EASTERN GAS UNIT PLANS TO BUILD OVER 200 BARGES

EASTERN GAS UNIT PLANS TO BUILD OVER 200 BARGES

A barge-operating subsidiary of Eastern Gas and Fuel Associates will use the proceeds of a $50 million bond issue to finance some 200 to 250 new open hopper barges for use on the U.S. inland river system.

The decision by Midland Enterprises Inc. runs counter to the generally depressed state of inland waterways barge construction of recent years, said a spokesman for the American Waterways Operators Inc., a trade group. There has been a severe overcapacity for the last four to five years, he said. Except for specialty vessels, essentially barge-building has come to a halt.Jesse Muhorovic, Eastern Gas vice president, said Midland preferred not to say how many of the $200,000 vessels, to be built over two years, would replace barges in Midland's current fleet of 2,200 barges of all types.

Mr. Muhorovic said Midland, whose major fleet arm is the Ohio River Co., may buy some good used barges to carry coal or grain. He said the company will likely use part of the bond issue either to build or purchase two or three used towboats; such vessels cost $4 million to $5 million new.

Midland will start up its mothballed Port Allen Marine Services barge yard at Baton Rouge, La., with a single shift of some 100 workers. A second

shift may be added later, Mr. Muhorovic said, even as the inland-barge building industry shows a 90 percent to 95 percent unemployment rate.

A spokeswoman for the American Waterways Shipyard Conference, an affiliate of the American Waterways Operators, said a recent report on Mississippi River system barge construction shows the doldrums builders are in. An average of 2,800 covered and uncovered hopper barges were built annually until 1981 when a sharp decline began with 1982's 768 vessels down to an average of 100 to 200 a year by 1986.

Some builders, such as Nashville Bridge, are getting orders, but the Shipyard Council spokeswoman could not say what barge operators were doing the ordering. Figures for 1987 are not yet compiled, she added.

The report, she said, shows that Ohio River Co.'s covered barges averaged 11 years in age in 1986, with uncovered hoppers averaging 13 years. That compares with an expected life-span of about 25 years for vessels other than coal carriers, which are built strong, but are retired earlier or put to lesser trades because of heat-induced pitting.

Eastern Gas and Fuel is now a holding company, having exchanged its last Appalachian coal mining operations for a 15 percent ownership in Peabody Coal in 1987. besides Midland, its other major subsidiary is Boston Gas Co.