Construction on rail lines to serve Railex Wine Services at the Dodd Road Business Park in Burbank may start by March.
The Port of Walla Walla commission decided in a 2-1 vote Thursday to contract with H&H Railroad Engineering Construction of Stockton, Calif., for the $2.4 million construction project.
The project involves extending existing rail to the recently opened wine services center and creating parallel tracks to help the company stack and store additional rail cars.
In all, H&H will install about 8,300 linear feet of new rail, rail switches and gravel services roads, according to port documents.
The port said it received seven bids on the project. The low bid for the full 8,300 linear feet was under the engineer's estimate by almost $800,000.
Jim Kuntz, the port's executive director, said the port chose a good time to seek bids because companies were looking for railroad construction projects to start in early 2014.
Port commissioners decided to contract for the initial 5,800 feet, and added an alternate plan included in the bids to bring the project up to the full 8,300 feet at a cost of about $600,000.
Commission President Ron Dunning voted against awarding the contract. Kuntz said he expressed concern with adding the alternate rail line because of the cost.
The rail expansion is meant to serve the new wine warehouse and accommodate additional train traffic Railex expects later this year, Kuntz said.
"Railex has been such a great economic success story," he said. "They want to grow. They want to create more jobs."
Two trains a week transport Eastern Washington produce from Wallula to New York. That traffic is expected to double this year as Railex opens a new distribution center in Jacksonville, Fla.
One train can transport about 8 million pounds of produce in refrigerated, temperature-controlled freight cars.
Adding the trains to Jacksonville will improve the company's reach on the East Coast, where 60 percent of the U.S. population lives, officials have said.
The port will use $1.3 million from the state Legislature, a $400,000 grant from the state Community Economic Revitalization Board, and a $700,000 grant and a $250,000 low-interest loan from the Washington State Department of Transportation's freight rail assistance account to pay for the project.
The port also needs to use about $75,000 of its own money. Car fees from Railex will help reimburse the port for some of its investment, Kuntz said.
Construction may take three to four months, he said.
The total project will end up costing about $3.2 million, including the engineering work done in 2012, Kuntz said.
-- Kristi Pihl: 582-1512; email@example.com