What an absolutely pathetic move on the part of STB. Lets see, how would CP acquiring DM&E affect competition in rail transportation in Wall, SD - or elsewhere along the route? It certainly doesn't allow CP to gain more market share in a market in which they already participate. There's one RR from Winona, MN to Colony, WY today and there will be one after this transaction. Seems there's nothing for the STB to decide.
I would suggest that BNSF and UP are far more behind this one than Mayo - given that they have something to lose in terms of a 3rd carrier busting up a bit of the monopoly they hold in the Powder River Basin. If you read the BNSF 3rd Qtr earnings release, they tout the fact that coal revenues went up 13% year over year, while units moved remained the same. When you have that kind of pricing power in spite of overall inflation at 2-3%, you're going to call in the political cards to keep a strangle hold on it.
*Citation needed* Please provide a link or source.
The most recent bit I was able to uncover from the STB specifically says that the DM&E aquisition is not a "major transaction." This is dated October 24, 2007:
http://www.stb.dot.gov/filings/all.nsf/6084f194b67ca1c4852567d9005751dc/a968be3ba2b796e38525737f00726115/$FILE/220538.pdf
News Release dated 11-2-07 categorizes it as a "Significant" rather than "Minor" transaction.
I can't seem to get a link, but look under News Releases, and then by date. It should be the first one or nearly so.
Try this one STB Ruling
Thank you. Yes. That makes sense, since I don't see how it could not be considered a "significant transaction." It surely is one. It can't be considered a minor transaction, even by neutral standards.
I think it will slide through okay no matter how much Mayo whines. The interesting part will be seeing how far Mayo will be prepared to embarass themselves. They've pretty much used up all their tricks.
deepspire wrote: Thank you. Yes. That makes sense, since I don't see how it could not be considered a "significant transaction." It surely is one. It can't be considered a minor transaction, even by neutral standards.I think it will slide through okay no matter how much Mayo whines. The interesting part will be seeing how far Mayo will be prepared to embarass themselves. They've pretty much used up all their tricks.
spokyone wrote: I have been in Rochester all week. The local paper and the city of Rochester are obsessed with quality of life issues. Just this week Mayo etc. received permission to divert a creek away from a gated community that wants an artificial lake that will be fed from springs. I presume administrators and senior researchers will live there. Another article mentions the Mayo coalition is rejecting coal trains is because of "Noise and vibration as well as the safety of the citizens."
I have been in Rochester all week. The local paper and the city of Rochester are obsessed with quality of life issues. Just this week Mayo etc. received permission to divert a creek away from a gated community that wants an artificial lake that will be fed from springs. I presume administrators and senior researchers will live there. Another article mentions the Mayo coalition is rejecting coal trains is because of "Noise and vibration as well as the safety of the citizens."
Perhaps so. I noticed that the Iowa DOT and the Iowa Northern Railroad joined the Mayo on this point. Iowa Northern must get a chunk of traffic from them, although I can't see what difference the CP aquisition would make since DM&E would route over IC&E anyway (unless there's something I'm missing here.)
I think Mayo will spare no expense in fighting this since this has become more of a battle of wills as far as they're concerned. I still think that ultimately it will go through. This is a healthy end to end merger with tremendous potential, not only for shippers, but for the economy as a whole, especially if and when they team up with KCS. However, I do wonder what, if any conditions might be made in the interim.
It will be interesting to see, after this is all said and done, just how much effort/expense (from DM&E and CP) will be put into fighting the Rochester coalition. It wouldn't surprise me if the cost of fighting will eventually exceed what would have been the costs of a little initial cooperation. Especially if you factor in the opportunity cost of the delays in opening up the PRB revenue stream.
