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GLENDALE, Ore. (AP) -- Southern Oregon mills have been fighting a transportation problem: Four tunnels too short for modern rail cars to get through.

Operators tell the Grants Pass Daily Courier they send shipments of products such as plywood by truck to the north to be reloaded onto rail cars, and the extra cost puts them at a competitive disadvantage.

A $5.7 million project to be finished next year is supposed to fix that. It calls for notching the tunnels to allow high-capacity cars to reach mills in Glendale, Rogue River and the Medford area.

A state grant using lottery proceeds is covering 80 percent of eligible project costs, up to $4.56 million.

The tunnels are on the Central Oregon & Pacific line that runs between Northern California and Eugene.

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