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UPDATE: STB Rejects CSX Application to Take Over Pan Am

A Pan Am Railway freight train is seen westbound at Scarborough Marsh near Portland, Maine. Photo by Justin Thomas Winiarz.

UPDATE: STB Rejects CSX Application to Take Over Pan Am

Updated: May 26, 7:45 p.m. EST

By Justin Franz

WASHINGTON — The U.S. Surface Transportation Board said Wednesday it would need more information before it could consider CSX Transportation’s plan to acquire Pan Am Railways. The board said that CSX’s application was “incomplete” and that it would have to try again before the federal regulator would consider it. 

The decision will likely push CSX’s potential takeover of the New England regional well into 2022. The Class I had previously hoped to take over Pan Am in March 2022. 

CSX said late Wednesday that it would revise its application as soon as possible.

“CSX appreciates that the STB desires additional information and we will provide it as expeditiously as possible. We are confident that the pro-competitive acquisition of Pan Am will bring significant benefits to stakeholders in the Northeastern United States and beyond and look forward to presenting further detail illustrating those benefits,” a spokesperson told Railfan & Railroad. 

CSX first submitted its plan to acquire Pan Am back in February but a month later it was rejected after the board deemed it would be a “significant” transaction. In April, CSX filed a 478-page amended application. But the board said that is not enough and that the new application didn’t have a “market analysis” looking at how the deal might impact the New England rail network. CSX will be able to file a revised application.

“A key difference between the applications for ‘minor’ and ‘significant’ transactions is the requirement for applicants in ‘significant’ transactions to include a Market Analysis that ‘describe[s] the impacts of the proposed transaction—both adverse and beneficial—on competition,’” the board wrote. 

The Board also noted that there were some discrepancies within the application. For example, CSX gave the STB a list of trains that currently operate on Pan Am, but it did not include information about occasional trains that serve the power plant in Bow, New Hampshire. The Board said that would not be enough to reject an application but that it should be fixed. 

The Board said that CSX would have until August to submit a revised petition. In the past, the STB has said it expected to take up to 10 months to review the transaction meaning the Pan Am acquisition — if approved — will not happen until Spring 2022 at the earliest. 

Late last year, CSX announced that it would purchase Pan Am for an undisclosed amount of money. As part of the proposed plan, Genesee & Wyoming would operate Pan Am Southern — a joint venture between Pan Am and Norfolk Southern — and NS will get trackage rights over CSX’s Boston Line so that it can move double-stack trains to Ayer, Mass. The new G&W line would be called Berkshire & Eastern. CSX would operate the railroad east of Ayer, Mass., into New Hampshire and Maine. 

This article was posted on: May 26, 2021