VRS Wants STB to Reject Pan Am Sale to CSX

Vermont Rail System wants the U.S. Surface Transportation Board to turn down CSX’s proposed acquisition of New England regional railroad Pan Am Railways.

In a filing with the Board, VRS said the deal would reduce competition. In particular, VRS objects to a Genesee & Wyoming subsidiary being named as the neutral party to operate Pan Am Southern, a joint venture with Norfolk Southern.

Genesee & Wyoming’s Pittsburg & Shawmut has been named by CSX to operate Pan Am Southern under the Berkshire & Eastern name.

Pan Am Southern has 425 miles of rail lines and trackage rights routes, including the former Boston & Maine main line between Mechanicville, New York, and Ayer, Massachusetts that is used by NS to reach the Boston area.

Pan Am Southern is currently operated by the Springfield Terminal, a Pan Am subsidiary.

VRS said the Pan Am acquisition as structured would surround it with G&W railroads. VRS operates state-owned tracks in Vermont.

In its filing, VRS said the deal would eliminate competition in portions of northern Massachusetts, Vermont and New Hampshire; and give G&W an unfair competitive advantage due to access to market and price information on competitive routes.

VRS said the latter threatens its local traffic as well as bridge traffic moving between Quebec and southern New England.

In a related development, a coalition of railroad labor unions has asked the STB to extend the comment and review period regarding the Pan Am transactions.

“The Allied Rail Unions are at a loss to understand how P&S/B&E plans to operate the same lines with the same, or hopefully more, traffic with only 75 percent of the current work force; in particular they cannot comprehend the plan to operate over the same infrastructure with more or greater traffic but with only 48 percent of the maintenance of way work force,” the unions told the STB in a filing posted on Tuesday.

The unions include The Brotherhood of Maintenance of Way Employes Division/IBT; Brotherhood of Railroad Signalmen; International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Division; and NationalConference of Firemen and Oilers.

A CSX spokeswoman declined to comment on the latest developments other than saying the Class 1 carrier will be filing responses with the STB.

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