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6/12/2003



Rail News: Rail Industry Trends

To preserve lines, small roads ask STB to simplify abandonment process


Last month, more than 60 regionals and short lines filed an exemption notice with Surface Transportation Board proposing that the board develop a simplified procedure to facilitate the sale and preservation of low-density branch lines targeted for abandonment.


The exemption would enable shippers and communities along a line to promptly seek the line's preservation. Under current board regulations, a line might languish for years while traffic diminishes and track deteriorates "to a point where it is no longer suitable for anything but a trail or bike path," according to a prepared statement.


For example, STB could develop a new procedure that no longer requires a carrier to prove a line isn't viable.


"The market can do that," said Mark Sidman, a principal with law firm Weiner Brodsky Sidman Kider PC, which submitted the filing on the railroads' behalf. "The interest of shippers and the public is much better served by the carrier promptly putting the line on the market for prospective purchasers, including shippers and government entities."


Under the small roads' proposal, a regional or short line would publish a detailed notice in local newspapers, transportation trade publications and the Federal Register as soon as the railroad decides a line is 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 they act within 90 days (current law enables parties to act within 30 days).


"In no way will this lead to wholesale abandonments," said Sidman. "Small carriers have limited commercial opportunities and they will not irrationally exit viable markets."


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