WASHINGTON — CSX Transportation’s proposed acquisition of New England regional Pan Am Railways will get a more thorough review.
The Surface Transportation Board has decided that the merger application will be treated as a significant transaction, not the minor deal that CSX and Pan Am had sought.
The move, announced in a draft notice in the Federal Register on Thursday, will create a longer review path for the deal and require CSX to submit a more detailed merger application and a revised proposed schedule.
As a minor transaction, CSX had hoped the deal would close in late September. But the board’s decision means the railroads won’t be able to tie the knot until December 2021, assuming the deal is approved following a typical 270-day review schedule.
Several parties — including short line Vermont Rail System, the Vermont and Massachusetts congressional delegations, Vermont and Massachusetts transportation officials, and a Massachusetts water agency — had asked the board to consider the merger as a significant transaction.
“CSX is confident that the proposed acquisition of Pan Am Railways will enhance customer competitiveness and provide benefits to stakeholders in New England and beyond,” the railroad said in a statement. “We look forward to demonstrating this further in our next filing to the STB.”
CSX on Nov. 30 announced that it had reached a deal to acquire privately held Pan Am Railways, which stretches from the Albany area to Maine and totals 1,700 miles when trackage and haulage rights are included [see “CSX to acquire New England regional Pan Am Railways,” Trains News Wire, Nov. 30, 2020].
CSX said that as an end-to-end merger the acquisition of Pan Am would not have an adverse impact on railroad competition in New England. Its Feb. 25 merger application included letters of support from 58 groups, including shippers and some railroads. Norfolk Southern, Poland Spring, and J.B. Hunt subsequently supported the deal, with NS urging the board to consider it a minor transaction.
But Vermont Rail System asked federal regulators to reject the deal, saying it would reduce competition. Much of VRS’s opposition flows from a separate element of the Pan Am deal: The naming of a Genesee & Wyoming subsidiary as neutral operator of the Pan Am Southern. CSX will step into Pan Am Railways’ 50% stake in Pan Am Southern, the joint venture with Norfolk Southern that provides NS with a route into New England.
Genesee & Wyoming’s Pittsburg & Shawmut would operate Pan Am Southern under the Berkshire & Eastern name. The Pan Am Southern consists of about 425 miles of rail lines and trackage rights routes, including the B&M main line between Mechanicville, N.Y., and Ayer, Mass., that provides NS access to the Boston area via its so-called Patriot Corridor.
Pan Am’s Springfield Terminal subsidiary currently operates the Pan Am Southern, which also includes the north-south route Pan Am uses along the Connecticut River between White River Junction, Vt., and its branches in Connecticut via Springfield, Mass. Pan Am operates over G&W’s New England Central on trackage rights between White River Junction and East Northfield, Mass.
Norfolk Southern also gains trackage rights over CSX, Providence & Worcester, and Pan Am Railways between the Albany, N.Y., area and Ayer, Mass., for intermodal and automotive traffic.
The STB said it could not determine that the CSX-Pan Am deal “clearly would not have any anticompetitive effects, based on the current record.”
The board also said the competitive impact of CSX acquiring Pan Am Southern, which was created to enable NS to be a more viable competitor to CSX in New England, was unclear.
Judging the deal as a significant transaction will provide the board with more information and time to analyze competitive concerns, the STB said.
CSX must provide the board with a revised review schedule no later than April 1.
The board’s action is not without precedent. In 2007, Canadian Pacific sought to have its acquisition of regional Dakota, Minnesota & Eastern treated as a minor deal, but the board considered the acquisition as a significant transaction. The board ultimately approved that deal.
— Updated at 10:10 a.m. with CSX statement.
Mr. Vincent, who says “all the inbound NE traffic” will be routed on the CSX Berkshire Sub? The agreement NS and CSX signed allows only one pair of NS trains, intermodal/autorack 22K and 23K, to operate over CSX Vorheesville, NY-Worcester (Ayer). Absent re-double tracking much of the Berkshire Sub, that Line may not be capable of handling “all the inbound traffic” and the westbound companion trains you seem to think do not exist without sustaining considerable delays.
The only rationale for the former B&M west of Greenfield was an alternative low grade route to the B&A. Once all the inbound NE traffic (there is little outbound) is routed by CSX, there is no need for the B&M west of Greenfield; little if any online business in economically depressed areas of NY and Mass.
If I were to take out an insurance policy on soon-to-be gone railroad lines, I’d load up on this one.
VRS taking it over? Where does the family-owned VRS get the money and why would they even want it?
VRS might like to have Hoosick Jct – Rotterdam Jct., but they really don’t need it. They can reroute through Whitehall/CP and degrade the B&R back to 10mph track with a weekly switcher.
I know a simple way for CSX to have this sales through the STB filing…sell their 50% stake in the Pan Am Southern to VRS(that’s probably what they’d like to happen), that would solve everything.
But Mr. Murray, when the state does not own the railroad, in this case west of Worcester and Fitchburg, it has to deal in good faith with the guys who do own it. MassDOT and those all-star state reps and senators from the western counties will get nowhere trying to bully the railroad. Virginia is getting lots from CSX down the RF&P Sub. Virginia wanted to relieve the generations-old chokepoint that was the single track bridge at Possum Point. So they put their $$$ where their mouth was. They paid for another with capacity for a second track on the new one for future triple-tracking. That’s how it’s done. Maybe MassDOT and the signers of that protest letter ought to learn how to speak Southern like the VA Dept. of Rail and Public Transportation apparently does.
I’ve always thought that Passenger services to the Community are essential services and therefor shouldn’t be compromised. Maybe State or Government Officials should start flexing their Authority rather than taking a long lunch.
Mr. Wayman, good point for sure. Absolutely all those pledges I cited need to made legally binding, the passenger service expansions west of Fitchburg and Worcester hinging on MassDOT also dealing in good faith, of course. Your caveat is well taken.
Mr Shapp, Did they make it binding? You’ve seen how they are responding to Amtrak on the proposed New Orleans – Mobile train. I would be suspicious. They promise anything to get the deal done and then see how their cooperation changes.
Well, I hope the all stars (NOT!) in the Massachusetts delegation who filed objections to this being designated a “minor transaction” are right proud of themselves. And one of them is my state senator and a horse’s you know what if ever there was one in the MA legislature. CSX has told the person who heads up what purports to be the Rail and Transit Division within the DOT that they take very seriously their obligations to operate MBTA Commuter Rail in the territories CSX will control. They pledged to keep in service [rather than transfer to JAX] the North Billerica dispatching office in order to “keep things local” for the Commuter Rail. They pledged cooperation with all entities concerned re operations in the Wachusett Reservoir area (only one additional pair of trains across that segment is proposed, NS 22K &23K). He’ll, they’ve even pledged to work with the DOT and state officials for expansion of passenger/commuter rail into territories “not limited to the former Boston&Albany main line”. These very same legislators are lobbying for passenger rail North Adams and Pittsfield to Boston and they know they’ll need a buy-in from CSX to get it. So what do they do? They go bully, browbeat, and buffalo that railroad. Brilliant!
If you think csx will keep dispatching local for longer then a few years you’re deluding yourself. Csx is run by the ghost of hunter harrison. Anything that increases the operating ratio or reduces board compensation has to go. Everything else like customers, safety, and maintenance are irrelevant.
Who do I trust more, CSX, or the circus which is Bay State’s state legislature ….. well, I’ll get back to you on that… These are the same clowns who mandated the Stoughton-Taunton branch (if built) be electrified, whereas MBTA doesn’t run electrics even where there now are wires (the Providence line).
would the recent KCS acquisition fall into the same category?