Exhibit 99 (a)

PORTEC, INC.
SAVINGS AND INVESTMENT PLAN
FINANCIAL REPORT
DECEMBER 31, 1997
                                 C O N T E N T S




INDEPENDENT AUDITOR'S REPORT               1

FINANCIAL STATEMENTS

  Statements of net assets available for benefits
     (with fund information)               2 - 5

  Statements of changes in net assets available for benefits
     (with fund information)               6 - 9

  Notes to financial statements            10 - 13

SUPPLEMENTAL SCHEDULES

      Item 27(a) - Schedule of assets held for investment
       purposes                            14

      Item 27(d) - Schedule of reportable transactions15









                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors,
  Board of Trustees and Administrative Committee
Portec, Inc. Savings and Investment Plan
Lake Forest, Illinois

We have audited the accompanying statements of net assets available for benefits
of Portec, Inc. Savings  and Investment Plan (the Plan) as  of December 31, 1997
and 1996,  and the  related statements  of changes in  net assets  available for
benefits  for  the  years  then  ended.    These  financial  statements  are the
responsibility of  the Plan's management.   Our responsibility is  to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance   with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles used  and  significant estimates  made  by
management, as well as evaluating the overall financial statement  presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the  financial statements referred to  above present fairly,  in
all material respects, the net assets available for benefits of the Portec, Inc.
Savings and Investment Plan as of December 31, 1997 and 1996, and the changes in
net assets  available for benefits for  the years then ended  in conformity with
generally accepted accounting principles.

Our  audits  were  made for  the  purpose of  forming  an opinion  on  the basic
financial statements taken  as a whole.   The  supplemental schedules of  assets
held for investment purposes and  reportable transactions as of or for  the year
ended December 31,  1997, are presented for purposes  of additional analysis and
are not a required part of the basic financial statements, but are supplementary
information  required by  the Department  of Labor's  Rules and  Regulations for
Reporting  and Disclosure under the  Employee Retirement Income  Security Act of
1974.   The  Fund Information  in  the statements  of net  assets available  for
benefits and the statements of  changes in net assets available for  benefits is
presented for  purposes of additional  analysis rather than  to present the  net
assets available for benefits and changes  in net assets available for  benefits
for  each fund.    The supplemental  schedules and  fund  information have  been
subjected to the auditing procedures applied in the audit of the basic financial
statements and,  in our opinion, are  fairly stated in all  material respects in
relation   to   the    basic   financial   statements   taken    as   a   whole.






Lincolnshire, Illinois
March 13, 1998


 STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

 (WITH FUND INFORMATION)
 DECEMBER 31, 1997
<TABLE>
<S><C>
                                                               T-Rowe            T-Rowe           T-Rowe
                                                               Price             Price            Price
                                                               Associates        Associates       Associates
                                                Portec,Inc.    New               Prime            Short-Term
                                                Common         Horizons          Reserve          Bond
 ASSETS                                         Stock Fund     Fund              Fund             Fund



 Investments, at fair value:
   Shares of registered investment           $          -    $    2,505,699   $    1,139,786   $      841,658
 companies

   Common stock                                   3,846,540             -                -                -

   Participants notes receivable                        -               -                -                -
                                                  3,846,540       2,505,699        1,139,786          841,658



 Receivables:
   Employer's contribution                          257,574             -                -                -

   Participants' contributions                        4,378           6,120            3,536            1,588
   Accrued interest                                     -               -                -                -

   Due from other funds                                 669             433               82              109

                                                    262,621           6,553            3,618            1,697
           TOTAL ASSETS                           4,109,161       2,512,252        1,143,404          843,355


 LIABILITIES

   Due to other funds                                   -               -                -                -


 NET ASSETS AVAILABLE

   FOR BENEFITS                              $    4,109,161  $    2,512,252   $    1,143,404   $      843,355



See Notes to Financial Statements.






