Norfolk Southern: East Palestine Derailment Cleanup Costs Doubled

Rail Company Norfolk Southern Doubles Estimate on⁢ East Palestine Train Derailment Disaster Costs

Rail company Norfolk Southern has revised its ⁢estimate on the cost of the East Palestine, Ohio, ‌train derailment disaster, now stating that the associated costs will amount to $803 million.

“From the beginning, we’ve been clear that we would be in town for the long haul,” said ⁤Connor⁤ Spielmaker, a Norfolk Southern spokesman. “We don’t have a timeline to⁣ provide as far as when it’ll be ‘job done,’ ​but we will be there until it is.”

According to ⁤executives, the⁤ majority of the cost is attributed to the environmental cleanup as crews continue to work on removing ​the ⁣hazardous chemicals released during the derailment six months ago.

“We are ⁤delivering on our commitment to recover service quickly,” said Norfolk Southern CEO Alan​ Shaw. “We’re delivering on​ our commitment to make a safe railroad even ‍safer. We’re delivering on our ‌commitment to address quality of life issues ⁢for our‌ hard-working craft railroaders. And we continue to⁣ deliver on our commitment to make things right for the people of East ‍Palestine and the surrounding communities.”

The Wall Street ⁣Journal reported that Norfolk Southern recorded a $416 million charge related to the East Palestine disaster as part of its second-quarter earnings. ​This is ‍an increase ‌from the previously announced 7 million charge earlier this year, according to the Associated ⁣Press.

Environmental Impact and Ongoing Cleanup Efforts

The derailment resulted in‌ a significant environmental impact, with ​hazardous ‍chemicals still present in a⁣ creek and trucks hauling contaminated water and soil out of the town. Norfolk ‌Southern chose ‍to burn several cars filled with the dangerous ​chemical vinyl chloride to prevent potential explosions, causing a cloud⁣ of smoke to linger over the ‍town for ⁤days.

Norfolk Southern’s $803 million estimate does‍ not include compensation for any long-term ‍health effects that East‍ Palestine ⁢residents‌ may experience due to the chemical spill.

Earlier this⁣ month, ⁣Governor Mike DeWine (R-OH) asked President Joe Biden to issue ⁣a major disaster declaration order, which would​ enable the town to receive federal aid for the cleanup.⁣ However, the Biden administration has yet to make a decision.

Financial Impact on Norfolk Southern

As a result of the disaster, Norfolk Southern’s profit from railway operations dropped by ‌over half in the ⁤most recent quarter compared to the previous​ year. Overall ⁣revenue also decreased by 8% to $3 billion. The ‌company’s profit decreased to $356 million‌ ($1.56 ​per share) from $819 million ($3.45⁣ per share) a year ago. Norfolk Southern estimates that without the derailment​ costs, it would⁣ have earned $2.95 per‌ share in the quarter.

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