The federal government has awarded Maine $20 million to help fund an ambitious $37.3 million project that will allow the state’s railroads to offer faster and more reliable freight service to businesses.

The project will rehabilitate 380 miles of track throughout Maine and remove longstanding bottlenecks. Four private railroads will supplement the grant with $14.5 million, and the Maine Department of Transportation will oversee the program and provide $400,000.

The scale of the project and the level of cooperation among the state’s railroads are unprecedented, said Nate Moulton, director of rail programs for the Maine DOT.

He said the project will allow the short-line and regional railroads to work together to provide customers with better service.

“They will act more like a single large railroad, like a Class I, to provide good and smooth service from one end of the state to the other,” he said.

Class I railroads are large railroads, such as Canadian Pacific and Norfolk Southern, that carry freight from one end of the continent to the other. Maine is one of only three states in the U.S. that don’t have a Class I railroad within their territory.

Improving rail service will allow Maine companies to move goods and commodities faster so the businesses can be more competitive, Moulton said.

Construction is expected to start next spring and last two years.

The railroads involved in the projects are Pan Am Railways, the largest railroad in New England; Central Maine & Quebec Railway, which connects Searsport with interior Maine and points west; and two railroads, Maine Northern Railway and Eastern Maine Railway, which are owned by a subsidiary of J.D. Irving. Project details:

n Pan Am will contribute $4 million to a $10 million project that will increase train speed to 25 mph from 10 mph between Northern Maine Junction in Hermon to Pan Am’s large yard in Waterville. The project is seen as critical because Pan Am connects Maine railroads and their customers to the two large Class I railroads.

Pan Am’s customers include Sappi Fine Paper, Galt Block Warehouse, Northeast Ag Feed Commodities and American Iron & Metal.

n Central Maine & Quebec Railway will contribute $4 million to a $10 million project. Trains on most of the railroad’s line between Hermon and Searsport now travel at 10 mph. The project will replace 34,650 ties and provide new ballast and new rail on the 78-mile section. When completed, trains will operate at about 25 mph.

The railroad’s customers include GAC Chemical, Maine Energy, Dead River and Pine Tree Propane.

n The Maine Northern Railway and Eastern Maine Railway will provide $6.5 million toward a $17.4 million project. Most of the money will be spent on the Eastern Maine Railway to upgrade the line connecting Maine railroads with New Brunswick, Canada, to allow speeds of 40 mph, up from 25 mph. The railroad’s customers are primarily in the paper and forest products industries, including Irving Woodlands, Irving Paper, Woodland Pulp, Atlantic Wallboard and Irving Pulp & Paper.

The Maine Northern Railway project will focus on improvements to its rail yard in Oakfield. The railroad operates on a state-owned line that runs from Madawaska at the Canadian border to Millinocket. Its biggest customers include Irving Woodlands, Twin Rivers Paper, Maibec Inc., Woodland Pulp, Huber Engineered Wood and Louisiana Pacific.

The Maine DOT will receive and distribute the funds and oversee the overall project.

The federal money comes from the Transportation Investment Generating Economic Recovery program, a competitive, discretionary grant program that was created in 2009 during the Great Recession.

Sen. Susan Collins, R-Maine, who chairs the Transportation, Housing, and Urban Development Appropriations Subcommittee, said in a written statement that the program has been critical to ensuring that the nation’s transportation infrastructure does not fall into disrepair.

Tom Bell can be contacted at 791-6369 or at:

tbell@pressherald.com

Twitter: @TomBellPortland