[Federal Register Volume 59, Number 69 (Monday, April 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8550]


[[Page Unknown]]

[Federal Register: April 11, 1994]


-----------------------------------------------------------------------

INTERSTATE COMMERCE COMMISSION
[Service Order No. 1516]

 

Dardenelle & Russellville Railroad Co.; Authorized To Operate 
Lines of Arkansas Midland Railroad Co.

    In 1992, the Arkansas Midland Railroad Company (AMR) acquired from 
the Union Pacific Railroad Company (UP) as part of a 131-mile package, 
four disconnected line segments. Each of the branch lines acquired by 
AMR extend from the same North/South UP line in central Arkansas. Five 
(5) active shippers (International Paper Company, Gifford-Hill & 
Company, Barksdale Lumber Company, Bean Lumber Company, and G&S Roofing 
Products Company, Inc.), and one inactive shipper (Cargill) are located 
on the Norman Branch. The line extends approximately 52.9 miles from 
its connection with UP at Gurdon, AR to Birds Mill, AR, which is the 
end of the line.

Discussion

    On December 3, 1993, a storm caused flooding, washouts, and 
landslides that seriously affected the Norman Branch. On December 15, 
1993, the AMR embargoed 31 miles of the line from Pikes Junction to 
Birds Mill as a result of the storm damage. This embargo affected 
Barksdale Lumber, Bean Lumber, and G&S Roofing. On February 22, 1994, 
AMR embargoed approximately 17 additional miles of the line which 
included service to Gifford Hill & Company located at Delight, AR.
    On December 29, 1993, after the initial embargo was placed in 
effect, a complaint was filed by G&S Roofing (G&S) indicating that 
AMR's cessation of operations was depriving G&S of essential rail 
service. On December 30, 1993, the Commission's Office of Compliance 
and Consumer Assistance (OCCA) assigned a Special Agent to make an on-
site investigation of the Norman Branch situation. On the basis of its 
inquiry, OCCA determined that a technical evaluation of the track 
conditions by the Federal Railroad Administration (FRA) had not been 
made since June of 1993 and that an updated FRA assessment of the 
condition of the line was necessary. The Commission asked FRA to 
inspect the line and provide a report. FRA's report, dated March 2, 
1994, concluded that the line was in poor condition; that extensive 
rehabilitation was necessary to bring the line up to Class I (10 mile 
per hour) standard, and that operations over the line in its current 
condition would likely result in derailments.
    On March 18, 1994, as supplemented on March 22, 1994, attorneys for 
the Dardanelle & Russellville Railroad Company (DRRC) and its newly 
formed non-carrier subsidiary, the Caddo, Antoine, Little Missouri 
Railroad Company (CALM) filed a request with the Commission requesting 
directed service authority to operate approximately 49 miles of the AMR 
line currently under embargo, and trackage rights over approximately 3 
miles of the remaining portion of the Norman Branch that AMR continues 
to operate. DRRC/CALM's filing also requests ``that it be entitled to 
all other benefits set forth in 49 U.S.C. 11125''.
    The Commission also received filings by affected shippers 
indicating the urgency of the situation and the potential impact on 
certain areas including points in Arkansas and Louisiana, if a shutdown 
of their industries were to occur because of lack of service. In 
addition, Gifford-Hill Company, Inc. indicated in its filing to the 
Commission that it has a contract with the State of Louisiana to 
deliver 640 cars of aggregate to be used in a current highway 
construction project, and that it requires service by March 28, 1994. 
The Commission also received a filing from the UP Railroad in support 
of a directed service order by the Commission. UP's stated objective is 
the immediate restoration of service.
    On March, 25, 1994, AMR filed a reply to DRRC/CALM's request 
indicating that it does not oppose an order by the Commission allowing 
DRRC/CALM access to the embargoed portion of the line on the basis of a 
proposed 120-day lease agreement, so long as DRRC/CALM agres to:

    (1) Indemnify AMR for any liability that might occur as a result 
of DRRC/CALM's operation of AMR's northern line segment;
    (2) Assume sole responsibility for maintenance of the northern 
line segment; and pursuant to authority granted by the Commission,
    (3) Assume sole responsibility for all common carrier 
obligations to shippers on the northern line segment; and
    (4) Assure that operations comply with all applicable State and 
Federal safety regulations.

