G&AR to Acquire Northern Indiana Railroad Company

It will be business as usual for Gulf & Atlantic Railways (G&AR) subsidiary Chesapeake & Indiana Railroad (CKIN) when G&AR acquires Northern Indiana Railroad Company, whose track CKIN currently leases and operates over in Indiana.

Gulf & Atlantic Railways, LLC (G&AR) has received Surface Transportation Board (STB) approval to acquire ownership and direct control over Class III Northern Indiana Railroad Company (NIRC).

The addition of NIRC will expand Jacksonville, Fla.-based G&AR’s portfolio. It already controls Camp Chase Rail, LLC; Chesapeake & Indiana Railroad LLC (CKIN); Vermilion Valley Railroad LLC; Grenada Railroad, LLC, which received Honorable Mention in Railway Age’s 2021 Short Line and Regional Railroad Awards program; and Florida, Gulf & Atlantic Railroad, LLC; and has been authorized to control the Pioneer Valley Railroad Company in Massachusetts, which includes the Pioneer Valley Railroad and Pinsly’s Railroad Distribution Services, Inc.

The STB on Dec. 20 granted a petition filed by Macquarie Infrastructure Partners V GP, LLC (MIP GP), on behalf of itself; Macquarie Infrastructure Partners V fund vehicle (MIP V); MIP V Rail, LLC (MIP Rail); and G&AR seeking an exemption under 49 U.S.C. 10502 from the prior approval requirements of 49 U.S.C. 11323 to acquire and control NIRC (download STB decision below).

According to the STB, G&AR has agreed to acquire 100% of the equity interests in NIRC. Upon the transaction’s close, G&AR would directly control NIRC, while MIP GP, MIP V, and MIP Rail would indirectly control the Class III.

NIRC owns 32.97 miles of rail line in Indiana, according to the petition, but has never conducted freight rail operations over the line, STB reported. CKIN has leased and operated the NIRC line since 2004, interchanging with both Norfolk Southern at Thomaston, Ind., and CSX at Wellsboro/Union Mills, Ind.; it only runs on 27.52 miles of line because it discontinued service over a 5.45-mile segment in 2017. The petitioners noted “that pursuant to an agreement with the Town of North Judson,” the Hoosier Valley Railroad Museum operates excursion trains on the 5.45-mile segment and will “continue to have the right” to provide that service, according to the STB.

The petitioners “assert that the transaction will bring G&A[R]’s financial strength and management expertise to NIRC, unite ownership and operation of the line in the same corporate family, and enhance NIRC’s access to capital, thereby ‘facilitating future strategic investment decisions with respect to the line,’” the STB reported. Additionally, the “leasehold operations will continue without change,” the STB reported the petitioners as saying.

The STB’s decision will be effective Jan. 21, 2024. Petitions for stay must be filed by Jan. 2, 2024, the agency said, and petitions to reopen must be filed by Jan. 11, 2024.