Norfolk Southern creates depreciation fund
Norfolk Southern has recommitted to creating a fund for residents near the site of an Ohio train wreck that would cover any decline in home values since before the derailment earlier this year.
In early February, 38 cars derailed in East Palestine, 11 carrying hazardous chemicals, with some spilling into nearby waterways. The U.S., the state of Ohio and residents near the crash have all filed lawsuits against Norfolk Southern over the derailment.
Half of the 5,000 residents of East Palestine were evacuated as emergency personnel burned off some of the chemicals to avert an uncontrolled explosion.
Norfolk Southern Corp. CEO Alan Shaw apologized for the impact the derailment has had on the community and the company has pledged to pay for the cleanup.
Shaw said in a letter late Tuesday to the Senate Committee on Commerce, Science and Transportation that while the company has total accrued charges of almost $400 million for the derailment, that amount doesn’t include expected costs for funds tied to falling property values, long term health care or water treatment. It also doesn’t reflect payments the railroad will receive from its insurance.
Shaw said the company was “undertaking these efforts and expenses without any judicial or investigatory finding of fault.”
Shaw anticipates that homeowners eligible for compensation will initially include those with homes within an approximately five mile radius of the derailment that happened near the Ohio-Pennsylvania border, and who sell their homes for less than what their property was appraised at before Feb. 3, when the derailment took place.
Among measures under consideration are requiring at least two crew members aboard each train, something the industry has been fighting against; an increase in the maximum penalty for violating rail safety rules, from $100,000 to $10 million; and requiring the use of defect detection technology that could prevent derailments like the one in East Palestine.