    During the 120-day period, and pursuant to Commission authority, 
AMR would allow operations over the southern line segment to affect 
interchange with the UP at Gurdon.
    On March 28, 1994, DRRC/CALM filed a joint rebuttal statement to 
AMR's March 25 comments. In its pleading, DRRC/CALM seeks to refute 
statements made by AMR and addresses AMR's proposal for the 120-day use 
of its line by DRRC/CALM.
    Section 11123(a) of the Interstate Commerce Act authorizes the 
Commission to take immediate action in situations where it finds that a 
shortage of equipment, congestion of traffic, or other failure in 
traffic movement exists which creates an emergency situation of such 
magnitude as to have substantial adverse effects on rail service in the 
United States or a substantial region of the United States (emphasis 
added). Under these circumstances, the Commission can, for an initial 
period of not more than 30 days,
    (A) Suspend any car service rule or practice;
    (B) Take action during the emergency to promote service in the 
interest of the public and commerce, regardless of the ownership of 
equipment, on terms of compensation the carriers establish between 
themselves, subject to Section 11123(b)(2);
    (C) Require joint or common use of facilities, on terms of 
compensation the carriers establish between themselves, or as set by 
the Commission in a later proceeding pursuant to Section 11123(b)(2) 
when the carriers cannot agree.

Conclusions

    We believe that the authority requested for operations over AMR is 
not appropriate under 49 U.S.C. 11125. Under that statutory provision, 
directed service may be ordered when a carrier cannot transport the 
traffic offered to it because: it lacks the cash needed to continue 
operations; a court has ordered cessation of operations; or it has 
discontinued operations without requisite authority from the Commission 
under 49 U.S.C. 10903. None of those conditions is present here. AMR 
has not been determined, nor does it contend to be cashless. Also, 
there is no court order requiring AMR to cease operations, and, while 
operations on the line have ceased due to unsafe track conditions and 
an embargo, the line in question has not been abandoned.
    AMR retains the common carrier obligation to continue operations 
unless and until it receives authority from the Commission to abandon 
the line. However, there is an immediate need for rail service over the 
AMR's Norman Branch, especially considering the urgency of aggregate 
shipments to the State of Louisiana for a highway construction project. 
AMR has indicated that it is willing to allow DRRC/CALM to operate the 
Norman Branch line under specified proposed conditions and DRRC/CALM 
has expressed a willingness to rehabilitate the line to the extent 
necessary and to provide service to shippers. Based upon these 
circumstances and the statutory requirements, an emergency service 
order under 49 U.S.C. 11123 is appropriate, is responsive to the 
shipper's service needs, and will allow overhead trackage rights by the 
DRRC/CALM to interchange traffic with the UP.
    In view of the need for continued rail service over AMR's Norman 
Branch, and DRRC/CALM's willingness to provide this service and limited 
track rehabilitation, this decision grants the requests of interested 
parties for interim service authority to DRRC/CALM on the terms and 
conditions noted below.
    The emergency nature of the situation compels us to conclude that 
advance public notice and hearings would be impractical and contrary to 
the immediate public interest in assuring the immediate resumption of 
essential rail transportation services. Accordingly, we exercise our 
authority under 49 U.S.C. 11123(a)(1) to waive advance public notice in 
the present circumstances.
    Section 11123 permits us to authorize service for an initial period 
of not more than 30 days, with an option to extend authority beyond 30 
days after a hearing, if cause exists. We believe this authority to be 
necessary here at least for an initial 30-day period. Any interested 
party may file comments on this action during this period relating to 
the necessity and appropriateness of continuing this order in effect 
beyond the initial 30-day period by filing a statement in affidavit 
form within 10 calendar days after service of this order. All filings 
should be addressed to Bernard Gaillard, Director, Office of Compliance 
and Consumer Assistance, Interstate Commerce Commission, Washington, DC 
20423; and in the lower left hand corner of the envelope in large 
letters should be printed, ``OCCA-4412.'' An original and 10 copies 
should be filed of all statements. Interested parties wishing to review 
the public docket file may do by calling 202-927-5538 for an 
appointment at the Commission's Headquarters in Washington, DC.

Terms and Conditions

Effective Date

    Service Order No. 1516 shall be effective at 12:01 a.m., March 29, 
1994, but operations by DRRC/CALM may commence only upon consummation 
of an agreement between DRRC/CALM and AMR on the terms and conditions 
described herein and upon notice to the Commission by DRRC/CALM that 
repairs have been made consistent with FRA standards to allow safe 
operations to commence over pertinent portions of the Norman Branch.

Expiration Date

    Unless otherwise modified by the Commission, Service Order No. 1516 
will expire at 11:59 p.m., on April 27, 1994.

