Posts Tagged ‘CSX Massena Line’

No Movement Yet on Massena Line Sale

March 13, 2021

Three weeks after the U.S. Surface Transportation Board refused to reconsider conditions that it imposed on Canadian National’s acquisition of CSX’s Massena Line, all remains quiet on the proposed transaction.

Neither CSX nor CN has offered public comment nor have they filed any new documents with the STB.

The Massena Line extends from Syracuse, New York, to Montreal.

In approving the sale, the STB imposed conditions that overrode clauses in the sale contract that prohibit CN from establishing interchange agreements with short line railroads in the Syracuse region.

CN and CSX had threatened to call off the sale if the STB did not remove the conditions allowing CN to some day negotiate interchange agreements with short lines Finger Lakes Railway and the New York, Susquehanna & Western.

Regulators approved the sale in April 2020. CN would make the acquisition through its Bessemer & Lake Erie subsidiary.

The original sale agreement between CSX and CN required the latter to interchange exclusively in Syracuse with CSX.

STB Won’t Reconsider Conditions Imposed on Massena Line Sale

February 26, 2021

In a 3-2 decision, the U.S. Surface Transportation Board declined to reconsider the conditions that it earlier placed on Canadian National’s proposed acquisition of CSX’s Massena Line in New York state.

The decision might end the transaction if the two railroad follow through on earlier contentions that they could not complete the deal unless the STB reconsidered a condition to allow CN to negotiate interchange agreements with short lines in Syracuse, New York.

The Massena Line extends from Syracuse to the Montreal region in Canada.

CN’s deal to buy the route had been announced in October 2019 and approved by the STB last April.

But a provision of the sale agreement banned CSX from negotiating direct interchange with the Finger Lakes Railway and the New York, Susquehanna & Western in Syracuse.

The STB’s latest action was revealed on Thursday afternoon and officials of CSX and CN told news reporters they were reviewing the decision before responding to it.

The STB decision cited “serious competitive concerns” and rejected the contention of the railroads that the Board erred in imposing a condition designed to protect B&LE, “a ‘sophisticated buyer’ capable of evaluating the commercial impacts of the transaction.”

The reference to B&LE refers to CN subsidiary Bessemer & Lake Erie, which operates in Ohio and Pennsylvania but had been designated by CN to operate the Massena Line under the CN banner.

“B&LE’s agreeing to a provision that the board has deemed anticompetitive does not remove the board’s authority to address the anticompetitive impacts of a transaction by ensuring a carrier’s ability to seek access or interchange with nearby carriers, consistent with the board’s statutory objectives,” the STB wrote in its decision.

STB members Patrick Fuchs and Michelle Schulz dissented with Fuchs writing that the majority on the Board had ignored the fact that CN and the Finger Lakes Railway can’t directly interchange today.

 “The majority’s erroneous attempt to perfect the transaction has delayed and jeopardized meaningful network improvements and may well discourage similar improvements in the future,” he wrote.

CN, CSX Still Unable to Finish Line Sale

December 2, 2020

The acquisition by Canadian National of a CSX secondary line between Syracuse, New York, and Montreal continues to lag.

The two railroads this week said they could not meet a Nov. 30 deadline to finish the deal and asked for a deadline extension to Feb. 28, 2021. Either party could back out of the deal before that date.

The line in question is known as the Massena Line and the STB had last April approved CN’s acquisition of it through its Bessemer & Lake Erie subsidiary.

However, a sticking point in completing the deal has been an STB directive that CSX and CN remove a sale provision that prohibits CN from ever negotiating direct interchange with the Finger Lakes Railway and the New York, Susquehanna & Western in the Syracuse area.

In their latest filing with the STB, CN and CSX said they remain unable to come to revised terms of the sale and have asked the Board to reconsider its directive.

The STB has twice extended the deadline for CN and CSX to submit a revised purchase and sale agreement.

In the filing this week the two railroads asked the STB to expedite its response to their request.

The sale involves  278.1 miles between Beauharnois, Quebec, and Woodard, New York,

including 41.8 miles of trackage in Quebec and branch lines and spurs on both sides of the border.