Dick H wrote:Two issue on the VTR taking over the Newport sub. First, that would require
operating into Canada. Secondly, the VRS only owns the ex D&H line from
Rutland to Whitehall. Maybe some sort of lease agreement. I do not see
the state of VT purchasing the Newport sub.
Those are kind of moot, because the bankruptcy court agreement that transferred MMA's assets to CMQR stipulated that the system had to remain fully intact for 10 years. CMQR is prohibited from partitioning any of itself without prior approval from the courts that such moves would be in the best interests of the ex-MMA territories. So any ownership moves affecting the makeup of the inherited railroad would require re-petitioning the bankruptcy court for approval under the terms of the original settlement. Even ones as inocuous as CMQR just selling the Newport Sub ROW under their feet to VTrans and flipping to trackage rights with zero change in ops. Certainly something as basic as that wouldn't raise any concerns with the court, and would also tap some new state-level funding sources through VTrans' responsibility to maintaining its asset. They might even be compelled to do a VRS sale if that demonstrably showed win-win service improvements on the sub, or a partial territorial outsource that moved the interchange from Newport to Richford or Cowansville so VRS could catch CMQR running slightly more frequently.
But there's also no compelling reason now
to go to all the trouble of reopening the bankruptcy settlement for a multi-national company for something as relatively small as that. The revenue at stake isn't worth the lawyers or paperwork in dotting all i's and crossing t's with the courts, when they can just wait another 7 years for the system preservation clause to expire and slice-and-dice the system any which way they please. Running in Canada is no biggie for VRS. They deal with Canadian tarriffs 24/7 with all its CP and G&W Canadian Gateway entanglements, as well as the St. Lawrence Seaway port traffic they handle on the separate NY & Ogdensburg reporting mark. Actually running into Canada to chase some minor net-positive addition to their bottom line isn't a very big leap for a company that already is so Canada-dependent on traffic sources. It fits their general business mold, so I don't think border-crossing red tape is going to deter them if they see strategic value in chasing it. But again...why go to the trouble of going before the bankruptcy court and pushing a lot of paper to get their blessing to amend the MMA preservation clause? Just wait 7 years. That's why there's not going to be any transfer of control of the Newport Sub in the near-future: too much easier to just wait 7 years to be able to negotiate mano-a-mano rather than having to lard on a bunch of extra lawyers to petition the courts.
Also figure, by waiting 7 years there'll be a resolution on the owner/operator staring contest over the St. Johnsbury-Gilman portion of the Mountain Div. Twin State's/Lamoille Valley's trackage rights agreement with Pan Am expires on 12/31/2018 unless representatives of Lamoille Valley's deceased owner's estate voluntary step forward to claim the 10-year carrier-option extension of those rights to 2028. If nobody from the estate steps forward to explicitly file for the extension, Pan Am (or most likely PAR dumping the track on VTrans) will be able to put the trackage rights back out to bid in as little as 17 months. State aid for considerable track rebuilding notwithstanding, VRS may have an easier path bidding their way east of St. Johnsbury and through NHCR territory into an eventual interchange with SLR. And they may not have to count carloads to make it worth their while to pursue that move, as the mere threat of a second Northern VT Class III interchange may be all it takes to light a fire under CMQR to stiffen up its Newport service levels and "fix the glitch" so-to-speak without VRS needing to buy its way across the border at all. So why dispatch lawyers before an international court to amend the MMA system preservation agreement now when it's less than 2 years before they know if they have the option to open-bid on Gilman, and only another 5 years after that before that 10-year preservation clause expires and they can make a deal directly with CMQR. Any way you slice it, it's a wait-and-see and not a situation where instant gratification is going to work to anyone's benefit. VRS is better off running out the clock on these time-limited agreements--both the MMA system preservation clause and the "keep CMQR honest" threat of a potential SLR interchange--and letting those expiration dates work to their competitive advantage rather than acting impatiently because CMQR...today
...is providing underwhelming service to Newport. There's a lot more chess moves to play by waiting for some expiration dates to pass on various legal entanglements and seeing if that loosens up their options.