Eastern Railroad Discussion > STB approves CN/B&LE acquisition of CSX Massena line...

As of Monday 4/6/20, the STB has approved CN/B&LE's acquisition of the CSX Massena line and Fulton subdivision denying all 3rd party (eg, FGLK, Port of Oswego) requested conditions except for one condition.Here is an excerpt from the bottom of page 14 of the STB decision with clarifying annotation on the one condition being applied (ie, item 3) from me in brackets:
"It is ordered:
1. B&LE’s application to acquire and operate CSXT’s Massena Lines is approved.
2. Approval of the Transaction is subject to the employee protective conditions set out in New York Dock Railway—Control—Brooklyn Eastern District Terminal, 360 I.C.C 60, aff’d New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 1979), as modified by Wilmington Terminal Railroad—Purchase & Lease—CSX Transportation Inc., 6 I.C.C.2d 799, 814-26 (1990), aff’d sub nom. Railway Labor Executives’ Ass’n v. I.C.C., 930 F.2d 511 (6th Cir. 1991).
3. Approval of the Transaction is further subject to the condition that B&LE and CSXT modify or eliminate section 5.14(b) of the PSA governing this Transaction to address the Board’s concerns described above. B&LE and CSXT must submit their proposed changes to section 5.14(b) to the Board by May 6, 2020, for review.
[additional excerpt: "section 5.14(b) is at the very least analogous to an interchange commitment, in that it places restrictions on a purchaser (here, B&LE, a short line) that “limit the incentive or the ability of the purchaser . . . to interchange traffic with rail carriers other than the seller” ... Even if B&LE wanted to explore new competitive options with FGLK or NYSW, including those requiring Board intervention, it would be contractually prohibited from doing so, despite the fact that B&LE owns a nearby line [600 feet away]. Thus, the Transaction as currently structured would put B&LE (and any potential new shippers generated by FGLK or NYSW) in a less favorable competitive position...]
4. Any condition requested by any party in this proceeding that has not been specifically approved in this decision is denied.
5. Petitions for reconsideration of this decision must be filed by April 27, 2020. Requests for stay must be filed by May 13, 2020.6. This decision will be effective on May 21, 2020."

https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/1586198453254/50171.pdf



Edited 1 time(s). Last edit at 04/07/20 05:36 by JPB.

Wow. That is interesting. If I understand correctly, the STB is preventing CSXT from creating paper barriers that would prevent CN from interchanging with other roads, such as NYSW. If CN could connect to the NYSW (and potentially purchase it in the future) it could give CN a direct way into the North Jersey market. It could get interesting in the near future. I wonder if CSXT may try to back out of this deal?



Edited 1 time(s). Last edit at 04/07/20 04:15 by PRR_4859.

Unless things have changed, CSX and NS own preferred stock and veto rights over a sale of NYS&W.

That was part of the Walter Rich estate settlement, I believe.

Posted from Android

I did not realize that was the case with NYSW. Eliminates that option for CN.

PRR_4859 Wrote:
-------------------------------------------------------
> I did not realize that was the case with NYSW.
> Eliminates that option for CN.

They bought control around the time of the Conrail split up, just to prevent CN or CP from doing a deal in order to prevent them from using the NYS&W to access the NYC area.  Conrail had been burned after they gave the NYS&W trackage rights between Warwick, NY and Binghamton, NY, never dreaming the NYS&W would then be able to land SeaLand container traffic.

Will CN get the line all the way to Syracuse? I thought I read in the past that CSXT was going to retain a few miles north of Syracuse.

Thank you in advance.

Does CN have any plans for the new Valleyfield, Quebec terminal?

PRR_4859 Wrote:
-------------------------------------------------------
> Will CN get the line all the way to Syracuse? I
> thought I read in the past that CSXT was going to
> retain a few miles north of Syracuse.
>
CN gets as far as Woodard, NY, which is on the north side of Syracuse. Whether their trains will actually run in to DeWitt Yard or how they'll otherwise handle interchange with CSX is unknown to me.
 

toledopatch Wrote:
-------------------------------------------------------
> PRR_4859 Wrote:
> --------------------------------------------------
> -----
> > Will CN get the line all the way to Syracuse? I
> > thought I read in the past that CSXT was going
> to
> > retain a few miles north of Syracuse.
> >
> CN gets as far as Woodard, NY, which is on the
> north side of Syracuse. Whether their trains will
> actually run in to DeWitt Yard or how they'll
> otherwise handle interchange with CSX is unknown
> to me.
>  

I think the yard tracks at Woodard are a bit too short for effective interchange there, so most likely they will run into DeWitt Yard, wirk the yard, then head further east...