Norfolk Southern to set up home value reimbursement fund after Ohio derailment
Adds more from CEO letter in paragraph 6, timing of bill before Senate committee in paragraph 4, Ohio AG quote in paragraph 8
By David Shepardson
WASHINGTON, May 9 (Reuters) -Norfolk Southern NSC.N said on Tuesday it will establish a fund to reimburse homeowners who live near the site of a Feb. 3 train derailment in East Palestine, Ohio who sell their homes for less than what the property was worth before the incident.
Norfolk Southern CEO Alan Shaw told senators in a letter the railroad initially expects "eligible homeowners for this compensation to include those with homes within an approximately 5-mile radius of the derailment, and who sell their homes for less than their property’s pre-February 3 appraised value."
The Norfolk-operated train derailment of 38 cars including 11 carrying hazardous materials in the village caused cars carrying toxic vinyl chloride and other dangerous chemicals to spill and catch fire.
The announcement comes a day before the Senate Commerce Committee is set to debate sweeping bipartisan rail safety legislation proposed in the wake of the East Palestine disaster that would among other reforms increase maximum civil penalties from $100,000 to $10 million for rail safety violations, and requires two crewmembers to operate a train.
Transportation Secretary Pete Buttigieg said Tuesday the Senate proposal has "a lot of things that would really make a difference" -- including the tougher fines.
Shaw said in March the railroad supports addressing long-term health risks through the creation of a medical compensation fund and has agreed to work with the community on programs to protect drinking water over the long term.
In April, Norfolk Southern announced total accrued charges for the derailment of nearly $400 million - a figure that Shaw noted on Tuesday "does not include expected costs for funds relating to property value diminution, long-term healthcare, or water treatment."
In March, the state of Ohio and the U.S. Justice Department sued Norfolk Southern seeking to ensure that the railroad pays the full cost of cleanup and any long-term effects of the derailment.
"This lawsuit is designed to make sure that Norfolk Southern keeps their word to the people of East Palestine," Ohio Attorney General Dave Yost said.
Reporting by David Shepardson
Editing by Chris Reese and Bill Berkrot
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.