[Federal Register Volume 63, Number 221 (Tuesday, November 17, 1998)]
[Notices]
[Pages 63960-63962]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30704]



[[Page 63960]]

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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Finance Docket No. 33556 (Sub-No. 2) et al.]


Canadian National Railway Company, Grand Trunk Corporation, and 
Grand Trunk Western Railroad Incorporated--Control--Illinois Central 
Corporation, Illinois Central Railroad Company, Chicago, Central and 
Pacific Railroad Company, and Cedar River Railroad Company; et al.

AGENCY: Surface Transportation Board.

ACTION: Decision No. 21; Notice of Acceptance of Responsive 
Applications.

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SUMMARY: The Board is accepting for consideration the responsive 
application filed by Ontario Michigan Rail Corporation 
(OMR)1 in STB Finance Docket No. 33556 (Sub-No. 2), and the 
responsive application filed by Canadian Pacific Railway Company (CPR) 
and St. Lawrence & Hudson Railway Company Limited (SL&H) in STB Finance 
Docket No. 33556 (Sub-No. 3). The responsive applications relate to the 
primary application filed July 15, 1998, by Canadian National Railway 
Company (CNR), Grand Trunk Corporation (GTC), and Grand Trunk Western 
Railroad Incorporated (GTW), Illinois Central Corporation (IC Corp.), 
Illinois Central Railroad Company (ICR), Chicago, Central and Pacific 
Railroad Company (CCP), and Cedar River Railroad Company 
(CRRC).2
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    \1\ Although OMR referred to its filing as an ``inconsistent 
application,'' the relief sought by OMR is conditional to, rather 
than in lieu of, approval of the primary application. Accordingly, 
OMR's filing is a responsive application and will be referred to as 
such. See 49 CFR 1180.3(h).
    \2\ CNR, GTC, and GTW, and their affiliates, are referred to 
collectively as CN. IC Corp., ICR, CCP, and CRRC, and their 
affiliates, are referred to collectively as IC. CN and IC are 
referred to collectively as applicants.

DATES: The effective date of this decision is November 17, 1998. 
Comments regarding the responsive filings must be filed with the Board 
by December 11, 1998. Rebuttal in support of the responsive filings 
must be filed with the Board by January 11, 1999. Briefs (not to exceed 
50 pages for the primary applicants and not to exceed 25 pages for all 
other parties) must be filed with the Board by February 19, 
1999.3
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    \3\ The briefs should succinctly present all arguments on which 
parties intend to rely, supported by clear references to any 
portions of the evidentiary record supporting their positions.

ADDRESSES: An original and 25 copies of all comments referring to the 
responsive applications in STB Finance Docket No. 33556 (Sub-No. 2) and 
STB Finance Docket No. 33556 (Sub-No. 3) must be filed with the Surface 
Transportation Board, Office of the Secretary, Case Control Unit, Attn: 
STB Finance Docket No. 33556, 1925 K Street, N.W., Washington, DC 
20423-0001.4
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    \4\ In order for a document to be considered a formal filing, 
the Board must receive an original and 25 copies of the document, 
which must show that it has been properly served. In addition, each 
formal filing must be accompanied by an electronic submission per 
our requirements as discussed in detail in this decision. Parties 
must clearly label each formal filing with an identification acronym 
and number. See 49 CFR 1180.4(a)(2). Each disk or CD should be 
clearly labeled with the identification acronym and number of the 
corresponding paper document, and labeled as containing confidential 
or redacted materials. Documents transmitted by facsimile (FAX) will 
not be considered formal filings and are not encouraged because they 
will result in unnecessarily burdensome, duplicative processing.
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    In addition to submitting an original and 25 copies of all paper 
documents filed with the Board, parties also must submit, on 3.5-inch 
IBM-compatible floppy diskettes (disks) or compact discs (CDs), copies 
of all textual materials, electronic workpapers, data bases and 
spreadsheets used to develop quantitative evidence. Textual materials 
must be in, or convertible by and into, WordPerfect 7.0. Electronic 
spreadsheets must be in, or convertible by and into, Lotus 1-2-3 97 
Edition, Excel Version 7.0, or Quattro Pro Version 7.0. A copy of each 
disk or CD submitted to the Board should be provided to any other party 
upon request.5 Further details are discussed below.
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    \5\ In Decision No. 3 (served May 19, 1998, and published on May 
22, 1998, in the Federal Register at 63 FR 28442-44), we denied a 
petition for reconsideration of Decision No. 2, concerning the 
requirement that parties submit copies of all textual materials on 
disks or CDs, and stated that parties may individually seek a waiver 
from the disk-CD requirement.
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    In addition, one copy of each document filed in these proceedings 
must be served on: the U.S. Secretary of Transportation; the U.S. 
Attorney General; Administrative Law Judge David Harfeld, Federal 
Energy Regulatory Commission, Office of Administrative Law Judges, 888 
First Street, N.E., Suite 11F, Washington, DC 20426 [(202) 219-2514; 
FAX: (202) 219-3289] and on each of applicants' representatives: (1) 
Paul A. Cunningham, Esq., Harkins Cunningham, 1300 19th Street, N.W., 
Suite 600, Washington, DC 20036-1609; and (2) William C. Sippel, Esq., 
Oppenheimer Wolff & Donnelly, Two Prudential Plaza, 45th Floor, 180 
North Stetson Avenue, Chicago, IL 60601-6710.
    In addition, one copy of all comments filed in these proceedings 
must be served on the responsive applicants' representatives: Fritz R. 
Kahn, Esq., Fritz R. Kahn, P.C., Suite 750 West, 1100 New York Avenue, 
N.W., Washington, D.C. 20005-3934 (representing OMR); and Terence M. 
Hynes, Esq., Sidley & Austin, 1722 Eye Street, N.W., Washington, DC 
20006 (representing CPR and SL&H).
    In addition, one copy of all documents filed in these proceedings 
must be served on all other persons designated parties of record on the 
Board's service list in STB Finance Docket No. 33556. See the service 
list attached to Decision No. 9 (served September 28, 1998), as 
modified in Decision No. 13 (served October 20, 1998).6

