User:NE2/SPCSL

[ICC docket 31522]

Sub-No. 1: Trackage rights over a Burlington Northern Railroad Company (BN) line between Girard, IL and Jacksonville, IL (approximately 33 miles).

Sub-No. 2: An undivided 50% interest in trackage rights over a Conrail line between Wann, IL and "WR" Tower, Granite City, IL (approximately 12.8 miles).

Sub-No. 3: Trackage rights over a Chicago, South Shore and South Bend Railroad (CSS) line between Kensington, IL and Burnham, IL (approximately six miles).

Sub-No. 4: Trackage rights over the following lines of Illinois Central Railroad Company (ICR): (a) between Joliet, IL and Kensington/Markham, IL (including the St. Charles Airline segment and access to the Hawthorn Yard (approximately 60 miles); and (b) between Kansas City Junction and Avenue Yard, Springfield, IL (approximately 4.7 miles).

Sub-No. 5: Trackage rights over the following lines of the Indiana Harbor Belt Railroad Company (IHB): (a) between Burnham, IL and Blue Island, IL (approximately 6.5 miles); and (b) between Argo, IL and Blue Island, IL (approximately 16 miles), a portion of which is jointly owned with the Baltimore and Ohio Chicago Terminal Railroad Company (BOCT). (SPCSL also seeks to expand existing interchange rights over this line to full trackage rights.)

Sub-No. 6: Trackage rights over the lines of the Commuter Rail Division of the Regional Transportation Authority (METRA) between Joliet, IL and Blue Island, IL (approximately 24.% miles).

Sub-No. 7: Trackage rights over: (a) a line of the Chicago & Illinois Midland Railway Company (CIM) from Ridgely Tower to 19th and Madison Streets, Springfield, IL to interchange/detour (approximately 1.87 miles). (b) the following lines of the Norfolk Southern Railway Company (NS): (i) joint levee tracks at Alton, IL (approximately two miles); (ii) track at the Amoco Oil plant at Wood River, IL (approximately 0.25 miles); and (iii) a line between Bridge Junction, IL and Madison, IL (approximately three miles). [?] (c) the following lines of the Terminal Railroad Association of St. Louis (TRRA): (i) a line between Bridge Junction, IL and M&O Junction near East. St. Louis, IL (approximately 1.5 miles); and (ii) a line between Valley Junction, IL and WR Tower, IL (approximately nine miles). (CMW does not currently have rights over a portion of this line but has requested rights from TRRA.) For these lines, SPCSL will acquire an undivided 50% interest, and CMW will retain the remaining interest.

Sub-No. 8: Trackage rights over:

CMW was organized in 1986, as a subsidiary of Venango River Corporation, to be an independent regional railroad. It acquired the 631-mile line of the Illinois Central Gulf Railroad Company (ICG)10 between Joliet, IL, East St. Louis and Kansas City, MO. and trackage rights over approximately 51 miles of ICG's line between South Joliet and Kensington Station in Chicago, IL.11 Its principal terminals and points of interchange are located at Kansas City, East St. Louis and Chicago. Intermediate terminals are located at Bloomington, IL and Springfield, IL. Interchanges with other carriers are located at Bloomington, Dwight, Jacksonville, Joliet, Lincoln and Springfield, IL.

On April 1, 1988, CMW filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. In September 1988, CMW received $13.9 million in low interest loans and grants by the State of Illinois, which was approved by the Bankruptcy Court and granted priority

However, CMW's creditors successfully appealed that Bankruptcy Court order thus preventing the Trustee from further using these funds for the time being.

THE PROPOSED TRANSACTION

SPCSL and the Trustee signed an Asset Purchase Agreement (ASA) on August 24, 1989. In return for the line and other assets, SPCSL will pay CMW $22 million and assume $7 million of CMW indebtedness. SPCSL will acquire approximately 250 miles of CMW main line between East St. Louis, IL and Chicago, IL, 33 miles of branch line and 13 miles of industrial lead tracks.

SPCSL is also seeking to add new connections at East St. Louis. To that end, it seeks authority under 49 USC § 10901 to construct a short (1000-foot) connecting track at Valley Junction, IL and authority under 49 USC § 11103 for terminal trackage rights at Valley Junction and Lenox, IL.

Finally, SPCSL is seeking authority to establish a joint facility with CMW on a line segment between Godfrey and East St. Louis, IL so as to facilitate continued service over the east-west line as next discussed.

Murrayville Jacksonville line. The trackage rights were approved by the court on December 7, 1988 and were the subject of a Notice of Exemption filed with the Commission under 49 CFR § 1180.2(d)(7).31 As we indicated above, we may not under §§ 11341 or 11343 compel the parties to deviate from the trackage rights agreement and assign the trackage rights.

