WASHINGTON — CSX Transportation has defended its proposed acquisition of New England regional Pan Am Railways.
Vermont Rail System, along with transportation officials from Vermont and Massachusetts, claim the deal would harm rail competition in the region and should face a more thorough review from the Surface Transportation Board. Massachusetts officials and lawmakers also expressed concerns that the transaction would affect current commuter operations and plans to expand passenger service across the Bay State. And the states and Vermont Rail System joined rail labor in requesting additional time to comment on an acquisition that would reshape the New England railroad map.
But in its filing with federal regulators, dated Thursday, CSX insisted its acquisition of Pan Am Railways would boost rail competition.
CSX also said the naming of a Genesee & Wyoming subsidiary as the neutral operator of Pan Am Southern, the 425-mile joint venture that provides Norfolk Southern with access to the Boston area, would maintain competitive routing options for shippers and interchanges that Vermont Rail System currently enjoys with Pan Am Southern at Hoosick Junction, N.Y., and White River Junction and Bellows Falls, Vt.
G&W’s Berkshire & Eastern, CSX noted, will be obligated to operate in the interest of Pan Am Southern, not in the interest of G&W’s other New England railroads to the detriment of Pan Am Southern.
CSX did ask the STB to extend the comment period by 30 days, as merger opponents had requested.
But CSX said the STB should consider the Pan Am Railways acquisition as a minor transaction, not under the more stringent significant transaction rules sought by merger opponents.
Merger opponents also told the board that CSX should not seek to have the Pan Am Southern transaction treated separately as a deal exempt from board review.
CSX pointed out that prior merger deals, including Conrail split, have involved multiple related transactions that while filed separately were considered in parallel.
“No party has offered a valid basis for requesting that the Board classify the Transaction as ‘significant’ or to require the Application to be re-filed,” CSX wrote in its filing. “The Transaction was carefully structured to eliminate potential competitive harm, enhance competition, and improve the rail network throughout the Northeast. The only thing ‘significant’ about the Transaction is the extent to which it enhances competition and strengthens the rail network in the Northeast.”
CSX’s filing also included a letter the railroad sent to Massachusetts officials, pledging to keep dispatching of Massachusetts Bay Transportation Authority commuter service based at the Pan Am headquarters in North Billerica, Mass., for the “foreseeable future.”
CSX also said it would work to maintain fluid commuter operations and cooperate with state officials to expand passenger service west of Worcester, Mass., on its Boston & Albany main line, and elsewhere.
The railroad also said it shares Massachusetts’ officials concerns about maintaining safe operations around a reservoir that provides drinking water for 3 million people in the Boston area.
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