Thursday, April 15, 2010

Shipper urges open access for imperiled MM&A line

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Toronto-based Fraser Papers, Inc., a shipper served in Maine by the Montreal, Maine & Atlantic Railway, has hailed the action by the Maine state legislature to identify $57.8 million in bonds, including roughly $10 million to purchase 240 miles of MM&A right-of-way. Such action still requires approval by state voters, who will decide this November whether the expenditure is worthwhile.

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But Fraser Papers has taken the issue a step further, suggesting that if Maine itself purchases the route, service should be provided with railway companies bidding on the use of the lines, with possibly more than one provider traversing the route—what’s known in the industry as “open access.”

Fraser Papers identified Canadian National and Saint John, New Brunswick-based regional railroad NB Southern Railway as possible competitors to serve the route. NB Southern Railway also serves Maine and Quebec.

Fraser Papers' Edmundston-Madawaska pulp and paper operation, straddling the Canadian-U.S. border, relies on the rail line to ship the vast majority of its paper.

MM&A, which owns track in Maine, Vermont, Quebec and New Brunswick, sought permission in February to abandon the Maine right-of-way, which runs from Madawaska to Millinocket, Maine.

The Surface Transportation Board announced Wednesday that it will ask MM&A officials and the Maine Department of Transportation to discuss formal mediation efforts in Washington. A hearing has been scheduled for April 22 at STB headquarters.

Said STB: “The Board believes that a meeting between the State and MMA, facilitated by Board staff, could be very beneficial in this case. While there is much that separates these parties, they also share some common interests. The State is interested in acquiring these lines to protect local industries and communities, while the railroad wishes to relieve itself of the obligation of owning and operating these rail lines if abandonment authority is granted. In these circumstances, the Board believes it is in everyone’s best interest to explore any and all options that may help preserve this rail corridor as part of the national rail system. We appreciate that the parties already have been engaged in lengthy discussions toward that end, and we encourage them to continue to do so. The Board has mediation resources and staff with extensive knowledge of its abandonment, discontinuance, and offer of financial assistance (OFA) procedures that may help the parties reach an agreeable resolution of some of their issues.  A meeting between the railroad and the State under the auspices of Board staff may thus offer opportunities for the consideration of procedures that could benefit all the parties in the case.”