New England Gets Rail Joint Venture

Federal regulators cleared the way for Norfolk Southern Railway and northeastern short lines operator Pan Am Railways to launch a New England joint venture railroad.

The Surface Transportation Board said they can set up Pan Am Southern as a new rail carrier to operate 437 miles of track, including an east-west corridor between Boston and Albany, N.Y., plus nearly 300 miles of secondary and branch lines that reach into Connecticut, New Hampshire and Vermont.

PAS will own 238 miles of track that take in some Pan Am properties, and use trackage rights over the rest of the new system. Norfolk Southern is committed to spending $87.5 million in cash to improve the PAS network and is putting some of its property into the new firm.

NS and Pan Am, which will share ownership equally, have also said they plan to build new intermodal and automotive terminals near Albany.

The STB must consider the impact on competition when it reviews rail venture proposals. In its unanimous decision, the board said “it appears the transaction would significantly increase competition between railroads” by upgrading an east-west mainline route for PAS to compete with CSX Transportation.

The regulators ordered standard industry labor protections on major portions of the new PAS system, as sought by unions for train conductors, engineers and other workers.
Those provisions include six years of income protection, while dismissed employees would be given priority in rehiring plus training in other job crafts.

Contact John D. Boyd at jboyd@joc.com.