Updated: March 25, 11:15 a.m.
By Justin Franz
WASHINGTON — The U.S. Surface Transportation Board has ruled that CSX Transportation’s proposed acquisition of Pan Am Railways would be a “significant” transaction, a decision that means a takeover of the New England regional railroad may not officially happen until 2022.
The STB’s ruling was to be published in the Federal Register on Thursday, but a draft copy was made available online late Wednesday.
CSX had argued that the transaction was “minor” because they believed it would not negatively impact shippers or competition in the region. A minor transaction would have also helped the railroad meet its original goal of sealing the deal by mid-2021. But a cascade of comments in recent weeks from other railroads and states have muddied the water and the STB said it would need more time to determine if the acquisition was in the public interest.
“Classifying this transaction as ‘significant’ would provide the Board with the additional information and time needed to develop a more comprehensive record so that the Board may analyze the competitive concerns,” the STB wrote.
In a statement to Railfan & Railroad on Thursday, CSX officials wrote, “CSX is confident that the proposed acquisition of Pan Am Railways will enhance customer competitiveness and provide benefits to stakeholders in New England and beyond. We look forward to demonstrating this further in our next filing to the STB.”
In February, CSX filed its plan to take over PAR with the STB. As part of the deal, 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.
But Vermont Rail System, Vermont Agency of Transportation, MassDOT and others said the deal would result in giving CSX and G&W too much control over the region’s rail system. The STB seemed to agree, noting that even if the G&W were to operate Pan Am Southern west of Ayer, it would still mean CSX would own or partially own two parallel routes across Massachusetts. The deal would also give G&W a fifth railroad in New England.
The ruling also means that CSX will have to re-submit its application. Any significant transaction application requires applicants to give notice two to four months prior to filing. The STB ruled that the February filing could count as the prefiling notification and that CSX could resubmit its revised application anytime between April 25 and June 25.