CSX Acquisition of Pan Am Railways

Link to the application: https://dcms-external.s3.amazonaws.com/ ... 301756.pdf

VRS is right to be worried about being surrounded by Pan Am. The B&E deal basically leaves their southern connections in the hands of their main competitor. VRS hasn't asked for trackage rights, simply that the application be rejected, or upgraded from a "minor" one to a "major" one. The language used made it seem that VRS is simply using this as a negotiating tactic against CSX, NS, and G&W.

Here was the attached map:

What the map also makes clear is just how dominant G&W lines will be in terms of providing freight service to the state of Connecticut - with the exception of the Housatonic, virtually every freight railroad in the state will be a G&W line.

Joshua

So why wouldn't VRS ask for trackage rights? If they could connect directly with NS and CSX in New York, and maybe with CSX in Springfield (or Palmer, or Ayer, or Worcester?) it seems like they might be better off than they are now, no?

While certainly I can understand VRS' position, which I pointed out earlier in this thread, .... this is a stupid tactic on their part.

What they should have done is pointed out their disadvantaged position AND asked for a remedy or solution. Basically trackage rights to Mechanicville and from Bellows Falls to Springfield (or whatever best interchange with CSX).

Instead, they now have a pissed off CSX (that should be a great 'negotiation"), who has a simple rebuttal -- VRS still has a class I gateway (CP) AND the economic and competitive benefits of the Pan Am/CSX, and B&E/PAS deals outweigh the position of VRS.

Further, it can be claimed that in reality, if PAS continued to exist and service the current traffic patterns (I think that's in the application) that really no harm comes to VRS end of the day.

If I were VRS I would have tried to be a little more diplomatic in courting CSX, not spiteful. Also no one likes a whiner (but really).

I wonder if CSX and NS asked both Vermont railway and G&W if they would like to be a partner in PAS or if just offer it to G&W. I see that they may have offered it G&W is so CSX has to deal with only one interchange partner. There is already freight to CSX in Palmer and will not have to interchange in Springfield and Palmer if Vermont Railway takes over PAS.

Apparently the VRS has not heard of don't bite the hand that feeds you. I agree with CN, this transaction is going to happen either way, proposing an approval based on a contingency that would be beneficial to them would have been the correct course of action, not outright refusal.

This will only make the VRS/G&W spat worse and now they have a 800 lb gorilla against them. CSX can twist their screws in multiple ways including putting their new NEGS venture effectively out of business if they wanted to post sale.

Why didn't VRS bring up this issue in the months leading up to CSX application? You would think they would have been purvey to certain info prior to CSX filing, even if they weren't, you would think a phone call to CSX to express their issue after the fact, would have probably yielded better results.

It's possible that VRS is still trying to figure out what their request/response should be. Any sort of trackage rights carries with it economic consequences as well (additional crews, more locomotives needed, etc.). The biggest thing they seem to be saying with their existing response is "the abbreviated schedule that comes with treating this as a minor transaction isn't enough time for us to provide a full, detailed response to this. We need more time, and the only way to get that is to push back on what's been submitted. We've raised some (we think) valid reasons why this should be slowed down. Please listen to them and give us the time we need."

You really can't say they have not had enough time to figure this out can you? We've been watching this for months and they knew it was happening. Not that difficult to figure out a set of responses to the "what ifs".

That's assuming they were purvey to the information prior to the filing, could it be possible they learned of the details after the fact?

I've had some time to think about it, and it is certainly in VRS's best interest to try and delay this transaction as much as possible. Excluding the isolated New York & Ogdensburg, New England Southern, and WACR Granite District, 4 out of 6 interchange points will be with G&W roads. (The other two are with CP at Whitehall and Newport.) Trackage rights to Rotterdam Junction, New York and Springfield, Massachusetts would be the obvious solution. However, VRS runs the risk of getting "Delaware & Hudson Syndrome," where access to the outside world is over the tracks of your competitor. I don't think that routing all traffic though Whitehall is an option either. I still think that this is a negotiating tactic by VRS in order to bring CSX, NS, and G&W to the table regarding further concessions. Whether it will be successful remains to be seen.

The language used made it seem that VRS is simply using this as a negotiating tactic against CSX, NS, and G&W.

I agree. Here's the specific language that indicates resolving the issue would make the opposition disappear along with a little compliment to CSX for trying to address any anticompetitive issues.

VRS is pleased that CSX, in particular, has expressed interest in resolving the anticompetitive impacts of the B&E-PAS Transaction. But it will take more than CSX- driven accommodations to resolve the problems that the B&E-PAS transaction creates. Other interested parties must actively participate in such efforts going forward. But, until such a resolution may be achieved, VRS must oppose...

But can PAS actually give VRS trackage rights to Rotterdam Junction without CP's approval as PAS itself needs to use trackage rights over CP to get to RJ?

Massachusetts has chimed in. Not surprisingly, they have raised the issue of the Wachusett Reservoir:

https://dcms-external.s3.amazonaws.com/ ... 301761.pdf

Mass has had this issue since the reservoir opened 100 plus years ago. And the RR predates the reservoir. During that time the route has had both very heavy and light traffic. At times under the B&M and GTI/pan am the track was garbage. There is really nothing new for them to complain about