We have reviewed the rights that SPCSL seeks over the BN's track in the Sub-No. 1 proceeding. Those rights do not appear to be an essential part of CMW's present operations between East St. Louis and Chicago. They were entered into simply to facilitate traffic movement by avoiding dilapidated CMW track and to give CMW access to certain shippers.

(We also note, but do not rely on, the fact that the applicants have not even argued that this track qualifies as either within or a reasonable distance

While SPCSL would obviously like to have the revenue granted by this service the line is not an essential link in the line to Chicago. Nor is a grant of trackage rights essential to the maintenance of service on the BN line. The BN obviously can operate over its own line, and CMW can enter into an agreement with BN for BN to

Indeed, BN has indicated its intention to seek authority to serve the shippers at Jacksonville.

In Sub-No. 2, SPCSL is seeking to acquire CMW's undivided 50 percent interest over certain Conrail lines near East St. Louis, and subject to a paired track agreement discussed, supra. Conrail's Wann - Granite City line is part of the Godfrey - East St. Louis segment that applicant proposes to operate as a joint facility. SPCSL will acquire an undivided 50 percent interest in CMW's line and seeks operating rights over Conrail's line. Applicants believe that CMW may assign a 50% interest in its line and operating rights over Conrail's line to SPCSL under the agreement with Conrail.

In this case, applicants urge both §§ 11341-11343 and 11103 as alternative bases for the relief sought. The same reasons we discussed above apply here for not compelling assignment of the 50% interest to SPCSL and operating rights over Conrail's line under § 11341, et seq. Nevertheless, the line here can be considered part of the terminal facilities at East St. Louis, it appears essential to continuation of the service CMW has provided, we can direct SPCSL's use of it under § 11103,

SPCSL's application to acquire CMW's line between East St. Louis and Chicago, IL is [?]

2. In Finance Docket No. 31522 (Sub-No. 1), SPCSL's application to acquire CMW's trackage rights over BN's line between Girard and Jacksonville, IL is denied.

3. In Finance Docket No. 31522 (Sub-No. 2), SPCSL's application to acquire an undivided 50 percent interest in trackage rights over Conrail's line between Wann and "WR" Tower, Granite City, IL is granted under § 11103.

4. In Finance Docket No. 31522 (Sub-No. 3), SPCSL's application to acquire CMW's rights over CSS's line between Kensington and Burnham, IL is granted under § 11103.

5. In Finance Docket No. 31522 (Sub-No. 4), SPCSL's application to acquire CMW's rights over ICR lines: (a) between Joliet, IL and Kensington/Markham, IL (including the St. Charles Airline segment and access to the Hawthorn Yard); and (b) between Kansas City Junction and Avenue Yard, Springfield, IL is granted under § 11103.

6. In Finance Docket No. 31522 (Sub-No. 5), SPCSL's application to acquire trackage rights over IHB/BOCT lines between (a) Burnham, IL and Blue Island, IL and (b) between Argo, IL and Blue Island, IL is denied. SPCSL may operate using the relevant interchange rights.

7. In Finance Docket No. 31522 (Sub-No. 6) SPCSL's application to acquire CMWs proposed trackage rights over METRA's line between Joliet and Blue Island, IL is denied.

8. In Finance Docket No. 31522 (Sub-No. 7), SPCSL's application to acquire CMWs trackage rights over: (a) CIM's line between Ridgely Tower and 19th and Madison Streets in Springfield, IL; (b) NS segments as follows: (i) joint levee tracks at Alton, IL; (ii) tracks at Amoco Oil plant at Wood River, IL; and (iii) line between Bridge Junction and Madison, IL; and (c) TRRA segments as follows: (i) between Bridge Junction and M&O Junction, IL and (ii) between Valley Junction and CP Junction, IL is granted except that the application to extend rights over TRRA's segment (c)(ii) to permit operations between CP Junction and WR Tower is denied.

9. In Finance Docket No. 31522 (Sub-No. 8), SPCSL's application (1) to construct a 1000-foot connecting track at Valley Junction, IL and (2) to use terminal facilities of UP at Valley Junction, IL and Lenox, IL is granted under §§ 10901 and 11103, respectively.

10. In Finance Docket No. 31522 (Sub-No. 9), the application for SPCSL and CMW to establish a joint facility between Godfrey and East St. Louis, IL is granted.

11. Applicants must comply with the following conditions designed to mitigate the effects of the acquisition on historic properties: 1. All historic properties located along the East St. Louis, Illinois to Chicago, Illinois line which are (1) acquired by RGI in this transaction and (2)

Godfrey (Alton) to Church (Valley Junction) and Tolson (Cahokia) were in fact jointly owned by GWWR and SPCSL in 1993. I don't know how this joint ownership played out near the south end where there were multiple tracks.