FRA, STB ISSUE SAFETY RULES FOR FUTURE RAILROAD CONSOLIDATIONS

FRA, STB ISSUE SAFETY RULES FOR FUTURE RAILROAD CONSOLIDATIONS    The U.S. Federal Railroad Administration and the Surface Transportation Board have issued final rules for safety of railroad operations during mergers or acquisitions.
   “We have an obligation to do all we can to ensure the safety of merged rail operations, particularly where consolidation could have a significant impact on thousands of rail employees nationwide and the communities in which they operate,” said Federal Railroad Administrator Allan Rutter. “I believe this rule accomplishes that goal.”
      The rulemaking was initiated in response to the FRA’s identification of safety deficiencies related to large-scale railroad mergers that took place in the mid-1990s, such as the Union Pacific and Southern Pacific and the Burlington Northern and Atchison Topeka & Santa Fe. As a result, the STB, at FRA’s request, required the filing of “safety integration plans” as part of the acquisition of Conrail by CSX Corp. and Norfolk Southern. Corp., and the merger between Canadian National and the Illinois Central.
   These plans are needed to “address the safety of railroad operations during every phase of a proposed transaction,” the FRA said.
   The new rules apply to mergers, acquisitions and consolidations of Class I and Class II railroads. Companies proposing these transactions will be required to submit safety integration plans to both FRA and STB, after which the FRA will review the document and report its findings and conclusions to the STB. While the STB is responsible for the approval or disapproval of proposed transactions, the FRA is responsible for monitoring the safe implementation of transactions approved by the STB.