Dick H wrote:If the HRRC did go under, not just some bankruptcy while reorganizing,
MA and CT probably would work to get a new operator. However, with
two states involved, it might take a while and a long shutdown of service
probably would decimate the remaining shippers. As was mentioned, the
P&W would likely be interested. Mr. Billiveau of the CNZR might be
interested if it was a "designated operator" situation. The CNZR has
operated a few passenger specials on the "Griffin Line" and the P&W
operates a number of passenger specials every year, so they probably
would be open to an agreement with the BSRM to operate on the line.
Or, if CSO were able to acquire the Berlin-Waterbury-Derby branchlines from a disinterested PAS I could see RailAmerica being interested in it. Figure what chess pieces are set in motion by their throwing their hat in and acquiring those routes:
-- RailAmerica wants tighter NECR and CSO integration to serve the Canadian gateway. PAS likely gets more lucrative business as pass-through carrier between NECR and CSO than it does running the off-Springfield Line branchlines itself only once per week. That's their motivation for making a deal for rights to Derby, and CSO's new Hartford engine house seems to be setting up this eventuality as it's their only viable path to territory expansion.
-- Get to Derby, and if Housatonic is available at a decent price they can shoot for a contiguous V-shaped circuit owning Central CT, with CSX interchanges at both ends. And between NECR and CSO near-parity with P&W at divvying up the majority of CT business.
-- 286K Pittsfield-Derby. P&W can already get every-other-car 286K to Cedar Hill in New Haven, uprated to every car when they get the last of the New London main up to spec. That leaves only the short Metro North territory 263K gap between NH and Derby from a contiguous U-shaped cross-state 286K circuit with each of the two carriers having a heavyweight CSX exchange at the ends. Not sure if the ongoing 4th track restoration work by MNRR cuts the 263K gap mileage in half or not, but that stretch doesn't traverse any of the movable bridges so is a pretty easy one to plug. Would leverage the P&W partnership as a heavyweight pass-through between NECR and CSO.
-- If the CT River bridge on the Springfield Line gets rehab and the state can negotiate less punitive per-car rates with Amtrak then CSO (and CNZR) get a 286K pipeline on that end of their systems as well, feeding the current Hartford-area branchlines that are already 286K-rated. The gap between Hartford and Derby would remain until Hartford Viaduct (and by extension the I-84 Viaduct + RR relocation plan) gets resolved and all of the PAS territory gets uprated...a long time from now. But they would be able to negotiate the gap by getting deep penetration with heavyweights into the heart of the state on either end.
-- They have sellable assets to defray some of the acquisition cost. The Suffield/Bradley Branch and Manchester Secondary are pieces the state would dearly want as 15-30 year commuter rail holds. And any wholesale acquisition of PAS or Housy territory I would think would come with immediate sale of line ownership to the state (either by the departing party or immediately flipped by the buying party) in exchange for track improvements. The state very much wanting the Berkshire to New Milford as a Danbury Line commuter rail hold, the Highland as a Hartford-Waterbury CR hold, the Maybrook west of Danbury for MNRR future considerations, and Maybrook Danbury-Derby to stabilize a multi-carrier interchange route.
That's a sequence of moves that has some plausibility and upside, albeit dependent on the ownership fate of the PAS branches. But even if a state-sponsored carrier took over the Berkshire I still think RailAmerica is going to be in the mix positioning itself to take advantage and match wits with P&W...who already quite badly wants the Maybrook to Danbury.
The main problems here are:
1) The repair bill on Housy is staggering. Their itemized needs list on the State Rail Plan
(p. 205 of the PDF) is $165M, all of it rather mundane SGR work and trying to prop up the transload facility. NECR ($38M), P&W ($49M), and PAS ($48M) combined are a full $30M less than that. For carriers that do a combined 10 times more annual tonnage than Housy. What is the justification for investing in that other than a full-on bailout to avoid losing the line? Any carrier that bids on it, beyond P&W firming up control of Derby-Danbury, has got to have truly grand long-term visions of how it's going to develop business. Otherwise the state's going to have to be willing to take a bath on infrastructure upgrades for purpose of do-no-harm to Western CT's freight economy. Which may be necessary when push comes to shove, but it sure ain't an attractive choice.
2) Given who's in charge of the company, how much do they overvalue themselves and how insolvent do they have to get before they'd offer a fair selling price. Their management is clearly living in la-la land and would ask for the moon. There won't be any suitors as long as they're living in their own delusions of grandeur. We have no idea how much debt they're in, either. And would going bankrupt even encourage rational business behavior on their part? Would they be radioactive right to the end. I seriously wonder if they're going to have to be a ward of the state and have to have taxpayers absorb their debts before liquidating them and getting a new carrier in on palatable terms. The bottom-line rules in business are at least rational. And there's nothing more toxic than a business acting so irrationally it gives no outward signs of believing the the bottom-line rules apply to them.
That's just a lot of thinking outside the box there in this post. At minimum I'll hedge on this being an interesting drama to watch for the next few years to its inevitably messy conclusion. The Guilford business strategy sure doesn't work when you don't have Guilford-level reserves of captive business to piss off to begin with. This carrier's got a pretty short run-up to throwing itself off the cliff, but it seems to be doing it with gusto.