Compensation

    DRRC/CALM's authority under Service Order No. 1516 is expressly 
conditioned upon its agreeing to:

    (1) indemnify AMR for any liability that might occur as a result 
of DRRC/CALM's operation of AMR's northern line segment;
    (2) its assumption of responsibility for maintenance of the 
northern line segment;

    No further compensation during the initial period of this order is 
contemplated.

Track Safety

    In accordance with the above, operations by DRRC/CALM may commence 
only upon consummation of an agreement between DRRC/CALM and AMR on the 
terms and conditions described herein and upon notice to the Commission 
by DRRC/CALM that FRA's safety exceptions in its March 2, 1994 report, 
are resolved to the extent necessary to allow safe operations to 
commence over pertinent portions of the Norman Branch.

Cars and Operating Equipment

    In operating AMR's line, DRRC/CALM shall use its own cars and 
operating equipment, or cars of other AMR connections as agreed to by 
those connections.

Employees

    In providing service under this service order, DRRC/CALM shall 
comply with the requirements of 49 U.S.C. 11123(a)(3) with respect to 
AMR employees required for this operation.

Rates

    Rates and charges shall be those applicable to the line and in 
effect at the time DRRC/CALM commences operations. DRRC/CALM shall not 
seek changes in AMR rates and charges during the initial period of this 
order. All revenues from such charges shall accrue to the account of 
DRRC/CALM during the effective period of this order, and shall not 
constitute assets of AMR.

Liability for Expenses

    Any rehabilitation, operational, or other costs related to the 
authorized operations shall be the sole responsibility and liability of 
DRRC/CALM. Any such costs or expenditures shall not be deemed an 
obligation or liability of the United States Government. DRRC/CALM 
shall hold the United States Government harmless from any claim arising 
out of the authorized operations.

Operational Difficulties

    Any operational difficulties associated with the authorized 
operations shall be resolved by DRRC/CALM and any other affected party 
through negotiated agreement, or, when the parties cannot reach 
agreement, by the Commission.
    We find: 1. DRRC/CALM has requested the Commission to permit it to 
provide continued rail service over those portions of the AMR lines 
included in the Norman Branch which it determines to be operationally 
safe, and, accordingly, shall so notify the Commission.
    2. To prevent transportation and economic disruptions in this area 
of Arkansas, and to assure the immediate continued movement of 
critically needed commodities to adjoining regions of the United States 
including Louisiana, it is necessary for the Commission to authorize 
DRRC/CALM to operate AMR's Norman Branch line under 49 U.S.C. 11123, 
conditioned up-on a waiver of any compensation from the Federal 
government and DRRC/CALM's agreement to hold the United States 
Government harmless from any claim arising out of the authorized 
operations.
    This action will not significantly affect either the quality of the 
human environment or energy conservation.
    It is ordered: 1. Based upon its undertaking to do so upon the 
terms and conditions noted above, DRRC/CALM is authorized under 49 
U.S.C. 11123 to enter upon and operate AMR's Norman Branch pursuant to 
the terms of this service order.
    (a) Entry by DRRC/CALM on the lines of AMR may occur on the date 
and time authorized in this decision provided it reaches an agreement 
with AMR and gives appropriate notification to the Commission that the 
lines to be operated have been made safe for that operation. Operations 
by DRRC may continue no later than the thirtieth day from the effective 
date of this decision.
    2. Operations performed under authority of this order shall conform 
to the directions and conditions prescribed above.
    3. All submissions filed in this proceeding should refer to Service 
Order No. 1516 and should be sent to the Commission's headquarters at 
12th Street and Constitution Avenue, NW., Washington, DC 20423. As 
noted above, an original and 10 copies should be submitted.
    4. The provisions of this decision shall apply to intrastate, 
interstate, and foreign commerce.
    5. The Commission retains jurisdiction to modify, supplement, or 
reconsider this decision at any time.
    6. Notice to the general public of this decision shall be given by 
publication in the Federal Register. The decision will be served on the 
Federal Railroad Administration, the Association of American Railroads, 
American Short Line Railroad Association, DRRC/CALM, AMR, and UP.
    7. This decision and order shall become effective at 12:01 a.m., on 
March 29, 1994.
    8. Unless otherwise modified by the Commission, this order will 
expire at 11:59 p.m., on April 27, 1994.
    9. DRRC/CALM's request for directed service under 49 U.S.C. 11125 
is hereby denied.

    Decided: March 28, 1994.

    By the Commission, Chairman McDonald, Vice Chairman Phillips, 
Commissioners Simmons, and Philbin.
Sidney L. Strickland, Jr.,
Secretary.
[FR Doc. 94-8550 Filed 4-8-94; 8:45 am]
BILLING CODE 7035-01-P