My bet is that unlike DM&E, there will be somebody at CP that is smart enough to recognize that reality.
edited to appease nanaimo73
Convicted One wrote: It will be interesting to see, after this is all said and done, just how much effort/expense (from DM&E and CN) will be put into fighting the Rochester coalition. It wouldn't surprise me if the cost of fighting will eventually exceed what would have been the costs of a little initial cooperation. Especially if you factor in the opportunity cost of the delays in opening up the PRB revenue stream.My bet is that unlike DM&E, there will be somebody at CN that is smart enough to recognize that reality.
It will be interesting to see, after this is all said and done, just how much effort/expense (from DM&E and CN) will be put into fighting the Rochester coalition. It wouldn't surprise me if the cost of fighting will eventually exceed what would have been the costs of a little initial cooperation. Especially if you factor in the opportunity cost of the delays in opening up the PRB revenue stream.
My bet is that unlike DM&E, there will be somebody at CN that is smart enough to recognize that reality.
Anti, CN is buying the EJ&E, while it is CP that is trying to acquire the DME/IC&E.
CP is the *good* railroad with red AC locomotives and the steam engine. CN is the *bad* railroad with black locomotives, a long string of accidents, and the former WC and IC.
Careful AG. It was the CP, not the CN.
Is there anyway that CP can appeal this ruling or no?
nanaimo73 wrote:it is CP that is trying to acquire the DME/IC&E. CP is the *good* railroad with red AC locomotives and the steam engine. CN is the *bad* railroad with black locomotives, a long string of accidents, and the former WC and IC.
Ahh you are right, I confused the two cannuck majors. I'll change the labels, but it still makes me wonder about the substance....
solzrules wrote:. It was the CP, not the CN.
Notwithstanding my lil' mistake, I still have to wonder how it will all rack up.
I find it amusing that the same people who believe that the Mayo has no business meddling in railroad affairs, fail to recognize that it is equally valid to say that anyone who does not live in in Rochester has no business opining about local quality of life issues specific to those environs.
When it's one's own backyard that is involved...it naturally matters more than it will to remote and unqualified critics
Convicted One wrote: It will be interesting to see, after this is all said and done, just how much effort/expense (from DM&E and CP) will be put into fighting the Rochester coalition. It wouldn't surprise me if the cost of fighting will eventually exceed what would have been the costs of a little initial cooperation.
It will be interesting to see, after this is all said and done, just how much effort/expense (from DM&E and CP) will be put into fighting the Rochester coalition. It wouldn't surprise me if the cost of fighting will eventually exceed what would have been the costs of a little initial cooperation.
If there were cooperation, what would be the end result on the ground?
The DM&E tried to work with Rochestor and the Mayo clinic and had the door SLAMMED in their face. Now a bigger and richer RR comes along to buy the DM&E and Mayo is going to have a stroke because simply CP Rail can outspend Mayo in the legal department and knows the regulations better. Now it will add to the cost of improving the tracks through Rochestor and the surrounding areas but the last merger denied was the SPSF and that was due simply to anticompetive issues all over the SW and the fact the ICC saw the fact the SP would have bankraupted the new company in a few years.
As soon as Rochestor realizes that Mayo is not the only game in town and then gets some new elected officals that will stop basically bending over to them then maybe the probelms would be less. Out of all the communties that are in the route of the proposed expansion ONLY 2 are against it what does that tell you the final tally is 54 for and 2 against.
What I can't get over is how my home state of Iowa (Iowa D.O.T.) is getting all lathered up about this. What makes it ironic is that, back in 1997, when CP was in the process of getting ready to sell the "Kansas City Corn Lines", the Iowa D.O.T. was able to stall the potential sale; wanting more "information". And now, they're wanting more "info" again? WTF??
What makes this even more irratating to me is how Mayo "welcomed" the chance to work with a new owner when CP made the acquisition announcement back on September 5. Well, looks to me like Mayo has effectively piddled all over whatever chance they had to forge a good working relationship with CP. Now I CANNOT wait for my employer to make the Mayo Clinic look like the bunch of pompous a-hole idiots they really are.
