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CP: All aboard for southern Louisiana passenger rail service

Shareholders overwhelmingly support CP-KCS merger

A Canadian Pacific train heads to its next destination. (Photo: Canadian Pacific)

Canadian Pacific will work with local officials to offer passenger rail service between Baton Rouge and New Orleans in Louisiana should the merger between CP and Kansas City Southern proceed.

CP (NYSE: CP) will open capacity for passenger rail on its owned track and allow one round trip per day to start, according to CP and James Clements, senior vice president of strategic planning and technology transformation. Additional funding would be needed to make capital improvements that would also expand passenger rail capacity.

“We look forward to the expansion and working with Amtrak to develop passenger service,” Clements said in a Wednesday release. “This is historic. We’re excited about what this does for our customers and what this does for our communities.”  

Joining Clements at a press event Wednesday morning announcing the service were Louisiana Gov. John Bel Edwards, Louisiana Secretary of Transportation Shawn Wilson, local elected officials and business leaders representing southern Louisiana. 

The potential expansion for passenger rail comes at a time when the recently passed Infrastructure Investment and Jobs Act has allocated funding to Amtrak to further develop a 15-year corridor vision program. The act also provides federal funding to the Federal-State Partnership for Intercity Passenger Rail grants. 

The region has been eyeing passenger rail service between Baton Rouge and New Orleans for years, as witnessed by voter surveys. Stakeholders anticipate upgrades to the local network as customer demand needs are assessed. To support a second train pair that wouldn’t interfere with existing freight rail service, analyses would also need to be performed, according to CP. 

“We’re willing to open up the capacity without the normal capacity studies, with one round trip per day,” Clements said during Wednesday’s press event. 

“We’ve not operated the Baton Rouge-New Orleans line. We have looked at the state of the infrastructure and have an understanding of it. And I do believe that while there could be capacity to offer the one train pair. There’s certainly some infrastructure improvements that will be needed to ensure both a safe passenger operation and that we have a competitive or attractive transit time” that would enable Amtrak to attract passengers, Clements said.

In a separate, unrelated announcement on Wednesday, CP said it has garnered shareholder support for the merger of CP and KCS (NYSE: KSU). Shareholders voted to approve the issuance of up to 277,960,197 CP common shares as the share consideration under the terms of the merger agreement. Shareholders also voted on the name change to CPKC.

Both items received over 99.8% shareholder support.

“The overwhelming support our shareholders have given today to the transaction is critical to making this combination a reality,” CP President and CEO Keith Creel said. “In the coming days, we will be working to complete the steps required to close into the voting trust, and in the months ahead we look forward to participating in the STB’s comprehensive regulatory review. Following receipt of STB approval and consummation of CP control, Canadian Pacific Kansas City will add new capacity to the U.S. rail network, create new competitive transportation options, support North American economic growth and deliver other important benefits to customers, employees and the environment.”

CP still anticipates to merge with KCS sometime in the fourth quarter of 2022. 

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily.