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8/18/2003



Rail News: Rail Industry Trends

STB to review small roads' line-abandonment rules



Surface Transportation Board will examine small roads' rail-line abandonment procedures to find ways to facilitate the sale and preservation of lightly used, low-density branch lines. The board expects to conduct a hearing in fall.

STB's recent announcement pleased 65 regionals and short lines, which in mid-May petitioned the board to simplify the procedures.

"The existing regulatory scheme forces carriers to delay filing for abandonment until after the traffic is gone and the condition of the rail infrastructure has deteriorated," said Mark Sidman, a partner in law firm Weiner Brodsky Sidman Kider PC, which represents the small roads, in a prepared statement.

The roads propose that a regional or short line be required to publish a detailed notice in local newspapers, transportation trade publications and the Federal Register as soon as a line is considered no longer viable. The notice would include three-year traffic and revenue data, the line's physical condition, estimated rehabilitation cost and net liquidation value, connecting carriers and interchange points. If another party believes a line can be operated profitably, the entity can acquire the line for its net liquidation value if the party acts within 90 days (current law requires action within 30 days).

Selling carriers would assure a line's buyer continued access to historic gateways under a haulage or trackage rights agreement.

"We [believe] the proposal should be embraced by shipper organizations and states, [which] have an interest in improving the odds of keeping marginal lines in service and allowing for rational deployment of capital by small railroads," said Sidman.

By expediting low-density line disposals, small roads would free up capital to upgrade infrastructure, he said.








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