Feds OK sale of D&H rail lines

David Becker, chief engineer for the Norfolk Southern Railroad, left, confers with U.S. Rep. Chris Gibson, R-Kinderhook, during a 2011 tour of the company's railyard under construction near Mechanicville. Norfolk Southern received approval Friday for t...

Federal regulators have approved the sale of 283 miles of railway across New York and Pennsylvania in an acquisition poised to affect nearly 250 jobs, including many in the Capital Region.

The U.S. Surface Transportation Board issued its final approval Friday, six months after Delaware and Hudson Railway Co. announced it wanted to sell its southern lines to the Norfolk Southern Railway Co. With federal approval, the $217 million sale can now take effect June 15.

Just this week, 243 D&H employees across the state received notice that the sale could affect their jobs. D&H parent company Canadian Pacific Railway has said the sale will likely have “minimal impact” on total employment, since Norfolk Southern is planning to hire about 150 current employees, and remaining employees with seniority and bumping rights will get to pick other D&H locations where they might like to work.

The railway’s southern lines stretch 267 miles between Sunbury, Pennsylvania, and Schenectady, and include about 15 miles of track between Voorheesville Junction and Delanson. Workers at D&H facilities in Clifton Park, Howes Cave, Albany, Saratoga Springs, Fort Edward, Plattsburgh, Binghamton, Oneonta and Willsboro will be affected.

In reaching the decision, federal regulators said the acquisition is not likely to “cause a substantial lessening of competition or create a monopoly or restraint of trade,” according to a news release issued Friday.

The D&H is planning to discontinue trackage rights it has on lines that connect to the south lines, which is part of a separate proceeding before the Surface Transportation Board. But the board said in its Friday decision that even if the D&H discontinues those rights the effect is unlikely to be anticompetitive.

“The board concluded that any anticompetitive effects are unlikely and, even if they were to occur, would be far outweighed by the very strong public benefits of the transaction,” the board said in the release.

The sale will provide more reliable, safe and efficient service for shippers, the board said. It will allow Norfolk Southern, and rail transportation in general, to provide more effective competition with other modes of transportation, like trucking and barges.

The sale gives Norfolk Southern, a transportation company that operates 20,000 route miles across 22 states in the eastern U.S., single-line routes from Chicago and the southeastern U.S. to Albany. The lines already connect with its network at Sunbury and in Binghamton and to its new intermodal terminal in Mechanicville.

Norfolk Southern was already the main user of D&H’s southern lines. By giving them ownership, the company argued that service would improve and operating efficiencies would increase. It said there’s also potential for job growth along the southern lines, since traffic is expected to increase following the transaction.

The board’s approval came with a number of conditions, including a stipulation that Norfolk Southern should enter into two voluntary commercial agreements with D&H to preserve certain shippers’ access to carriers.