CSX Acquisition of Pan Am Railways

newpylong wrote:Others can fill in the blanks.

Pan Am interchanges with the New Brunswick Southern there. Pan Am started having CMQ bridge this traffic for them Northern Maine Junction to Brownsville vs going to Keag due to deteriorating track conditions.

CP did not continue the agreement with Pan Am that the CMQ had moving their NBSR haulage from NMJ to Brownsville, therefor Pan Am doesn't really have much of a choice but to go back to interchanging with the NBSR at Keag. I would imagine sinking money into this line is on hold with a potential sale in the works.

FWIW the latest scuttlebutt out of Billerica is two Class Is are interested, and Watco is as well. I can see a slice and dice in the future.

It very well could be that CP has provided notice to Pan Am that they will discontinue the NBSR haulage to NMJ, but that traffic is still moving via Brownville Jct. and NBSR-CP. Pan Am currently utilizes the Keag trackage occasionally to haul captive cars to the tie chipper and back.

As to rebuilding the Keag route, I'll believe it when I see it. In my time living next to the line (17 years on and off now), I have seen it upgraded twice with tie blitzes and a few dumps of ballast. Never enough to do anything other than get it back open and running at 10 MPH. The real issue is that it needs SIGNIFICANT ballast - in the spring it shifts like a Maine highway with frost heaves because most of it sits on the ground.

One other point - Pan Am may put yet again, just enough work into the line because of the new spur being installed at the Pleasant River Lumber plant in Howland. Enough carloads there and maybe it is worth another tie blitz and a few more ballast dumps one more time.

codasd wrote: ↑Mon Aug 17, 2020 6:06 pm I don't think TM cares if it is split 1 or 10 ways.

That's not what I've heard.

How big a customer is Pleasant River supposed to be?

All I can say about the Keag line is they applied for a Federal grant. Who knows in 2020 too how those even will work out (will the $$ be there still?) but the grant is sizable as is the scope of work (its a very ambitious plan lets put it that way). I believe the D1 grant was not used in favor of trying to secure funding for this 'Corridor' project (yes it has a name).

Why are federal grant details a secret?

Might we wonder where some of the sale proceeds end up?

https://www.nytimes.com/2020/08/16/us/p ... d=em-share

Fair Use:

Timothy Mellon, reclusive heir to a Pittsburgh banking fortune, was such an unknown figure among Republican operatives that they needed to Google his name when he reached out in 2018, unexpectedly, to offer his help in the midterm elections.

The staff of the Congressional Leadership Fund quickly discovered this was no middling donor: Mr. Mellon planned to give $10 million — with the suggestion that he wanted to contribute more to the party at a later date, according to two people with knowledge of the exchanges.

This April, Mr. Mellon gave another $10 million, this time to President Trump’s super PAC, America First Action, the only Trump-endorsed fund-raising group permitted to collect unlimited contributions. The donation instantly transformed Mr. Mellon, a septuagenarian investor who would sometimes communicate by fax, into the president’s biggest political benefactor o..

No further comments regarding such from this author.

Interestingly if you check out the NS route map it shows them going all the way to Waterville:

http://www.nscorp.com/content/nscorp/en ... rview.html

That's been on their map for years. They have haulage rights to Waterville which came to be as part of the creation of PAS. CSX also has haulage rights to Rigby as a legacy of the Conrail years. Doesn't really mean anything.

Haulage rights should mean NS is getting the revenue for carloads shipped to (and maybe from?) Waterville but NS pays PAR operating expenses from/to Ayer, I'm guessing. And same for CSX to/from Rigby, I would think. If true, then I don't think NS or CSX want to lose those revenues when Pan Am is sold to someone else.

It means PAR is moving their traffic at an agreed upon rate, if they are actually exercising the rights. Someone can correct me but I don't think there is currently any NS overhead haulage occurring over PAR. At least there never used to be.

I will say it again...
The more complicated the sale, split up over several buyers, the more red tape there will be and the longer Tim Mellon has to wait for his money. This is still an "all or nothing" sale at this point. They aren't entertaining any break up. There are enough players bidding with deep pockets that a split up is not on the radar. And again, NS has had ten years to get off the pot and buy everything and they still haven't.

Also - those NS haulage rights to Waterville are not in use. Pan Am's Springfield Terminal keeps 100% of the revenue for the Maine to Ayer or Worcester part of a shipment. Pan Am Southern gets their own revenue when cars move locally at, or West of, Ayer. So NS gets 50% of a PAS revenue, and then their own revenue West of Mechanicville.

Cosakita18 wrote: ↑Tue Aug 18, 2020 12:54 pm

bostontrainguy wrote: ↑Tue Aug 18, 2020 12:31 pm Interestingly if you check out the NS route map it shows them going all the way to Waterville:

http://www.nscorp.com/content/nscorp/en ... rview.html

That's been on their map for years. They have haulage rights to Waterville which came to be as part of the creation of PAS. CSX also has haulage rights to Rigby as a legacy of the Conrail years. Doesn't really mean anything.

So competition will be maintained after the sale, right? If so then STB approval should be easy.

NS had haulage rights to the Waterville intermodal ramp from 1998, last used 2004 or so and since expired. NS has no desire to run intermodal to Maine - profitable intermodal lanes need balance - and there isn’t much long haul freight going into Central Maine. CSX never had any haulage to Rigby.

As for PAS - NS doesn’t get 50% of the revenue - they get 50% of any profit - if there is any.

Not only did CSXT have haulage to Rigby but all the way to Keag. Pan Am was moving CSXT-NBSR overhead haulage and it was quite substantial prior to rerouting over to MMA/CMQ. It tailed off after that.

PAS is profitable.

The sale has been narrowed down to 6 candidates. 3 are Railroads (rumored to be NS, CN, and Watco) and the other 3 are investment companies.