       T-Rowe          T-Rowe           T-Rowe
       Price            Price           Price
      Associates      Associates       Associates
       Equity         Small-Cap      International      Participant
       Income           Value           Stock            Notes
        Fund            Fund             Fund          Receivable         Total




 $    5,779,227   $      546,240   $      391,386   $         -     $   11,203,996
            -                -                -               -          3,846,540

            -                -                -           250,604          250,604

      5,779,227          546,240          391,386         250,604       15,301,140




            -                -                -               -            257,574
         10,795            2,714            4,009             -             33,140

            -                -                -               342              342
            804               77              243             -                -

         11,599            2,791            4,252             342          291,056


      5,790,826          549,031          395,638         250,946       15,592,196




            -                -                -             2,417              -




 $    5,790,826   $      549,031   $      395,638   $     248,529   $   15,592,196

 STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS

 (WITH FUND INFORMATION)
 DECEMBER 31, 1996

                                                                T-Rowe          T-Rowe           T-Rowe
                                                                Price           Price            Price
                                                                Associates      Associates       Associates
                                                Portec,Inc.     New             Prime            Short-Term
                                                Common          Horizons        Reserve          Bond
 ASSETS                                         Stock Fund      Fund            Fund             Fund



 Investments, at fair value:
   Shares of registered investment           $          -    $    2,133,598   $      969,520   $      715,489
 companies

   Common stock                                   2,276,786             -                -                -

   Participants notes receivable                        -               -                -                -
                                                  2,276,786       2,133,598          969,520          715,489



 Receivables:
   Employer's contribution                          483,944             -                -                -

   Participants' contributions                        3,889           8,861            3,337            3,207
   Accrued interest                                     -               -                -                -

   Due from other funds                               1,823             831              677              374

                                                    489,656           9,692            4,014            3,581


           TOTAL ASSETS                           2,766,442       2,143,290          973,534          719,070


 LIABILITIES

   Due to other funds                                   -               -                -                -


 NET ASSETS AVAILABLE

   FOR BENEFITS                              $    2,766,442  $    2,143,290   $      973,534   $      719,070










       T-Rowe          T-Rowe           T-Rowe
       Price            Price           Price
     Associates      Associates       Associates
      Equity         Small-Cap      International      Participant
      Income           Value           Stock            Notes
        Fund            Fund             Fund          Receivable         Total




 $    4,746,100   $      357,193   $      357,349   $         -     $    9,279,249

            -                -                -               -          2,276,786

            -                -                -           286,744          286,744
      4,746,100          357,193          357,349         286,744       11,842,779




            -                -                -               -            483,944

         15,800            5,017            4,737             -             44,848
            -                -                -               940              940

          1,817              195              490             -                -

         17,617            5,212            5,227             940          529,732


      4,763,717          362,405          362,576         287,684       12,372,511




            -                -                -             6,207              -




 $    4,763,717   $      362,405   $      362,576   $     281,477   $   12,372,511



 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

 (WITH FUND INFORMATION)

 YEAR ENDED DECEMBER 31, 1997
                                                                T-Rowe           T-Rowe           T-Rowe
                                                                Price            Price            Price
                                                                Associates       Associates       Associates
                                               Portec,Inc.      New              Prime            Short-Term
                                               Common           Horizons         Reserve          Bond
                                               Stock Fund       Fund             Fund             Fund


 Additions to net assets attributed to:
   Investment income:

  Net appreciation (depreciation) in
  fair value of investments:                 $    1,168,532  $      164,608   $          -     $        1,258

     Interest and dividends                          84,463          60,813           52,677           40,707

                                                  1,252,995         225,421           52,677           41,965


 Contributions:
   Employer's match                                 257,574             -                -                -

   Participants'                                     66,757         191,562           78,320           68,068

                                                    324,331         191,562           78,320           68,068


           Total additions                        1,577,326         416,983          130,997          110,033


 Deductions from net assets attributed to

   benefits paid directly to participants           243,168          93,910          134,834          107,360


           NET INCREASE (DECREASE) PRIOR
 TO

             INTERFUND TRANSFERS                  1,334,158         323,073          (3,837)            2,673



 Interfund transfers                                  8,561          45,889          173,707          121,612



           Net increase (decrease)                1,342,719         368,962          169,870          124,285


 Net assets available for benefits:

   Beginning of year                              2,766,442       2,143,290          973,534          719,070


   END OF YEAR                               $    4,109,161  $    2,512,252   $    1,143,404   $      843,355




See Notes to Financial Statements.





