Vermont joins chorus in support of proposed CSX-Pan Am Railways merger

State drops opposition after regional rail access concerns are addressed


The Vermont Rail System and Vermont Agency of Transportation have dropped their opposition to CSX Transportation’s proposed acquisition of Pan Am Railways, which is pending before the federal Surface Transportation Board.

Vermont officials opposed the original terms of the transaction, claiming that by limiting competition it would have adverse impacts on shippers in the Green Mountain State.

Under the merger proposal, CSX would acquire Pan Am Southern, a joint venture owned equally by Pan Am and Norfolk Southern Railway. Pan Am Southern includes the Patriot Corridor, 425 miles of track between Albany, N.Y., and Ayer, Mass. as well as the north-south route along the Connecticut River between White River Junction, Vt., and branch lines in Connecticut and Massachusetts.

As originally presented, the merger called for Genesee & Wyoming Inc., which owns 122 railroads in the United States and Europe, to operate Pan Am Southern. As owner of the New England Central Railroad running through the Connecticut River Valley between New London, Conn., and St. Albans, Vt., Genesee & Wyoming would surround the Vermont Rail System and, Vermont officials argued, enjoy “a near monopoly on interchange” with the Vermont Rail System, to the disadvantage of shippers.

The terms of an agreement between CSX, Norfolk Southern, Genesee & Wyoming and New England Central provides for a complex mix of trackage rights, haulage rights and interchange arrangements to provide the Vermont Rail System access to the regional rail network. CSX has asked the Surface Transportation Board to impose the agreement as a condition of its transaction to acquire Pan Am.

The STB will hold a public hearing on the merger Jan. 13 at its headquarters in Washington. It earlier announced it expected to issue its decision approving or denying the transaction on April 1 of this year.

This week, CSX released a statement by President and CEO James Foote noting, “throughout New England, there’s near universal support from shippers and other stakeholders for the merger. Of the more than 100 comments filed in support, New Hampshire stakeholders filed 20.” Gov. Chris Sununu, Transportation Commissioner Victoria Sheehan, Manchester Mayor Joyce Craig, state legislators and shippers have endorsed the deal, along with the Milford-Bennington Railroad, New Hampshire Central Railroad and New Hampshire Northcoast Railroad.

However, the U.S. Department of Justice has registered opposition to the merger, saying that it threatens to diminish competition among freight carriers in New England. Amtrak is challenging the proposal as well, saying it proposes “a significant threat” to passenger rail in northern New England.

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