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CONTRACT AWARDED FOR RAIL LINE RELOCATION FEASIBILITY STUDY IN MOREHEAD CITY

May 22, 2006

Raleigh, NC -- The North Carolina Railroad Company (NCRR) has awarded a contract to Wilbur Smith Associates and Earth Tech, Inc., to study the possibility of relocating its railroad out of the center of Highway 70 in Morehead City. It is estimated that the study will take approximately nine months to complete and should be finished by early 2007. It will include an identification of any possible other routes to serve the Morehead City Port Terminal, an assessment of their feasibility and a consideration as to whether the relocation can be done in conjunction with the North Carolina Department of Transportation.

The North Carolina Ports Authority is planning an expansion at its Radio Island property and freight rail traffic is increasing nationwide. Concurrently, Carteret and Craven County are experiencing unprecedented growth, with increasing vehicular traffic along the rail corridor. There are 53 rail crossings between Havelock and Morehead City, creating operational issues, highway safety issues, and train speed restrictions. An ideal solution would allow service with larger, faster trains on a route that wouldn’t impede vehicular traffic in Morehead City and could invite the location of rail-served industries in Carteret and Craven counties, and improved rail service to Cherry Point Marine Corps Air Station and other military bases in eastern North Carolina. The study will address whether such a route exists or if the railroad should remain where it is. Factors to be considered include environmental issues, continued quality service to military bases and the Port at Morehead City and funding options.

Wilbur Smith Associates has 54 years of experience in conducting railroad relocation feasibility and economic studies across the United States, including North Carolina, South Carolina, Virginia, Florida, Mississippi, Texas, Louisiana, California, and Illinois. The company maintains offices in Raleigh and Greensboro, NC staffed with 79 employees. Earth Tech is a leader in the engineering and construction services market, working with clients both locally and nationally in rail planning, design services and environmental studies.

The North Carolina Railroad Company owns and manages the 317-mile rail corridor extending from Morehead City to Charlotte. The railroad carries 60-plus freight trains and eight passenger trains daily. It is the state’s most valuable transportation asset and a catalyst for economic development statewide. It is a private company whose voting stock is owned by the state of North Carolina.