[Federal Register Volume 61, Number 42 (Friday, March 1, 1996)]
[Notices]
[Pages 8105-8107]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-4795]
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1\
DEPARTMENT OF TRANSPORTATION
\1\ The ICC Termination Act of 1995, Pub. L. 104-88, 109 Stat.
803 (the Act), which was enacted on December 29, 1995, and took
effect on January 1, 1996, abolished the Interstate Commerce
Commission (ICC) and transferred certain functions to the Surface
Transportation Board (Board). This notice relates to a railroad
acquisition of control transaction that is subject to Board
jurisdiction pursuant to 49 U.S.C. 11323-25.
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[STB Finance Docket No. 32858]
Illinois Central Corporation and Illinois Central Railroad
Company; Control; CCP Holdings, Inc., Chicago, Central & Pacific
Railroad Company and Cedar River Railroad Company
AGENCY: Surface Transportation Board.
ACTION: Notice of acceptance of application.
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SUMMARY: The Board accepts for consideration the application filed
January 31, 1996, by Illinois Central Corporation (IC Corp.), Illinois
Central Railroad Company (ICR), CCP Holdings, Inc. (Holdings), Chicago,
Central and Pacific Railroad Company (CCPR), and Cedar River Railroad
Company (CRRC) (collectively referred to as applicants) for approval
and authorization of IC Corp.'s acquisition of control of CCPR and CRRC
through ownership of the stock of Holdings, CCPR/CRRC's parent. IC
Corp. already controls ICR through ownership of all of ICR's
stock.2 In accordance with 49 CFR 1180.4(b)(2)(iv), the Board
finds that this is a minor transaction as described in 49 CFR
1180.2(c).
\2\ Where appropriate, IC Corp. and ICR are collectively
referred to as IC, and CCPR and CRRC are collectively referred to as
CC&P.
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DATES: This decision is effective on March 1, 1996. Written comments,
including comments from the Secretary of Transportation and the
Attorney General of the United States, must be filed with the Board no
later than April 1, 1996, and concurrently served on applicants'
representatives. The Board will issue a service list shortly
thereafter. Comments must be served on all parties of record within 5
days after the Board issues the service list and confirmed by
certificate of service filed with the Board indicating that all
designated individuals and
[[Page 8106]]
organizations on the service list have been properly served.
Applicants' reply is due April 22, 1996.3
\3\ This procedural schedule comports with the schedule proposed
by applicants in their petition for establishment of a procedural
schedule, filed concurrently with the application.
ADDRESSES: Send an original and 10 copies of pleadings referring to STB
Finance Docket No. 32858 to: Office of the Secretary, Surface
Transportation Board, Case Control Branch, 1201 Constitution Avenue,
N.W., Washington, DC 20423. In addition, send one copy of all documents
to applicants' representatives: (1) William C. Sippel, Two Prudential
Plaza, 45th Floor, 180 North Stetson Avenue, Chicago, IL 60601; (2)
Myles L. Tobin, 455 North Cityfront Plaza Drive, Chicago, IL 60611-
5504; and (3) Byron D. Olsen, 4200 First Bank Place, 601 2nd Avenue
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South, Minneapolis, MN 55402.
FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for
the hearing impaired: (202) 927-5721.]
SUPPLEMENTARY INFORMATION: By application filed January 31, 1996, Board
approval is being sought under 49 U.S.C. 11323-25 (formerly 49 U.S.C.
11343-45) for IC Corp.'s acquisition of control of CCPR and CRRC
through ownership of the stock of Holdings.
The applicants recite that their transaction is a ``minor
transaction'' subject to the provisions of 49 CFR 1180.2, the
regulations that implemented former sections 11343-45. The transaction
here specifically is subject to the standards of new section 11324(d),
because it does not involve the merger or control of two Class I
railroads. Also, as discussed below, because we have determined that
the transaction is not of regional or national significance, the
procedures set out at new section 11325(d) apply. Section 204(a) of the
Act provides that all ICC rules in effect on the date of the enactment
of the Act ``shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked in accordance
with law by the Board . . . or operation of law.'' While the standards
and procedures of former sections 11343-45 and new sections 11323-25
are substantially similar insofar as minor transactions are concerned,
the procedures of new section 11325(d) differ slightly from those
contained in the regulations at 49 CFR 1180.4 and, therefore, shall
govern. Otherwise, the use of the regulations at 49 CFR Part 1180 for
this proceeding appears proper.
Applicant ICR is a Class I railroad operating approximately 2,624
route miles of rail lines in six Midwestern and South Central States.
