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Common abbreviations : B&A - Bangor and Aroostook System, BCLR - Bay Colony RR, CFQ - chemins de fer Québec System, CPR - CanadianPacific, CDAC - Canadian American Railroad, CSO - Connecticut Southern RR, EOTC - Mass. Exec. Office of Transportation&Construction, GRS -Guilford Rail System, FHWA - Federal Highway Admin., FRA - Federal Rail Admin., FTA - Federal Transit Admin., HRRC - Housatonic RR, MB -Milford-Bennington RR, MBTA - Mass. Bay Transportation Authority, MDOT - Maine Dept.Transp., MPO - Metropolitan Planning Organization, MTQ- Québec Ministry of Transport, NECR - New England Central RR, NHDOT - NH Dept. of Transp., NHVT - NH & VT RR, NNEPRA - Northern New England Passenger Rail Authority, NSDOT - Nova Scotia Depart. of Transp, PW - Providence & Worcester RR, SLQ - St.Lawrence & Atlantic RR(Québec), SLR - St.Lawrence&Atlantic RR, SRP-Safe Handling Railroad (coastal Maine), VAOT- Vermont Agency of Transportation, VRS-Vt RailSystem (Green Mt. GMRC + Vermont Ry VTR + Clarendon&Pittsford CLP + Washington County Railroad WACR)

Helping to move rail and port traffic through NewEngland, the Maritimes,& eastern Québec.A twice-monthly trade newsletter.

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ATLANTIC NORTHEAST

RAILS & PORTSoperating railroads + ports, intermodal facilities, and government environment

Issue 02#04A 12 April 2002

REGIONAL ISSUESB&A: Trustee seeks to reject CN deal to serveFraser paper mill. Burkhardt negotiationscontinuing. RailWorld company buyslocomotives.NY/NJ: PIDN plans reviving.PW: 4th quarter operating ratio 99%.Koppers: Three facilities in New England.Tank farms: Why the number has shrunk.

CONNECTICUTStatewide: Current and planned rail/port transferfacilities handling construction and demolitiondebris.

MAINEMDOT: New version of integrated freight plan out.$6000 to study state rail.GRS/Calais: Proposed transload awaiting permit.SRP: Rockland branch construction should finishthis year.Searsport: B&A pier demolished.

MASSACHUSETTSBoston/GRS: Coastal Zone Management role inMystic Wharf abandonment explained. [Nochange from e-bulletin.]GRS/CSXI/PW: Maersk stays at Worcester.HRRC: Wants the STB to set price to buy CSXstub in Pittsfield MA. [No change from e-bulletin.]

NEW HAMPSHIRE[No report.]

RHODE ISLANDPW: South Quay lost as railroad site. Coalcoming to ProvPort. [No change from e-bulletin.]Quonset Point/Davisville: Gains autos at theexpense of Boston.

VERMONTVRS: Purchase of New York & Ogdensburg

consummated. [No change from e-bulletin.]MARITIMES/QUÉBEC

CBNS: Major customer Stora Enso “hints” atclosure. SYSCO pier opposition wanes? [Nochange from e-bulletin.] New wage scale.NBSR: St.Stephen transload still coming.Sydney: Marine terminal to port authority?

PEOPLE, POSITIONS, EVENTSBruce Jamieson, Tom Stevens.

Didn’t know thatMore than 30% of international trade consists ofmultinational companies moving parts and rawmaterials within their companies. Therefore,imposing high trade barriers would “perpetratemassive disruptions on the worldwide productionarrangements of US multinationals. You would takea wrecking ball to the US economy.” {Brink Lindsay,Cato Institute, cited by Peter Tirschwell in Journal ofCommerce 8-14.Apr.02}

More on the fastest trainSuper C ran for more than eight years in revenueservice between Chicago and Los Angeles, but onlyin tests between New York and Chicago. {FredFrailey in Trains May.86}

Date of next issueNEARS (24-26 April) and a vacation (13-21 April)means the next issue won’t see the light of day until 3May. - Chop Hardenbergh Next issue: 3 May.

FROM THE PUBLISHER

2 ATLANTIC NORTHEAST RAILS & PORTS – twice-monthly trade newsletter 02#04A: 12 April 2002

REGIONAL ISSUES

B&A: BANKRUPTCY18 March, Portland. THE TRUSTEE ASKED THE COURTTO VOID THE CN TRACKAGE RIGHTS TRANSACTIONof March 2001 [see 27 March 2001 issue and map], whichconsisted of three agreements:

Trackage rights. This permitted CN to run its own trains toMadawaska to serve Fraser Paper. CN would pay B&A $100per car transiting the B&A trackage. This agreement wouldrun for 99 years, though CN had the right to terminate with sixmonths’ notice.

Junction settlement agreement. B&A and CN until March 2001had split the revenue for Fraser paper traffic moving via VanBuren. The junction agreement gave the Fraser traffic entirelyto CN, with CN paying B&A $500 per car for hauling the trafficto St.Leonard for physical exchange to CN. In return for thisstream of revenue, CN paid B&A $5 million. The agreementwould run for five years, with renewal upon mutual consent.

Ancillary agreement. According to the trustee’s filing, this‘purported to create an easement but incorporated the termsand conditions of the trackage rights agreement.’ It grantedthe Waterloo Railway the same rights as CN.

The problemWhile the agreements provided a one-time infusion of capital,because the haulage fee is substantially less than the revenuesplit, current revenues are significantly diminished. Moreover,the value of the BAR to a prospective buyer is alsodiminished. Ed Burkhardt has agreed to pay substantially moreif the economics of the Fraser traffic are restored to the pre-

March 2001 position. The trackage rights agreement, the trusteeargued, must also be rejected because it would permit CN to serveFraser directly even if the junction agreement were voided.

