CSX: Basics of the PAR Acquisition

NEED-TO-KNOW INFO ABOUT THE CSX FILING TO ACQUIRE PAR: BASIC STRATEGY, HOW IT'S GONNA WORK, STB FILINGS

26.February, Washington DC – CSX filed with the Surface Transportation Board an APPLICATION to acquire Pan Am. Docketed as No. FD 36472, five other documents under that docket, plus one other related filing (Docket# AB 1312) were posted to the STB website at the same time as the APPLICATION. Many additional filings are expected.

Editor’s Note: This is a very complex series of filings, referencing numerous current, obscure, and captive entities, agreements, and events. All of the related filings have been redacted to protect competitive information. The R&P editorial staff will present our best effort to discern, understand, clarify, and explain the numerous complicated and subtle elements of the filing documents and the proceedings, for the benefit of our subscribers. Constructive comments are welcome. As always, we appreciate the interest of our readers. 

 

The APPLICATION is the foundational document of the docket. It is titled,

CSX CORPORATION AND CSX TRANSPORTATION, INC., ET AL.

—CONTROL AND MERGER—

PAN AM SYSTEMS, INC., PAN AM RAILWAYS, INC., BOSTON AND MAINE
CORPORATION, MAINE CENTRAL RAILROAD COMPANY, NORTHERN RAILROAD,
PAN AM SOUTHERN LLC, PORTLAND TERMINAL COMPANY, SPRINGFIELD
TERMINAL RAILWAY COMPANY, STONY BROOK RAILROAD COMPANY, AND
VERMONT & MASSACHUSETTS RAILROAD COMPANY

The APPLICATION

Writ large, the APPLICATION (Filing 301684) seeks to establish Genesee & Wyoming’s Pittsburg & Shawmut Railroad (doing business as Berkshire & Eastern Railroad, and heretofore referred to as “B&E”) as the operator of the Pan Am Southern railroad, and to incorporate the rest of PAR’s assets into CSX in such way as to gain STB approval for the $600 million transaction. Additionally, the APPLICATION details the scheme of operating and access adjustments to the existing regional freight rail network, calculated to encourage STB approval. These changes are reflected in a series of ancillary filings.

NS via CSX
Norfolk Southern will acquire overhead trackage rights on CSX to operate run-through trains between Ayer MA and Voorheesville NY. The route is cleared for domestic double-stack container cars. At Ayer, NS will run ~3.0 mi over Shawmut Line (ex-PAS) track to Harvard Station, ~23 mi over CSX (ex B&M/PAR) to Barbers Station, ~1.0 mi over P&W/GWI to the head of the CSX Main line at Worcester Union, and ~162 mi on the CSX Main line to Voorhiesville NY via Selkirk. At Voorheesville NS joins its own track ~15 mi, joining the NS Main Delanson.

Ancillary filings

In four filings on Docket FD 36472 , PAS half-owner Norfolk Southern establishes new double-stack access along ex-PAR and current CSX and GWI lines:

1. between Ayer and Harvard MA (~3 mi via PAS),

2. between Harvard and Barbers Station (Worcester MA) via (~22.7 mi via PAR/B&M),

3. between Barbers and the head of the CSX Main line, (1.05 mi via Providence & Worcester/GWI), and

4. along the CSX Main line to Voorhies NY (~161.5 mi via CSX).

In the fifth filing on Docket FD 36472, the Pittsburg & Shawmut Railroad  (the “Shawmut Line”) seeks STB authority to operate Pan Am Southern’s ~425 mi of owned (~281.38 mi) and leased (~143.62) lines, upon CSXT’s acquisition of 50% interest in PAS. Shawmut will essentially supplant Springfield Terminal as the contracted operator of the PAS network. As with ST, Shawmut will operate the lines on behalf of the company’s two equal owners (NS and CSX), and without preference for either.

On a separate docket (AB 1312), NS serves notice that it is discontinuing SMS Rail Lines’ operator status along a ~15-mi stretch between Voorhies and Delanson NY (south of Schenectady). That line will connect NS traffic allowed via CSX through Selkirk NY back on to the NS Main line.

