Railroad company Norfolk Southern said Wednesday that February’s massive train derailment that unleashed toxic chemicals and prompted thousands of people to evacuate could cost it upwards of $387 million.
First-quarter 2023 income from railway operations dropped 34% compared to the first quarter of last year, the company said in its three-month earnings report. Its $711 million in income included a “$387 million charge associated with the Eastern Ohio Incident,” the company said, bringing profit to $466 million. Last year’s first quarter brought in $1.1 billion, $703 million of which was profit.
The $387 million estimate includes $30.9 million in recovery money the railroad company has pledged to the East Palestine community and its residents. Norfolk Southern has also spent about $55 million to remove 34,000 tons of tainted soil and more than 13.2 million gallons of contaminated water.
On top of that, the Atlanta-based railroad has promised to contribute toward long-term health issues and protection of drinking water, compensate residents for property-value declines and reimburse the U.S. Environmental Protection Agency for overseeing the cleanup.
The Feb. 3 derailment sent 38 cars off the tracks outside East Palestine, Ohio, a few miles from the Pennsylvania border. Some of those caught fire, damaging 12 more cars. Eleven of the derailed and damaged cars on the 150-car train were carrying hazardous materials, some of which had to be burned off.
The leak to the surrounding environment killed 43,000 aquatic animals and forced more than 2,000 residents from their homes as the potential for explosion loomed, officials said. It was days before they could return home.
The aftermath sickened both railroad workers and investigators from the U.S. Centers for Disease Control and Prevention (CDC) as they sought to clean up and determine the cause of the accident. An overheated wheel bearing was ultimately blamed, with federal officials calling the derailment “100% preventable.”
Authorities in both Pennsylvania and Ohio vowed to investigate, and Ohio has sued. At the end of March, the U.S. Department of Justice and the EPA also filed suit. The company faces massive fines.
On Wednesday president and CEO Alan Shaw reiterated the company’s commitment to making those who were affected whole.
“From the beginning, we have been guided by one principle: We are going to do whatever it takes to make it right for East Palestine and the surrounding areas,” he said in a statement.
With News Wire Services