RIO GRANDE FILING PLAN WITH ICC TO CONTROL SFSP

RIO GRANDE FILING PLAN WITH ICC TO CONTROL SFSP

Officials of Rio Grande Industries Inc. are due to file today the company's plan to control the Southern Pacific Transportation Co., and open what may be the final chapter in a five-year ordeal.

Rio Grande won the hotly contested bidding for the Southern Pacific for some $1.8 billion in cash and assumed debts. The Interstate Commerce

Commission proceedings on its plan will bring opposition from several quarters and bids from some railroads for concessions.The ICC has committed itself to investigating and voting on Rio Grande's plan within six months from the filing of this control plan.

The Southern Pacific has been run by a trustee since 1983 when its parent owner merged with the parent owner of the Atchison, Topeka & Santa Fe Railway.

The rail assets of the Southern Pacific were ordered kept separate, while the ICC weighed the merger request. Three years later, the ICC rejected the merger.

After the ICC last year refused to reconsider its rejection of the merger, the combined holding company - the Santa Fe Southern Pacific Corp. - decided to sell the Southern Pacific.

The winning bidder is sure to face an attempt by a primary losing bidder, Kansas City Southern Industries, to get the ICC to award it the Southern Pacific - an unlikely event, according to most industry observers.

A far more serious potential problem for Rio Grande Industries - which operates the Denver & Rio Grande Western Railroad - is the stated intention of the Union Pacific to seek trackage rights into what has been exclusive Southern Pacific territory in Northern California and Oregon.

Rio Grande Chairman Philip F. Anschutz can be expected to vigorously oppose any trackage rights, and especially to the Union Pacific, which he sees as the Southern Pacific's prime competitor.

Opposition can also be expected from the Henley Group, which is embarked in a proxy fight with the current management of the SFSP.

Officials of Henley - the holding company's largest single stockholder - are opposed to the sale of the Southern Pacific, claiming that selling the Santa Fe - generally perceived to be in better financial condition than the Southern Pacific - would be better for the stockholders.

The Rio Grande's plan is expected to quickly gain the public support of rail labor, removing one potential roadblock. Mr. Anschutz has said he intends to honor all existing contracts with the unions.