CSX Acquisition of Pan Am Railways

roberttosh wrote: ↑Sat Jan 15, 2022 4:37 pm First, some of that NS lumber traffic ends up in shared asset (both North Jersey & Philly), where CSX will now have single line pricing and a more direct route.

Mr. Tosh, possibly I'm mistaken, but I don't think I am, roads (NS, CSX, CP) that have Conrail Shared Assets access make their own rates, subject to non-discrimination provisions still applicable post-ICC, and do not divide them with CRSA. They pay CRSA for the access.

What I don't know is if CRSA is treated as a Jointly Owned Terminal Company with $0 profit or loss or if it is a proprietary business entity.

CN, I guess we will have to agree to disagree. The proof will be in what CP's car counts in Maine look like a year or two from now.

Mr Norman, yes both NS and CSX can price directly in or out of shared asset, my point is that in a few months, CSX will be able to offer shippers single line pricing from ME & NB to shared asset (North Jersey and Philly), over a much more direct route via PAR/B&A to Selkirk and directly down the river line, whereas CP/NS can only offer 2 line pricing via a much more circuitous routing through Montreal, Binghamton and Harrisburg. No matter how you slice and dice it, CSX is clearly going to be in the driver's seat.

I spoke with someone today who heard (I guess it's a rumor?) that CSX wants to run the Rumford branch via Waterville. Not sure how true that is, but it would be interesting and support the notion of Rigby being significantly downsized and converted to an intermodal facility. I guess the idea would be that Waterville would serve as a nexus for all Central ME traffic, as well as CP, Irving and anything else. Might work too if they do keep Waterville, to have a power servicing facility. Rigby would be local traffic with block swaps en route. You could certainly run a 9000' train Waterville to Worcester and onward to Selkirk with that scheme. We'll see how it all shakes out...

That could indeed be interesting. It also sounds like in yesterday's hearing, CSX made it clear that they won't be hauling everything up to Rigby anymore like Pan Am does now, only to be brought back South, but will instead build multiple blocks for drop off along the way. As has been discussed, they will likely make somewhere like Lawrence their Eastern MA and NH hub.

backroadrails wrote:Back to the $100 Million that CSX is promising to invest, how much of that is to do the work Pan Am already had grants for? The Royal jct to Waterville upgrade was in the ballpark of $20 million, without looking at the PDF to be sure of the number, the Waterville to Mattawamkeag project included bridge work and was going to be a tad over 24 million.

Your numbers are off by quite a lot. To get from Royal Junction to Waterville to 40 (which includes new rail, switches, along with bringing several sidings on power) it was going to cost $35 Million which was split between federal grants, DOT grants, as well as capital Pan Am was looking to invest. To rehab from Waterville to Keag to get it up to 25 MPH, the DOT estimated it would cost $42 Million. Even then that only replaces about 75 miles of worn rail, in addition to upgrades to 20+ bridges. The DOT put a hold on those grants, so if CSX ends up with the railroad they wont be getting any free money from the taxpayers. So in essence, that alone is over 3/4 of the $100 million CSX said they would invest. Between the proposed work in Mass, and the work in Maine it doesn't appear anything besides the freight main will be upgraded in the near future. Luckily CSX has the money to hire RJ Corman or Hulcher to clean up the derailments...

Bet Timmy has been a good customer for the "Hulcher Vultures" and that Chessie would like to be less so.

I like to think "they ain't dumb" @ 500 Water and are aware that the public funding for these Maine projects could dry up post-merger. Obviously, Chessie knows she will be on Kibbles and Bits rather than Fancy Feast for a while.

Sure sounds like that $77M (35+42) noted by Mr. CPF will only buy a Class 2 (25mph) road; hate to think what the number would be for Class 3 (40mph), which I would think would be needed to be competitive to attract manufactured goods maritime traffic from Saint John.

Gilbert B Norman wrote: ↑Sun Jan 16, 2022 9:47 am Bet Timmy has been a good customer for the "Hulcher Vultures" and that Chessie would like to be less so.

On the contrary, Pan Am is one of the last (maybe the last?) regional railroad in the country to still employ its own in-house wreck cleanup outfits. Two of them, in fact: one based at East Deerfield and the other based at Waterville. AFAIK Timmy has never paid a penny to Hulcher or Corman.