Legal argumentThe trustee argued that all three contracts were executory underbankruptcy law: they ‘remain substantially unperformed by allparties.’ The junction agreement is ongoing; and neither thetrackage rights agreement terms nor the ancillary agreement termshave been used.

Response by CNIn its Memorandum of Law filed on 3 April, CN stated:

Financing agreement. ‘BAR and CN did not simply enter into aservice agreement. On the contrary, at a time when BARdesperately needed working capital and was unable to obtainfunds elsewhere, CN accommodated BAR by providing $5 millionof new funds in exchange for a grant of property interests inBAR’s railway line and a repayment plan structured as reducedrate haulage and trackage fees. Financing agreements are notexecutory contracts capable of rejection.’

CN relies on Title 11 section 365(e)(2)(B) which states: ‘(2)Paragraph (1) of this subsection does not apply to an executorycontract or unexpired lease of the debtor, whether or not suchcontract or lease prohibits or restricts assignment of rights ordelegation of duties, if -(B) such contract is a contract to make aloan, or extend other debt financing or financial accommodations,to or for the benefit of the debtor, or to issue a security of thedebtor.

Paragraph (1) states: ‘Notwithstanding a provision in anexecutory contract or unexpired lease, or in applicable law, anexecutory contract or unexpired lease of the debtor may not beterminated or modified, and any right or obligation under suchcontract or lease may not be terminated or modified, at any timeafter the commencement of the case solely because of a provisionin such contract or lease that is conditioned on - (A) theinsolvency or financial condition of the debtor at any time beforethe closing of the case; (B) the commencement of a case under thistitle; or (C) the appointment of or taking possession by a trustee ina case under this title or a custodian before such commencement.

[The statute seems to say only that a financing agreementmay, by its terms, be automatically terminated upon the occurrenceof bankruptcy. Editor And CN cannot find solace in the terms ofsection 365(c) which states: ‘The trustee may not assume or assignany executory contract or unexpired lease of the debtor, whetheror not such contract or lease prohibits or restricts assignment ofrights or delegation of duties, if...(2)...such contract is a contract tomake a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the debtor, or to issue asecurity of the debtor....’ There the statute does not addressrejecting such a contract. Editor]

Adverse abandonment. ‘The unwinding of that deal is an“adverse” abandonment of a railway line under 49 USC 10903

RAILWORLD BUYS LOCOMOTIVESEd Burkhardt, whose company is negotiating to buythe B&A, also owns part of Rail World LocomotiveLeasing (RWLL). RWLL recently purchased F-40PHlocomotives from Amtrak and assigned over theleases, including a lease to CDAC.

Burkhardt wrote: ‘Whilst these locos are thebest locos in service on the BAR System, theyprobably will not be assigned there permanently oncewe complete the purchase. We do intend to acquire acomplete replacement fleet, and negotiations have notbeen made final as of this date.’ {e-mail to ANR&P3.Apr.2002; Canadian Railway Observations issueappearing 1.Apr.02}

ATLANTIC NORTHEAST RAILS & PORTS – twice-monthly trade newsletter 02#04A: 12 April 2002 3

which requires approval of the Surface Transportation Board(STB), a stay of this Court’s ruling until the STB issues suchauthority, and consideration of public interest under 11 USC1165.’

The trustee recognized this difficulty, and stated in hismotion that he intended to immediately file a petition with theSTB seeking the abandonment of the trackage rights.

The STB must look to the public interest in granting suchan abandonment. CN argued that continuing CN’s rightswould preserve competition and hence promote public interest,and that the customer, Fraser, wanted CN to remain as a carrier.

Easement deed. CN views the Ancillary Agreement as aneasement, not a contract, and notes substantial law holdingthat the grant of an easement does not fit the category ofexecutory contract, and therefore the easement cannot berejected. Without rejection of the easement, CN can continueto serve Fraser, and make the issue of rejecting the other twoagreements moot.

Facts as seen by CNIron Road Railways (IRR) approached CN in January 2001seeking up to $25 million. Robert Schmidt, IRR president,couched the terms of the transaction thus: ‘A part of thisadditional revenue (or savings) to CN will be in essenceprepaid to B&A....’

More importantly, the term sheet for the proposedtransaction stated: ‘Iron Road/BAR shall also grant CN aneasement, subject to consent of lien holders, on the propertyunderlying the same track, so that CN’s right to reach Fraser-Madawaska would also be protected in an asset sale of thecompany.’

Fraser, said CN, was concerned about the continuation ofrail service and asked for the trackage rights and easement.

Next stepOn 3 April, the bankruptcy judge postponed a hearing on themotion to reject executory contracts to 1 May 2002 at 11:00AM at Bankruptcy Courtroom, Portland. {text of filings fromcourt website}

11 April, Bangor. “WE’RE GETTING VERY CLOSE TOAGREEMENT,” , said trustee Jim Howard, referring tonegotiations with Burkhardt. However, “I have never givenany deadline.” {ANR&P discussion}

NEW YORK/NEW JERSEY PIDN10 April, New Jersey. THE PORT AUTHORITY IS LOOKINGAT THREE PORTS for a near-term startup of its port inlanddistribution network (PIDN) [see 20 July 2001 issue], followinga hiatus due to 911. Bill Ellis, who is directing the PIDN projectfor the Port Authority of New York and New Jersey (NYNJ)said he hoped that one of the three could start in the next

twelve months.

Quonset Point/Davisville . On 9 April the RI EconomicDevelopment Corporation board approved a joint planningagreement. Now NYNJ and RIEDC can move forward on planningfor container-on-barge service between the two ports.

Bridgeport and New London. Ellis is awaiting the decision of theConnecticut Transportation Strategy Board about which port willinitiate the barge service.

