GLENDALE, Ore. (AP) State lottery proceeds of up to $4.56 million have been pledged to a project to enlarge four railroad tunnels so modern freight cars can transport wood products from Southern Oregon mills on the Central Oregon & Pacific Railroad.

The four vintage tunnels in the Glendale area don’t have enough vertical clearance for modern high-capacity freight cars, the Grants Pass Daily Courier reported. They’re wide enough, just not high enough, and the shorter cars that fit through are rapidly being retired from service.

John Murphy Jr. of Murphy Plywood took business leaders on a tour of the company’s Rogue River mill in October and said the too-low tunnels put his Southern Oregon business at a disadvantage to producers who can get their products directly onto rail cars.

“I have to truck my plywood up to Eugene to be reloaded,’’ he said.

A $5.7 million project is planned to fix that. It calls for notching the tunnels to allow high-capacity cars to reach the Swanson Group mill in Glendale, Murphy Plywood in Rogue River and other Central Oregon & Pacific customers in the Medford area.

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

Planning is nearing completion, and the construction contract should be awarded Dec. 15, said Kathy Holmes, program coordinator of the Oregon Department of Transportation.

The project is expected to be finished in August 2014.

The line is expected to remain open during construction.

Central Oregon & Pacific operates between Northern California and Eugene, on 389 mi. (626 km) of mainline track, and moves about 17,000 carloads annually, with lumber and related products being the mainstays.