    \6\ Members of the United States Congress and Governors are not 
parties of record and therefore need not be served with copies of 
filings, unless any such Member or Governor is designated as a party 
of record. See Decision No. 6 (served Aug. 14, 1998), slip op. at 9.
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FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 565-1613. [TDD 
for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: By application filed with the Board on July 
15, 1998, the primary applicants seek approval and authorization under 
49 U.S.C. 11321-26 for: (1) The acquisition of control, by CNR, through 
its indirect wholly owned subsidiary Blackhawk Merger Sub, Inc., of 
control of IC Corp. and through it of ICR and its railroad affiliates; 
and (2) the resulting common control by CNR of GTW and its railroad 
affiliates and ICR and its railroad affiliates. A related application 
for terminal trackage rights in Springfield, IL, was also filed in STB 
Finance Docket No. 33556 (Sub-No. 1), seeking relief contingent upon 
approval of the primary application. In Decision No. 6, served August 
14, 1998, and published that day in the Federal Register at 63 FR 
43744-51, the Board accepted for consideration the primary application 
and the related filing. In Decision No. 11, served October 2, 1998, the 
Board extended the procedural schedule at the request of various 
parties and directed that inconsistent and responsive applications be 
filed by October 27, 1998.7
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    \7\ By motion filed November 2, 1998 (designated as ECA-8), 
Exxon Chemical Americas (ECA) requests that the public version of 
its comments filed on October 27, 1998, be reclassified as 
confidential because its public version filed on that date 
inadvertently included information that should have been redacted. 
ECA states that it has served corrected copies of the public version 
of its comments on all parties of record. ECA's motion will be 
granted.

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[[Page 63961]]

Responsive Filings: Conditions Requested

    In STB Finance Docket No. 33556 (Sub-No. 2), as a condition to any 
approval of the CN/IC transaction, OMR seeks to require CN to convey 
its 50% interest in the CNCP Niagara-Detroit Partnership (NDP), owner 
of the Detroit River Tunnel Company (DRTC), to OMR.8 In STB 
Finance Docket No. 33556 (Sub-No. 3), CPR seeks a similar condition 
requiring CN to convey its one-half interest in DRTC to CPR's affiliate 
SL&H, which would result in CPR's indirect ownership of 100% of DRTC.
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    \8\ In addition, OMR seeks the divestiture of CN's one-half 
interest in The Canada Southern Railway Company and The Niagara 
River Bridge Company, switching railroads also owned by NDP. OMR 
states that these rail properties are potential sources of needed 
traffic to support the DRTC.
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    In its application, OMR requests that its proposed divestiture be 
found to be a minor transaction.9 Even if OMR's requested 
relief is a minor transaction, a responsive applicant is required to 
submit certain information, including operational data and a discussion 
of the public interest justification in support of the application. See 
49 CFR 1180.6 and 1180.8. The filing by OMR provides rudimentary 
financial and operational evidence. On the basis of this information 
alone, however, the Board will be unable to determine whether there 
will be significant changes in traffic patterns or whether OMR's 
proposed acquisition and operation of the DRTC will be in the public 
interest in terms of OMR's ability to cover, through tunnel operating 
profits, the fixed charges that will arise from the proposed financing.
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    \9\ Although OMR filed a description of its anticipated 
inconsistent application on the August 31, 1998 due date for such 
submissions, OMR failed to file a petition for waiver or 
clarification with respect to its proposed relief. In Decision No. 7 
(served September 18, 1998), however, we granted CPR's petition for 
waiver or clarification by finding, among other things, that CPR's 
similar divestiture proposal constituted a minor transaction. A 
similar conclusion is warranted here with respect to OMR's proposal.
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    We previously reserved the right to require the filing of 
supplemental information from any party or individual if necessary to 
complete the record in this matter. See Decision No. 6, slip op. at 7 
n.14, 63 FR at 43747 n.14. To enable the Board to assess the impact of 
OMR's proposal, OMR will be required to submit no later than December 
1, 1998, the following information: (1) the operational data prescribed 
at 49 CFR 1180.8(b); (2) information regarding carrier usage of the 
existing tunnel and the impact of projected traffic increases on 
carrier facilities on both sides of the Detroit River; (3) identity and 
amount of financing for each expected source of capital, as outlined on 
page 2 of the verified statement of Patrick J. O'Neill; (4) method(s) 
and amount of financing expected to be undertaken by any prospective 
partnership group to fund construction and ongoing operations of the 
proposed Detroit-Windsor Tunnel; (5) balance sheet of OMR giving effect 
to construction and financing of the tunnel, as estimated for the 
beginning of the first year of post-construction operations, including 
the proposed method of handling interest on debt financing during 
construction; and (6) income statements showing expected revenues, 
expenses, fixed charges, and net income from operations for the first 
year of operations and for a normal year of operations.

