The Surface Transportation Board on Dec. 15, 2016 granted Genesee & Wyoming Inc. authority to acquire control of Providence & Worcester Railroad Co.
STB, in its decision (Docket FD_36064_0), said it will grant GWI’s petition for exemption, “subject to standard labor protective conditions (New York Dock Railway—Control—Brooklyn Eastern District Terminal) and the condition that GWI will not interfere with the ability of Springfield Terminal Railway to interchange with CSX Transportation, Inc. in Worcester, Mass.”
Highlights from the decision:
• Upon consummation, P&W will be the surviving entity and will become a wholly-owned subsidiary of GWI. P&W connects with several railroads, including two GWI subsidiaries: New England Central Railroad, Inc. (NECR), and Connecticut Southern Railroad, Inc. (CSO). GWI states that, although there are some commonly served cities and towns, there are no customers that are served solely by NECR or CSO, on the one hand, and P&W, on the other, and that as such there will be no “2-to-1 customers” as a result of the proposed transaction. GWI states that it does not contemplate any material changes to P&W’s operations, maintenance, or service.
• GWI also states that P&W and NECR are part of the “Great Eastern Route” strategic alliances. According to GWI, the Great Eastern alliances furnish P&W with pricing authority for service with CN through an arrangement by which NECR provides haulage for P&W between East Alburg, Vt. and Willimantic, Conn. on certain contractually agreed commodities. GWI states that P&W expanded the Great Eastern Route by entering into an additional strategic alliance with Vermont Rail Systems (VRS), which furnishes P&W with pricing authority for service with Canadian Pacific through an arrangement by which VRS and NECR provide haulage for P&W between Whitehall, N.Y. and Willimantic, Conn. on certain contractually agreed commodities. GWI states that its present intention is to keep these strategic alliances, and the connections with CN and CP, in place.
GWI requested expedited action on its petition for exemption. It seeks action on or before the date P&W shareholder approval is obtained, and in the event that such approval is not obtained before shareholder approval, expedited action to avoid a prolonged period of interim control of operations via a voting trust. “Based on the record, the Board finds GWI’s request to be reasonable,” STB said. “Accordingly, our grant of the exemption will be effective immediately.”
Click HERE to access the full decision.