MassDOT Acquisition of Framingham Secondary

[F-line to Dudley via Park]

I recall CSX was asking $5 million (?) for the line from downtown Leominster to Fitcburg a few years ago, quite the price. Agreed on the NIMBY towards freight trains in Leominster, people don't like the horns issue, from the 2-3 times per week they enter the area. And the City of Leominster filed a law suit against CSX for a washed out culvert behind the Long Horn Steakhouse for environmental and safety reasons. Not sure how that law suit was resolved...

J

That was just CSX trolling the Town of Leominster with that asking price. It was a town-level negotiation, with MassDOT not involved. And it was wrapped in a whole angry storm cloud of bad blood and mistrust between town and freight carrier, so neither party was exactly acting in good faith and both were itching for a fight. Leominster disbanded its trail group after that debacle, and said they refuse to try again as long as CSX is the owner. Probably won't be another trail effort until MassDOT buys it.

The $29M for the Framingham Secondary sets the theoretical ceiling for how much this line could conceivably cost. It's not a critical thru freight corridor, only having a daily local for on-line business. And the Framingham-Clinton, Clinton-Leominster, and Leominster-Fitchburg segments are of very unequal value vs. the Framingham Sec. which is more or less end-to-end balanced by a lower half with max passenger considerations and an upper half with the most thru freight considerations. I doubt CSX's valuation for the whole end-to-end line is going to exceed $15-19M.


But, again, speculative. MassDOT's not going to approach CSX for the Fitchburg Sec. It's going to be CSX approaching them about dumping its last Eastern MA line ownership off of Jacksonville HQ's tax ledgers. They only have 2 branchlines longer than a 1-mile industrial track left in MA: this one, and the Milford Branch. And Milford's probably going to get transacted to the state soon after G&U takes over as the freight carrier. The MBTA already has a pre-existing Conrail lease agreement from 1988 for the Forge Park commuter rail extension that contains an outright purchase clause, CSX really really isn't going to want that on their tax rolls after they stop using it, and it'll be the best for all parties if MassDOT takes over and G&U doesn't have to answer to an absentee landlord. Some time after that, when the Fitchburg Sec. sticks out like a sore thumb as CSX's very last branchline ownership (and not an overly critical one at that)...Jacksonville's probably going to want it off their books. They've been completely consistent since taking over from Conrail about methodically selling off-main properties to MassDOT for as good a price as they can negotiate. They've been almost as much a real estate company in MA as a railroad the last 15 years, and these are the last non-critical pieces to cash out of before they've got their idealized network: complete control of the main, state-modernized yards, outsourcing to as many landlocked shortlines available, and trackage rights floated by public investment everywhere else. It's an inevitability their last two branch ownerships are going to get treated completely consistent with that overarching plan.

[BandA]

What's the value of the perpetual freight rights that CSX is retaining? I assume that allows them to run an unlimited number of freight trains on those 21 miles, forever and for free on track maintained by state? Also note massdot is using a Chicago specialty law firm for their STB filings

[F-line to Dudley via Park]

What's the value of the perpetual freight rights that CSX is retaining? I assume that allows them to run an unlimited number of freight trains on those 21 miles, forever and for free on track maintained by state? Also note massdot is using a Chicago specialty law firm for their STB filings

Probably similar to the PAS sale of the Conn River. Absolutely no restrictions to CSX freight, slots or clearances. It's a wide clearance route, meaning any stations (as is planned for Foxboro) must get freight passing tracks before full-high platforms can be constructed. Otherwise must be mini-highs with retractable edges. CSX is likely perpetually responsible for maint costs attributed to wear its freights put on the infrastructure, MassDOT responsible for all passenger-related physical plant maint. Etc., etc. It's all pretty boilerplate if you take a random sample of STB filings in any region of lines with similar passenger/freight + public/private considerations.

Framingham Sec. only used for 3-4 freight round-trips per day on the upper half that has no passenger considerations, and 2 round trips per day on the lower half. Upper half probably has some growth potential for more runs, but we're talking pretty inocuous freight schedules overall. And the T's only going to use the upper half for equipment swaps, for which it is pretty handy. Maybe in the future if the upper is less godawful-slow they might consider a Pats game-day train out of Worcester. A private group considered funding that 1-2 years ago, but track speeds and the fact that I-495 just isn't that bad Hopkinton-Foxboro on Sundays and night games make that have pretty much zero demand compared to the very well-patronized game trains from Boston and Providence.

