[Federal Register Volume 66, Number 56 (Thursday, March 22, 2001)]
[Notices]
[Page 16096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-6866]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34005]


Canadian Pacific Railway Company-Corporate Family Transaction 
Exemption-Interests in Detroit River Tunnel and Niagara River Bridge

    Canadian Pacific Railway Company (CPR) has filed a verified notice 
of exemption under 49 CFR 1180.2(d)(3)\1\ for what CPR describes as a 
corporate family transaction involving CPR's reorganization of certain 
assets in the Detroit River Tunnel (Tunnel) and the Niagara River 
Bridge (Bridge).\2\
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    \1\ On February 27, 2001, CPR also filed a motion to dismiss the 
notice of exemption on jurisdictional grounds. That motion will be 
addressed by the Board in a separate decision.
    \2\ According to CPR, a portion of the Tunnel (approximately 1.8 
route miles) and the Bridge (approximately .2 route miles) are 
located in the United States.
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    The Detroit River Tunnel Company (DRTC) currently owns the Tunnel 
and leases it to the CNCP Niagara-Detroit Partnership (N-D 
Partnership). N-D Partnership owns all of the voting stock of DRTC. The 
Niagara River Bridge Company (NRBC) currently owns the Bridge and 
leases it to N-D partnership. NRBC is a wholly owned subsidiary of 
Canadian Southern Railway Company (CSR). N-D Partnership owns all of 
the voting stock of CSR. CPR owns a 50% partnership interest in N-D 
Partnership and holds a 50% undivided interest in the Tunnel and the 
Bridge through N-D Partnership. The Canadian National Railway Company 
(CN) owns the other 50% partnership interest in N-D Partnership.
    Under the proposed transaction, N-D Partnership will be dissolved 
and its assets distributed equally to its partners CPR and CN. CPR will 
contribute its 50% undivided interest in the Tunnel, including the 
stock of DRTC and the Tunnel lease, to Detroit River Tunnel Partnership 
(DRT Partnership), a noncarrier partnership. Also, CPR will contribute 
its 50% undivided interest in the non-Tunnel assets, including the 
stock of CSR and the Bridge lease, to CNCP Niagara-Windsor Partnership 
(N-W Partnership), a noncarrier partnership. Upon consummation, CPR 
will own a 50% partnership interest in both DRT Partnership and N-W 
Partnership.\3\
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    \3\ This transaction is related to the following verified 
notices of exemption all filed at the Board on February 27, 2001: 
STB Finance Docket No. 34006, Canadian Pacific Railway Company-
Trackage Rights Exemption-Detroit River Tunnel Company; STB Finance 
Docket No. 33984, Borealis Infrastructure Trust Management, Inc., 
Sole Trustee of the Borealis Transportation Infrastructure Trust-
Acquisition Exemption-Detroit River Tunnel Company; STB Finance 
Docket No. 34007, Canadian National Railway Company-Corporate Family 
Transaction Exemption-Interest in Detroit River Tunnel and Niagara 
River Bridge; and STB Finance Docket No. 34001, Canadian National 
Railway Company-Trackage Rights Exemption-Detroit River Tunnel 
Company.
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    The transaction was scheduled to be consummated on or soon after 
the March 6, 2001 effective date of the exemption (7 days after the 
exemption was filed).
    CPR has filed its notice of exemption under 49 CFR 1180.2(d)(3) 
based on its assertion that the proposed reorganization is exempt as 
one within the CPR corporate family.\4\ As described, the transaction 
will not result in adverse changes in service levels, significant 
operational changes, or a change in the competitive balance with 
carriers outside the corporate family, but whether CPR and its 
affiliates qualify for the corporate family transaction class exemption 
and whether they need that exemption or some other Board approval (or 
exemption) for the proposed transaction are matters that will be 
addressed by the Board in its consideration of CPR's motion to dismiss.
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    \4\ Unredacted versions of the Distribution Agreement among CPR, 
CN and N-D Partnership, the Dissolution Agreement between CPR and 
CN, the Partnership Agreement between CPR and Borealis 
Infrastructure Trust Management, Inc. (Borealis), the Operating, 
Management and Maintenance Agreement among DRT Partnership, CPR and 
Borealis, and the Partnership Agreement between CPR and CN, as 
required by 49 CFR 1180.6(a)(7)(ii), were filed under seal. A motion 
for a protective order, filed on February 27, 2001, was granted by 
the Board's decision served on March 14, 2001.
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    Applicants state that the reorganization of CPR's ownership 
interests in the Tunnel and Bridge will affect no CPR employees. Under 
49 U.S.C. 10502(g), the Board may not use its exemption authority to 
relieve a rail carrier of its statutory obligation to protect the 
interests of its United States employees. As a condition to this 
exemption, any United States employee affected by the transaction will 
be protected by the conditions imposed in New York Dock Ry.-Control-
Brooklyn Eastern Dist., 360 I.C.C. 60 (1979).
    If the notice contains false or misleading information, the 
exemption is void ab initio. Petitions to revoke the exemption under 49 
U.S.C. 10502(d) may be filed at any time. The filing of a petition to 
revoke will not automatically stay the transaction.
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 34005, must be filed with the Surface Transportation 
Board, Office of the Secretary, Case Control Unit, 1925 K Street, NW., 
Washington, DC 20423-0001. In addition, a copy of each pleading must be 
served on George W. Mayo, Esq., Hogan & Hartson L.L.P., 555 Thirteenth 
Street, NW., Washington, DC 20004-1109.
    Board decisions and notices are available on our website at 
``WWW.STB.DOT.GOV.''

    Dated: March 14, 2001.

    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 01-6866 Filed 3-21-01; 8:45 am]
BILLING CODE 4915-00-P