Palmer train 2012.jpg

A passenger train arrives at what use to be the Palmer train station and is now the Palmer Steaming Tender Restaurant on Depot Street in October, for a special trip from New London, Conn., to Brattleboro, Vt.

(Mark M. Murray / The Republican file)

Thanks to grants from the state Department of Transportation's industrial rail access program, Sherwood Lumber received funding for a rail spur project to improve business operations in Palmer, and a segment of the New England Central Railroad in Amherst will be refurbished.

The $500,000 industrial rail access program grants were announced last week by Lt. Gov. Timothy P. Murray and MassDOT Secretary and chief executive officer Richard A. Davey.

Sherwood Lumber, in the Palmer Industrial Park in the Bondsville section, will match the $500,000 with $1.1 million for the $1.6 million project.

Palmer Town Manager Charles T. Blanchard said the Town Council provided letters of support for the project back in December. He noted it also was supported by state Rep. Todd M. Smola, R-Palmer, and Sen. Stephen M. Brewer, D-Barre.

"I'm really pleased Sherwood was successful in getting that grant. It allows them to handle a lot more product . . . . It's a great benefit to them and to Palmer," Blanchard said.

Guy D. Hannum, terminal manager for Sherwood Lumber, a wholesale lumber distributor based in Islandia, N.Y., said the company has been in Bondsville for three years.

This will enable the company to build its own rail spur, instead of using the shared line that serves the entire park. The spur will be able to accommodate 20 rail cars and be approximately 2,500 feet in length, he said. The project also will include loading dock and other improvements, and is expected to increase efficiency by 30 percent, reduce operating costs by 30 percent and potentially increase carloads by 100 percent.

Before, only three rail cars could be accommodated at one time, Hannum said.

“It's definitely going to bring more business and more opportunities, not only for us but for other people in the park,” Hannum said. “Last year, we did 2,250 rail cars through here.”

Hannum said his company will meet with state transportation officials to determine when work can begin; construction is expected to take two to three months.

“It has to be done before Thanksgiving,” Hannum said.

The industrial park is on the New England Central Railroad line.

In Amherst, Town Manager John P. Musante said he is pleased and supportive of the railroad’s efforts to continue to maintain and upgrade track conditions.

That project will improve the main line tracks of the New England Central Railroad near Amherst’s water supply; the railroad had two derailments in this area in 2011. The railroad runs north-south from the Vermont and Quebec border to New London, Conn., serving customers in Palmer, Belchertown, Monson and Millers Falls. With a $1 million match from the railroad, the total project cost is $1.5 million.

Charles Hunter, assistant vice president of government affairs for New England Central, said the project covers a 3-mile section, and will install new, larger and heavier rail.

He said they hope to have the project done by the year’s end.

“As part of the Massachusetts state rail plan, we are focused on increasing access for freight rail service to support regional economic growth,” Murray said in a prepared statement. “By investing in these projects, we are upgrading the commonwealth’s freight rail network which will not only attract new business and jobs, but also promote a more efficient transportation of goods and services.”

The MassDOT industrial rail access program - created through the 2012 transportation bond bill - provides grants to railroads, rail shippers and municipalities that identify a public benefit gained through improved use of the rail transportation network or that will facilitate economic growth through access to rail assets within the commonwealth.

There were a total of nine grant recipients; $2.85 million was received with matching funds covered by each applicant. Projects in New Bedford, Hopedale, Fitchburg, Rochester, Quincy-Braintree and Worcester, where the Providence & Worcester Railroad will see two bridges replaced with a new structure for business operations.