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Rail News Home Financials

3/29/2007



Rail News: Financials

CSXT to address FRA's safety concerns, Ward says



CSX Transportation will move “promptly and aggressively” to address safety concerns by heightening inspection standards and implementing several initiatives.

That’s the message CSX Corp. Chairman, President and Chief Executive Officer Michael Ward sent to Federal Railroad Administrator Joseph Boardman in response to a recent FRA inspection report that identified problems with CSXT’s safety performance after a January investigation. The FRA currently is conducting a track geometry inspection of CSXT’s lines in New York state following several recent derailments.

Although CSXT reduced train accidents 24 percent last year, derailments that occurred in New York, Kentucky and West Virginia earlier this year have prompted “both the FRA’s action and the company’s re-assessment,” CSX officials said in a prepared statement.

“Safety is our top priority and we welcome the FRA’s inspections and insights,” said Ward in a prepared statement. “We are committed to working closely with FRA on all safety issues.”

CSXT “promptly took corrective action” on defects identified in the FRA report and will tighten standards for geometry car track inspections to exceed FRA thresholds, CSX said.

In New York, CSXT is operating three test cars featuring ultrasound technology to identify internal rail defects on all mainlines (testing will conclude by April’s end), and conducting additional weekend visual inspections of track between Erie, Pa., and Selkirk, N.Y., in addition to normal twice-weekly inspections. On April 2, CSXT will begin operating track geometry cars on all mainlines between Erie and Bergen, N.J. Tests then will be conducted at least three times annually, CSX said.

Meanwhile, CSX announced it received notification of an unsolicited “mini-tender” offer from TRC Capital Corp. to purchase up to 3 million shares of CSX common stock, or 0.7 percent of outstanding shares.

TRC Capital offered a price of $35.50 per share, a 9.2 percent discount compared with the March 27 closing price of $39.08 per share, CSX said.

CSX officials recommend stockholders not tender shares to TRC Capital because mini-tender offers “avoid many of the investor protections afforded for larger tender offers,” according to a prepared statement.


Contact Progressive Railroading editorial staff.

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