Albany. NYNJ is also working with the Port of Albany on bargeservice up the Hudson River. {ANR&P discussion 10.Apr.02}

PROVIDENCE & WORCESTER‘Providence & Worcester (PWX) did not include 4Q01 figures inits March 25 release of financial results for full year 2001. However,subtracting earlier quarters’ data from full-year results indicatesthat operating revenues in 4Q01 were down 3.5% relative to 4Q00,while operating expenses were up 4.6%. The company’s railoperating ratio in 4Q01 was 99.1%, up from 91.4% in the year-agoquarter. The full-year 2001 operating ratio was 98.4%, an increaseof 3.5 percentage points over 2000. The company said that whiletraffic volume for the year increased 1.2%, revenue per car wasdown 2.9% because of a shift toward lower-rated commodities [see29 March issue].’ {Rail StockWatch 2.Apr.02}

KOPPERS IN THE REGIONKOPPERS HAS THREE POLEYARDS IN NEW ENGLAND.Tom Isaj of the company said each is operated by an independentcontractor who unloads the poles, stores them, inventories them,and trucks them to customers when requested to do so byKoppers.

New Haven, CSXT (Cedar Hill Yard), contractor Anastasio Reloadand Distribution. 200-250 carloads a year. [See 29 March issue.]

Willimantic, NECR, contractor CC Lounsbury. 100-125 cars a year.

Merrimack NH, GRS, contractor William M. Footer TruckingCompany. 200-250 cars a year.

Koppers is the largest producer of poles in the United States.{ANR&P discussion 3.Apr.02}

REGION: TANK FARMS8 April. WHY ARE TANK FARMS DISAPPEARING? BobBlanchard, vice-president of Sprague, explained why, for example,tank farms in East Providence have disappeared, and tank farms inProvPort stand empty.

Excess capacity. In the past, most major companies had their ownfacilities, which stood partially empty, and which had a slow


throughput.

Drive to cost-efficiency. As the tanks aged, the owners werefaced with repair or replacement. At the same time, regulationof tanks became more stringent, so the cost of repair orreplacement increased. Rather than pay that cost, manycompanies opted to aggregate product with others, finding thecost of renting volume cheaper than owning their own tanks.

In addition, the size of ships serving tank farms increased,so they could not serve tank farms in shallower waters.

Increased throughput. New England has increased its use ofpetroleum products, even with fewer tanks, by speeding up theflow.

Providence inventory tax. An inventory tax enacted by thecity, as permitted under state law, presents an additional costof doing business. Blanchard explained that any company withinventory in the city must pay a 7% tax on the value, takenover a twelve-month average. This, he said, in part explainswhy the two tank farms in ProvPort stand empty [see 4 Marchissue]. {ANR&P discussion 8.Apr.02}

CONNECTICUT

CONNECTICUT CONSTRUCTION &DEMOLITION DEBRIS FACILITIES

Connecticut has three facilities now sending construction anddemolition debris (demolition debris) out by rail, with five morepermitted or proposed. A facility to transload to barge is alsoproposed. In addition, the state has 14 truck-served facilitiesalready operating.

Concerns about whether the state will churn out enoughdemolition debris to supply all the facilities were addressed byJohn Cimochowski, assistant director of the waste planningand standards division and the Connecticut Department ofEnvironmental Protection (DEP). “The permit facilities don’t tieback to amount of bulky waste available.” The tonnage listedfor the permitting process could be counted three times forthree different types of permitted facilities: a facility which onlyprocesses the waste, a transfer facility which may aggregatedifferent types of bulky waste, and then finally a facility whichtransports for disposal. “We encourage volume reduction,reuse, and as a last resort, disposal.”

Operating, railMilford, WCTIPortland, Mid-State Recovery.Danbury, TSI

Proposed or permitted but not operating, railNew Haven, Circle of LifeSuffield, Babylon (Logano)Willimantic, Willimantic Waste PaperHartford, Capitol TransloadHartford, American Disposal Systems

Proposed, bargeNew Haven, Waterfront

A request to recycleThe Connecticut Department of Environmental Protection isrevising its Solid Waste Management Plan. The proposed plan,which had public hearings in 2000, states in the executivesummary: ‘The Department estimates that Connecticut generatesapproximately 2 million tons/year of bulky and related wastes, over740,000 tons of this is construction and demolition waste frombuildings. The state has only four permitted landfills that havesignificant remaining capacity to accept bulky and related waste.If all the construction and demolition waste generated statewidewere to be sent to these landfills, their remaining capacity could beexhausted within one to two years. A similar disposal capacityshortage exists in other northeastern states. Developing thenecessary regulatory framework and infrastructure to recycle asmuch of this waste stream as practical is therefore not onlyconsistent with the legislative hierarchy for waste management, itis imperative.’ {DEP website}

The permitting processAccording to Carin Tanovici of the department, DEP issues permitsfor all sorts of solid waste facilities, including facilities handlingconstruction and demolition debris (hereafter ‘demolition debris’).When an applicant proposes a facility, the department investigatesthe adequacy of the project, including whether the applicant hasa supply of solid waste debris, and a place to send it. If theapplication is complete, it issues a notice that it will grant a permitto construct, and a permit to operate. After overcoming anyobjections including a public hearing if requested, the applicantreceives its permit to construct. Once the applicant hasconstructed the facility, it requests DEP to inspect the facility andissue the permit to operate.

All demolition debris volume reduction facilities must operatewithin an enclosed structure.

In operationAutomated Waste Disposal, located in Danbury, served by HRRC,permitted for 400 tons per day. This company started shipping atthe turn of the year [see 15 March issue], and anticipates shippingupwards of 20 carloads a week to Ohio.

