Posts Tagged ‘Delaware Lackawanna’

R&N Sues PNRRA Over Lease Extension

February 13, 2020

The Reading & Northern has sued the Pennsylvania Northeast Regional Railroad Authority arguing that it violated the state’s open meetings act when it extended the contract of rail operator Delaware-Lackawanna for five years.

The suit argues that the Authority discussed the extension in an executive session at which the public was excluded and without public notice.

The suit contends that the Authority should have acted in public. It is seeking a reversal of the decision.

R&N said it would drop the lawsuit if the Authority “would embark on a good faith bid process,”

The Authority acted to extend the least last month. That action also drew criticism from another railroad operator, the Myles Group.

Both the Myles Group and R&N contend that the Authority did not give them the opportunity to offer competing proposals.

The Myles Group operates an excursion service, the Stourbridge Line, in Wayne and Pike counties.

The Authority contracted with the Delaware-Lackawanna almost three decades ago and has never sought proposals from other railroads.

Lawrence Malski, president of the Authority, said the board did discuss the lease in private, but said that is allowed by law to discuss a real estate matter.

He said the board also talked in private about another lawsuit filed by the R&N in 2013 against the Authority that challenged its right to own and operate a railroad.

That lawsuit resulted in a court ruling in December that the authority doesn’t have to seek proposals and can continue to operate a railroad.

The Authority owns about 100 miles of tracks serving 17 customers

Malski said the board feared that the possibility of being forced out of the railroad business discouraged it from seeking proposals.

However, he said seeking proposals would “probably” be a good idea in the future.

The extension was of the lease had been sought by the Delaware-Lackawanna a year ago.

Malski said the board took into account the railroad’s ability to land state grants for infrastructure improvements and shipper satisfaction with its service when agreeing to grant the extension.

Although the Myles Group appeared before the board in December, Malski said it could not adequately explain how it would attract new shippers.

John Titterton, Myles Group’s vice president, retorted that his company never got a chance to make a presentation to the board.

The thing is, why not? Whose interest are you protecting by not hearing proposals. What is the downside to this?” he said.

Titteron said seeking proposals should be standard operating procedure and there is something very odd about the rail authority, including the closed and secret way it works, and its relationship with D-L.

As for the R&N, Malski said it didn’t give it an opportunity to make a proposal in part because of the lawsuit but also because R&N wants to buy the authority’s system, a prospect the Authority opposes.