Gilbert B Norman wrote:Moving on, I think all recognize that MM&A got toasted at Megantic and could well end up dissolved as a corporate entity. Their insurer, who knows, especially what if some lawyer finds a way around any stated policy limits?
Now lets presume the rail properties of MM&A and MM&A Canada are up for sale, the logical buyer would be Canadian Pacific and its US Sub SOO Line. But as an alternative , might CP consider an interchange first with its SOO (D&H) to Mechanicville, thence Pan Am (B&M MEC) to Eastport and Irving Oil's own road to St John?
CP may simply conclude that existing MM&A track (FRA Class 2 maybe?) is so deteriorated that they cannot safely move heavy HAZMAT trains over such and that continued operation over such would just be another accident waiting to happen. I have no idea to what extent the existing marketing arrangement between PAR and NS is mutually exclusive and/or could Pan Am handle not only their existing oil traffic plus that of CP and with the MM&A simply abandoned.
Anyone; or is there simply no reasonable alternative and the existing MM&A lines continue in operation?
I disagree with you here Mr. Norman. CP, with EHH at the helm, is more concerned right now with service issues on the SOO, namely capacity in the Bakken, as well as getting their financial house in order. CP is plenty happy west of Montreal, and as much as I would like to see CP red in Maine, I believe the most likely buyer in this situation is J.D. Irving's rail division. And Irving, even the non-oil Irvings, has deep pockets. Additionally where Irving is already operating the northern half of the Bangor and Aroostook and doing very well I see no reason why they wouldnt be interested in the other half. Searsport would have many possibilities with an Irving railroad running the show. They are a really aggressive and well run regional that does something Maine's other railroads seem to lack-customer service.
I highly doubt the MM&A's portion of the CP line will be abandoned, there are too many possibilities with the line, and its the only clearance route through the state of Maine. Auto racks and occasional IM service were paying the bills prior to oil coming about. Also without a connection in Montreal, or Brownville, NBSR/EMRY/MNR is reliant solely on Pan Am, not something that would be good for business... Don't write off the MM&A line for crude either. Much of Pan Am's line, especially east of Northern Maine Junction, is Class 1 or II track. Just like on MM&A major disasters will be avoided as long as things are down slowly
. My guess is that traffic on the line will rebound after the crime scene is released at Megantic and the railroad can be reopened. I doubt much will change, racks, wood and crude will return, behind green EMD's with yellow lettering.
Also to clarify another point that seems to get commonly confused. Irving Oil doesn't own or operate any railroads. J.D. Irving is the rail operator and is largely a transportation and wood products company (Sunbury Transport, NB Rail, Midland Trucking, Irving Woodlands, Irving Pulp and Tissue...) Irving Oil is the same family of Irvings, I believe father and 2 sons, from Saint John but besides management sharing a table at Thanksgiving, the companies are separate entities.
And another, Pan Am is not currently running any oil with an NS routing. Oil to Saint John is following three routings. BNSF-CSX-PAR-EMRY/NBSR or BNSF-CN-NBSR or SOO-CP-MMA-EMRY/NBSR. Their is no exclusiveness to the Pan Am Southern deal as PAS is a common carrier and is competing for any business. I'm sure they would gladly take the oil off CP, but I think that will continue to flow across the International of Maine once the line is reopened.