Mid-State Recovery, located in Portland, served by PW, permittedfor 400 tons per day. Located on PW’s line to the Smurfit Stonecardboard plant, Mid-State opened on 19 February. According toRory Fallon, general manager, the facility has begun gradually, andwill build up to above 300 tons a day during the construction


season. About 92% of that will go out by rail; the balance(scrap steel, corrugated cardboard, concrete, et al) is sent toother facilities by truck for re-use. He’ll produce about threerailcars a day; PW can switch the facility every day, as itserves Smurfit Stone daily. {ANR&P discussion 27.Mar.02}

Waste Conversion Technologies, located in Milford, servedby CSXT, permitted for 500 tons/day. Principals LoreneStapleton and Rich Wills did not respond before press time.Tanovici said the facility received its first permit in 1991-92 anda modified permit in 1997-98.

Permitted or proposedAmerican Disposal Service, located in southern Hartford,served by CSO, permitted for 295 tons a day. The facility, at143 Murphy Road does not now use rail. Tanovici said thepermit is being transferred. Ken Valera, general manager, wasunable to return calls by press time.

According to Tanovici, the permit is written to AmericanDisposal Services. [An official at Connecticut WasteProcessing Materials (CWPM) [itself formed from ConnecticutWaste Processing, a Manafort Brothers company, and anotherfirm] said CWPM sold the Murphy Road facility to McCauley.At this point, McCauley, some of the operations of AmericanDisposal Services, and All Waste have an interrelationship.Perhaps Valera can make this clear. Editor]

Babylon LLC, located in Suffield, served by CSO, pendingpermit for 800 tons per day. Tanovici said the permit toconstruct has issued; it applies to construction and demolitiondebris. Principal Tommy Logano has put the facility, onceprojected to open in June or July 2002 [see 19 November 2001],on hold pending some issues he declined to discuss. It willrecycle some of the tonnage, and rail the rest to a landfill inOhio. {ANR&P discussion 27.Mar.02}

Willimantic Waste Paper Company, located in Willimantic,served by NECR, pending application for 250 tons a day.Principal Tim DeVivo said the facility is already shipping scrapmetal and paper by rail. The company has a permit toconstruct the demolition debris facility, and anticipates it willbegin operating this summer. Willimantic Waste will notreceive 250 tons a day immediately, but will grow gradually,assuming that the local landfill prices remain high. “If the pricedrops, we’ll take it to the landfill.” He plans to recycle 20-25%of the debris, and rail out one or two carloads a day. {ANR&Pdiscussion 26.Mar.02}

Circle of Life, located in North Haven, served by CSXT,pending application for 2,370 tons per day.Developer Mark Bourgeois anticipates between 4,000 and7,000 railcars a year [see 29 March issue]. It will go to a landfillin Ashtabula Ohio.

Capitol Transload, located in north Hartford, served by CSO,pending application for 600 tons a day. Mark Zessin of AnchorEngineering is designing this facility. He also did the Willimanticand the Danbury facilities. This is located on Weston Avenuebehind the shuttered jai alai fronton. Waste will go to Ohio.

New Haven Waterfront Gateway Terminal in the New Haven portis proposing a waste-to-barge facility. Tom Dubno of Gateway saidto get the permit, the company must show:

- Where it will get the waste from. Gateway will truck it fromexisting licensed and permitted waste transfer stations. “We willnot store waste, just transship it,” said Dubno.

- To what site it will deliver the waste. Dubno declined to specifythe destination for the barge.

According to Tanovici, similar facilities operate now in New YorkHarbor and Singapore, where solid waste is unloaded/reloaded inan enclosed building. DEP has environmental/operationalconcerns about possible collapse of the barge, an error in loadingwhich would endanger coastal waters, and the outdoor operationof unloading and reloading.

Under section 22a-209-9(d) of the Connecticut statutes,construction and demolition debris activities (unloading, reloading,etc) must occur in an enclosed structure. {ANR&P discussion4.Apr.02}

MAINE

End March. MDOT RELEASED THE ‘MAINE INTEGRATEDFREIGHT PLAN’. Conceived as an update to the 1998 version

[see 4 June 1998 issue], it had these points relevant to rails andports:

Survey resultsThe consultant, Cambridge Systematics, mailed out 600 surveysand received 169 responses, ranging from small to largebusinesses. The consultant also conducted interviews withcarriers. Under 10% of the mail respondents used rail.

Respondents (both mail and interview) rated potentialtransportation infrastructure improvements. On a scale of 1-5,improve rail came fifth of seven improvements at 1.7, beating onlyimprove ports (1.6) and improve air (1.6). Companies with morethan 500 employees rated ‘improve rail’ third, behind ‘improvehighways and bridges’ and ‘change truck size and weight laws’.

Over 30% cited the lack of adequate and consistent rail servicewithin the state as a major concern.


Focus groupsCambridge Systematics also conducted three focus groups. Inthe shipper/receiver group, some suggested making non-highway modes more attractive through the use of taxincentives.

The carrier session found some questioning the veryexistence of the Office of Freight Transportation, ‘stating thatthe flow of freight is and should be driven exclusively byeconomic factors, not by the State’s desire to balance modeshares.’

Mention of B&A. ‘In fact, specific reference was made toOFT’s involvement in a privately-held railroad company, whichcurrently is undergoing serious financial problems [the B&A,right? editor], as an example of the challenges faced bygovernment agencies when attempting to influence economicactivity.’

Rail through Canada. The group also said: ‘Rail costs throughCanada ($200 per switchover) discourages shippers from usingrail service effectively.’ Kevin Rousseau of MDOT explainedthat carriers indicated freight from Maine exchanging to aCanadian railroad costs $200 more than exchanging to a USrailroad.