[boatsmate]

CSX is going to be very careful when they decide to finally get ride of the Northern end. Like the Southern end, they are concerned about someone else (P&W on the South, and PAN AM on the North, having new access to the Boston Region they don't now have. so don't look for CSX to dump tose areas too quick.

[F-line to Dudley via Park]

CSX is going to be very careful when they decide to finally get ride of the Northern end. Like the Southern end, they are concerned about someone else (P&W on the South, and PAN AM on the North, having new access to the Boston Region they don't now have. so don't look for CSX to dump tose areas too quick.

They wouldn't be dumping freight rights at all. Read the legalese on these STB filings for the Framingham Sec. sale. It's all gummed up with with exclusive-and-perpetual freight rights clauses preventing exactly that scenario. The state cannot allow another freight carrier to use trackage rights--including overhead-only--on any of the line without CSX being the party initiating that request. Nor can it compel CSX to do haulage for another carrier. This is simply a title/deed transfer of the land and hardware to MassDOT so Jacksonville HQ can scrape a few more bucks of tax bills off its remaining Eastern MA holdings and get some publicly-paid track upgrades in the trade. Same exclusive/perpetual language is prominent throughout the PAS Conn River Line sale to the state (to shut out NECR and CSOR from connecting without PAS's consent) and on the earlier CSX line sales of the Worcester Line, Grand Junction Branch, and Port of South Boston. The only thing they lose control over are the passenger rights...which are completely irrelevant to them.


Second. . .

There's additional competitive intrusion protection in the agreements CSX has been cutting with shortlines to outright dish off freight territory. For example, the hand-off of Fall River and New Bedford freight rights to MassCoastal a couple years ago. P&W still has overhead rights from East Junction, Attleboro to Attleboro Jct., Taunton, Fall River, and the state line to access its local rights from the Tiverton side of the state line to downtown Newport. Even though the Tiverton connection has been out-of-service for over 25 years (they kept their paper rights at RIDOT's request so the line wouldn't slip into abandonment). However, despite now overlapping MassCoastal everywhere from Weir Jct. to the state line MC cannot set up an interchange with P&W. Not even with trickery like shunting 1 car a coupler's length over the state line for P&W to pick up on Tiverton terra firma and take back home overhead. CSX's agreement transferring the rights to MC mandated that any freight in ex-CSX/Conrail legacy territory could only interchange with CSX. And since 100% of the South Coast lines are legacy CSX territory, there is no way in for another carrier to vulture interchange business and MC is effectively landlocked. Same thing happened much earlier when Conrail dished off the Cape, Newton-to-Millis, Plymouth, Greenbush, Dean St. Industrial in Taunton, the Wattupa Branch, and the Framingham & Lowell to Bay Colony in the early-80's.

And the same thing is going to happen next year when CSX completes its transfer of freight rights on the Milford Branch and Franklin Industrial Track to Grafton & Upton. While theoretically the Franklin Line could someday get reconnected to the P&W main at Blackstone allowing P&W to get close, all that ex-CSX/Conrail perpetuality red tape is going to prevent G&U from setting up an interchange at Franklin. The black-and-gold G&U engine could literally be staring across the Grove St. grade crossing at a black-and-red P&W engine and they wouldn't be able to hand off. There may even be legalese preventing a handoff of native G&U mainline loads to another carrier (though the threat of CSX cutting them off at North Grafton probably serves as adequate threat to keep them from thinking about it).


So the combo of all the exclusive/perpetual clauses in the line sales to the state and all the exclusive/perpetual interchange clauses with the shortline carriers they dished off freight territory to prevents any threat whatsoever of competitive intrusion. CSX has complete control dictating who runs freight where on any of the lines it sold off by virtue of packing the separate line sale and/or freight rights transfer agreements with these clauses. Conrail was very good at that kind of trickery too back in the day...it's why all the shortlines in New England that took over from post-1974 Conrail-'proper' (as opposed to P&W seceding from Penn Central pre-Conrail) have such limited interchange options even if they touch multiple carriers. To the point where you need a chart to tell what lines or customers CSOR and CNZR are allowed to interchange with CSX vs. PAS to this day. Given all that, the Milford Branch and Fitchburg Sec. can be sold to MassDOT with absolute zero risk of competitive intrusion even if they have seemingly open flanks to another carrier. Just take the Framingham Sec. STB filings, cross out the name of the line, and write the new name and it ensures the state ownership won't introduce any competition. Then any new territory gifted to shortlines is going to be with certainty hamstrung by the same exact exclusivity clauses that MC, G&U, and many shortlines before them were bound to.

