CSX's decision to basically discontinue regular freight service on the old Monon Route from Louisville to Bedford, Indiana--thus, forcing INRD to enter a haulage agreement with the Louisville & Indiana and haul its freight another 100 miles--has me thinking.
The Milwaukee Road--INRD's predecessor--received trackage rights on this line as a result of the L&N/C&EI merger. In light thereof, is INRD--as standing in the shoes of the Milwaukee Road--not receiving the benefit of allowing the merger to go forward as a result of CSX's decision to discontinue regular freight service? (FYI, this effectively forces INRD off the line, as it probably does not generate enough traffic to maintain the line by itself).
I know the part answer is INRD is free to maintain these tracks all by itself--but maintaining the tracks all by itself certainly was not the bargain that the Milwaukee Road got when the L&N/C&EI merger went through.
The other part of the answer is, as Mudchicken points out--as CSX owns 85% of INRD, it is not like INRD is going to make too much of a fuss . . .
Still it has me thinking, can a railroad, for all practical purposes, abandon track that is subject to trackage rights granted as a result of a merger?
I know I am thinking too much with my lawyer hat on, but I think a third-party shipper--or even the public--should have standing to contest CSX's decision. It is my understanding that such trackage rights are granted to help balance the competitive environment following a merger. Thus, even if INRD is hand-tied, I feel as though a shipper should be allowed to protest.
Gabe
P.S. If anyone knows of any planned movement on the old Monon line PLEASE tell me. I want to get some parting shots of the semiphores and all of that street running.
Gabe:
Third Party Shippers & the public have the right to comment or have the right to place an OFA , if CSX were to abandon. The legal gyrations over abandonment tied to trackage rights has happened before and are fun to watch during the mitigation process. (Start by looking at the basic explanations here: http://www.stb.dot.gov/stb/public/resources_abandonment.html) Mollifying the CTH&SE/MILW claims would have to take into account that there are no online shippers in there that CSX would also be walking away from?
Is CSX thinking about a Discontinuance of Service as opposed to an abandonment or short term embargo? The expense argument is compelling, but is there something else in play?
Certainly not offering an "expert" opinion here by any stretch but how can CSXT, for all intents and purposes, kick INRD off the Bedford - Louisville segment when it had those trackage rights that previous owners MILW, SOO, and CPRS all enjoyed and was presumably "grandfathered" into the sale agreement from CPRS in the first place? Although I did not know CSXT owns 85% of INRD, it still seems like CSXT is trying to pull a fast one here.
OVERVIEW:
http://www.stb.dot.gov/stb/docs/Abandonments%20and%20Alternatives1.pdf
''Under the offer of financial assistance (OFA) procedures, any financially responsible party seeking to continue service on a line approved for abandonment (or exempted) may compel the railroad to sell or conduct subsidized operations over the line. The statutory requirements and STB regulations concerning offers of financial assistance are contained at 49 U.S.C. 10904 and 49 CFR 1152.27, respectively.''
- PDN.
Because of the potential legal tangle that might be involved, it would appear that CSX is discontinuing service over the line in question without actually abandoning the line. The line may be superfluous to the needs of CSX for overhead freight and I don't know if there are any online shippers.
I think I read someplace that INRD would have to pay for its share of the maintenance on the line, in accordance with the original trackage rights agreement. If they are the only ones running trains on the line, that would be 100% of the maintenance. Not exactly a good deal for them -- considering that it still isn't "their" line (even with the CSX ownership interest) -- and I suspect that the LIRC routing is more favorable. (Doesn't CSX own a large part of LIRC as well?)
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