Discussion of railThe Integrated Freight Plan noted that in 1999, the six privaterailroads in the state employed more than 750 workers andmoved more than 7.6 million tons of freight. According to abar chart, while in the span 1991-1996 inbound and outboundfreight was relatively balanced, in 1998 and 1999 outboundfreight boomed, up to 4.4 million tons from 4.0 in 1996, whileinbound increased far less, up from 3.86 million tons in 1996 to3.95 million tons in 1999.

The consultant projected the possible change in railcommodities from 1998 to 2006, and found the changes in eachcommodity one percent or less. The forests account for amajority, with pulp & paper at 37%, and lumber or woodproducts at 21% of total state tonnage.

A note about Presque IsleThe Plan stated the intermodal facility here ‘has one majorcustomer [McCain Foods - editor], a shipper of frozen foodsin refrigerated trailers, plus sporadic business from othershippers. Weekly volume of l50 to 60 lifts in mid-2001 hasdropped to a level of about 30. It is expected that the railroadwill see a return to the previous level in the future. Currentlythe traffic is moving via BAR to Northern Maine Junction,thence Guilford to Ayer MA, from which point it is trucked tosouthern New England and Pennsylvania destinations.’

Modal splitTruck dominates the shipping analyzed in the plan, which

covered interstate, Canadian, and intrastate traffic [but not,curiously, overhead traffic - editor]. As reported earlier [see 15February issue], 13% of Maine tonnage moves by rail; some 5%moves by water.

Looking at interstate movements, rail takes up 18% of inboundtonnage and 19% of outbound. Water takes 23% of inbound[presumably petroleum tonnage - editor], but less than 1% ofoutbound.

For Canadian movements, rail has a 22% inbound share, butonly 4% outbound. Water has a 40% inbound share [petroleumagain - editor] but less than 1% outbound.

RecommendationsThe Plan notes that many Maine businesses do not have easyaccess to rail. ‘This is the result of abandoned rail sidings andshort lines, and lack of interest by the railroads in providingspecific shippers with rail service.’ Also, the state has no strategyto address the lack of doublestack routes and 286,000-poundcapacity. The Plan recommended MDOT create such a strategy.[See below for legislative action.]

Ports. The Plan notes the poor truck access for Portland and thelack of rail access for Eastport. ‘Improving these connections,including the consideration of rail access to the port of Eastportvia intermodal and or transload facilities on the Calais BranchRailroad [sic]....may allow. [more efficient operation].’

Revisit the three-port strategy. The Plan noted that the focus onEastport, Searsport, and Portland has prevented MDOT fromproviding funds to other ports. ‘Dragon Cement, for instance,currently ships cement by barge from Rockland to Boston.Similarly, there has been interest in providing marine cargo servicefrom the Mason Station in Wiscasset.

While improvements to these facilities in Rockland andWiscasset may improve freight movements throughout the Stateand attract further business development, these and other areasare not eligible for state-funded improvements under the existingthree-port strategy. To improve the operations of the State’soverall marine system, MDOT should consider re-addressing orsupplementing its three-port strategy to include other marine portsin addition to Portland, Searsport, and Eastport.’ [The MDOTbacked away from such a revisiting last year. See 7 November 2001issue]

IRAP. The plan recommended that ‘MDOT should continue toidentify specific rail needs and provide funding assistance (on a50/50 match level) to ensure that rail infrastructure remains able tocompete effectively with the highway mode....Particular emphasisshould be placed on lines with large volumes of intrastate traffic asthis is often the traffic that is most susceptible to truck diversion.’[Sic]


MDOT responseRob Elder, head of the Office of Freight Transportation,responded to wishes of some that government stay out of thetransportation market: “If that were so, we would not beinvolved in integrating the modes, providing more choices toshippers, or even doing a freight plan. We’re no longer just ahighway agency; our planning covers all freight modes.Government does have a role, especially since 911 and thepressure on shipper costs created by the need for heightenedsecurity.

“Also, [if MDOT got out of freight] we’d be going in the

opposite direction of other New England states and theFederal Highway Administration.”

Finally, “many in the freight community have asked us toget involved” in a lot of situations. {ANR&P discussion10.Apr.2002}

10 April. THE LEGISLATURE FUNDED A $6000 STUDYOF THE ROLE OF RAILROADS in the state transportationsystem. The bill, sponsored by Representative Sharon Libby-Jones, passed by the Legislature and expected to be signed bythe governor, creates a task force to examine the six privaterailroad companies that operate in Maine and the more than1,000 miles of track in the state. The 12-member task force willinclude eight lawmakers from legislative committees onappropriations, business and economic development, andtransportation. Also on the task force will be someone from theMaine Port Authority, a member representing railroadshippers, one from the Northern New England Passenger RailAuthority, and a member representing an airport integratedwith an existing rail system.

At a hastily-called public hearing of the TransportationCommittee and at a work session on 5 April, MDOTCommissioner John Melrose said: “We need to have acomprehensive look at all aspects of rail policy. TheLegislature really has not taken a look at the policy in this areain modern times.” With the BAR in bankruptcy and other raillines facing financial difficulty, the state needs to establish acomprehensive policy that addresses both passenger andfreight services. The state, through federal funds and somebond issues, has completed some rail construction andrehabilitation projects over the last decade. But he said thework has been piecemeal. He said there has not been acomprehensive look at rail needs and how to fully integrate railwith other modes of transportation.

What policy has been implemented has been from theexecutive branch and has been limited to trying to maintainexisting tracks and provide minor improvements, Melrose said.“Rail transportation is an integral part of the state’sinfrastructure. We have spent a lot of time, as we should, onhighways, but we have not really taken a close look at railpolicy.”

Paul Tessier, a Democratic representative from Fairfield

and the co-chairman of the Maine Economic Growth Council, saidrailroads could play a much more important role in the state’seconomy than they do currently. “For rural areas, adequatetransportation is key for economic development. I know ofcompanies that would make more use of rail if some of theproblems could be worked out.” Those problems, he said, includedelays in freight cars leaving the state because there is not enoughvolume to warrant trains leaving on a frequent and regular basis.Such irregularities and delays only discourage shippers from usingrails.

Melrose explained that using the highway fund would raise

constitutional issues because that money is limited to roads andbridges. He suggested using railroad excise tax revenues to fundthe study and committee members agreed.

In 2001, Libby-Jones proposed a similar bill. The Legislature

agreed to a hearing on rail questions before the Joint StandingCommittee on Transportation [see 18 September 2001 issue], whichoccurred without substantive result [see 24 October 2001 issue].{Mal Leary, State House News Service in Bangor Daily News10.Apr.02}

GUILFORD/CALAIS10 April, Baring. THE PROPOSED TRANSLOAD HERE ISSTILL HUNG UP IN PERMITTING [see 16 January 2002 issue].

Brad Prout of proposer Bluebird Ranch said both the US ArmyCorps of Engineers and the state Land Use Regulation Commissionhad to vet the application. {ANR&P discussion 10.Apr.02}

ROCKLAND BRANCH8 April. COMPLETING TRACK REHAB THIS YEARPRESENTS A CHALLENGE , according to project manager Paul

Pottle. By the end of last year, contractor Atlas Construction hadinstalled 26 miles welded rail, 12-14 miles of new ties, and someballast. In 2002, Atlas must lay 20+ more miles of welded rail, thebalance of ties, the ballast, and complete drainage, ditchingsystems, and crossings.

Per Pottle, the project is scheduled for completion inNovember. Work is on or ahead of schedule, though anticipatedrail traffic may interfere.

“We have to plan out the work with traffic on line,” notedPottle. The state, the contractor, SRP, and customers are meetingto plan work around the needs and desires of the parties. “Wedon’t want to lose the service to customers, but enhance it.” Inparticular, Maine Yankee has stepped up its desire to move debrisout, more than anticipated, generating a lot of train movementsbefore the end of this year. Unfortunately, the bulk of remainingrehab work takes place in the segment west of Wiscasset.{ANR&P discussion 8.Apr.02}


SEARSPORT8 April. THE B&A PIER WAS DEMOLISHED LAST WEEKto make room for constructing the new pier. Paul Pottle, projectmanager for the Mack Point rebuild [see 6 December 2001issue], said the railroad some months ago had pulled the railoff the pier and back to the switch. Workers are now drivingtest piles to determine how to put in the new piles. Targetcompletion: August 2003.

Interim useThe other pier, owned and operated by Sprague, is nowhandling all liquid and bulk products. When finished, the newpier will handle the bulk.

While the new pier will have no rail immediately, Pottlenoted that the stakeholders have employed a design to permitfuture rail if desired. The ‘F-track’, which runs near the foot ofboth piers, will remain. {ANR&P discussion}

PORTLAND8 April. THE CITY OF PORTLAND WILL DECIDE THECONFIGURATION of the new ‘Ocean Gateway’ projectwhich as planned will handle all marine passenger traffic [see15 June 2001 issue and map in www.atlanticnortheast.com ]while freight traffic–containers–would have an exclusivefacility upriver.

Paul Pottle, MDOT project manager, said CommissionerJohn Melrose wanted to let the city decide. It is currentlyholding public meetings; eventually the City Council will vote.

Consultant Woodard & Curran of Portland is handling thestudy portion of the project, and will handle the design as well,“if we can come to agreement on the contract.” {ANR&Pdiscussion 8.Apr.02}

A working waterfront wrinkleIn early March, Cianbro Corporation announced it had agreedto complete construction on two oil rigs for the Gulf of Mexico,and proposed to use part of the 16-acre site being vacated byBath Iron Works. Jeff Monroe, Portland director oftransportation, said the Cianbro proposal shook up thethinking on the Ocean Gateway. The water where the BIW drydock once floated is 70 feet deep, connected by a 50-footchannel, rare at an a East Coast port. Cianbro will be able touse that deep-water site for testing the semisubmersible rigs.It could be an asset to attract other marine construction someday. "Are there other big ticket, deepwater opportunities?"Monroe said. "If we maintain the infrastructure, we stay in thebusiness." {Tux Turkel in Portland Press Herald 14.Mar.02}

MASSACHUSETTS

BOSTON/GUILFORD3 April. THE COASTAL ZONE MANAGEMENT REVIEW OFTHE MYSTIC WHARF ABANDONMENT was explained by

Deerin Babb-Brott, assistant director of the Commonwealth ofMassachusetts Coastal Zone Management Program (CZM). A1972 federal law permits states with federally-approved coastalprograms to review federal actions for consistency with state law,and the federal law provides federal funds for that review. "It's aunique program"

The Massachusetts law and policyLaw of the Commonwealth created a policy of maintaining portinfrastructure in ‘designated port areas’ (DPAs). These have threecharacteristics: (1) developed waterside facilities and access to adeepwater channel; (2) backland available for industrial operations;and (3) existing landside infrastructure to support the port. CZMimplements this policy in part by preventing the loss of port areathrough incompatible development.

The Commonwealth has DPAs (typically geographicallydiscrete areas within urban harbors) in Gloucester, Salem, Beverly,Lynn, Mystic River Boston, East Boston Waterfront, Chelsea RiverBoston, South Boston Waterfront, Weymouth Fore River, NewBedford, and Fall River.

