By Justin Franz
WASHINGTON — The chorus of voices against CSX Transportation’s takeover of Pan Am Railways is growing. This week, Massachusetts and Vermont both filed comments in opposition to the plan with the U.S. Surface Transportation Board, alleging that the proposed takeover was “anti-competitive” and would negatively impact shippers and passengers in the region.
On Thursday, CSX filed a response to both states and the Vermont Rail System — which also came out against the proposal earlier this week — defending its position that the sale would positively impact the New England rail network and that it should go forward through the review process as a “minor” transaction. VRS, the Vermont Agency of Transportation and MassDOT have all said the transaction should be considered “significant,” a designation that would result in more scrutiny and time to review the deal.
In February, CSX filed its plan to take over PAR with the STB. As part of the deal, Genesee & Wyoming will 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.
In its filing, the State of Vermont echoed VRS’ concerns that five of the short line’s seven interchange points would be controlled by G&W, reducing competition for it and thus negating hundreds of millions of dollars the state has invested in its short line network over the last 50 years. If the deal were to go through, the landscape would be dominated by CSX, NS and G&W, which already owns four short lines there: New England Central, Providence & Worcester, Connecticut Southern and St. Lawrence & Atlantic.
The Commonwealth of Massachusetts raised a different set of issues, including concerns that increased freight traffic would negatively impact Massachusetts Bay Transit Authority commuter rail operations around Boston. It was also concerned about an increase in freight rail traffic, and thus an increase in the possibility of a derailment, near the Wachusett Reservoir, one of the largest freshwater impoundments in the state that supplies drinking water to more than 3 million people in the Boston area. MassDOT officials wrote that they tried to raise their concerns about an increase in freight traffic to CSX but instead the railroad promoted its accident response protocols, not prevention efforts.
“By emphasizing accident response measures and discounting, or failing to consider, accident prevention, the Applicants reflect an alarming inattention to critical Commonwealth concerns, and an alarming disregard for health and safety to the detriment of the public interest that the Applicants claim that they wish to advance,” officials wrote.
In its response, CSX officials said they would meet with MassDOT to address concerns regarding the Wachusett Reservoir and that they did not believe freight traffic would increase in a manner that would negatively impact commuter operations. It also stated that, in its opinion, neither state nor VRS had presented evidence that the transaction would negatively impact competition and thus it should still be considered a “minor” transaction.
“The Transaction was carefully structured to eliminate potential competitive harm, enhance competition, and improve the rail network throughout the Northeast,” officials wrote. “The only thing ‘significant’ about the Transaction is the extent to which it enhances competition and strengthens the rail network in the Northeast.”
