The City of Baltimore and CSX Transportation announced that a settlement agreement has been reached in the City of Baltimore's litigation against CSXT arising from the July 18, 2001, train derailment and fire in the Howard Street Tunnel.

"Rather than continuing to litigate, both parties have agreed to dedicate shared resources and energy to further enhance safety and security in the city," Martin O'Malley, Baltimore Mayor, and Michael Ward, Chairman, President and Chief Executive Officer of CSX Corporation, said in a joint statement.

Included in the terms of the agreement are:

* CSXT will pay the City $2 million for costs incurred by the City as a result of the derailment and tunnel fire.

* The City and CSXT will increase communications about hazardous and non- hazardous rail shipments. This includes shared access to police radio frequencies and real-time surveillance images from tunnel security cameras, as well as the sharing of information about shipping patterns for use in planning future security measures.

* The parties will also request jointly an inspection of the Howard Street Tunnel by federal and state regulatory authorities, and CSXT agrees to do what the regulatory authorities state needs to be done.

The settlement, which was finalized on February 13, 2006, assigns no fault to either party.

"The City of Baltimore acknowledges CSXT's commitment to the safety and security of our citizens, and we look forward to working with them to further improve conditions in the Howard Street Tunnel," said O'Malley. "The settlement also provides our city with an opportunity to further protect the citizens of Baltimore by giving us firsthand knowledge of rail shipments coming through the tunnel."

"CSXT cares deeply about the well-being of every community where it operates, including Baltimore where we have a long and important history," said Ward. "The company looks forward to working cooperatively with the city on behalf of the citizens."

The City filed its case in July 2004. Prior to reaching the settlement announced today, both parties conducted extensive investigations and pretrial discovery. The case was scheduled to go to trial on March 13, 2006. The City will ask the Board of Estimates to approve the settlement at the Board's meeting on February 22, 2006.