Application to the Mystic Wharf branchIn this case, explained Babb-Brott, while the rail line is seeing littleuse now [see 16 January issue], “it’s a big deal for future access.”When GRS proposed abandoning it, “we asked for a voice inassessing alternative uses.” The STB specifically required GRS tocooperate with CZM.

Fortunately for CZM, Massport is negotiating its purchasefrom GRS, and CZM has postponed initiating the formal reviewuntil the negotiations have concluded. {ANR&P discussion3.Apr.02}

GRS/CSXT/PWbeginning of March, Charlotte NC. MAERSK DECIDED TOREMAIN IN WORCESTER, and not move to Ayer [see 31

January issue]. J.C.Evans, corporate general manager for rail, saidthe company had renewed its contracts with Intransit Containerand with CSXI. {ANR&P discussion 11.Apr.02}

HOUSATONIC RAILROAD21 March, DC. THE RAILROAD ASKED THE STB TO SETTERMS AND CONDITIONS, in a filing following the inability of

the two railroads to agree on a price [see 15 March issue].Executive Vice-president Ed Rodriguez said the two sides were


“not even close.” CSX responded on 26 March. {ANR&Pdiscussion 8.Apr.02}

The STB must decide quicklyContrary to other decisions allocated to the SurfaceTransportation Board, US law requires the STB to set termsand conditions within 30 days of the petition. Section 49 CFR1152.27 states, in subsection (g) that the offeror must requestthe Board to set terms and conditions within 30 days after theoffer is made [21 February–see 4 March issue]. Undersubsection (h), the Board shall issue a decision within 30 daysafter the request is due, in this case 21 March.

Subsection (g) continues:

(6) If requested, the Board will determine the price and otherterms of sale. The Board will not set a price below the fairmarket value of the line (including, unless otherwise agreedupon by the parties, all facilities on the line or portionnecessary to provide effective transportation services). Fairmarket value equals constitutional minimum value which isthe greater of the net liquidation value of the line or the goingconcern value of the line. The constitutional minimum valueis computed without regard to labor protection costs.

RHODE ISLAND

PROVIDENCE & WORCESTER2 April, Providence. MT.TOM COAL WILL MOVETHROUGH PROVPORT, a change from previous shipments

through New Haven [see 29 March issue Connecticut]. FrankRogers, PW marketing director, said his customer NortheastUtilities wanted to “try a competitive port, to see which oneworked better.” By the end of the month, the railroad willmove its 110 empty gondolas, now stored in Putnam CT, toProvidence. A ship will arrive by the end of the month. Theuse of Providence is not happening because the subsidy forNew Haven may be ending, insisted Rogers.

Port handlingBruce Waterson, who does ProvPort’s stevedoring [see 4March issue], said ship’s gear would unload the ship at Berth3, near the Marine Terminal Building. His front-end loaderswould scoop the product into either railcars or trucks.{ANR&P discussions}

3 April, East Providence. THE RAILROAD ANDC H E V R O N T E X A C O A G R E E D T O J O I N TDEVELOPMENT OF A 75-ACRE PARCEL, according to

press releases issued this day. [Chevron and Texaco mergedon 9 October 2001, according to the ChevronTexaco website.]

P&W owns a 45-acre site known as the South Quay, whichconsists of a 33-acre parcel created over a period of yearsbetween 1979 and 1998 by P&W's filling of tide-flowed land onthe Providence River, and an adjacent 12-acre parcel. P&W's feesimple absolute title to the 33-acre parcel was confirmed by theRhode Island Supreme Court in 1999, and its fee simpleabsolute title to the 12-acre parcel was confirmed by the RhodeIsland Superior Court in 2000. Chevron owns the 30-acre parcelimmediately to the south of the South Quay.

"75 acres situated on the waterfront just across the harbor fromProvidence, and a short drive from other major New Englandcities, offers a unique opportunity for development," said OrvilleR. Harrold, P&W's president. "We are pleased to be exploring thepossibilities with both Chevron and the City of East Providence.In addition, P&W and the City of East Providence have beenworking to improve access to the South Quay, which shouldenhance the development potential of this site." {PW website}

What future for the parcel?In 1999, PW hired Cushman and Wakefield to look for uses of theparcel [see 16 July 1999 issue], but has now “moved on” f rom thatarrangement, according to Mary Tanona, PW general counsel.The development will probably occur according to the city’s‘Waterfront Vision Plan.’ [The city once complained about PWdragging its feet on redevelopment.]

According to City Manager Paul Lemont, the municipality istrying to get away from “old dirty industrial uses.” Some yearsago, the waterfront was “dotted with old storage tanks and fairlydirty uses,” such as an oil refinery. Now the tank farms are reducedto two: the larger MobilExxon and the smaller Getty terminal (notdirectly on the waterfront). East Providence envisions thewaterfront north of I-195 as industrial, and that south [where SouthQuay is located] as commercial office, hotel, retail, and residentialuse.

The Vision Plan, put together with the assistance of George deTarnowsky of North American Realty Advisory Services in NewYork, noted that the south area needed better vehicular access,and recommended using the PW right-of-way for a new‘Waterfront Drive.’

Lemont, in a press release this day, stated: ‘ the Providenceand Worcester and ChevronTexaco properties represented themost critical pieces of the Redevelopment Flan. The agreementbetween the two key property owners symbolizes their enthusiasmfor the City's Redevelopment Vision.’ {Memo on Vision Plan28.June.200; city press release}

QUONSET POINT/DAVISVILLE11 April. THE DAVISVILLE AUTOPORT IS GAINING AT THEEXPENSE OF BOSTON. Volkswagen will shift the unloading of

82,000 cars to QPD by the end of this year. Boston attributes themove to the Harbor Maintenance Tax, which its users pay, butQPD’s do not. [More in a future issue.]


