(The following story by John D. Boyd appeared on the Traffic World website on October 3.)
WASHINGTON, D.C. — Norfolk Southern Railway’s bid to unite with Pan Am Railways in a New England joint venture network will go slower than first expected, after the Surface Transportation Board decided to conduct a limited environmental study.
The STB had deemed the deal as “minor,” which under its rules put the plan on a fast-track regulatory review, and set a schedule in June that would have allowed the venture to take effect Nov. 4.
But some critics said that the plan was a bigger deal than the STB’s initial treatment recognized.
NS and Pan Am aim to share ownership 50-50 in a new rail firm they would call Pan Am Southern, using PAR’s 155 miles of track between Boston and Albany, N.Y. – plus another 281 miles of secondary and branch lines in five states – while NS sinks cash and property totaling $140 million into the lines to upgrade the network for more traffic.
At first, NS and Pan Am saw no need to any impact study that might slow te STB’s approval. “Applicants maintain that the transaction would not have significant environmental impacts,” the STB said in June, “because it would not cause significant changes in railroad operations and that further environmental review is not warranted.”
But the STB said Sept. 24 that after some commenters expressed concerns about potential effects of the venture, Pan Am and NS requested an environmental assessment from the STB – a less time-consuming review than a full-fledged environmental impact statement.
Some observers likened the deal to the well-regarded NS deal with Kansas City Southern in Mississippi to create a high-speed track zone called the Meridian Speedway.
NS and Pan Am said their efforts would form what they called the “Patriot Corridor” in New York, Massachusetts, Connecticut, Vermont and New Hampshire. It would soon have new intermodal and automotive terminals, boost train speeds and expand capacity. Pan Am’s Springfield Terminal Railway subsidiary would operate the venture.
It drew support from some area short lines and state governments, but others, including the state of Massachusetts, began raising objections.
Unions questioned its labor protections or whether litigation by railcar supplier Greenbrier could push Springfield Terminal into receivership, while Massachusetts and some allies asked for a public hearing and oral arguments in the case.
But while the assessment puts the earlier approval schedule on hold, STB Chairman Charles D. Nottingham and Commissioner W. Douglas Buttrey also rejected requests for a public hearing and oral arguments.
“We believe that the material issues in this case can be fully presented and addressed through the written record and that oral argument is not necessary,” the board said.
That prompted a partial dissent from Vice Chairman Francis P. Mulvey, the board’s lone Democratic appointee who has regularly challenged the majority.
“I believe oral arguments would have augmented our understanding of the wide-ranging impact of the proposed transaction and its potential regional significance,” he wrote.
Mulvey also reiterated his objection to call this a minor deal in the first place, saying transactions “that are likely to have substantial regional impacts if approved and implemented” should be given “the fullest possible scrutiny.”