- Associated Press - Friday, May 8, 2015

HUTCHINSON, Kan. (AP) - Plans to develop a $40 million railroad car refurbishing plant in Hutchinson have been temporarily derailed.

Mervis Railcar announced last year that it planned to build the plant on 100 acres in Hutchinson, with construction starting in April. However, company officials said Thursday those plans will be delayed because of dropping oil prices and new rules for tank cars that ship hazardous fluids, which federal officials released last week, The Hutchinson News (https://bit.ly/1EUw3pd) reported.

The company indicated it still intends to build the plan but it’s unsure how long the delay will be.

Company CEO Adam Mervis said the company has invested several million dollars in planning for the plant so it will work to make it happen. But he said company officials are considering how the new federal rules will affect the industry.

Even when the project does move forward, the company may have to rework plans for the plant’s design to respond to the rule revisions, said Larry Culligan, director of railcar operations. Further development of those plans has halted “until we figure things out,” he said.

“We’ve made strides in the design, but we’re at a pause point,” he said. “We don’t have a firm date to make a decision to go this way or that. We’re actively crunching the numbers to get a sense of that.”

Mervis Railcar had projected the plant would employ 150 people within three years, inspecting, cleaning and retrofitting tank cars for crude oil and ethanol shippers, when it announced its plans for the plant.

“This is certainly a disappointing development,” said Jason Ball, president of the Hutchinson and Reno County Chamber of Commerce. “Given the macroeconomic trends in oil production and transportation, we understand Mervis Railcar’s need to re-evaluate its business plan. Our office is actively working with Adam and his team and will continue to assist in any way we can.”

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Information from: The Hutchinson (Kan.) News, https://www.hutchnews.com


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