A rendering shows what the S.C. State Ports Authority's Navy Base Intermodal Facility in North Charleston will look like upon completion. (Courtesy of the S.C. State Ports Authority)
A group of state legislators heard an update Tuesday on a North Charleston rail yard that’s costing taxpayers at least $550 million, but the discussion was almost entirely out of the public’s view.
Micah Mallace, the head of the S.C. State Ports Authority, told members of the legislative Joint Bond Review Committee that the latest news on the 118-acre rail yard — dubbed the Navy Base Intermodal Facility — couldn’t be shared in open session because it contained confidential negotiations with the railroads expected to use the facility.
Mallace and the committee talked about the negotiations with railroads Norfolk Southern and CSX Corp. for about an hour behind closed doors before ending the meeting without further discussion.
Negotiations with both railroads have been contentious in the decade since the rail yard was proposed on former Navy Base property adjacent to the Port of Charleston’s Leatherman Terminal.
Both railroads have expressed reluctance to use the facility since they make money from their own facilities in North Charleston.
Most recently, Norfolk Southern said it wouldn’t use the rail yard unless the authority also spent $27 million on unrelated rail improvements benefiting the railroad.
The authority says it needs the rail yard to compete with other ports, like the Port of Savannah, which already have on- or near-dock rail access.
The rail yard has also experienced cost overruns and construction delays that drew legislative scrutiny prior to the abrupt resignation in August of former ports leader Barbara Melvin.
The authority has vowed not to ask taxpayers for any more money for the rail yard, but a written project update Tuesday stated that promise “may require certain considerations.”
An authority spokeswoman did not have information about what those considerations might be.
The authority, which owns and operates the Port of Charleston, said in a presentation to legislators that it expects negotiations with the railroads to be completed by June 2026. After that, bids for construction of the rail yard’s final phase will be accepted.
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The rail yard was originally supposed to open in July 2025. A new opening date has not been announced.
In addition, the $550 million in taxpayer funds — set aside by the Legislature in 2021 — was supposed to pay for a barge system that would move cargo containers by water from the port’s Wando Welch Terminal in Mount Pleasant to the Leatherman Terminal. That project has been put on the back burner as rail yard construction continues.
The rail yard originally had a price tag of $400 million, with another $150 million for the barge project.
In the progress report provided to legislators Tuesday, the authority said it has committed $485 million to the rail yard to date and paid $380.3 million to vendors.
The authority added that all six of the rail-mounted gantry cranes at the rail yard have been assembled and a road connecting the rail yard to the adjacent Leatherman Terminal should be finished by late 2026.
The authority has for years tried to boost the number of cargo containers moved by trains rather than trucks to help alleviate traffic on Charleston-area roads.
About 25% of the port’s containers currently move by trains, but it comes at a steep cost. The authority spends about $39 million per year on its Rapid Rail program, in which trucks move containers from waterfront terminals to railroad yards in North Charleston.
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Courtesy of South Carolina Daily Gazette
