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10/12/2004



Rail News: M&A

Progressive Rail's plan to lease two Wisconsin lines, control new short line runs into regulatory snag



On Friday, the Surface Transportation Board rejected Progressive Rail Inc.'s (PR) application to invoke a class exemption to control Wisconsin Northern Railroad Co. L.L.C. (WNRC) after the road becomes a Class III carrier.

Lakeville, Minn.-based PR plans to lease about 24 track miles in Barron County, Wis., owned by Canadian National Railway Co. (and formerly owned by Wisconsin Central Ltd.), and about 38 track miles in Barron and Chippewa counties, Wis., owned by Union Pacific Railroad. PR then would establish WNRC to operate the lines.

The class exemption includes only those transactions that "involve the acquisition or continuance in control of a non-connecting carrier or one of its lines where the railroads would not connect with each other or any railroads in their corporate family, the acquisition or continuance in control is not part of a series of anticipated transactions that would connect the railroads with each other or any other railroad in their corporate family, and the transaction does not involve a Class I," according to the board's decision.

Because the lines connect in Barron County, PR can't use the class exemption to obtain controlling authority over WNRC, STB members ruled.


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