Railroad model

October 29, 2012 

The state-owned N.C. Railroad is a profitable enterprise, particularly on the strength of a $14 million annual lease payment by Norfolk Southern to run freight trains along the NCRR’s 317 miles of track between Charlotte and Morehead City. But should the railroad company (its holdings are in real estate and infrastructure, not rolling stock) spin off some of its revenue to benefit other state government programs in a time when the budget has been under extreme stress?

A recent pitch in that vein came from the state Ports Authority, which wanted the NCRR to help subsidize improvements at the Morehead City port. The railroad’s board declined the honor – perhaps risking being overruled by the General Assembly.

If the railroad’s earnings were being tucked under a mattress, that would be one thing. Instead, its approach has been to reinvest in capital improvements such as additional tracks. That makes the whole venture more useful to freight operators and shippers, and even for expanded passenger service. The railroad’s business model is working. There’s no need to fix it.

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