This was not a move by Mayo, but the Iowa DOT and Iowa Northern RR along with others. One needs to look and read the filings from the interested parties in case FD_35081_0. The STB has every right to demand more information about a transaction. Deal with it.
I think this decision also implies that the CN + EJ&E will also be considered a "significant" transaction which must displease CN. As far as DM&E and IC&E becoming "Class I" carriers as a result of this transaction, probably only if the PRB extension is built.
As far as the CP and the Mayo Clinic goes, I think the CP has two choices, either fight Mayo to the bitter end, or fight for the option to route coal via the IC&E. A Rochester bypass would almost certainly be so expensive as to make the PRB project unfeaseable, the economics of operating via the IC&E may also be too expensive to make the PRB project happen.
The IANR is probably looking for what it can get out of the deal, perhaps trackage rights to Chicago.
Modeling the "Fargo Area Rapid Transit" in O scale 3 rail.
RRKen wrote: This was not a move by Mayo, but the Iowa DOT and Iowa Northern RR along with others. One needs to look and read the filings from the interested parties in case FD_35081_0. The STB has every right to demand more information about a transaction. Deal with it.
Perhaps they do but again, what's in it for the Iowa D.O.T. and specifically, IANR, to challenge this? As I stated in an earlier post, back in 1997, the Iowa D.O.T. was able to delay CP's plans to sell off the "Kansas City Corn Lines" to the erstwhile IMRL. And now Iowa D.O.T. needs more "info" again as CP seeks to reclaim that portion plus DME?? I would think that Iowa D.O.T. would welcome a strong, healthy Class I carrier like CP back with open arms rather than trying to delay this. IANR, I can see their stance up to a certain point. This was the same loser regional that tried to stop Jack Haley's purchase and start up of the Chicago, Central and Pacific over the former Illinois Central Gulf's Iowa Division back in '85. They lost that one, too.
Los Angeles Rams Guy wrote: What I can't get over is how my home state of Iowa (Iowa D.O.T.) is getting all lathered up about this. What makes it ironic is that, back in 1997, when CP was in the process of getting ready to sell the "Kansas City Corn Lines", the Iowa D.O.T. was able to stall the potential sale; wanting more "information". And now, they're wanting more "info" again? WTF??
Wasn't the state of Iowa the same state that wanted to charge, tax, the UP (maybe others but the UP sticks out cause they were going to reroute their trains around Iowa) per car that entered the state?
Paul
http://www.youtube.com/user/pavabo
http://www.flickr.com/photos/paulvbox
Bucyrus wrote: If there were cooperation, what would be the end result on the ground?
Hard to say with any certainty, one would surely be speculating.
I feel it's safe to say though, that the brinksmanship of the past has only hardened the resolve of those opposed. Fewer flys with vinegar than with honey--etc.
I strongly suspect that the issue of safety is a specious argument, in cover for the fact that the anticipated huge bump in traffic will be a monumental inconvenience (noise, dirt) on the community. Consequently (IMO) the "so what" attitude displayed by DM&E up to this point, has inspired the coalition to launch a pre-emptive barrage of inconvenience upon their self declared adversary.
Convicted One wrote: solzrules wrote:. It was the CP, not the CN. Notwithstanding my lil' mistake, I still have to wonder how it will all rack up.I find it amusing that the same people who believe that the Mayo has no business meddling in railroad affairs, fail to recognize that it is equally valid to say that anyone who does not live in in Rochester has no business opining about local quality of life issues specific to those environs.When it's one's own backyard that is involved...it naturally matters more than it will to remote and unqualified critics
The problem is that the opposition is only concerned with their backyard and the railroad that runs through it. In the bigger picture, that railroad serves several states and quite a few people. Do the needs of the mayo clinic (which has had a railroad next to it for the entire life of the clinic) outweigh the needs of 3 or 4 state economies? I think not.
