Union Pacific Railroad, the largest rail network in the U.S., is expected to break ground later this year on a new transportation hub that will expand its existing operations in the Southwest. The $400-million project will be constructed in Santa Teresa, N.M., not far from the Omaha-based rail company’s existing El Paso, Texas, facility.

Originally proposed in 2006, the project has been on hold in part because the railroad was waiting for the New Mexico Legislature to pass a locomotive fuel tax exemption.

At a press conference in Santa Teresa on Jan. 8, newly elected Gov. Susana Martinez (R) said she expects the Legislature to pass the tax “so Union Pacific can break ground and begin the process of hiring New Mexico workers and bringing back jobs that have been lost to other states.”

The project is expected to create 3,000 jobs during the four-year construction phase, according to Aaron Hunt, Union Pacific’s director of media relations. “No design firms are involved in the project yet,” he adds.

Construction will include a new fueling facility for the railroad’s El Paso-to-Los Angeles route, crew-change buildings to serve as a home base for Union Pacific employees operating long-haul trains out of the area, an intermodal block swap/switching yard and an intermodal ramp used for loading and unloading containers between truck trailers and flat cars. More than 600 permanent jobs are expected to be created once the site begins operations in 2015.

The Santa Teresa location was selected because there was no land available adjacent to the El Paso facility to accommodate the various components.

“If we do not get the locomotive fuel tax exemption, we will have to re-evaluate our plans,” Hunt says. “Our operations will continue in El Paso regardless.”

The hub is part of Union Pacific’s planned $3.2-billion capital spending program in 2011 to enhance safety and efficiency throughout the firm’s 32,000-mile freight transportation network. Much of that spending will center on maintenance.