Documents filed with STB

Official Filing Date Docket Number Filing ID Filed For Filing Type Docket Title Attachment
2/25/2021 AB_1312_0_X 301685 Norfolk Southern Railway, acting on behalf of SMS Rail Lines of New York, LLC Notice Of Exemption SMS RAIL LINES OF NEW YORK, LLC – DISCONTINUANCE OF LEASE AND OPERATIONS AUTHORITY – IN ALBANY COUNTY, N.Y. 301685.pdf
2/25/2021 FD_36472 301684 CSXC and CSXT, Pan Am Systems, Inc. Application CSX CORPORATION AND CSX TRANSPORTATION, INC.—CONTROL AND MERGER— PAN AM SYSTEMS, INC., PAN AM RAILWAYS, INC., BOSTON & MAINE CORPORATION, MAINE CENTRAL RAILROAD COMPANY, NORTHERN RAILROAD, PAN AM SOUTHERN, LLC, PORTLAND TERMINAL COMPANY, SPRINGFIELD TERMINAL RAILROAD COMPANY, STONY BROOK RAILROAD COMPANY, AND VERMONT & MASSACHUSETTS RAILROAD COMPANY 301684.pdf

 

2/25/2021 FD_36472_5 301683 Pittsburg & Shawmut Railroad, LLC d/b/a Berkshire & Eastern Railroad Petition For Exemption PITTSBURG & SHAWMUT RAILROAD, LLC d/b/a BERKSHIRE & EASTERN RAILROAD – OPERATION OF PROPERTY OF RAIL CARRIER PAN AM SOUTHERN LLC – PAN AM SOUTHERN LLC AND SPRINGFIELD TERMINAL RAILWAY COMPANY 301683.pdf
2/25/2021 FD_36472_4 301682 Norfolk Southern Railway Company Notice Of Exemption NORFOLK SOUTHERN RAILWAY COMPANY – TRACKAGE RIGHTS EXEMPTION – PAN AM SOUTHERN LLC 301682.pdf
2/25/2021 FD_36472_3 301681 Norfolk Southern Railway Company Notice Of Exemption NORFOLK SOUTHERN RAILWAY COMPANY – TRACKAGE RIGHTS EXEMPTION – BOSTON AND MAINE CORPORATION 301681.pdf
2/25/2021 FD_36472_2 301680 Norfolk Southern Railway Company Notice Of Exemption NORFOLK SOUTHERN RAILWAY COMPANY – TRACKAGE RIGHTS EXEMPTION – PROVIDENCE AND WORCESTER RAILROAD COMPANY 301680.pdf
2/25/2021 FD_36472_1 301679 Norfolk Southern Railway Company Notice Of Exemption NORFOLK SOUTHERN RAILWAY COMPANY – TRACKAGE RIGHTS EXEMPTION – CSX TRANSPORTATION, INC. 301679.pdf
2/25/2021 FD_36472 301678 CSX Corporation CSX Transportation, Inc. Pan Am Systems Inc. Motion For Protective Order CSX CORPORATION AND CSX TRANSPORTATION, INC.—CONTROL AND MERGER— PAN AM SYSTEMS, INC., PAN AM RAILWAYS, INC., BOSTON & MAINE CORPORATION, MAINE CENTRAL RAILROAD COMPANY, NORTHERN RAILROAD, PAN AM SOUTHERN, LLC, PORTLAND TERMINAL COMPANY, SPRINGFIELD TERMINAL RAILROAD COMPANY, STONY BROOK RAILROAD COMPANY, AND VERMONT & MASSACHUSETTS RAILROAD COMPANY 301678.pdf

 

Entities

B&E      Berkshire & Eastern Railroad, operating subsidiary of Pittsburgh & Shawmut Railroad, LLC (GWI)
B&M      Boston & Maine Corporation PAR)
CSO      Connecticut Southern Railroad (GWI)
CSX      CSX Corporation and CSX Transportation, Inc.
GWI      Genesee & Wyoming Inc.
MEC      Maine Central Maine Central Railroad Company (PAR)
NECR      New England Central Railroad (GWI)
Northern      Northern Railroad (PAR)
NSR      Norfolk Southern Railway Company
P&W      Providence and Worcester Railroad Company (GWI)
PAR      Pan Am Railways, Inc., comprising B&M, MEC, PT, ST, Northern Railroad, SBR, V&M
PAS      Pan Am Southern LLC (PAR/NS)
PT      Portland Terminal Portland Terminal Company (PAR)
SMS      SMS Rail Lines of New York, LLC
ST      Springfield Terminal Railway Company (PAR)
STB or Board      U.S. Surface Transportation Board
SB      Stony Brook Railroad Company
V&M      Vermont and Massachusetts Railroad Company