[Federal Register Volume 62, Number 141 (Wednesday, July 23, 1997)]
[Notices]
[Pages 39600-39602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19380]


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

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Finance Docket No. 33388 (Sub-No. 6)]


Norfolk and Western Railway Company--Construction and Operation 
Exemption--Connecting Track with Consolidated Rail Corporation at 
Alexandria, IN

AGENCY: Surface Transportation Board (Board, DOT).

ACTION: Notice of exemption; Request for comments.

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

SUMMARY: On June 23, 1997, Norfolk and Western Railway Company (NW), a 
wholly owned subsidiary of Norfolk Southern Railway Company (NSR), 
pursuant to 49 U.S.C. 10502, filed a petition for exemption from the 
prior approval requirements of 49 U.S.C. 10901 to construct and operate 
a connection track at Alexandria, IN.1 The

[[Page 39601]]

Board seeks comments from interested persons respecting the exemption 
criteria and any other non-environmental concerns 2 involved 
in our approval of the construction and operation of NW's Alexandria 
construction project sought in STB Finance Docket No. 33388 (Sub-No. 
6).
---------------------------------------------------------------------------

    \1\ This proceeding is related to STB Finance Docket No. 33388, 
CSX Corporation and CSX Transportation, Inc., Norfolk Southern 
Corporation and Norfolk Southern Railway Company--Control and 
Operating Leases/Agreements--Conrail Inc. and Consolidated Rail 
Corporation (CSX/NS/CR). In CSX/NS/CR, Decision No. 9, served June 
12, 1997, we granted a petition for waiver that would allow NSR to 
seek approval for construction of three construction projects, 
including this proposed construction at Alexandria, following the 
completion of our environmental review of the construction projects, 
and our issuance of further decisions exempting or approving the 
proposals, but prior to our approval of the primary application.
    \2\ The handling of environmental issues will be discussed 
below.

DATES: Written comments must be filed with the Board by August 22, 
1997. Replies may be filed by petitioner on or before September 11, 
---------------------------------------------------------------------------
1997.

ADDRESSES: An original and 25 copies of all documents must refer to STB 
Finance Docket No. 33388 (Sub-No. 6) and must be sent to the Office of 
the Secretary, Case Control Unit, ATTN: STB Finance Docket No. 33388 
(Sub-No. 6), Surface Transportation Board, 1925 K Street, NW., 
Washington, DC 20423-0001.3 In addition, one copy of all 
documents in this proceeding must be sent to Administrative Law Judge 
Jacob Leventhal, Federal Energy Regulatory Commission, 888 First 
Street, NE., Suite 11F, Washington, DC 20426 [(202) 219-2538; FAX: 
(202) 219-3289] and to petitioner's representative: James R. Paschall, 
Norfolk Southern Corporation, Three Commercial Place, Norfolk, VA 
23510-2191. Parties to STB Finance Docket No. 33388 will not be 
automatically placed on the service list for this proceeding.

    \3\  In addition to submitting an original and 25 copies of all 
documents filed with the Board, the parties are encouraged to submit 
all pleadings and attachments as computer data contained on a 3.5-
inch floppy diskette formatted for WordPerfect 7.0 (or formatted so 
that it can be converted into WordPerfect 7.0) and clearly labeled 
with the identification acronym and number of the pleading contained 
on the diskette. See 49 CFR 1180.4(a)(2). The computer data 
contained on the computer diskettes submitted to the Board will be 
subject to the protective order granted in Decision No. 1, served 
April 16, 1997 (as modified in Decision No. 4, served May 2, 1997), 
and is for the exclusive use of Board employees reviewing 
substantive and/or procedural matters in this proceeding. The 
flexibility provided by such computer data will facilitate timely 
review by the Board and its staff.
---------------------------------------------------------------------------

FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 565-1613. [TDD 
for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: On June 23, 1997, CSX Corporation (CSXC), 
CSX Transportation, Inc. (CSXT), Norfolk Southern Corporation (NSC), 
NSR, Conrail Inc. (CRR), and Consolidated Rail Corporation (CRC) 
4 filed their primary application in the CSX/NS/CR 
proceeding seeking our authorization for: (a) the acquisition by CSX 
and NS of control of Conrail; and (b) division of Conrail's assets by 
and between CSX and NS. In Decision No. 9 in that proceeding, we 
granted the requests by applicants, with respect to four CSX 
construction projects and three NS construction projects, for waivers 
of our otherwise applicable ``everything goes together'' 
rule.5 The waivers would allow CSX and NS to begin the 
physical construction following the completion of our environmental 
review of the construction projects, and our issuance of further 
decisions exempting or approving the proposals, but prior to our 
approval of the primary application. This petition for exemption for 
the construction at Alexandria, IN, concerns one of the seven 
construction projects. By this notice, we are inviting comments on 
whether the proposed transaction meets the applicable exemption 
criteria and on any other non-environmental concerns regarding the 
construction and operation of this particular project.
---------------------------------------------------------------------------

    \4\ CSXC and CSXT are referred to collectively as CSX. NSC and 
NSR are referred to collectively as NS. CRR and CRC are referred to 
collectively as Conrail. CSX, NS, and Conrail are referred to 
collectively as applicants.
    \5\ See 49 CFR 1180.4(c)(2)(vi).
---------------------------------------------------------------------------

    Pursuant to 49 U.S.C. 10502, NW has filed a petition for exemption 
from the prior approval provisions of 49 U.S.C. 10901 to construct and 
operate a connection track in Alexandria, IN, between Conrail's line 
from Anderson to Goshen, IN, and NW's line from Muncie to Frankfort, 
IN. 6 The connection will be approximately 970 feet in 
length, occupy approximately 2.3 acres of land, and will be in the 
northeast quadrant of the intersection of the two lines. NW estimates 
that eight trains per day will operate over the proposed track, and 
that the proposed construction will cost about $1.4 million. A map 
showing the proposed connection track at Alexandria is attached as 
Exhibit C to NW's petition.
---------------------------------------------------------------------------

    \6\  NW filed a petition for exemption to construct and operate 
a connection track in Alexandria, IN, as a related filing in Volume 
5 of the primary application filed on June 23, 1997, in the CSX/NS/
CR proceeding. See CSX/NS-22 (Volume 5) at 152. NW subsequently 
refiled its exemption petition with the Board on June 24, 1997 (NS-
5). We will consider both filings together here. As we stated in 
CSX/NS/CR, Decision No. 9, at 6-7:
    * * * in reviewing these projects separately, we will consider 
the regulatory and environmental aspects of these proposed 
constructions and applicants' proposed operations over these lines 
together in the context of whether to approve each individual 
physical construction project. The operational implications of the 
merger as a whole, including operations over * * * the seven 
construction projects, will be examined in the context of the 
[Environmental Impact Statement] EIS that we are preparing for the 
overall merger. * * * No rail operations can begin over these seven 
segments until completion of the EIS process and issuance of a 
further decision.
---------------------------------------------------------------------------

    NW indicates that the Alexandria connecting track will permit it to 
link the NS and Conrail rail systems to provide an efficient, less 
congested route between Chicago, IL, and Cincinnati, OH, and on to 
Atlanta, GA, and points in the Southeast. Petitioner maintains that the 
connection will improve the efficiency and quality of NS's rail service 
by adding or expanding facilities to handle anticipated increases in 
rail traffic, and by improving NS's handling of through traffic via 
Alexandria and Muncie, IN. NW also indicates that the connection will 
not add new industries or territory to the combined NS/Conrail system 
proposed in the primary application.
    Under 49 U.S.C. 10901, a railroad may: (1) Construct an extension 
to any of its railroad lines; (2) construct an additional railroad 
line; or (3) provide transportation over an extended or additional 
railroad line, only if the Board issues a certificate authorizing such 
activity. However, under 49 U.S.C. 10502, the Board shall exempt a rail 
transaction from regulation when it finds that: (1) application of the 
pertinent statutory provisions is not necessary to carry out the rail 
transportation policy of 49 U.S.C. 10101; and (2) either the 
transaction is of limited scope, or regulation is not needed to protect 
shippers from the abuse of market power.
    NW contends that detailed scrutiny of this transaction under 49 
U.S.C. 10901 is not necessary to carry out the rail transportation 
policy. NW states that the exemption will promote that policy by 
enabling NS to compete more effectively and efficiently with other rail 
carriers, especially CSX, if the primary application is granted. 
According to NW, the proposed connection will increase competition, 
minimize the need for federal regulatory control over rates and 
services, and avoid undue concentrations of market power.
    NW maintains that the proposed track connection will increase, 
rather than reduce, rail competition, and will therefore tend to reduce 
market power and increase the welfare of shippers. NW states that the 
transaction is limited in scope because the length of the track to be 
constructed is short (approximately 970 feet) and, although the 
connection may shorten routes or expedite traffic and provide 
additional interchanges between main line tracks, it will not extend 
the line into new territories or industries.
    The environmental report covering the proposed construction and 
operation of the connection tracks at

[[Page 39602]]

Alexandria is contained in the Environmental Report filed with the 
Board in STB Finance Docket No. 33388. In addition, as we required in 
CSX/NS/CR, Decision No. 9, NS must submit, no later than September 5, 
1997 (Day F+75), a preliminary draft environmental assessment (PDEA) 
for each individual construction project covered by our waiver 
decision. Each PDEA must comply with all of the requirements for 
environmental reports contained in our environmental rules at 49 CFR 
1105.7. Also, the PDEA must be based on consultations with our Section 
of Environmental Analysis (SEA) and the federal, state, and local 
agencies set forth in 49 CFR 1105.7(b), as well as other appropriate 
parties. If a PDEA is insufficient, we may require additional 
environmental information or reject the document. See CSX/NS/CR, 
Decision No. 9, at 8.
    As part of the environmental review process, SEA will independently 
verify the information contained in each PDEA, conduct further 
independent analysis, as necessary, and develop appropriate 
environmental mitigation measures. For each project, SEA plans to 
prepare an EA, which will be served on the public for review and 
comment. The public will have 20 days to comment on the EA, including 
the proposed environmental mitigation measures. After the close of the 
public comment period, SEA will prepare Post Environmental Assessments 
(Post EAs) containing SEA's final recommendations, including 
appropriate environmental mitigation. Therefore, in deciding whether to 
grant petitioner's exemption request, we will consider the entire 
environmental record, including all public comments, the EA, and the 
Post EA. Id. at 8.
    Should we determine that the Alexandria construction project could 
potentially cause, or contribute to, significant environmental impacts, 
then the project will be incorporated into the EIS for the proposed 
control transaction in STB Finance Docket No. 33388. Id. at 8. As we 
have previously emphasized, our consideration of the seven construction 
projects does not, and will not, in any way, constitute approval of, or 
even indicate any consideration on our part respecting approval of, the 
primary application in STB Finance Docket No. 33388. See CSX/NS/CR, 
Decision No. 9, at 6; and Decision No. 5, served and published in the 
Federal Register on May 13, 1997, 62 FR 26352, slip op. at 3. If we 
grant any exemptions for these seven construction projects, applicants 
will not be allowed to argue that, because we have granted an exemption 
and applicants may have expended resources to construct a connection 
track, we should approve the primary application. Applicants have 
willingly assumed the risk that we may deny the primary application, or 
approve it subject to conditions unacceptable to applicants, or approve 
the primary application but deny an applicant's request to operate over 
any or all of the seven connections. Id.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. Comments on whether the proposed transaction meets the exemption 
criteria of 49 U.S.C. 10502 and on any other non-environmental concerns 
regarding the construction and operation of the connection track in 
Alexandria are due August 22, 1997.
    2. Petitioner's reply is due September 11, 1997.
    3. This decision is effective on the date of service.

    Decided: July 16, 1997.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 97-19380 Filed 7-22-97; 8:45 am]
BILLING CODE 4915-00-P