       T-Rowe          T-Rowe           T-Rowe
       Price            Price           Price
     Associates      Associates       Associates
      Equity         Small-Cap      International      Participant
      Income           Value           Stock            Notes
       Fund            Fund             Fund          Receivable         Total




 $      728,905   $       80,828   $     (15,588)   $         -     $    2,128,543

        578,559           34,712           20,710          22,431          895,072
      1,307,464          115,540            5,122          22,431        3,023,615




            -                -                -               -            257,574

        327,422          104,702          101,824             -            938,655

        327,422          104,702          101,824             -          1,196,229


      1,634,886          220,242          106,946          22,431        4,219,844




        373,677           15,990           14,248          16,972        1,000,159



      1,261,209          204,252           92,698           5,459        3,219,685




      (234,100)         (17,626)         (59,636)        (38,407)              -



      1,027,109          186,626           33,062        (32,948)        3,219,685



      4,763,717          362,405          362,576         281,477       12,372,511



 $    5,790,826   $      549,031   $      395,638   $     248,529   $   15,592,196



 STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

 (WITH FUND INFORMATION)

 YEAR ENDED DECEMBER 31, 1996
                                                                   T-Rowe           T-Rowe           T-Rowe
                                                                   Price            Price            Price
                                                                   Associates       Associates       Associates
                                                 Portec,Inc.       New              Prime            Short-Term
                                                 Common            Horizons         Reserve          Bond
                                                 Stock Fund        Fund             Fund             Fund

 Additions to net assets attributed to:
   Investment income:

     Net appreciation (depreciation) in
      fair value of investments:                 $   66,778  $      117,985   $          -     $     (14,474)
     Interest and dividends                          17,724         194,421           54,119           41,605

                                                     84,502         312,406           54,119           27,131


 Contributions:

   Employer's match                                 483,859             -                -                -
   Participants'                                     63,557         160,220           84,387           69,061

                                                    547,416         160,220           84,387           69,061


           Total additions                          631,918         472,626          138,506           96,192



 Deductions from net assets attributed to
   benefits paid directly to participants           122,829          53,651          326,097           34,318


           NET INCREASE (DECREASE) PRIOR
 TO

             INTERFUND TRANSFERS                    509,089         418,975        (187,591)           61,874




 Interfund transfers                                (4,769)       (115,829)           55,565         (28,206)


           Net increase (decrease)                  504,320         303,146        (132,026)           33,668


 Net assets available for benefits:

   Beginning of year                              2,262,122       1,840,144        1,105,560          685,402


   END OF YEAR                               $    2,766,442  $    2,143,290   $      973,534   $      719,070












      T-Rowe          T-Rowe           T-Rowe
      Price           Price            Price
      Associates      Associates       Associates
      Equity          Small-Cap        International     Participant
      Income          Value            Stock             Notes
      Fund            Fund             Fund              Receivable         Total







 $      495,368   $       42,554   $       33,405   $         -     $      741,616

        297,595           17,862            9,234          17,700          650,260
        792,963           60,416           42,639          17,700        1,391,876




            -                -                -               -            483,859

        283,411           83,082           74,637             -            818,355

        283,411           83,082           74,637             -          1,302,214


      1,076,374          143,498          117,276          17,700        2,694,090




        142,275            6,041            6,362           6,166          697,739




        934,099          137,457          110,914          11,534        1,996,351



        (7,560)           17,202           24,944          58,653              -



        926,539          154,659          135,858          70,187        1,996,351



      3,837,178          207,746          226,718         211,290       10,376,160



 $    4,763,717   $      362,405   $      362,576   $     281,477   $   12,372,511

</TABLE>

Significant Accounting Policies

Investment valuation  and  income recognition:   The  Portec,  Inc. Savings  and
Investment Plan's (the  Plan) investments are stated at fair value.  Investments
in shares of registered investment companies  are valued at quoted market prices
which represent  the net  asset value of  shares held  by the Plan  at year-end.
Investments in  the Portec, Inc. (the  Employer) common stock are  valued at its
quoted market  price.  Participant  notes receivable are  valued at face  value,
which approximates fair value.  Purchases  and sales of securities are  recorded
on  trade-date  basis.   Interest  income  is  recorded  on the  accrual  basis.
Dividends are recorded on the ex-dividend date.

Payment of benefits:  Benefits are recorded when paid.

Accounting estimates:   The  preparation of  financial statements  in conformity
with  generally  accepted  accounting  principles requires  management  to  make
estimates  and assumptions  that affect  the amounts  reported in  the financial
statements  and  accompanying notes.   Actual  results  could differ  from those
estimates.

Plan Description

The  following description  of  the  Plan  provides  only  general  information.
Participants should refer to the Plan agreement for a more complete  description
of the Plan's provisions.

General:   The Plan, as  amended, is  a defined contribution  plan covering  all
salaried and hourly employees of the Employer and its affiliates.  Employees are
eligible  to  participate on  the  first day  of  the  calendar month  following
employment.   The Plan is subject  to the provisions of  the Employee Retirement
Income  Security Act of 1974 (ERISA) and has been amended to comply with the Tax
Reform Act of 1986 and subsequent revenue acts.

Contributions:   Each year, participants may contribute  from 1 percent up to 15
percent, in whole  percentages, of annual compensation, as  defined in the plan.
The  Employer  contributes  a  percent  of  the  first  6  percent  of  eligible
compensation  that  a participant  contributes to  the  plan, as  defined.   The
Employer receives  a federal tax deduction  for amounts contributed to  the Plan
subject  to certain limitations.  The Employer's matching percentage ranges from
30 percent to 100 percent depending on the ratio of  the Employer's consolidated
net income for the Plan year to its consolidated net sales for the Plan year, as
defined in  the Plan document.   For  a ratio  up to 3.8  percent, the  Employer
contribution is 30 percent.  The contribution gradually increases to 100 percent
as the  ratio increases to 8.6 percent.   For the plan  years ended December 31,
1997 and 1996,  the ratio was  3.9 percent and 7.1  percent, respectively.   The
corresponding  match  on  the first  6  percent  of  the participant's  eligible
compensation that  a participant contributed for December 31, 1997 and 1996, was
40  percent and  80 percent,  respectively, as  defined.   The Plan  permits the
Employer to modify this formula  provided it is amended prior to December  15 of
the preceding Plan year.  Additional amounts may be contributed at the option of
the  Employer's  Board  of Directors.    Contributions  are  subject to  certain
limitations.



NOTE 2.PLAN DESCRIPTION (CONTINUED)

Participant accounts:   Each participant's account is  credited with participant
contributions, the Employer's matching  contribution, if any, and an  allocation
of investment  earnings.  The allocation  is based on the  participant's account
balance, as  defined.  The  benefit to  which a participant  is entitled is  the
benefit that can be provided from the participant's account.

Vesting:  Participants'  and employer's contributions  and earnings thereon  are
immediately vested.

Payment  of benefits:  Generally, upon termination  of service for any reason, a
participant may  elect to receive  a lump-sum amount equal  to the value  of the
participant's  account.   At  the  attainment of  age  59.5, subject to certain
limitations as defined, the participant may make withdrawals from his account of
the  amounts attributable  to pretax  contributions and  Employer contributions,
increased  by any gains  and earnings and  decreased by  any losses attributable
thereto and distributions  made therefrom.   The method of  payment, whether  in
cash or stock, is subject  to certain conditions and elections as defined in the
Plan document.   Distributions from the  Plan are subject to  federal income tax
rules and regulations.

