Rail operator Norfolk Southern said Wednesday that a toxic chemical derailment in East Palestine, Ohio, this past February will cost the company an initial $387 million, a figure that is likely to increase.
The charge was announced as part of Norfolk Southern's first-quarter financial report. While the company didn't go into specific details, Mark George, Norfolk Southern's chief financial officer, said on an investors call that the costs were related to site cleanup, community support, legal expenses, and pending settlements, The Alanta Journal-Constitution reported.
George said that Norfolk Southern has spent about $55 million so far on recovery efforts, and that the $387 million did not include costs that might be picked up by the company's insurance.
The financial update comes months after the fallout from the Feb. 3 derailment in East Palestine, just miles from the Ohio-Pennsylvania border. Dozens of tankers fell off the tracks, including some that were carrying hazardous materials like vinyl chloride, prompting a controlled burn that released toxic chemicals into the air.
Thousands of residents were initially evacuated, and concerns remain over potential health risks for the people of East Palestine. Notably, a team of researchers from the Centers for Disease Control and Prevention (CDC) became sick while studying the effects of the derailment, The Hill reported.
The derailment does seem to have affected the company's financial health, as Norfolk Southern reported its first-quarter earnings-per-share were down 30 percent compared to the first quarter of 2022. In addition, the company reported first-quarter railway income was $711 million, down 34 percent compared to 2022.
"We have been guided by one principle: We are going to do whatever it takes to make it right for East Palestine and the surrounding areas," Norfolk Southern President and CEO Alan Shaw said.