ICR is a wholly owned subsidiary of IC Corp., a noncarrier holding
company. ICR controls and operates the Kensington & Eastern Railroad
Company and Waterloo Railway Company, applicant carriers that own rail
property in the States of Illinois and Mississippi. ICR also owns non-
controlling stock interests in several switching and terminal
railroads.4
\4\ IC owns non-controlling stock interests in The Belt Railway
Company of Chicago, the Mississippi Export Railroad Company, the
Paducah & Illinois Railroad Company, the Peoria & Pekin Union
Railway Company and the Terminal Railroad Association of St. Louis.
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Applicant CCPR is a Class II rail carrier that owns and operates
approximately 724 miles of rail line between Chicago, IL, on the east
and Sioux City, IA, and Council Bluffs, IA/Omaha, NE, on the west. The
Chicago-Sioux City/Omaha line was formerly the Iowa Division of IC;
CCPR purchased the line from IC and began operations in 1985.
Applicant CRRC is a Class III rail carrier that owns or operates
approximately 102 miles of rail lines between Waterloo, IA, and
Glenville, MN. CRRC was formed in 1991 as a wholly owned subsidiary of
CCPR 5 to acquire the Waterloo-Albert Lea, MN line from the
defunct Cedar Valley Railroad Company.
\5\ CRRC is now a wholly owned subsidiary of Holdings and a
sister company to CCPR.
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Applicant Holdings is a noncarrier holding company which directly
controls CCPR and CRRC. Holdings also controls Iron Horse Properties,
Inc. and the Missouri River Bridge Company, both noncarriers. Holdings
is controlled by Donald R. Wood, Jr.
IC Corp. proposes to acquire control of CCPR and CRRC through
purchase of all of the issued and outstanding common stock of Holdings.
Although CCPR and CRRC will be marketed as part of the IC rail system
and CCPR's operations will be coordinated with those of ICR, they will
remain separate legal entities. IC Corp. has no present plans to merge
CCPR or CRRC into IC.
IC proposes to consummate control of CC&P (through IC Corp.'s
acquisition of Holdings' stock) as soon as a Board decision approving
this application and authorizing the proposed control transaction has
become effective.
Applicants state that common control of IC and CC&P will position
both rail systems to more effectively serve their customers and compete
in the increasingly concentrated rail marketplace which surrounds them.
The proposed transaction assertedly will provide shippers and receivers
on IC and CC&P with new routing options and more efficient and
competitive single-line service. For example, according to applicants,
CC&P grain shippers will gain direct, single-line access to long-haul
destination markets in the South-Central United States and to export
markets through the Gulf ports of New Orleans and Mobile, AL. At the
same time, grain receivers on IC will be assured reliable, independent
and long-term access to grain from Iowa origins. Coal shippers and
receivers on IC's lines will likewise gain access to additional markets
via CC&P's lines. Applicants state that all customers will benefit from
the improved transit times, better equipment utilization and other
operating efficiencies made possible by common control.
Applicants maintain that, in addition to generating benefits for
the shipping public, the proposed transaction will strengthen the
combined IC/CC&P system and improve both its operating and financial
performance. Applicants estimate that common control will attract
approximately 11,500 new carloads of traffic annually to the IC/CC&P
system and will present significant opportunities to reduce expenses
and rationalize operations. Applicants maintain that the proposed
transaction will help position IC to remain a competitive, independent
and viable carrier amid consolidation and market aggregation in the
rail industry.6
\6\ In Union Pacific Corporation, Union Pacific Railroad
Company, and Missouri Pacific Railroad Company--Control and Merger--
Southern Pacific Rail Corporation, Southern Pacific Transportation
Company, St. Louis Southwestern Railway Company, SPCSL Corp., and
The Denver and Rio Grande Western Railroad Company, Finance Docket
No. 32760, applicants in that proceeding have submitted a settlement
agreement entered into with IC that, among other things, calls for
developing traffic through joint marketing efforts after
consummation of the UP/SP merger if it is approved. See applicants'
submission of settlement agreements with Utah Railway and Illinois
Central, UP/SP-74, filed February 2, 1996, in Finance Docket No.
32760.
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Applicants submit that the proposed end-to-end combination of IC
and CC&P under common control will have no adverse impact on
competition. To the contrary, they state that common control of IC and
CC&P will enhance competition and provide improved service and routing
options for shippers on ICR and CC&P lines. According to applicants,
grain shippers on CC&P in particular will benefit from new single-line
routes to major grain processing plants on ICR and from competitive
single-line rail access to export grain markets via ICR's lines to the
ports of New Orleans and Mobile. These shippers will also benefit by
having
[[Page 8107]]
access to ICR's fleet of over 4,000 covered hopper cars. Applicants
also state that grain receivers on ICR, including grain processors in
Illinois, Tennessee, Mississippi, Louisiana and Alabama will benefit
from reliable, long-term, independent access to Iowa grain.
