by gokeefe
I have been watching for some time now the state of good repair efforts that have been underway for several years. In the face of declining traffic and revenues Pan Am continues to make unprecedented investments in their plant. I have noticed in particular efforts in areas which have not received assistance related to passenger rail service initiatives. The Freight Main Line ("Back Road") between Royal Junction and Waterville is one example and the Worcester Branch in Massachusetts is another. Neither of these sections of railroad have been or are currently receiving any funding for passenger rail related initiatives nor are they part of the Pan Am Southern partnership. Consequently these investments have been almost entirely "out of pocket" for Pan Am. There were some investments made in Northern Maine between Waterville and Mattawamkeag which were almost certainly related to oil train traffic. However, these efforts have since been terminated or substantially dialed back as the oil trains disappeared.
In general Pan Am Railways, whether now or under the previous management of Mr. David Fink, Sr., has never made substantial improvements or investments in physical plant without new or additional freight traffic loads that justified such investments. At this moment I see no new traffic and continued secular declines that are ongoing in Maine especially. While I would accept an argument based on a different operational philosophy between the two Mr. Fink's this only seems to go so far in the face of what appears to be a major effort to bring the plant into an exceptionally good operational state.
One possible explanation for this change that seems to make sense to me is planning related to succession for Mr. Mellon's estate and the likelihood of a sale of the railroad once time takes its inevitable toll. This event seems likely to be closer now than before and so in some senses the actions of the executives make perfect sense. I am certainly open to much simpler explanations (new track foremen, younger civil engineers, routine implementation of best practices, better control of labor costs etc.) but all of those possibilities seem to fly in the face of what has historically been a very conservative organization that I speculate has always remained focused on delivering reliable dividends to ownership.
All of this being said, and given the private ownership structure of Pan Am, which is still substantially a property of Timothy Mellon and a small handful of other minority investors (three or four others at the most), I think we should have an ongoing conversation about this topic which continues to surface on an almost daily basis elsewhere in this forum.
Is Pan Am Railways being prepared for sale or acquisition?
In general Pan Am Railways, whether now or under the previous management of Mr. David Fink, Sr., has never made substantial improvements or investments in physical plant without new or additional freight traffic loads that justified such investments. At this moment I see no new traffic and continued secular declines that are ongoing in Maine especially. While I would accept an argument based on a different operational philosophy between the two Mr. Fink's this only seems to go so far in the face of what appears to be a major effort to bring the plant into an exceptionally good operational state.
One possible explanation for this change that seems to make sense to me is planning related to succession for Mr. Mellon's estate and the likelihood of a sale of the railroad once time takes its inevitable toll. This event seems likely to be closer now than before and so in some senses the actions of the executives make perfect sense. I am certainly open to much simpler explanations (new track foremen, younger civil engineers, routine implementation of best practices, better control of labor costs etc.) but all of those possibilities seem to fly in the face of what has historically been a very conservative organization that I speculate has always remained focused on delivering reliable dividends to ownership.
All of this being said, and given the private ownership structure of Pan Am, which is still substantially a property of Timothy Mellon and a small handful of other minority investors (three or four others at the most), I think we should have an ongoing conversation about this topic which continues to surface on an almost daily basis elsewhere in this forum.
Is Pan Am Railways being prepared for sale or acquisition?
gokeefe