STB okays CSX-Pan Am deal

Regulators agree deal will bring capital, service improvements to New England

CSX TRANSPORTATION’S ACQUISITION of New England regional Pan Am Railways has been approved by regulators, with CSX planning to close the deal on June 1.

In a unanimous, 75-page decision handed down April 14, the Surface Transportation Board largely agreed with CSX’s contention the merger will bring muchneeded capital improvements while aiding service and safety. CSX has pledged to spend more than $100 million to improve Pan Am’s track, bridges, and yards as well as its aging and failure-prone locomotive fleet, over the next three years.

CSX, already the dominant freight railroad in the region, will extend its reach into Vermont, New Hampshire, and Maine, as well as to Saint John, New Brunswick, via Pan Am’s haulage-rights agreement with Irving-owned short lines.

“We look forward to integrating Pan Am, [its] employees and the rail-served industries of the Northeast into CSX,” CSX CEO Jim Foote said, “and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.”

The board also approved several transactions related to the Pan Am Southern, the joint venture between Pan Am Railways and Norfolk Southern. CSX will step into Pan Am Railways’ shoes in the joint venture, which gives NS access to New England via the former Boston & Maine line from Mechanicville, N.Y., to Ayer, Mass., via Hoosac Tunnel.

The board approved Norfolk Southern’s new trackage rights over CSX from the Albany, N.Y., area to Worcester and Ayer, Mass., as a faster and fully cleared route for intermodal and automotive traffic.

Designation of Genesee & Wyoming subsidiary Berkshire & Eastern as neutral operator of the Pan Am Southern also was approved. The board’s five-year oversight of the merger includes a requirement CSX provide reports on Pan Am Southern traffic levels west of Ayer, Mass., for at least two years.

Agreements between CSX and parties including Amtrak, Vermont Rail System, and the Northern New England Passenger Rail Authority, sponsor of Downeaster service, were imposed as merger conditions. But the STB declined to impose additional conditions that Amtrak and the Massachusetts Bay Transportation Authority had sought to protect passenger and commuter service, noting they are already covered under existing contracts or regulations.

Including haulage rights, Pan Am stretches 1,700 miles. It includes trackage of the former Maine Central, Boston & Maine, and Portland Terminal railroads, and connects with four Class I railroads — CSX, NS, Canadian National, and Canadian Pacific — as well as 14 short lines. — Bill Stephens

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