Shellpot Bridge Agreement: A Case for Public-Private Cooperation A web presentation by Michael Kirkpatrick, Planner III, Delaware Dept. of Transportation

The 115-year old Shellpot railroad swing bridge was out of commission– leaving a major gap in Delaware’s rail system. Delaware and the Norfolk Southern needed to cooperate on a solution to put it back to work. The Problem

Shellpot Bridge – built by Penn. RR in 1888 Diverted freight and express around Wilmington Station Served industries on east and south sides of Wilmington

Wilmington, Delaware

1995 – Conrail takes bridge out of service Cost to repair estimated at over $10 million Conrail business strategy works against Shellpot Shellpot piers slowly sinking into the Christina River mud

Edgemoor Yard ‘stranded’ Re-routing and/or loss of traffic from SB NEC Loss of ‘general merchandise’ train pick-ups Degraded service into Port of Wilmington and points south Freight forced through passenger station Closing: The Effects

June 1999 – Norfolk Southern took over Conrail’s Delaware assets NS had different business strategy than Conrail NS focused on increasing north-south movements into lucrative Northeastern market Purchase of Conrail left NS cash-starved and with limited capital available The Players

DelDOT created Freight Rail Plan in 1999 Goals include increasing rail mode share and protecting access to state network - restoration of Shellpot route was an important strategy DelDOT had financial resources Public-private partnership with for-profit company was ‘dark’ territory The Players

Issues included: Justifying investment in for-profit company venture Developing a mechanism to partner with private company How to share risks & rewards

Solution: Part grant-part loan Sliding-scale payback mechanism Incentive-based program that shares benefits

The agreement: $13 million total cost $5 million grant $9 million loan Minimum annual payback Sliding per-car tariff: $35-$5 – based upon traffic volume thresholds

Results? Less than one year of data Upward trend in car counts during the first year NS reports new business due to line opening Edgemoor Yard using available capacity

Lessons learned: Good way to leverage State funds against RR needs Not a universal solution Flexibility is important