Responsive Filings Accepted

    The responsive applications filed by OMR, CPR, and SL&H are in 
substantial compliance with the applicable regulations. We are 
accepting for consideration the responsive application by CPR and SL&H. 
Subject to the supplemental filing requirement above, we are accepting 
for consideration the responsive application by OMR.

Public Inspection

    The responsive filings are available for inspection in the Docket 
File Reading Room (Room 755) at the offices of the Surface 
Transportation Board, 1925 K Street, N.W., in Washington, DC. The 
responsive filings may also be obtained upon request from the 
applicants' representatives named above.

Proceedings Consolidated

    The responsive filings in STB Finance Docket No. 33556 (Sub-Nos. 2 
and 3) are consolidated for disposition with the primary application in 
STB Finance Docket No. 33556 (and the embraced Sub-No. 1 proceeding).

Comments May Be Submitted

    Interested persons may participate formally by submitting written 
comments regarding any or all of these responsive filings, subject to 
the filing and service requirements specified above. Such comments 
(referred to as ``Response[s]'' in the procedural schedule) must be 
filed with the Board by December 11, 1998. Comments must include the 
following: the commenter's position in support of or in opposition to 
the transaction proposed in the responsive filing; any and all 
evidence, including verified statements, in support of or in opposition 
to such proposed transaction; and specific reasons why approval of such 
proposed transaction would or would not be in the public interest.

Requests for Affirmative Relief Will Not Be Accepted

    Because the responsive applications accepted for consideration in 
this decision contain proposed conditions to approval of the primary 
application in STB Finance Docket No. 33556, the Board will entertain 
no requests for affirmative relief with respect to these responsive 
applications. Parties may only participate in direct support of or in 
direct opposition to these responsive applications as filed.

Electronic Submissions

    In addition to submitting an original and 25 paper copies of each 
document filed with the Board, parties must submit, on disks or CDs, 
copies of all textual materials, electronic workpapers, data bases and 
spreadsheets used to develop quantitative evidence. Data must be 
submitted on 3.5 inch IBM-compatible floppy disks or CDs. Textual 
materials must be in, or convertible by and into, WordPerfect 7.0. 
Electronic spreadsheets must be in, or convertible by and into, Lotus 
1-2-3 97 Edition, Excel Version 7.0, or Quattro Pro Version 7.0. Each 
disk or CD should be clearly labeled with the identification acronym 
and number of the corresponding paper document, see 49 CFR 
1180.4(a)(2), and a copy of such disk or CD should be provided to any 
other party upon request. Also, each disk or CD should be clearly 
labeled as containing confidential or redacted materials. The data 
contained on the disks and CDs submitted to the Board will be subject 
to the protective order granted in Decision No. 1, served February 26, 
1998, and will be 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.10
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    \10\ The electronic submission requirements set forth in this 
decision supersede, for the purposes of this proceeding, the 
otherwise applicable electronic submission requirements set forth in 
our regulations. See 49 CFR 1104.3(a), as amended in Expedited 
Procedures for Processing Rail Rate Reasonableness, Exemption and 
Revocation Proceedings, STB Ex Parte No. 527, 61 FR 52710, 52711 
(Oct. 8, 1996), 61 FR 58490, 58491 (Nov. 15, 1996).
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    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

[[Page 63962]]

    It is ordered:
    1. The responsive applications in STB Finance Docket No. 33556 
(Sub-Nos. 2 and 3) are accepted for consideration, and are consolidated 
for disposition with the primary application in STB Finance Docket No. 
33556 (and the embraced Sub-No. 1 proceeding), subject to the 
requirement that OMR file the supplemental information outlined in this 
decision no later than December 1, 1998.
    2. The parties shall comply with all provisions as stated above.
    3. The motion in ECA-8 to reclassify as confidential the public 
version of ECA's comments filed on October 27, 1998, is granted.
    4. This decision is effective on November 17, 1998.

    Decided: November 10, 1998.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 98-30704 Filed 11-16-98; 8:45 am]
BILLING CODE 4915-00-P