By Theron Larkins
Staff Writer
LIMESTONE — As previously reported, Gov. Paul LePage, Loring Development Authority president and CEO Carl Flora and other members of a Maine delegation traveled to Beijing in June to meet with representatives of Norinco — a Chinese company interested in establishing a rail car manufacturing business at Loring. The delegation included representatives of LDA, Maine DOT, Maine Military Authority (MMA), as well as the Governor’s senior economic adviser.
Gov. LePage, Flora and the rest of the delegation returned home with a ceremonial signed copy of the Memorandum of Understanding (MOU), the ceremonial pen used to sign said document and an optimistic outlook toward the potential business partnership with Norinco, not only on the rail car project, but other possible business ventures as well.
The LDA board of trustees met on Sept. 3 for their regular monthly meeting and with this being the first time the board has met since Flora’s return from Beijing, one of the agenda items was an update on the project and an outline of the next steps the two sides would be taking.
The first step Norinco looks to take involves relocating a representative of their company to the U.S., where they would work more closely with LDA to continue moving forward on the rail car project. Sui Ping, who is a key representative of Norinco, is currently in the process of obtaining the appropriate work visa to allow him to work in the U.S., open bank accounts and set up initial operations.
Tragic derailments occurred in places like Lac-Megantic in July, 2013 and the more recent Lynchburg, Va. incident, in which several train cars carrying crude oil derailed and caught fire along the James River in Virginia. These accidents are the latest in a string of oil train derailments that have safety experts pushing for better oversight and more safety regulations. Concern about the safety of oil trains began to heighten when a runaway oil train derailed and exploded in Lac-Megantic, Quebec, near the Maine border. In that derailment, 47 people died and 30 buildings were incinerated. Canadian investigators said the combustibility of the 1.3 million gallons of light, sweet Bakken crude oil released in Lac-Megantic was comparable to gasoline. With this clear potential for disaster, it was no surprise when the U.S. Department of Transportation and the Federal Railroad Administration began publishing drafts for stricter safety regulations and considering new standards for rail car designs.
Despite the increase in oversight and more stringent safety regulations being established, Flora has been assured that Norinco can accommodate the proposed new standards in their designs. However, Flora also explained that Norinco does have additional work to do as far as researching markets and customers’ non-safety-related design preferences.
Another step for both LDA and Norinco will be to meet with the JAC Group — an international recruitment consultancy — to develop definitive agreements, along with a teaming agreement with MMA.
“As an internal item, a decision must also be made whether to set up a business corporation or LLC to enter into a production agreement with Norinco and pursue other business opportunities with other customers. It remains to be seen how such a private organization would work out,” said Flora. “Investors must also be identified and incentive programs, including New Markets Tax Credit, and state incentives must be researched.”
Yet another step in the process will be readying the buildings in which the rail car manufacturer will occupy.
“Buildings 7220 and 7230 must be readied to assemble and otherwise perform work on rail cars,” said Flora. “Plans must also be developed to construct a permanent facility to support assembly and manufacturing of rail cars.”
Lastly, the rail line between Caribou and Loring will need to be brought back into service. This was a feat that Loring officials including Flora believed would be a much more difficult sell, however, Flora stated at the Sept. 3 meeting that the Maine DOT appears poised to take on the task.
“Getting the rail line put back in service was one step we thought might be difficult,” said Flora. “However, the Maine DOT has agreed to help, so it may not be the obstacle we once thought it would be.”
“We’ve established a good foundation with Norinco,” said Flora. “However, we do still have a lot of concrete steps that need to be taken.”
Flora is scheduled to meet again with representatives from Norinco on Monday, Sept. 15 to discuss the necessary concrete steps both sides will be taking to continue progressing toward their prospective business venture.
