Rail Decision Worries Chemical Manufacturers

The recent decision by the Surface Transportation Board (STB) to permit the breakup and acquisition of the Conrail railroad system by two competing systems has the chemical industry concerned. Worries about higher rail rates, environmental problems, and lack of competitive services remain unaddressed. The transaction has been under way for some time. Last year, Norfolk Southern Corp. (NS), of Norfolk, Va., and CSX Corp., based in Richmond, Va., announced an agreement whereby NS would purchase 58% of Conrail for $5.9 billion and CSX would acquire the rest for $4.3 billion. The Conrail system has extensive East Coast lines running from Montreal to the Washington, D.C., area and as far west as St. Louis. After taking over Conrail, CSX and NS will control about 44,000 miles of track throughout 24 states. Although the two companies will split Conrail's assets, a number of facilities will be shared as joint assets. STB, an independent federal board created after ...