the East to provide efficient run-through type trains that will eliminate terminal processing not only on the consolidated NS system, but on Western carriers as well. We believe this plan of operation will substantially improve service reliability over present levels. Section IV.B. of this Statement offers specific examples of how and why the improvements will occur. Western Gateways/Midwest-Northeast For east-west traffic moving between the Chicago gateway and Eastern Seaboard points, again the goal was to eliminate double classification at both Conway and Elkhart Yards to the maximum practical extent. Elkhart is Conrail's system classification yard supporting the Chicago gateway. NS intends to use Elkhart for a similar purpose. This utilization of Elkhart will permit NS to eliminate classification work at its own Chicago Calumet facility and permit the development of that facility as a major intermodal terminal at some future point. To eliminate intermediate handling at Conway, Chicago gateway traffic flows were organized to generate long distance trains which will run between Elkhart Yard and Northern New Jersey, bypassing intermediate classification at Conway. The increased traffic generated by consolidation of NS and its allocated Conrail lines will allow the assembly of efficient run-through trains from Elkhart to many Midwestern and Western destinations as well as to the upper Midwest and Canada. North-South North-South manifest traffic service will also improve substantially. The improvements will be attributable to the elimination of interchange between Conrail and NS at Hagerstown, MD, Cincinnati, and Columbus, OH. The improvement will also be due to the elimination of excess intermediate terminal switching, which will be made possible by the larger traffic volumes generated as a result of the consolidation. For example, under current operating practice, Conrail traffic originating from the Chicago gateway and Central Michigan is assembled and classified at Conrail's Elkhart, IN facility. It is then moved to Conrail's Buckeye classification yard in Columbus, OH, where it is again reclassified and then assembled into a run-through train to the NS interchange at Cincinnati. NS then handles the traffic to Chattanooga, TN, where it must again be re-classified. The traffic is currently subject to additional re-classification south of Chattanooga depending upon its ultimate destination. With larger traffic volumes available, and with an expanded route structure, traffic can be assembled at Elkhart, IN for long distance trains to operate direct from Elkhart to both Chattanooga, TN and Macon, GA, eliminating intermediate classification at Buckeye and, in many cases, at least one additional terminal. Traffic data indicate that similar efficiencies will be obtained on northbound traffic from the Southeast to the upper Midwest. On the Eastern Seaboard, manifest traffic flows will improve for the same basic reasons. Traffic data indicate that there will be sufficient traffic to generate daily service from the Allentown, PA hub to Knoxville, TN. From Knoxville, traffic will be handled directly to the Memphis and/or New Orleans gateway, as well as to Macon, GA. Traffic volumes are also sufficient to generate a new Baltimore to Roanoke, VA service for handling beyond Roanoke. Some of the more important new merchandise train operations are highlighted below. GMCWDE and GMDEPI are new trains offering excellent examples of the service reliability improvement strategy. Blocks for BNSF and UP assembled from traffic originating on the East Coast will be marshaled at Conway and forwarded to Decatur, IL for close connection with trains arriving from the upper Midwest. At Decatur, blocks will be exchanged to assemble trains to run as far west as Barstow, CA and North Platte, NE eliminating intermediate terminal processing on the consolidated NS system and on western carriers as well. GMELOI is a new 32-hour schedule from Elkhart, IN to Oak Island. It will eliminate intermediate processing at Conway and offer direct service for manifest traffic from the Chicago gateway to Northern New Jersey. GMOILI and GMLIOI will provide new service between Philadelphia, Wilmington, DE, Baltimore, MD and points in the Carolinas and beyond with a transit time of 30 hours. These and similar schedules will generate additional traffic on north-south routes, which Conrail has not emphasized because of the relatively short hauls between origin and Southeastern gateways. The consolidated system will be strongly motivated to maximize traffic potential in these new lanes. GMSLKC, GMKCDESF, GMDEKCUP, GMKCDEUP are merchandise trains that will be assembled at Decatur and at Moberly, MO to provide full run-through trains with BNSF to Barstow, CA and with UP to North Platte, NE with similar service in the reverse direction. GMPISIUP, GMSIPIUP, GMFWSIUP, GMSIFWUP are new services that will be operated in conjunction with UP over Sidney, IL between the East Coast, the upper Midwest and Southwestern points. These trains will operate directly to and from Conway Yard without intermediate classification on an average 20-hour schedule. Traffic to and from the upper Midwest will be assembled at Fort Wayne, IN and will move on similar schedules. GMELMA, GMMAEL, GMELCH, GMCHEL are new merchandise schedules between the upper Midwest and Midsouth. The traffic studies indicate that there is sufficient traffic to eliminate the current interchange with Conrail at Cincinnati, as well as numerous intermediate classifications. Long distance trains can be created in both directions between Elkhart, Chattanooga, TN and Macon, GA that will not be re-handled in route, reducing one to three days from current transit times and improving service reliability. GMALKX and GMKXAL are general merchandise trains over the Shenandoah Route between Allentown, PA and Knoxville, TN with blocks for Macon, Chattanooga and Birmingham. Estimated schedule times between Knoxville and Allentown will be 33 hours. The new blocking scheme will materially improve service reliability as well. 2. The Automotive Network The Operating Plan offers an extensive discussion of service improvements planned for automotive traffic. The organization of the consolidated NS automotive network is predicated on generating sufficient volumes of automobile or automobile parts traffic to operate intact trains from origin to destination. When such volumes are not available, traffic will be directed to a single automotive hub at Bellevue, OH, where run-through automotive trains can be assembled for Eastern, Western, and Southern destinations without further handling at major classification terminals. Some of the improved services are discussed below. AUBVOI, AUBVDO, AUDOBV are examples of through automotive vehicle schedules operating between the Bellevue automotive hub and the East Coast. Trains will operate between Bellevue and Oak Island, NJ, or directly to the Doremus Avenue automotive facility near Oak Island with no intermediate handling. AUBVRH and AURHBV will be important new automotive multilevel trains operated from Bellevue to the Ridgefield Heights, NJ ramp on a dedicated basis via the Southern Tier. AUATBV, AUATOA, AUBVAT, and AUOAAT will handle automotive traffic on a dedicated basis from the upper Midwest via Bellevue, OH to Atlanta. These trains will handle both automotive parts and multilevels in each direction, eliminating interchange and classification delays, thereby improving service reliability. Trains will be operated from Bellevue on an average 30-hour schedule, and from Detroit to Atlanta with an average transit time of 35 hours. Depending on the traffic involved, transit time savings will vary from one to three days. AUOAKCSF and AUKCOASF will represent important new automotive services to BNSF via the Kansas City gateway, operated directly to and from Oakwood Yard in Detroit via Decatur. AUBVKCSP and AUBVKCUP, AUKCBVSP, AUKCBVUP will handle automotive traffic for Union Pacific on a schedule from Bellevue to interchange at Kansas City of under 30 hours. Similarly, AUBVSIUP, and AUSIBVUP will handle consolidated intermodal and automotive trains between Bellevue and the new UP interchange at Sidney on a 15-hour average schedule from Bellevue, and a 12-hour average service from the Toledo (Airline) hub for intermodal traffic. 3. The Coal Network The principal change in the coal network operations is the elimination of circuity for coal traffic originating at Conrail mines in West Virginia. This traffic must now move by Conrail's West Virginia's secondary to Columbus, OH and then east over Conrail's mainline to Harrisburg, PA for traffic moving to points generally north and east of Harrisburg. The Plan moves this traffic via Deepwater and Elmore, WV to Roanoke, VA, Hagerstown, MD and Harrisburg, PA, eliminating an average 143 circuitous miles for each train so handled. CLGRBE, CLBEGR, CLWLBE, CLBEWL, CLIABE, and CLBEIA all offer service and equipment benefits to coal customers by eliminating the circuity inherent in current Conrail routes. Coal traffic originating at Conrail's West Virginia mines and destined to points generally north and east of Harrisburg, PA will move via the new direct single-line route from Deepwater to Elmore, WV, thence to Roanoke, VA, Hagerstown, MD and Harrisburg, PA, depending upon train destination. 4. The Intermodal Network As is current practice for both NS and Conrail, dedicated intermodal trains will be operated between all points on dedicated schedules wherever volume or business prospects justify. But unlike the current Conrail system, the new network will focus on both longhaul and shorthaul intermodal traffic, and NS will make the investments needed to pursue the dual market strategy. NS will add a new network onto the current Conrail system which will be designed to handle shorthaul traffic efficiently between multiple origin-destination pairs. There is a large amount of truck traffic available for diversion in the Conrail service territory (see Verified Statement of P. J. Krick). To accommodate shorter haul business, the Operating Plan contemplates the construction of two major block exchange facilities at Toledo (Airline) and at Harrisburg (Rutherford). These two terminals will efficiently assemble and distribute traffic on a close connection basis to points in the upper Midwest and on the Eastern Seaboard. New intermodal schedules are discussed in the Operating Plan, many of which will be processed over these two hubs. Traffic to and from Northern New Jersey will be handled at exclusively-served NS facilities at Croxton and E-Rail in the Newark area. NS will also have direct access to the Port Newark area and to the APL intermodal facility at South Kearny. Importantly for intermodal operations, the Operating Plan contemplates the upgrading of Conrail's Southern Tier line between Buffalo, NY and Croxton, NJ as a principal artery for double stack service moving between West Coast points, the Chicago gateway, and the Eastern Seaboard. Some of the important intermodal services are discussed below. IMERHB, IMHBER, IMHBKCUP, and IMKCHB are important new examples of service to and from the expanded E-Rail intermodal terminal in Newark, NJ. These four new trains are typical of service that will be handled over NS's new intermodal hub at Rutherford, PA near Harrisburg, where block exchange and train consolidation will occur. From Harrisburg, long distance trains will be operated to and from the Kansas City gateway and beyond. The IMBLNO, and IMNOBL trains are new service offerings via the Piedmont Route between Baltimore and New Orleans, with transit time of 50 hours. These important new schedules will offer intermediate service to Greensboro, Charlotte, NC and Greenville, SC. IMHBNO, IMNOHB are new intermodal trains via the Shenandoah route, which will originate or terminate at the consolidation hub at Rutherford. The trains will handle traffic from the New Jersey, Philadelphia and Baltimore areas. Service will be provided for both conventional intermodal traffic and doublestack between the points named on the one hand, and Knoxville, Memphis, Huntsville, Birmingham, New Orleans, on NS and Dallas via connection with the KCS at Meridian, MS. Transit time between Harrisburg and New Orleans will be 46 hours. IMBFBN and IMBNBF will handle intermodal traffic between Buffalo and Binghamton, connecting to CP at Binghamton. New service to New England points will also be offered over Harrisburg and Sunbury, PA as traffic grows in conjunction with the haulage agreement executed between CP and NS as noted above and in the Plan. IMALKCSF, IMKCALSF intermodal service to the BNSF at Kansas City will be provided by a pair of trains originating and terminating at the Airline, OH (Toledo) hub. At Airline, connections will be made for New Jersey, New England, Baltimore and Buffalo. IMHBKCUP will be the intermodal service to and from the Union Pacific via Kansas City originating at Harrisburg, PA and operating via the Toledo (Airline) hub to Kansas City, with a transit time of 45 hours. IMATER-1, IMATER-2, IMERAT-1, IMERAT-2, IMBLNO, and IMNOBL will connect the Northeast and Southeast. NS currently operates two intermodal trains daily between Atlanta and Newark. These new schedules will originate and terminate from NS's expanded E-Rail facilities. Transit time from the E-Rail facility to Atlanta will average 32 hours. The trains will handle conventional intermodal and doublestack traffic and will be routed via the Lehigh line. (Until such time as clearance improvements are made, these trains will operate via the Trenton Line.) Connections to Jacksonville and Miami will be made in Atlanta. DSCGCX-1, DSCGCX-2, DSCXCG-1, DSCXCG-1, DSCXCG-2, IMCXSL, IMSLCX are representative of new schedules NS will operate as through service from Chicago via the Southern Tier Route from Buffalo to Croxton, NJ. Six intermodal trains a day will be operated in and out of the Croxton terminal. Four of these trains will be doublestack, and the third pair between Croxton and St. Louis will handle both doublestack and conventional intermodal traffic. The St. Louis trains will connect with the Kansas City trains at the Toledo (Airline) hub, providing 48-hour service between Northern New Jersey and Kansas City, with traffic pre-blocked for western connections. 5. The Triple Crown Network NS and Conrail already operate trains for an integrated Triple Crown RoadRailer( system. The service is seamless from the customer's perspective. The restructuring of Conrail and division of its routes will require certain changes in current operations on both NS and Conrail. It will also open up some new markets-- markets that Conrail was reluctant to pursue because its rail hauls for Triple Crown were often very short. For the Triple Crown RoadRailer( operation, the most important changes include: * Rerouting one pair of Portside, NJ/Atlanta trains onto Amtrak's Northeast Corridor to reduce schedule time between these points to 27 hours. * Initiating direct rail service between the Ft. Wayne hub on the one hand and Baltimore and Morrisville, PA on the other. * Shifting the current Rochester service to Buffalo. * Shifting the current Crestline service to Bellevue, with Triple Crown trains re-routed between Ft. Wayne and Pittsburgh. Use of the Northeast Corridor is required for some of these changes. The NEC offers a far more direct route between Atlanta and the Northeast than the current route used by TCS through Hagerstown. RoadRailers( are compatible with NEC operations, and the new route will save mileage and time, open the Carolina-Northeast market, and make a new terminal at Baltimore economically feasible. NS is discussing the details of this Triple Crown service with Amtrak. TCATPS and TCPSAT are the new symbols for re-routed Triple Crown RoadRailer( trains between Portside, NJ and Atlanta, GA, with new intermediate service to Charlotte, Baltimore and Philadelphia. Transit times for these trains, which will also traverse the Piedmont Route, will be 27 hours. TCBAFW, TCFWMV and TCMVFW will be the new Triple Crown symbols for services operated on the Pennsylvania route for east-west traffic between new terminals at Baltimore, MD and Morrisville, PA and Triple Crown's Fort Wayne hub. At Fort Wayne, connections will be made to the rest of the Triple Crown network. Average transit times from the eastern terminals to Fort Wayne will be 27 hours. B. Improved Service Reliability Two attributes of the consolidated system Operating Plan that will work to improve service reliability are route flexibility and the reduction in intermediate terminal handlings. 1. Route Flexibility Figures 15 and 16 represent the important route flexibility characteristics of the route structure of the expanded NS. Figure 15 shows the principal east-west routes of the consolidated system and demonstrates the available route capacity that results from the transaction. The NS system will have two efficient through routes between Chicago and New Jersey/Greater New York, which are actually composed of five route segments: * Conrail's former New York Central line from Chicago to Cleveland. * Conrail's former Pennsylvania, Reading and Lehigh lines from Cleveland to Northern New Jersey. * NS's former NKP line from Chicago to Cleveland. * NS's former NKP line from Cleveland to Buffalo. * Conrail's Southern Tier Route from Buffalo to the Newark area. Although the Southern Tier line will require some upgrading, the remainder of the route structure is in excellent condition, and the combination of former New York Central and Pennsylvania routes from Chicago through Cleveland to Harrisburg and Reading, PA is substantially all multiple main track and traffic control. With this type of route capacity and flexibility, a high degree of service reliability can be achieved, especially when taken in conjunction with a blocking and train operation plan which is specifically designed to maximize reliability. The transportation plan should provide a high degree of customer satisfaction. Figure 16 demonstrates a similar set of route attributes on north-south routes of the expanded NS system. The Shenandoah and Piedmont routes between the Northeast and Atlanta and other southeastern points are substantially parallel. The Operating Plan calls for corridor capacity improvement projects on the Shenandoah Route between Roanoke, VA and Knoxville, TN. The upgrading will be undertaken both to improve traffic flow to the Southeast and the Memphis and New Orleans gateways and to permit the Shenandoah route to function as a fully competitive route to the Atlanta area. Under present circumstances, the availability of two such substantially parallel, high capacity corridors will materially improve service reliability between the Northeast and southeastern points. 2. Examples of Improvement in Service Reliability The following are six substantive examples of how and why transit times and service reliability will improve after the transaction is implemented. The improvements will occur because of interaction of a number of factors. First, the consolidation of operations provides larger traffic volumes. The larger traffic volumes facilitate larger block sizes which in turn provide the opportunity to operate more long distance trains with a minimum of intermediate terminal classification. Second, the Operating Plan itself is based on the elimination of intermediate terminal classifications whenever that is practical and economic. In the denser traffic lanes both east-west and north-south, the Plan substantially accomplishes this objective. Third, as discussed, the alternate route characteristics and improvements both east-west and north-south will assure greater reliability for the line haul portion of the transportation function. Fourth, the service investments discussed in both the Plan and in this Statement will serve to enhance reliability and help attract more rail traffic while reducing costs. Six examples of transit time and service reliability improvement are discussed below and are shown graphically on Figure 17. Philadelphia to Kansas City Transit times between Philadelphia and Kansas City on a combination of Conrail and NS routes currently average just under four days; on the combined system, the average transit times in this corridor will be reduced to two and one-half days. The consolidated system will maximize service offerings via the service efficient Kansas City gateway. Traffic volumes are projected to increase, and the increases will allow reductions in intermediate terminal handlings. This will in turn provide more reliable service and reduced transit times for shippers. Currently, traffic originating in the Philadelphia area destined to the Kansas City gateway is classified by Conrail at Conway Yard at Pittsburgh, and again at Avon Yard near Indianapolis. It is then re-classified at TRRA's Madison Yard in St. Louis and then interchanged to NS. NS then handles the traffic beyond to Kansas City. Under the Operating Plan, the traffic will be initially classified at Conway into run-through blocks for western carriers operating beyond Kansas City. The traffic will be consolidated with other trains on a close connection, flat switch basis at Decatur, IL. The trains assembled at Decatur can operate as far as Barstow, CA on BNSF, or North Platte, NE on the UP without further re-classification. In this case, eliminating at least two intermediate classifications is responsible for the reduction in transit time. Intermediate classifications on western carriers will be reduced as well. Detroit to Kansas City Current transit times average just under four days, but under the Operating Plan they will average just over two. Lengthy interchange delays between Conrail and NS will be eliminated on this route. Under current operating practice, traffic originating on Conrail in the Detroit area destined for Kansas City is assembled in Detroit, is moved to Elkhart, is classified there, and then moved from Elkhart to Avon Yard at Indianapolis where it is reclassified. The traffic then moves to TRRA's Madison Yard in St. Louis. It is again reprocessed at that yard and then transferred to NS, which then advances the traffic to Kansas City. Under the proposed operation, NS will operate schedules directly from Detroit to Ft. Wayne and Decatur, where blocks will be assembled and exchanged to create run-through trains to western connections. Again, intermediate terminal processing will be eliminated, transit time will be reduced by half, and service reliability will improve. Cleveland to Kansas City Current transit time to Kansas City averages approximately eight days from Conrail origins in the Cleveland area. In the future, transit times on the new NS for this routing should be reduced to just over four days. Multiple handlings at Avon, St. Louis, and Kansas City will be eliminated, in favor of a single initial classification at Bellevue, OH followed by block consolidation at Decatur, IL. Again, long distance run-through trains will handle this traffic west from Decatur. Brownstown (Detroit), MI to McDonough, GA Transit times will be cut in half, from an average of more than 4 days to 2 days, for Ford after-market automotive parts traffic originating at Brownstown on Conrail in the Detroit area and moving to McDonough, GA, near Atlanta. Current handling has this truck-competitive traffic from the Brownstown area classified at River Rouge Yard in Detroit, again at Stanley Yard in Toledo, again at Buckeye Yard in Columbus, then interchanged to the NS, which transfers the traffic between trains on NS lines for handling to McDonough. Under the Operating Plan, traffic originating at Brownstown would undergo an initial classification at Oakwood Yard, and then run directly to Inman Yard in Atlanta, GA. From that point, the traffic would be forwarded in blocks to destination. Savannah, GA for interchange to Chicago on the Wisconsin Central Current transit time for shipments from the Savannah area destined for the Wisconsin Central average just over 8 days. With the proposed changes in operation, the transit times will be reduced to an average of 3.6 days. The improvement lies in the elimination of intermediate terminal switching, made possible by consolidating NS and Conrail traffic volumes at Elkhart for handling through a single Chicago gateway operation. Under today's operations, traffic moves from Savannah, GA to Macon, GA for classification. It is then forwarded to Chattanooga, where it is reclassified. It is consolidated on-line and then forwarded to the Wisconsin Central at Chicago. After consolidation of operations, traffic can be operated from Savannah to Macon, then directly to Elkhart, where it will be added to traffic from Conrail points and assembled into a run-through train for the Wisconsin Central. Buffalo, NY to New Orleans, LA The current transit time of over 8 days will be reduced to just over 6 days after the consolidation. Larger volumes and run-through train operations in this case will eliminate intermediate terminal processing at Chattanooga and various other intermediate handlings. 3. Service and Reliability Investments NS expects to spend in excess of $500 million on construction and upgrading projects related to its expanded system. These projects are described in summary fashion below. Corridor Capacity Upgrades Corridor upgrades to improve service reliability and provide additional capacity will require investment of nearly $120 million. The table below indicates planned corridor improvement projects. Corridor Capacity Upgrades CORRIDOR PROJECT Siding construction, Extensions and Traffic Control Lehigh Line Supports Pennsylvania, Shenandoah and Piedmont routes Bound Brook $ 3.6 million Read Valley 3.1 Flemington Junction 3.2 Pattenburg 11.3 Other Lehigh Line 10.5 Reading-Harrisburg CTC 17.0 Shenandoah Route Clark 1.8 Rural Retreat 2.9 Glade Springs 1.7 Bristol 1.4 Piney Flats 1.9 Rader 2.4 Mid-South Corridor KD/Cumberland Falls 15.3 Southwestern Gateway Route Andrews 3.5 Rockfield 2.6 Attica 3.5 Marshfield 3.5 Catlin 6.4 Sloan 2.8 Sido/Brunswick 10.7 Additional Ft. Wayne 6.0 Angola 2.7 Bement .5 Reddick 1.5 Subtotal Corridor 119.8 million Additional Track Upgrading NS also plans in general to upgrade the level of utility of Conrail core routes. Towards that end, $32 million in years one and two will be invested to bring curve rail on Conrail lines up to NS standards. An additional $10.3 million will be invested to upgrade the NS line from Deepwater Bridge to Elmore, WV in conjunction with the re-routing of coal traffic from Conrail lines in West Virginia via Deepwater, Elmore, and Bluefield, WV to Hagerstown, MD, and Harrisburg, PA. Further, $35 million will be allocated to upgrade the current Conrail Southern Tier line between Buffalo and the Port Jervis area in conjunction with greatly expanded service in that corridor. Clearance Improvement NS will also invest in major clearance improvement projects to accommodate double stack and other dimensional traffic at a number of locations including: * The Pattenburg Tunnel between Bethlehem, PA and Northern New Jersey * Harrisburg to Baltimore, including an allocation of funds to raise the catenary (power wire) on Amtrak's Northeast Corridor between Perryville and Bayview, MD * The Shenandoah Route * Columbus to Cincinnati Intermodal Facility Improvements NS will invest $200 million in expanding or upgrading intermodal facilities to handle projected traffic for the consolidated system; the Operating Plan details the projects. Chief among them (and their estimated costs) are: * Constructing a new intermodal hub at Rutherford near Harrisburg, PA for $40 million. * Expansion of facilities in Northern New Jersey, principally the E-Rail terminal, for $25 million. * Construction of a new intermodal hub at Toledo (Airline) for $25 million. In addition, $20 million will be allocated for new or expanded Triple Crown facilities at Morrisville, PA, near Philadelphia, and Bellevue, OH. Finally, $30 million is budgeted for the construction of new automotive facilities in the Philadelphia, PA and Baltimore, MD areas. New Connections The Operating Plan lists and explains planned new connections. Approximately $25 million will be invested to provide these connections necessary to form efficient, reliable consolidated through routes. Connections proposed are shown below: Connection Location Estimated Cost of Construction Alexandria, IN $ 1.4 Million Butler, IN 1.5 Tolleston, IN .2 Sidney, IL 1.8 Kankakee, IL 1.4 Tolono, IL 1.6 Oak Harbor, OH 2.9 Vermillion, OH 2.6 Buffalo, NY 6.1 Hagerstown, MD 1.0 Detroit, MI .6 Columbus, OH 1.6 Bucyrus, OH 2.3 Total Connections 25.0 Mechanical Facilities In order to implement the mechanical consolidation plan and improve locomotive fleet reliability, approximately $102 million will be allocated for the improvement of mechanical facilities. The largest investments will be to upgrade, modernize, and increase the capacity of a locomotive shop along the Penn Route between Enola Yard and Conway Yard, PA (including those end points), at a location to be determined, and to move the functions now performed at NS's Pegram Shop in Atlanta to the Conrail shop at Altoona, PA.