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6/5/2003
Rail News: Rail Industry Trends
STB to consider petition placing direct control of Conrail's New York Lines under CSXT, Pennsylvania Lines under NS
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CSX Corp., Norfolk Southern Corp. and Conrail are seeking Surface Transportation Board approval for a transaction that would enable CSX Transportation and Norfolk Southern Railway to obtain direct ownership and of New York Central Lines L.L.C. (NYC) and Pennsylvania Lines L.L.C. (PRR), respectively.
Since the June 1999 Conrail split, CSXT and NS have managed and operated NYC and PRR, respectively, under STB-approved operating agreements.
If approved, the proposed transaction would "make the financial, operational and administrative management of Conrail, NYC and PRR more efficient … and facilitate CSX and NS capital investment in those properties," according to a prepared statement. The proposed transaction also would enable CSXT and NS to consolidate NYC's and PRR's financial results into their own quarterly statements.
As owners of NYC and PRR, CSXT and NS no longer would need each other's consent to make asset-management decisions for each line, CSXT and NS officials said.
The proposed transaction would not affect rail operations, service, competition, or the Shared Assets Area of north and south New Jersey, Philadelphia and Detroit, which Conrail would continue to own, manage and operate; and would have no adverse effect on customers, or CSXT and NS employees, CSXT and NS officials added.
In addition to STB approval, CSXT and NS need Internal Revenue Service to qualify the transaction as a non-taxable disposition to complete the ownership deal.
NYC's lines run from New YorkCity/New Jersey through Albany and Buffalo, N.Y., to Boston and East St. Louis, Ill.; PRR's lines run from New YorkCity/New Jersey and Philadelphia through Pittsburgh and Cleveland, and to Chicago.
Since the June 1999 Conrail split, CSXT and NS have managed and operated NYC and PRR, respectively, under STB-approved operating agreements.
If approved, the proposed transaction would "make the financial, operational and administrative management of Conrail, NYC and PRR more efficient … and facilitate CSX and NS capital investment in those properties," according to a prepared statement. The proposed transaction also would enable CSXT and NS to consolidate NYC's and PRR's financial results into their own quarterly statements.
As owners of NYC and PRR, CSXT and NS no longer would need each other's consent to make asset-management decisions for each line, CSXT and NS officials said.
The proposed transaction would not affect rail operations, service, competition, or the Shared Assets Area of north and south New Jersey, Philadelphia and Detroit, which Conrail would continue to own, manage and operate; and would have no adverse effect on customers, or CSXT and NS employees, CSXT and NS officials added.
In addition to STB approval, CSXT and NS need Internal Revenue Service to qualify the transaction as a non-taxable disposition to complete the ownership deal.
NYC's lines run from New YorkCity/New Jersey through Albany and Buffalo, N.Y., to Boston and East St. Louis, Ill.; PRR's lines run from New YorkCity/New Jersey and Philadelphia through Pittsburgh and Cleveland, and to Chicago.
