Friday, January 21, 2005 () A short line railroad located in the Great Smoky Mountains National Park in far western North Carolina is receiving a $7.5 million direct loan from the Federal Railroad Administration (FRA) to rehabilitate its infrastructure and maintain its economic importance to the region.

The $7.5 million loan, made under the FRA Railroad Rehabilitation and Improvement Financing (RRIF) program, will be used to refinance existing debt and upgrade four miles of track to heavier rail and replace over 38,000 railroad ties. The railroad also will purchase and install three turntables, which are used to turn locomotives around, to increase the safety and efficiency of its operations. By refinancing existing debt, the Great Smoky Mountains Railroad (GSMR) will have more cash available for maintenance and capital improvement expenditures.

“Short line railroads connect communities of all sizes to the national and global economies, making it possible for businesses across America to manufacture and sell their products anywhere in the world,” said U.S. Department of Transportation Secretary Norman Y. Mineta.

The GSMR operates primarily as a tourist railroad and carried approximately 167,000 passengers in 2004. It also handles some freight shipments along its 53 miles of track. Located in one of the most economically disadvantaged counties in North Carolina, the GSMR is one of the largest employers in the area. It employs about 46 people full-time and nearly 140 seasonal employees. The GSMR provides an estimated $50 million in economic benefits to the region annually.

The RRIF loan program was created by Congress primarily to assist smaller short line and regional railroads in acquiring, improving, or rehabilitating rail equipment and infrastructure. Funds also may be used to refinance existing debt incurred for those purposes and to develop new intermodal or rail facilities. Direct loans can fund up to 100 percent of the cost of an approved railroad project with repayment periods of up to 25 years and interest rates equal to the cost of borrowing to the federal government.

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