Investment  options:   Upon  enrollment in  the Plan,  a participant  may direct
contributions  in any  of seven investment  options.   At December  31, 1997 and
1996, there were 509 and 453 employees, respectively, participating in the Plan.
The funds are invested in  shares of a registered investment company  except for
the Portec, Inc. Stock Fund which is invested in common stock of the Company.

Portec,  Inc. Common Stock Fund  - Invests in  common stock of  Portec, Inc. and
temporarily in short-term money  market instruments.  All of  the Employer match
is invested in this fund.
T-Rowe Price  Associates New Horizons Fund  - Invests in common  stock of small,
rapidly growing companies in a broad range of industries.
T-Rowe  Price Associates Prime Reserve  Fund - Invests  in high-quality domestic
and  foreign  money  market  securities,   including  U.S.  Treasury  bills  and
certificates of deposit that have an average maturity of 90 or fewer days.
T-Rowe Price Associates Short-Term  Bond Fund - Invests primarily  in short-term
U.S. Treasury notes and corporate  bonds that have an average maturity  of three
or fewer years.
T-Rowe Price  Associates Equity Income Fund  - Invests in a  portfolio of common
stocks  of  established  companies  that pay  above-average  dividends  and have
prospects of future dividend increases.
T-Rowe  Price  Associates Small-Cap  Value Fund  -  Invests primarily  in common
stocks of small companies  which are believed to be  undervalued at the time  of
purchase and to have potential for capital appreciation.


NOTE 2.PLAN DESCRIPTION (CONTINUED)

T-Rowe Price Associates International Stock  Fund - Invests in common stocks  of
large, established non-U.S.  companies that are  broadly diversified in  Europe,
the Far East, Australia, Canada, and other areas.
Participants may change their  deferral elections once per month  and investment
elections at any time.

Participant  notes receivable:  Participants may borrow from their fund accounts
a minimum of $200  up to a maximum equal to the lesser  of $50,000 or 50 percent
of their account balance.  Loan transactions are treated as a transfer to (from)
the investment fund from (to) the Participant Notes Receivable Fund.  Loan terms
range from 1-5 years or up to 10 years  for the purchase of a primary residence.
The  loans are collateralized  by the balance  in the  participant's account and
bear interest  at a rate commensurate with  local prevailing rates as determined
by the Plan administrator.  Interest rates currently range from  6.25 percent to
9.25 percent.  Principal and interest is paid through payroll deductions.

Related Party Transactions

Certain Plan investments are shares  of registered investment companies  managed
by  T-Rowe Price  Associates.   T-Rowe Price  Trust Company  is the  trustee, as
defined  by the  Plan and,  therefore, these  transactions qualify  as party-in-
interest.   Furthermore, T-Rowe Price Retirement Plan Service, Inc. is providing
plan administration  services to  the  Plan.   Fees are  paid  by the  Employer.
Certain other administrative expenses are paid  by the Employer on behalf of the
Plan.    The amount  of  these  expenses is  not  significant  to the  financial
statements.

As  of December 31,  1997 and  1996, the Plan  held 265,279 and  230,561 shares,
respectively,  of Portec,  Inc.  common stock  with  a  cost of  $2,712,027  and
$1,706,562,  respectively, and  a  fair  value  of  $3,846,540  and  $2,276,786,
respectively.

During the  year ended December 31,  1997, 62,539 shares of  Portec, Inc. common
stock  were purchased  at values  ranging from $14.75  to $9.50  for a  total of
$683,682.  In  1997, 27,821  shares of Portec,  Inc. common  stock were sold  at
values ranging from $14.375 to $9.50 for a total of $282,460.

During the  year ended December 31,  1996, 39,848 shares of  Portec, Inc. common
stock were  purchased at values  ranging from $8.875 to  $11.125 for a  total of
$297,026.   In 1996,  20,117 shares of  Portec, Inc.  common stock were  sold at
values ranging from $8.875 to $11.125 for a total of $177,765.

