MECHANICVILLE — A $40 million logistics center and terminal will be built through the towns of Halfmoon, Mechanicville and Stillwater, anchoring the western end of Pan Am Railways and linking the Capital Region with Boston.

State and local officials gathered at the now defunct Norfolk Southern railyard this morning to announce the project, slated to be launched early next year and completed by April 2010. As many as 250 local jobs will be created when the terminal and warehouse facilities open.

The high-speed freight rail will transport consumer products - primarily automobiles - across the region, alleviating highway travel by trucking companies.

"We're in an era of $5 per gallon for diesel fuel; using railways not only reduces fuel consumption, but also alleviates traffic congestion and wear and tear on highways," said Wick Moorman, CEO of Norfolk Southern.

Once considered a thing of the past, railway transportation is now considered 3 1/2 times more efficient as shipping goods by highway.

The joint project, called Pan Am Southern, will serve as the primary distribution center for the company's Patriot Corridor, including a 155-mile main line and 280 secondary and branch lines in Massachusetts, New Hampshire, New York and Vermont.