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Regional Rail to Add Three More Small Roads

Written by Marybeth Luczak, Executive Editor
3i-backed Regional Rail proposes to acquire all of the stock of Effingham, Ill.-based EFRR, South Point, Ohio-based SPOR and ILW, and assume direct control of those rail carriers, according to the Surface Transportation Board. (SPOR Photograph)

3i-backed Regional Rail proposes to acquire all of the stock of Effingham, Ill.-based EFRR, South Point, Ohio-based SPOR and ILW, and assume direct control of those rail carriers, according to the Surface Transportation Board. (SPOR Photograph)

Regional Rail, a Kennett Square, Pa.-based short line holding company, has filed a verified notice of exemption under 49 CFR 1180.2(d)(2) to acquire control of Class III carriers Effingham Railroad Company (EFRR) and South Point & Ohio Railroad, Inc. (SPOR), as well as Illinois Western Railroad Company (ILW), upon its becoming a Class III rail carrier.

3i-backed Regional Rail proposes to acquire all the stock of Effingham, Ill.-based EFRR, South Point, Ohio-based SPOR, and ILW, and assume direct control of those rail carriers, according to a Surface Transportation Board (STB) notice in the Dec. 2 edition of the Federal Register (scroll down to download). All three small roads are part of Agracel Rail Holdings, which is headquartered in Effingham, Ill. ILW concurrently filed a verified notice of exemption seeking to operate approximately 1,300 feet of trackage owned by the city of Greenville, Ill., extending from a connection with CSX into the Alan E. Gaffner Industrial Park (scroll down to download).

The moves follow Regional Rail’s acquisition last month of the 123-mile Great Sandhills Railway in southwestern Saskatchewan and the interests in three other freight rail assets located in western Canada from G3 Canada Limited.

Regional Rail also owns East Penn Railroad, operating 110 miles of track in southeastern Pennsylvania and northern Delaware; Middletown & New Jersey Railroad, operating 55 miles of track in southeastern New York state; Tyburn Railroad, operating a 14-acre rail-to-truck transload facility, a trucking company, and a terminal switching operation in Morrisville, Pa.; Florida Central Railroad, operating 68 miles of track serving the Orlando area; Florida Midland Railroad, operating 28 miles of track serving central Florida; Florida Northern Railroad, operating 104 miles of track on two branch lines covering the region north of Tampa; Port Manatee Railroad LLC, operating seven miles of track serving Port Manatee, Fla.; and Carolina Coastal Railway, operating 179 miles of track in eastern North Carolina, including service to the Port of Morehead City, N.C. The company provides railroad crossing signal design, construction, inspection and maintenance services in 20 U.S. states via its Diamondback Signal subsidiary.

(EFRR Photograph)

“3i RR and Regional Rail state that the stock purchase agreements do not include any provision that would limit the future interchange of traffic with a third-party connecting carrier,” the STB reported. “3i RR and Regional Rail represent that: (1) the rail lines of EFRR, ILW, and SPOR do not connect with the rail lines of any of the other rail carriers controlled by 3i RR and Regional Rail; (2) the transaction is not part of a series of anticipated transactions that would result in such a connection; and (3) the transaction does not involve a Class I rail carrier. The proposed transaction is therefore exempt from the prior approval requirements of 49 U.S.C. 11323 pursuant to 49 CFR 1180.2(d)(2). This transaction may be consummated on or after December 18, 2022, the effective date of the exemption (30 days after the verified notice was filed).”

The STB noted that “[b]ecause this transaction involves Class III rail carriers only, the Board, under the statute, may not impose labor protective conditions. …” Additionally, “[a]ccording to 3i RR and Regional Rail, this action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic reporting requirements under 49 CFR 1105.8(b).”

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