(The Surface Transportation Board issued the following news release on August 15.)
WASHINGTON — The U.S. Surface Transportation Board announced August 13 that it will institute a proceeding under Ex Parte 647 and hold an oral hearing this fall to consider simplifying abandonment procedures that apply to small railroads. The proposal under consideration would facilitate the sale and preservation of lightly used, low-density branch lines.
“Our clients are extremely pleased with the STB’s action,” said Mark Sidman, a member of the Weiner Brodsky Sidman Kider PC law firm representing the 65 short lines and regional railroads that petitioned the STB in mid-May. “The existing regulatory scheme forces carriers to delay filing for abandonment until after the traffic is gone and the condition of the rail infrastructure has deteriorated.”
Ex Parte 647 proposes giving local shippers and communities enhanced opportunity to preserve lines approved for abandonment. In addition to 90 days’ notice, versus 30 days currently, potential buyers would receive commercial data about the line. Selling carriers would assure the buyer continued access to historic gateways under a haulage arrangement or trackage rights. “The market-based approach urged in the petition will increase the likelihood that low density rail lines will stay in service,” Sidman added.
The proposal is expected to receive broad-based support from small railroads and industry trade associations. “We also think that the proposal should be embraced by shipper organizations and the states,” Sidman said. “They have an interest in improving the odds of keeping marginal lines in service and allowing for rational deployment of capital by small railroads.”
Expedited disposal of low density rail lines would free up scarce capital that could be used to upgrade other portions of the railroad, according to Sidman, and avoid saddling other shippers with the expense of subsidizing unprofitable parts of the system.