Here are some recent photos of Pan Am wreck trains:

At Carmel, ME: http://photos.greatrails.net/s/?p=256492

At Plaistow, NH: http://photos.greatrails.net/s/?p=256040

At Wendell, MA: http://photos.greatrails.net/s/?p=207108

At Lowell, MA: http://photos.greatrails.net/s/?p=256451

As for unit ethanol... actually ethanol for blending. Canada lets provincial rules govern the blends but new laws are starting to push higher ethanol content in gasolines for Canadians. CP already moves E85 (3475) but CN moves E85 plus some 1987 placards.

This got me curious about potential. Current gasoline consumption in the Maritimes (NB/NS/PEI) is less than 2MM gal/day... a little more than Maine. If all ethanol moved into the market by rail for an E85 blend, that would that be about 1 unit train every 7-10 days.

CN got a few big blocks last year as trials but I haven’t seen much else. The 3475 comes in both carriers I believe. Some more interesting news on this:

https://www.cbc.ca/news/canada/new-brun ... -1.6256225

CPF66 wrote: ↑Sat Jan 15, 2022 10:37 pm Your numbers are off by quite a lot. To get from Royal Junction to Waterville to 40 (which includes new rail, switches, along with bringing several sidings on power) it was going to cost $35 Million which was split between federal grants, DOT grants, as well as capital Pan Am was looking to invest. To rehab from Waterville to Keag to get it up to 25 MPH, the DOT estimated it would cost $42 Million. Even then that only replaces about 75 miles of worn rail, in addition to upgrades to 20+ bridges. The DOT put a hold on those grants, so if CSX ends up with the railroad they wont be getting any free money from the taxpayers. So in essence, that alone is over 3/4 of the $100 million CSX said they would invest. Between the proposed work in Mass, and the work in Maine it doesn't appear anything besides the freight main will be upgraded in the near future. Luckily CSX has the money to hire RJ Corman or Hulcher to clean up the derailments...

I thought the grant money is still there. They are just waiting for the transaction to shake out before any grant work is started. CSX mentioned it in their application. When you say put a hold on the grant, are you saying temporary or permanent?

What we don't know (but everyone appears to be assuming, without actual knowledge) is if the $100 million CSX has promised to invest is $100 million total, including all of the grants, or $100 million out of pocket, which when added to the grants would result in a significantly higher total. The Waterville-Royal Jct improvements are funded as a 1:1 match between Federal and railroad funds, with a small amount coming from Maine DOT. If we assume the $100 million is cash from CSX's pockets, that adds $17-18 million (based on the documented cost estimates). I don't have the figures in front of me for the other matching grant amounts, but I suspect the total amount that's going to be spent is significantly more than $100 million once all is said and done....

On the first day of the STB two day hearing CSX continually mention the $100m 'they' would be investing in the property the first two years. I did not hear them mention once any state or federal money. I know it is a nuance but I too hope the monies are on top of the grants.

It is from their own pockets and the grants are just on hold until the sale.

It's going to take a lot more than that to get up to Keag up to Class 3, but they haven't said that is their goal for the first few years.

'evening, all!

Been following this discussion with a lot of interest - this looks like it will have seismic effects on the northeast for at least a few years to come.

While all this D1 and D2 discussion and predictions have been fascinating, I was wondering if I could get any thoughts on the future of a line in my neck of the woods- namely the CT River Line between Deerfield and Springfield. Do you guys see the line serving any purpose beyond Amtrak and the one periodic PLED/EDPL train? I'd love to see the line get more action, but am not sure if that's in the cards with this transaction.

Anyone want to take a stab at predicting its future?

Here are the grants CSX expects/hopes as well as $ the RR will invest out of pocket for the various PAR and PAS infrastructure upgrades post acquisition as snipped from the amended acquisition application filed with the STB July 1, 2021. Approximately $118.2M of existing and pending grants plus "RR" contribution are to be used of which CSX/Pan Am will contribute $53.4M. And approximately $93.3M of committed grant + RR $ are to be used for PAR upgrades in Maine, with CSX responsible for $44.8M. The balance of the $ go to PAS upgrades.