They aren't asking to re-invent the wheel here. They aren't even asking to build a new railroad through Rochester. All they want to do is upgrade the old one. They could run 50 coal trains a day through it now, if they wanted. I guess if I were CP Rail, I would build into the PRB when it is economically feasible, and then just upgrade the track through Rochester at company expense. They have all the approvals for this project, and they do not need to seek any further approval from the STB in this matter. I highly doubt that the STB will hold up this purchase JUST because of the Mayo clinic. There is absolutely no justification for that.
Dan
Los Angeles Rams Guy wrote: RRKen wrote: This was not a move by Mayo, but the Iowa DOT and Iowa Northern RR along with others. One needs to look and read the filings from the interested parties in case FD_35081_0. The STB has every right to demand more information about a transaction. Deal with it.Perhaps they do but again, what's in it for the Iowa D.O.T. and specifically, IANR, to challenge this? As I stated in an earlier post, back in 1997, the Iowa D.O.T. was able to delay CP's plans to sell off the "Kansas City Corn Lines" to the erstwhile IMRL. And now Iowa D.O.T. needs more "info" again as CP seeks to reclaim that portion plus DME?? I would think that Iowa D.O.T. would welcome a strong, healthy Class I carrier like CP back with open arms rather than trying to delay this. IANR, I can see their stance up to a certain point. This was the same loser regional that tried to stop Jack Haley's purchase and start up of the Chicago, Central and Pacific over the former Illinois Central Gulf's Iowa Division back in '85. They lost that one, too.
I would say the Iowa Northern of today is a far different railroad from what it was in 1985. I would guess that instead of stopping the sale, they are possibly looking to gain access to some trackage. For my money I would think access to some of the elevators on the "corn line" across northern Iowa.
I can certainly understand the IDOT's interest in the transaction. There's been a lot of speculation, warranted or not, about CP retaining or selling some of the ICE trackage once the purchase is final. I wouldn't think they'ld start selling off lines, but I'm reminded about what happened in the early 1980s. The Milwaukee Road was operating the ex-RI from Davenport to Iowa City. They looked into extending the operation on to Des Moines and even Council Bluffs. The idea was dropped when an official said if they had wanted a line to Council Bluffs, they wouldn't have abandoned the one they had.
Jeff
If Mayo is going to stop this, I don't think preventing the CP buyout will be the successful tactic. Their strongest tactic is simply making CP look so bad that they (CP) decide the PRB deal is not worth the damage to their brand. But even that may not be strong enough to stop the deal. I would think that the economic attractiveness of the PRB connection is not a constant over time, but rather, varies with a host of market conditions. So the timing of these conditions will have a correlation with the amount of resistance Mayo is able to mount at any given time. A lot has been invested in the deal so far, so if it can be toppled now, it may be harder to re-start.
However, if the force of the PRB connection proves to be simply irresistible to all detraction, then Mayo will likely demand concessions. As far as I know, Mayo has not stipulated any terms under which the railroad upgrade would be acceptable. The seemingly most probable solution has been a possible bypass, but I am sure that is fraught with problems.
The most effective solution to Mayo's concern would be a tunnel with some kind of elastic roadbed. The roof would need to be deep enough or strong enough to be explosion proof. And there are some watercourses to deal with. But still, a tunnel is doable. All it takes is money. Mayo won't spend that much money, and neither will CP. But the State of Minnesota loves to spend money. If the rail objective were perceived as being green, and it was coupled with the mission of protecting Mayo from physical peril, the state would probably pay for a tunnel. Of course there is the little problem of coal trains being decidedly un-green.
But there is another way to introduce a green attraction into the objective. A tunnel would have the added benefit to Rochester of liberating the area now occupied with the DM&E line. This strip of land could be converted into a wonderful bicycle, pedestrian, wildlife greenway with amenities galore. This green vision would truly be candy to the ones who resent coal trains. They would just have to forget what is going on beneath the surface. It would be like a bad subterranean carbon footprint with a green roof.
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