Shares of  the  Company's  common  stock  are either  funded  by  the  Company's
authorized but  not issued and  outstanding shares  or acquired through  T. Rowe
Price Financial Center, the Plan's broker.

The fair values  of the  Portec, Inc.  common stock  are determined  by and  all
purchases and sales of the stock are transacted on the New York Stock Exchange.



Sale of Corporate Divisions

In the fourth quarter of 1997  Portec, Inc. signed definitive agreements to sell
the  Railway Maintenance Products  Division, the Shipping  Systems Division, and
the  Construction Equipment  Division.    Plan  participants  of    the  Railway
Maintenance Products  Division, and  Shipping Systems  Division, were  given the
opportunity to take distributions from  the plan at the time the  divisions were
sold.   The  method of  payment, either  cash or  stock,  is subject  to certain
conditions and elections as defined in the Plan  document.   Account balances of
Plan  participants  of  the  Construction Equipment  Division  were  transferred
directly  to a successor trustee of the purchasing employer.

Plan Termination

Although it has not expressed any intent to do, the Employer has the right under
the Plan to discontinue  its contributions at any time and to terminate the Plan
subject to the provisions of ERISA.

Tax Status

The  Internal  Revenue Service  has determined  and informed  the Employer  by a
letter dated October 25, 1995,  that the Plan and related trust  are designed in
accordance  with applicable sections  of the Internal  Revenue Code (IRC).   The
Plan   has  been  amended  since   receipt  of  the   Internal  Revenue  Service
determination letter, to comply with  changes in law and operation of  the plan.
The  Plan administrator  and the  Plan's tax  counsel believe  that the  Plan is
currently being operated in  compliance with the applicable requirements  of the
IRC.

Subsequent Event

On March 11, 1998  Portec, Inc. signed a definitive agreement  to be acquired by
another company.  The transaction is structured as a merger with Portec, Inc. as
the surviving company.  In the merger, each share of Portec common stock will be
converted into the  right to receive  $16 per share  in cash.   No changes  with
respect to operation of the plan are anticipated at this time.
 ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES

 DECEMBER 31, 1997

<TABLE>
<S><C>


(a)   Identity of Issue/Description of Investment                                Cost            Fair Value



  *    Portec, Inc. Common Stock                                             $  2,718,028     $    3,846,540
       Shares held with registered investment company:

         T-Rowe Price Associates:
  *        New Horizons Fund                                                    2,348,202          2,505,699

  *        Prime Reserve Fund                                                   1,139,786          1,139,786

  *        Short-Term Bond Fund                                                   840,008            841,658
  *        Equity Income Fund                                                   5,112,302          5,779,227

  *        Small-Cap Value Fund                                                   477,711            546,240
  *        International Stock Fund                                               407,823            391,386

                                                                                13,043,86         15,050,536


       Participant Notes Receivable (interest rates range

         from 9.25 percent to 9.50 percent)                                       250,604            250,604

                                                                             $  13,294,46     $   15,301,140



  *    Identifies a party known to be a party-in-interest.




 ITEM 27(D) - SCHEDULE OF REPORTABLE TRANSACTIONS
 YEAR ENDED DECEMBER 31, 1997


                                               Purchases                                 Sales

                                         Total                       Total

 Identity of Party Involved/            Number of       Total        Number of      Total        Total        Total
 Description of Asset                   Purchases       Price        Sales          Cost        Proceeds      Gains




 SERIES OF TRANSACTIONS
 Shares of registered investment companies

   T-Rowe Price Associates
     Prime Reserve Fund                       45  $     497,261           47   $  326,995   $   326,995  $       -

     Equity Income Fund                       53      1,054,798           43      539,852       750,576      210,724

 Portec, Inc. Common Stock                    34        683,682           53      189,059       282,460       93,401

 </TABLE>