CKIN, NIRD Seek to Merge
Written by Carolina Worrell, Senior Editor
Gulf & Atlantic Railways, LLC (G&AR) on Feb. 20 submitted a verified notice of exemption to the Surface Transportation Board (STB) for the benefit of Chesapeake and Indiana Railroad, LLC (CKIN) and Northern Indiana Railroad Company, LLC (NIRC), both existing Class III railroads, which are seeking to merge, with CKIN the surviving carrier.
CKIN and NIRC are both controlled directly by G&AR and indirectly by Macquarie Infrastructure Partners V GP, LLC (MIP GP); Macquarie Infrastructure Partners V fund vehicle (MIP V); and MIP V Rail, LLC (MIP Rail).
NIRC owns 32.97 miles of rail line in Indiana but has never conducted freight rail operations on the line. NIRC has no rail employees and does not own or lease any rolling stock. CKIN currently leases and operates 27.52 miles of NIRC’s rail line between milepost CF 0.63, at or near Lacrosse, Ind.; and milepost CF 15.23, at or near Wellsboro, Ind.; and between milepost CI 218.0, at or near English Lake, Ind.; and milepost CI 230.92, at or near Malden, Ind., in LaPorte, Porter, and Starke Counties, Ind. CKIN discontinued service over the remaining 5.45-mile segment of NIRC’s line between milepost CI 212.55 and milepost CI 218.0 in 2017.
The 5.45-mile segment remains part of the national rail network, but there have been no freight operations on that segment since at least 2015, according to the verified notice. The Hoosier Valley Railroad Museum operates excursion trains over that 5.45-mile segment pursuant to an agreement with NIRC. NIRC’s line, the majority of which CKIN operates, is shown on the map below.
According to the verified notice (download below), the proposed merger of CKIN and NIRC will consolidate ownership and operation of the NIRC line into a single entity—CKIN, which will “simplify G&AR’s corporate structure, promote efficient management, and eliminate the need for the parties to maintain the current lease arrangement between NIRC and CKIN.”
CKIN will continue to operate the 27.52-mile portion of the NIRC line in the same manner as it does today under its lease with NIRC. The transaction, G&AR says, “will not result in any adverse changes in service levels, significant operational changes, or a change in the competitive balance with carriers outside the corporate family.”
Following the merger, the lease agreement pursuant to which CKIN currently operates 27.52 miles of the NIRC line will terminate, and NIRC’s separate corporate existence will cease.
According to the verified notice, “the merger will not affect CKIN’s customers because CKIN will continue to operate the majority of the NIRC line in the same manner it does today.” And because CKIN’s operations and service levels will remain unchanged post-merger, “the competitive balance with carriers outside the corporate family will be preserved,” G&AR said.
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