EMR to Acquire 45 Miles of CMQR Track (UPDATED)

Written by Marybeth Luczak, Executive Editor
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Class III Eastern Maine Railway Company (EMR) has filed a verified notice of exemption under 49 CFR 1150.41 to acquire approximately 36.57 miles of main line and nine miles of branch line in Maine from Central Maine & Quebec Railway US Inc. (CMQR), which is owned by Canadian Pacific (CP).

The Surface Transportation Board (STB) on Oct. 21 published the notice in the Federal Register (download below), following its Oct. 18 decision. The 99.5-mile EMR, one of three short lines owned by Saint John, New Brunswick-based NBM Railways, and CMQR executed the acquisition agreement on Sept. 1.

The main line (see map above) is between milepost 109 (Grindstone, Penobscot County, Maine) and milepost 72.43 (near Brownville in Piscataquis County, Maine). The branches comprise the East Millinocket line, from milepost 0.0 to milepost 7.72; and the Millinocket line, from milepost 104.65 southward 1.2 miles to the end of the track. EMR will also acquire all other associated yard, spur, siding and other track along the main line between milepost 109 and milepost 72.43.

Additionally, EMR will acquire incidental trackage rights on CMQR between milepost 72.43 (near Brownville) and the connection of CMQR’s track with an EMR rail line in the vicinity of Brownville Junction (milepost 75.07 of CMQR’s Bangor Subdivision), a distance of about three miles, including CMQR’s Brownville Junction yard, as well as the use of the CMQR main line to the west for one mile (to milepost 1.0 of CMQR’s Moosehead Subdivision), according to the verified notice. Maine Northern Railway Company (MNRC) currently has overhead trackage rights over the line; those rights will remain unchanged by the acquisition.

“EMR certifies that the proposed acquisition and operation of the line does not involve a provision or agreement that may limit future interchange with a third-party connecting carrier,” according to the notice.

“EMR further certifies that its projected annual revenues as a result of this transaction will not exceed the maximum revenue of a Class III rail carrier and will not exceed $5 million. The transaction may be consummated on or after Nov. 5, 2022, the effective date of the exemption (30 days after the verified notice was filed).”*

Also, “[a]ccording to EMR, the action is categorically excluded from environmental review under 49 CFR 1105.6(c) and from historic reporting requirements under 49 CFR 1105.8(b).”

CP in June 2020 completed its acquisition of the Central Maine & Quebec Railway US Inc., allowing CP to integrate 244.2 route miles of rail line in Maine and Vermont into its network. The transaction also included 57.3 route miles leased from the Maine Department of Transportation. Together with its earlier acquisition of Central Maine & Quebec Railway Canada Inc., this completed CP’s purchase of the entire 481-mile Central Maine & Quebec Railway network, which was first announced in November 2019. (The Central Maine & Quebec Railway network was honored as Railway Age’s 2016 Short Line of the Year.) Central Maine & Quebec Railway US Inc. and Central Maine & Quebec Railway Canada Inc. operate as CP subsidiaries.

Midcoast Railservice, Inc., a subsidiary of New York-based Finger Lakes Railway, in September 2021 assumed the lease and operations of the Maine DOT branch line from Central Maine & Quebec Railway US Inc., which had been handling operations since 2015.

* In an Oct. 28 STB filing, David E. Benz, counsel for CMQR d/b/a Canadian Pacific, wrote: “The Board averred on page 2 of its October 21st decision that ‘EMR further certifies that its projected annual revenues as a result of this transaction….will not exceed $5 million.’ The quoted language is contrary to the Notice of Exemption filed by Eastern Maine Railway (‘EMR’) on October 6th. EMR clearly stated on page 5 of its Notice of Exemption that ‘[b]ecause the projected annual revenues of EMR after the proposed transaction will exceed $5 million, EMR has effected posting of a labor notice as required by 49 CFR § 1150.42(e).’ The same error also appears in the Federal Register notice published at 87 Fed. Reg. 64129 (Oct. 21, 2022). The undersigned counsel for EMR has informed the Office of Proceedings of the error in the Board decision issued on October 21st, and counsel understands that the Board intends to take corrective action. Nevertheless, for avoidance of doubt, EMR is filing this letter so that the docket may reflect the actual EMR certification as well as EMR’s and Canadian Pacific’s plan to move forward with consummation of the transaction on November 8th.”

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