Not exactly fair to notions of rigorous competition, but it is legal and CSX's control of who can and can't do what with the territory it shops around is very nearly absolute. They can do pretty much whatever they want, and if Jacksonville wants to cut costs with more shortline outsourcing and cut its tax bill with more public line sales to MassDOT they are fully in the driver's seat to set the competitive terms on the freight side for basically forever unless interstate commerce laws get totally rewritten at the fed level slashing back some of these paper barrier boobytraps that have piled up through 4+ decades of territorial wheeling-and-dealing in the modern freight industry.

[Dick H]

Could CSX decide to sell off those rights on Line X to shortline Y? If so, would the MBTA have to be involved? Thanks to F-line for his research.

[F-line to Dudley via Park]

Could CSX decide to sell off those rights on Line X to shortline Y? If so, would the MBTA have to be involved? Thanks to F-line for his research.

Yeah. CSX can do anything with its trackage rights, including outright abandon them if it wants (though it'll never need to since it costs them so little to retain unused paper rights under the legacy agreements Conrail got upon its inception on all the ex-Penn Central lines that were sold to the state in the bankruptcy fire sale). MassDOT, being line owner, would have to approve the freight rights transfer with its own STB co-filing. Just as it would have to file a support statement if some other company acquired CSX. But that's a mere formality. As long as the recipient of those rights isn't some shady outfit it's usually a rubber-stamp procedure, and has happened many times before in this state.

[BM6569]

This was posted yesterday

http://stb.dot.gov/decisions/readingroo ... enDocument" onclick="window.open(this.href);return false;

[eustis22]

So if I read that correctly, MassDOT will pay for the upgrade of the line and continued maintenance, in order to provide commuter rail services, but CSX still has exclusive right to run freight if they want to?

[eustis22]

Please ignore my previous post.

[BandA]

So how much extra to extinguish the exclusive perpetual rights? The passenger rights have zero real value since service requires a subsidy, yet the state is paying millions for them. Amazing.

[F-line to Dudley via Park]

So how much extra to extinguish the exclusive perpetual rights? The passenger rights have zero real value since service requires a subsidy, yet the state is paying millions for them. Amazing.

They can't. CSX has to voluntarily give up their perpetual rights. Interstate commerce law protects them there. They can't be booted off every other MBTA line in which they have trackage rights--both the ones they sold and the ones their predecessors Conrail and Penn Central sold. There is absolutely nothing new, different, or controversial here. For whatever reason the media was bored after Thanksgiving and had to stir the pot with "OMG!!! Taxpayer fleecing!" substance-free wind-ups to angry up the blood of newspaper comment sections. There's nothing outrageous about this purchase. All 5 New England states will buy active lines with active traffic when they are available; it's done all the time. They do it to stockpile transportation assets and exert influence to ensure that active freight stays active and contributing to the regional economy. It's good business. The purchase cost almost always amortizes itself over the course of a few decades if the line has stable traffic.


State control means they get complete control over the physical plant and dispatching should they institute passenger service. Including things that don't necessarily relate to passenger service but are in MassDOT's interest, like upgrading the crossing protection (most of the line is flashers-only), any grade crossings CSX hasn't adequately maintained, any brush-cutting CSX hasn't done for optimal sightlines. They can intervene in abutter disputes, police trespassers more than CSX railroad police bothered to do, and so on. They can perform their own track inspections. They can upgrade the rail weight to support more freight business such as at the ports where CSX's disinterest would let it rot. And CSX can't claim slots it doesn't use just for the sake of thwarting passenger service, or suddenly decide to substantially increase its slots over track capacity without paying for the requisite upgrades to coexist with passenger service. Likewise, the T can now shuttle equipment between the NEC, Franklin, and Worcester lines whenever it wants without asking for any more permission than a track warrant (so long as CSX is the dispatcher...and they probably will continue to be unless/until regular T service starts).

There's more here than just passenger rights (and since when did the notion of passenger subsidy become controversial?). It's useful control over a valuable connecting line and the primary freight route to Boston, the South Shore, and South Coast. That daily freight puts a fair amount into the Eastern MA economy every year, and it's in the state's best interest to have a measure of control over that revenue and to steer its future growth. Even the upper half of the line which will likely never have any passenger considerations pulls its weight long-term for that reason. If you want to know why this cost $29M and not $18M like the Berkshire Line and the (steal!) $17M of the Conn River, look at how many carloads Housatonic and Pan Am were carrying down those lines prior to their sales. Then look at what CSX hauls down the Framingham Sec. to/from Foxboro-Mansfield-Attleboro, Attleboro-Middleboro-Braintree, Readville + jobs staged out of Readville, Franklin-Milford, and Medfield Jct. in the course of a typical January 2015 workweek. It's substantially higher today (not tomorrow, like the Conn River). And this is the only track common to all those loads that the state does not own. It substantially supports their prior $100M purchase of the South Coast lines, Track 61 to Port of Southie, and Framingham-Worcester to lock up the one link that ties them all together. It's not a bargain price; it's a fair valuation of the line. I'm not sure why people are expecting something different.

[F-line to Dudley via Park]

http://www.stb.dot.gov/decisions/readin ... enDocument" onclick="window.open(this.href);return false;

Ownership transfer official.

[BandA]

Read that, wow! Even though MassDOT purchased the line, and own it, technically they didn't purchase it, CSX still owns it (in the parallel universe that STB operates under). You can own a railroad, maintain it, dispatch it, and still MassDOT is not a railroad. Is the MBTA a railroad? Is KeolisCS a railroad? [OT] Indiana DOT is a railroad!

The decision also mentioned that CR will have priority during certain hours, freight during certain hours. Sounds almost like the STB says if everybody is happy they are happy and don't have to look further.

[F-line to Dudley via Park]

Read that, wow! Even though MassDOT purchased the line, and own it, technically they didn't purchase it, CSX still owns it (in the parallel universe that STB operates under). You can own a railroad, maintain it, dispatch it, and still MassDOT is not a railroad. Is the MBTA a railroad? Is KeolisCS a railroad? [OT] Indiana DOT is a railroad!

The decision also mentioned that CR will have priority during certain hours, freight during certain hours. Sounds almost like the STB says if everybody is happy they are happy and don't have to look further.

Not really. This is pretty much cookie-cutter. CSX, being a common carrier, has its freight rights protected in perpetuity. They get protected for slots up to the maximum traffic growth they see as the valuation of the line (pretty much moot for passenger conflicts), protected against harm to their clearances, and if the state does anything to worsen their freight capacity/ability they get billed for it. That's Interstate Commerce 101 there. The much more consequential Conn River Line sale to MassDOT has exactly the same protections. And MassDOT cannot bid out overhead freight rights to somebody else because of CSX's control. However, they can bid out passenger rights to anyone they please because CSX waived any legacy claim to interest in being a passenger carrier (much like PAS did on the Conn River). CSX and the T are the railroads...MassDOT isn't a railroad, and that's why the T has to be dispatching proxy (though, really, a couple of rubber-stamp Form D's per day is no big deal).

It's still deeded to the state and they are the controlling party. Which means they can initiate upgrades they couldn't in the past, they can mitigate disputes they couldn't in the past, they can conduct inspections they couldn't in the past, and if CSX breaks something the state owns CSX is the one on the hook for fixing it (up to and including the wear-and-tear freights would put on future passenger track, in same manner as the state's responsible for any passenger wear-and-tear it puts on freight capacity). And some of what they plan to do is strictly freight-related like bringing 286K (which currently only extends Framingham-Medfield Jct.) to Mansfield where it joins the already 286K-rated Mansfield-Attleboro stretch of the NEC. And Class 2 maintenance from Framingham to Walpole Jct. to support port upgrades at Fall River, New Bedford, and South Boston...initiatives CSX has no interest paying its own money to jump-start, but which the state (for better or worse) has its own interests in pushing ahead.


Next up: the Milford Branch. I have got to think when G&U takes over freight ops this summer or fall that CSX is going to be nagging MassDOT to pick up the purchase option on the T's 1988 Conrail lease on the branch that was inked for the Forge Park commuter rail extension. There's a baked-in clause they can mutually execute to transfer the ownership...basically a pre-arranged version of these same STB filings with a fixed price and all the Interstate Commerce perpetuity blah blah blah. Jacksonville has no interest whatsoever in being the landlord on a line they no longer run or being bothered for sign-off on approvals of any dispute mitigation (regardless of whether it's somebody else's money doing the mitigating). They'll be the ones making the phone call to the state to get it over with. Nothing to haggle over on price, since the '88 lease sets it w/indexing to inflation and the line certainly isn't any more freight-valuable to CSX than it was to Conrail 27 years ago.