Maine close to agreement to buy rail line

In a decision served late Friday, the Surface Transportation Board said it was informed Thursday that the State of Maine and the Montreal, Maine & Atlantic Railway, Ltd. (MM&A) “have substantially completed the negotiation of a purchase and sale agreement and the related trackage rights and interchange agreements necessary to implement the settlement.”

The joint petition filed Dec. 9 by the state and the railroad came a little over nine months after MM&A filed an application for permission to abandon and discontinue service over approximately 233 miles of line in Aroostook and Penobscot counties.

In addition to Maine’s Department of Transportation, a group of shippers—Irving Woodlands LLC, Irving Forest Products, Inc., Fraser Papers Inc., Fraser Timber Limited, and Katahdin Paper Company—filed a joint protest. Separate protests were filed by Huber Engineered Woods, LLC and the Brotherhood of Locomotive Engineers and Trainmen.

On May 25, the Board issued an order encouraging the parties to enter into talks to resolve issues arising out of the abandonment application and a proposal by the state to purchase the line for continued service. On Oct. 20, the state and MM&A notified the board that they had reached an agreement by which the railroad agreed to sell the line to the state for continued rail service and working out the details. 

STB said that in its Dec. 9 filing, the parties placed a number of conditions on the transaction: “Primarily, they ask that the board grant the abandonment; acknowledge that the state will not become a common carrier after the purchase; and allow the railroad to consummate the abandonment, subject to environmental conditions, if the state fails to close on the deal, or withdraw the abandonment authority and reinstate the opposition if the railroad fails to close on the deal. The parties wish to consummate their purchase and sale agreement by Dec, 31, 2010. The parties state that, after the consummation of the sale, MMA will provide interim service until the State chooses a new operator for the line.”

STB has given interested parties until Dec. 17 to file replies to the petition.