Massachusetts, Vermont challenge Pan Am Railways deal

Fears of effects on commuter service, freight competition cited

Officials in Massachusetts and Vermont are challenging CSX Transportation’s bid to acquire Pan Am, claiming the transaction will lessen competition among freight carriers in New England and pose  risks to commuter service in Massachusetts.

The states have been joined by trade unions and rail shippers as well as state lawmakers and local officials in questioning the deal, which is before the federal Surface Transportation Board.

The New Hampshire Department of Transportation has filed a notice to participate in the proceedings, but has not yet submitted a substantive comment. In New Hampshire CSX would acquire 121 miles of track divided among five lines owned and operated by Pan Am.

These include the NH Main Line from Nashua to Concord, the preferred corridor for commuter rail service, and the 35 miles of track carrying the Amtrak Downeaster between Boston and Portland, Maine. CSX would also assume Pan Am’s haulage rights on the 394 miles of the Connecticut River Line, operated by the New England Central Railroad, which includes 24 miles of track in New Hampshire between Walpole and Cornish.

While CSX has asked the Surface Transportation Board to treat the merger as a “minor transaction,” critics have urged the board to apply the more stringent standards required of a “significant transaction.”

Likewise, they have asked the board to treat the agreement between CSX and Norfolk Southern Railway to evenly share ownership of Pan Am Southern – the 437 miles of the “Patriot Corridor” between Mechanicsville, N.Y., and Ayer, Mass. as a separate transaction.

Apart what they said would be reduced competition among freight carriers, Massachusetts officials raised concern that increasing freight traffic could disrupt or limit commuter service. The Massachusetts Bay Transportation Authority serves 32 million commuters a year in three states and, together with officials in New Hampshire, is considering extending service into the Granite State.

In Vermont, where the state has invested heavily in its railroad network, officials are concerned about maintaining competitive freight service, not least at the interchanges at Bellows Falls and White River Junction, where the two carriers linking to the Vermont Railway System would be reduced to one.

In responding to critics, CSX insisted the merger would enhance, not diminish, competition. As the neutral operator of Pan Am Southern, Genesee & Wyoming Inc. would maintain the competitive routing options the Vermont Rail System currently enjoys at Bellows Falls and White River Junction, CSX said.

CSX also told Massachusetts officials that MBTA commuter services would be maintained for “the foreseeable future” and work with the state to extend passenger service west of Worcester.