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By DAVE JANOSKI [email protected]
Monday, June 17, 2002     Page: 4A

If you don’t look too closely, it might seem like a classic case of
American capitalism in action. Two railroads competing fiercely for the
business of a plastics plant, both trying to offer the better service at a
better price.
   
That is until you realize both railroads are owned by government agencies
using millions in state grant money to woo that plastics plant.
    During the past seven years, Luzerne County and the state have committed
about $8 million to the county Redevelopment Authority’s railroad on the
premise of preserving 1,400 rail-reliant jobs and attracting new industry.
   
But one of the authority’s first initiatives after buying the rail line in
1996 was to steal a customer from the Lackawanna County Rail Authority –
Compression Polymers Group near Moosic, just over the county line. Lackawanna
stole the plastics plant back in January, using a $3 million state grant to
rehabilitate its rail access.
   
“That is a very counterproductive situation,” said Fred Lohman, vice
president of the Greater Wilkes-Barre Chamber of Business Industry.
   
The chamber promotes cooperation between the region’s two most populous
counties on several fronts. But Lohman said the chamber’s suggestions that
Luzerne’s rail operation cooperate with its more experienced neighbor to the
north haven’t been well-received.
   
There is a palpable sense of competition between the two county rail
operations, which both offer local businesses access to the interstate lines
that run through the region. While the head-to-head competition for
Compression Polymers is unique – the two line’s territories overlap only in a
small section of Lackawanna County and few businesses have the luxury of
choosing between them – the two government railroads are competitors when it
comes to attracting new industry to the region.
   
Robert Connolly, executive director of the Luzerne authority, complains
that Lackawanna deliberately snubbed Luzerne County when drawing up plans to
resume passenger rail service from Scranton to New York.
   
And Connolly makes no apology for taking the Compression Polymers business
away from the Lackawanna authority, using a section of the Luzerne line that
extends into Lackawanna County.
   
Compression Polymers was responsible for 30 to 40 percent of Luzerne’s
traffic, helping it stay afloat until a government bailout last year.
   
“It was a bonanza for us for a while,” Connolly said.
   
Larry Malski, executive director of the older and more profitable
Lackawanna authority, doesn’t hide his satisfaction at wresting Compression
Polymers back from the competition.
   
“They always seem to be in the wrong place at the wrong time,” Malski
said. “Some people have accused us of stealing that customer from Luzerne
County, but they were our customer until about four years ago.”
   
Until 1998, Compression Polymers had been using trucks to transport
shipments of plastic to its plant from a nearby line owned by the Lackawanna
authority. That year, the Luzerne authority leased a line that offered direct
access to the Compression Polymers plant from Louis DeNaples, the
landfill/scrapyard magnate who once owned the Luzerne authority’s rail system.
   
In 2001, the Lackawanna authority purchased that Compression Polymers line
from DeNaples, Malski said, and used a $3 million state grant to upgrade the
rails. In January, Compression Polymers, which employs about 150, became a
Lackawanna customer again, leaving the Luzerne authority scrambling to find
new customers to fill the gap in its revenues.