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Updates a story posted Thursday at 4:45 p.m.

GREENFIELD – Improvements on the Pan Am Rail line from Springfield to Northfield in the next two years will allow the Amtrak's Vermonter line to move back to its original route, reduce travel time and restore passenger service to Northampton and Greenfield, the nation's top railroad official said Thursday.



"It will cut 30 minutes off the trip. These improvements will attract more passengers and contribute to local economies," said Joseph C. Szabo, administrator of the Federal Rail Administration.



Szabo joined U.S. Rep. John W. Olver, D-Amherst, along with state and local officials Thursday on Miles Street near Greenfield station being built on Olive Street for the ceremonial replacement of the first two of 75,000 railroad ties that will be replaced along the 50-mile stretch of Pan Am's route from Springfield to Northfield.



Funded with a $73 million grant through the 2009 American Recovery and Reinvestment Act, known as the stimulus bill, the project will include replacing all of the Pan Am track on its 50-mile north-south stretch along the Connecticut River, upgrades at every crossing along the way, new platforms at Northampton and Greenfield stations and changes to the rail bed bike path in Northampton.



Olver said the money will lead to economic improvement in Western Massachusetts.



"Some believe the federal government should stop investing in projects like this. They fail to recognize that investments like this create jobs and create a multiplier effect for the regional economy," Olver said.



The rail track running from Springfield to Northfield used to be part of Amtrak's route for the Vermonter, a line between St. Albans, Vt., and Washington, D.C., which since 1981 has had an eastern loop through Palmer and Amherst.



The original route was discontinued in 1989 because the condition of the Springfield-Northfield section of track was determined not to be safe enough for passenger trains.



Freight trains still run on this track but they may travel no faster than 10 miles per hour.



Pan Am Rail President David Fink said that when the new track is installed and the related improvements are finished in two years, trains will be able to reach speeds of 79 miles per hour.

Fink said Pan Am will do the construction work, starting in the spring of 2012, and the project will be managed by the state's MBTA that runs the transit system in and around Boston.



The application filed by the state that landed this $73 million stimulus grant states that it will create 367 new jobs for the two-year project life.



Fink said there will be some local hiring for the installation but most of these jobs will be elsewhere in the country, where the 50 miles worth of steel rails and the new signal lights and switching will be produced.



The project is called the Knowledge Corridor Revitalization, a name that Lt. Gov. Timothy Murray said reflects the number of colleges and universities in the Connecticut River Valley.



U.S. Rep. Richard E. Neal, D-Springfield, said the project will promote economic growth as it transforms local infrastructure.



"The Knowledge Corridor high speed rail project is an exciting initiative that enjoys public and private support across the region. It is a significant investment in our future," Neal said.



Similar federal stimulus grants are funding rail improvements along the Vermonter line in Connecticut and Vermont.



There are also plans for a $76 million project to restore and activate Union Station in Springfield as a regional, intermodal station for trains and buses.



Springfield Mayor Domenic J. Sarno said the $6 million federal grant recently announced for Union Station from a separate pool of funds is a crucial part of its funding.



"This effort not only will reactivate this long-vacant landmark, but also will transform it into the region's key interchange for local, regional and intercity bus service," Sarno said.



Maureen Hayes, a consultant for the city on the project, said there is $27 million already committed to Springfield's Union Station restoration project and the city is trying to bring in a portion of the $24 million in federal earmarks that have lapsed over the period this project has been stalled.



"We are doing other applications to obtain the balance," Hayes said.