In addition to grain shippers and receivers, applicants submit that
the combination of CC&P and IC into a single system will open new
single-line routes for shippers of Illinois Basin coal from ICR origins
in Illinois to destinations on CC&P's lines and new marketing
opportunities for intermodal shippers.
Applicants maintain that shippers on both railroads will benefit
from improved car supply from access to the larger car fleet of the
combined system, and from faster transit times and improved operating
efficiency. They state that no customer will lose rail service as a
result of the transaction. Indeed, they claim that a combined IC/CC&P
system will be stronger, financially and operationally, than either
carrier could be separately, and thus will be better able to compete
with other railroads, motor carriers and barges in providing effective
and efficient service to the shipping public.
According to applicants, common control will have no adverse impact
on the continuation of essential transportation services by IC, CC&P or
any other carrier. Diversions of traffic from other rail carriers will
be minimal. Furthermore, they state that the transaction will assure
the preservation and continued viability of CC&P's lines.
Applicants do not anticipate that any existing ICR employees will
be adversely affected by the proposed control transaction. All of
CCPR's non-management employees and CRRC's maintenance-of-way employees
are represented by national unions and covered under existing
collective bargaining agreements. According to applicants, these
agreements will remain in force, modified as necessary to achieve the
efficiency benefits of the proposed transaction, after consummation of
control. Some work currently performed by CC&P employees will be
transferred to IC locations.
As a result of the proposed transaction, applicants anticipate that
a total of 57 positions subject to collective bargaining will be
eliminated in the first year of common control. No labor impacts are
anticipated in the second and third years after consummation.
In addition, five CC&P dispatchers currently located in Waterloo
will be transferred to IC's dispatching center in Homewood, IL, as a
result of the consolidation of dispatching functions at the latter
facility. Some CC&P maintenance-of-way positions will be eliminated by
introduction of modern mechanized track maintenance procedures on
CC&P's lines. However, all maintenance work on CC&P lines will continue
to be performed by CC&P employees.
The applicable level of labor protection for the control
transaction proposed herein is that set forth in New York Dock Ry.--
Control--Brooklyn Eastern Term. Dist., 360 I.C.C. 60 (1979). No
employee protection agreements have been reached as of the date of the
application. IC anticipates offering transfer or a severance package to
employees whose positions are eliminated as a result of IC's
acquisition of control of CC&P.
Under 49 CFR 1180, we must determine whether a proposed transaction
is a major, significant, or minor transaction. The proposed
transaction, which does not involve the merger or control of two or
more Class I railroads and which will reunite under common control rail
lines that were previously operated by IC as a single system, has no
regional or national significance and will not have any anticompetitive
effects. Accordingly, we find the proposal to be a minor transaction
under 49 CFR 1180.2(c), consistent with the categories of transactions
now defined at 49 U.S.C. 11325(a). Because the application
substantially complies with the regulations governing minor
transactions, we are accepting it for consideration.
The application and exhibits are available for inspection in the
Public Docket Room at the Offices of the Surface Transportation Board
in Washington, DC. In addition, they may be obtained upon request from
applicants' representatives named above.
Interested persons, including government entities, may participate
in this proceeding by submitting written comments. Any person who files
timely comments will be considered a party of record if the person so
requests. No petition for leave to intervene need be filed.
Consistent with 49 CFR 1180.4(d)(1)(iii), written comments must
contain:
(a) The docket number and title of the proceeding;
(b) The name, address, and telephone number of the commenting party
and its representative upon whom service shall me made;
(c) The commenting party's position, i.e., whether it supports or
opposes the proposed transaction;
(d) A statement whether the commenting party intends to participate
formally in the proceeding, or merely comment on the proposal;
(e) If desired, a request for an oral hearing with reasons
supporting this request; the request must indicate the disputed
material facts that can be resolved only at a hearing; and
(f) A list of all information sought to be discovered from
applicant carriers.
Because we have determined that this proposal is a minor
transaction, no responsive applications will be permitted. Except as
noted above, the time limits for processing a minor transaction, set
forth at 49 U.S.C. 11325(d), govern.
Discovery may begin immediately. We admonish the parties to resolve
all discovery matters expeditiously and amicably.
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
It is ordered:
1. This application is accepted for consideration under 49 U.S.C.
11323-25 as a minor transaction under 49 CFR 1180.2(c).
2. The parties shall comply with all provisions stated above.
3. This decision is effective on March 1, 1996.
Decided: February 23, 1996.
By the Board, Chairman Morgan, Vice Chairman Simmons, and
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-4795 Filed 2-29-96; 8:45 am]
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