New York Regional Rail Announces 35% Increase In Capacity.

NEW YORK--(BUSINESS WIRE)--Sept. 30, 1999--

New Contract With Hershey Foods To

Start Shipping Week of October 11th

NEW YORK REGIONAL RAIL CORPORATION (OTC BULLETIN BOARD: NYRR) announced today that the renovation of NYRR's 360 foot rail car float No. 29 will be completed in October.

Rail car float No. 29 should increase the Company's operating profit margin by an estimated 10% thus allowing it to utilize the increased capacity of its larger rail car float. The Company has previously been operating just one of its 290 foot rail car floats. With the Company's existing infrastructure, 34,000 rail cars will be able to be transported across the Hudson River on an annual basis.

W. Robert Bentley, President of NEW YORK REGIONAL RAIL CORPORATION stated, "This important step in our renovation of assets program will increase our capacity by about 35%. The renovation program is necessary because of the rapidly increasing demand for our rail car float operation."

Mr. Bentley continued, "The Company continues to show strong revenue gains on a quarterly basis. Though we have not closed the third quarter yet, we expect to show revenues of about $1,700,000, an increase of about 65% over the $1,203,040 revenue in the second quarter. This comes after an approximate 47% gain in the second quarter over the first quarter's revenues of $721,417.

New York Cross Harbor, a subsidiary of NEW YORK REGIONAL RAIL CORPORATION, has just received a new order from Hershey Foods (NYSE: HSY) to ship cocoa in approximately 120 railcars during the six week period starting October 11th. The Company will be meeting with other chocolate manufacturers over the next two weeks.

The June 1, 1999 breakup of Conrail and the resultant new access to Oak Island, NJ for Norfolk Southern (NYSE: NFS), CSX Transportation (NYSE: CSY) and Canadian Pacific (NYSE: CP) is changing the New York City/Long Island/Southern New England (NYC/LI/SNE) freight marketplace dynamics in a very fundamental way. For the first time in 23 years (Conrail was created in 1976), three class one railroads are competing to bring freight in and out of NYC/LI/SNE via rail.

Commenting on the marketplace, Mr. Bentley stated, "I believe that we have not even seen the beginning of the growth that can be expected from the historic breakup of Conrail's monopoly. The three class one railroads are still focused on smoothing out the integration of their routes. None of the class one railroads have begun aggressively marketing to the NYC/LI/SNE region. When this begins, we can expect a new phase of large scale growth."

The NYC/LI/SNE region, by virtue of its dense population, is the largest metropolitan consumer market in the nation. It is a market wide open for huge rail freight growth because only about 3% of freight in the area is moved via rail versus 97% via truck. Other major metropolitan areas in the US are roughly balanced at 60% truck versus 40% rail.

NEW YORK REGIONAL RAIL CORPORATION, through its subsidiary, New York Cross Harbor operates the only rail-freight marine service in the NY/NJ/LI metropolitan area. With operations located at Jersey City's Greenville Yard, and multiple points of access on the Brooklyn waterfront, the Cross Harbor Railroad holds the only ICC Certificate of Necessity & Convenience to transport rail-cars via tug-propelled car-float (float-barge) between New York and New Jersey and throughout the Harbor. The Company currently has agreements with the Norfolk Southern Railway (NYSE: NSC) and CSX Corp. (NYSE: CSX) to handle traffic destined for New York.

To review NEW YORK REGIONAL RAIL CORPORATION's web site on-line via the World Wide Web, access http://www.nyrr.com