CSX is insisting that its acquisition of regional railroad Pan Am Railways will increase and not diminish competition in New England.
The carrier made the claims in filings with the U.S. Surface Transportation Board in response to contentions by Vermont Rail System, along with transportation officials from Vermont and Massachusetts that the deal will harm rail competition in the region and should be subject to a more thorough review.
CSX contends that a Genesee & Wyoming subsidiary that will oversee operations of Pan Am Southern will be a neutral operator.
Pan Am Southern is a joint venture of Pan Am and Norfolk Southern. CSX would assume Pan’s Am 50 percent ownership share of Pan Am Southern.
The G&W’s subsidiary, Berkshire & Eastern, will be obligated to operate in the interest of Pan Am Southern, not in the interest of G&W’s other New England railroads to the detriment of Pan Am Southern, CSX said in its filing.
CSX did agreed to ask the STB to extend the comment period by 30 days, as merger opponents have requested.
In its filing, CSX also contended the STB should consider the Pan Am acquisition to be a minor transaction and thus not subject to the more stringent transaction rules applied to merger opponents.
Opponents of the sale want the STB to treat the Pan Am acquisition as a merger.
“No party has offered a valid basis for requesting that the Board classify the transaction as ‘significant’ or to require the application to be re-filed,” CSX wrote in its filing. “The transaction was carefully structured to eliminate potential competitive harm, enhance competition, and improve the rail network throughout the Northeast. The only thing ‘significant’ about the Transaction is the extent to which it enhances competition and strengthens the rail network in the Northeast.”
In a letter sent to Massachusetts officials, CSX pledged to keep dispatching of Massachusetts Bay Transportation Authority commuter service based at the Pan Am headquarters in North Billerica, Massachusetts, for the “foreseeable future.”
CSX also said it would work to maintain fluid commuter operations and cooperate with state officials to expand passenger service west of Worcester, Massachusetts, on its Boston & Albany route and elsewhere.
In its filing, CSX said it has 58 letters of support from shippers, government officials and local communities that favor the benefits the acquisition would provide.