NEW REGULATIONS for consideration of US railroad mergers will be published by the Surface Transportation Board on June 11 2001. Board Chairman Linda Morgan announced the date on March 31, confirming the timescale set in the March 17 decision to suspend consideration of all mergers, including the proposed US$6bn BNSF-CN tie-up (p285).
On April 7 the STB denied a request by BNSF and CN for reversal of its moratorium, claiming that its current regulations ’are inadequate to address what will likely turn out to be the final round of North American rail restructuring’.
The two railways have filed a federal court action seeking to overturn the decision. CN President & CEO Paul Tellier criticised other railways for supporting the moratorium. ’The STB does not exist to protect other railroads from competition,’ he insisted. ’Our transaction would have the effect of promoting competition.’
Morgan said on March 31 that the STB would consider expanding its current policy of ensuring competition when considering a merger by seeking increased competition in some cases. As part of its review, the agency will broaden its overview of the industry and will consider the effects each merger may have on other deals in the future, instead of handling one case at a time.
Reflecting the service disruptions that followed recent mergers, the STB intends to look at the possibility of setting performance standards that could include cash compensation to shippers who suffer from delayed deliveries.
Other areas to be explored are whether safety issues are being adequately addressed, if the jobs of railway staff are being satisfactorily protected, financial viability of the companies involved, the potential loss of infrastructure and capacity, and the potential harm to American interests that might result from the merger of Canadian and US railways.