VERMONT

VERMONT RAIL SYSTEM22 March, Ogdensburg NY. OWNERS OF VRS BOUGHTTHE NEW YORK AND OGDENSBURG, as planned [see 31January issue]. VRS Vice-president Jerry Hebda said themoney had changed hands. {ANR&P discussion 27.Mar.02}

Facts from the STB filingA notice of exemption was filed with the STB on 14 March bythe owners: David Wulfson, Gary Wulfson, Lisa Cota, RichardSzuch, and Peter Szuch [descendants of VTR founder JayWulfson–see issue 1998#16]. Eyal Shapira [sic-correctingspelling] sold the owners 175 shares of stock, constituting87.5% of the stock of the NYO.

Later, the owners were asked to state on 1 April that noneof the railroads in the VRS family would connect with the NYO,nor was the transaction part of an anticipated series whichwould connect VRS to NYO. However, the 15 Marchapplication did say that the owners expected ‘economies ofmanagerial experience.’ {STB Finance Docket No.34186 filed15.Mar.02; letter to STB 1.Apr.02}

QUÉBEC /MARITIMES

CAPE BRETON & CENTRAL NS8 April, Port Hawkesbury. STORA ENSO FACES JOB CUTS.

On 7 April, the 890 unionized employees of Stora Enso’sfacility here turned down a proposal by the company to reopentheir collective agreement. The paper-making company islooking to cut costs to deal with a drop in demand for itsproduct. It is also facing a looming hike in electrical rates. Jobcuts are a possibility, and one official has hinted the newsprintmill could close. {CBC online} However, it did just upgrade itsmachinery, expending millions of dollars [see 7 November 2001issue].

How to chose between truck and railOn 10 December 2001, Stora Enso North America andoptAmaze announced the development of a transportationplanning solution “that is unique in the industry,” saidMichael Hyde, logistics manager for SENA. “The optAmazeTransportation Optimization service allows us to load vehiclesmore efficiently by considering all available modes and typesof equipment. This results in lower freights and improved on-

time delivery to our customers.”According to John Rachlin, President and Chief Scientist of

optAmaze, “While the cost of shipping represents a significantfraction of a manufacturer's revenues, most companies attempt tosolve the problem entirely by hand. Our strategic partnership withStora Enso North America enabled optAmaze to develop a uniqueweb-based service for tacking this complex yet critical industry-wide planning problem..

“The optAmaze optimization engine provides planners withseveral excellent alternatives from thousands of possible solutions,revealing the tradeoffs among competing objectives. This uniqueapproach allows transportation planners to understand the actualcost of making a particular decision. The TransportationOptimization service can model complex shipping rate structures,vehicle availability, weight, and volumetric constraints byjurisdiction, and can handle rail rate surcharges for currencyexchange,'' said Raymond Henry, Vice-President of Technology foroptAmaze Inc. {optAmaze press release}

MORE ABOUT STORA ENSOStora Enso North America is a Division of Stora Enso Oyj, one ofthe world's leading forest product companies. The Division isNorth America's leading producer of coated and supercalenderedprinting papers for the printing and publishing industries. Inaddition, Stora Enso North America is a premier producer ofspecialty papers, and manufactures paperboard and paperboardproducts.

The Division produces elemental chlorine-free draft pulp,

totally chlorine-free mechanical pulp and recycled pulp fromprinted, preconsumer and postconsumer scrap paper.

Stora Enso North America has papermaking operations inWisconsin Rapids, Stevens Point, Whiting, Kimberly, Niagara, andBiron, Wisconsin; Duluth, Minnesota; and Port Hawkesbury,Nova Scotia, Canada.

Stora Enso Oyj is domiciled in Finland. Its core businessesinclude magazine papers, newsprint, fine papers and packagingboards. In these product areas, Stora Enso holds a leading globalmarket position. Stora Enso also conducts extensive sawmillingoperations. To learn more about Stora Enso, visit the company'sWeb site at http://www.storaenso.com.

8 April, Sydney. FEW PEOPLE TURNED OUT TO VOICEOPPOSITION TO COAL at the former SYSCO pier [see 15 March

issue]. Organizer Lorne Gallivan, a resident of the Whitney Pierneighborhood, alleged that millions of tons of coal might sit on theSYSCO pier.

However, the regional environment manager, LawrenceMacDonald, reported an application under review for coalstockpiling at the piers. And that application will be subject tocurrent environmental assessment standards.

MacDonald said some Canadian facilities already handle largeamounts of coal in a season or a year, but do not have millions oftonnes on the ground at any given time. It was highly unlikely that


Sydney would. {Peggy MacDonald in CBC website}

DETAIL OF THE BLE CONTRACT [see 29 March issue]came from a source close to the negotiations:

4 year 9 month deal / April 1, 2001 to December 31, 2005Apr 2001 / 2.75 % / $22Apr 2002 / 3.00%Jan 2003 / 3.00%Jan 2004 / 3.00%Jan 2005 / 4.00% / $25 {e-mail to ANR&P }

NEW BRUNSWICK SOUTHERN10 April, St. Stephen. THE PROPOSED TRANSLOADHERE AWAITS TRACKWORK. Don Saunders, the towndevelopment officer [see 25 September 2001 issue with map,and map in www.atlanticnortheast.com], said the operator,St.Croix Transfer, is finishing its building which will be readyfor occupancy within weeks. “I’m optimistic that after that, the900-foot spur will go in.” {ANR&P discussion 10.Apr.02}

SYDNEY4 April. “WE’RE CLOSE TO ENTERING NEGOTIATIONS”

for the Cape Breton Regional Municipality to turn over theSydney Marine Terminal [see 15 March issue] to the new portauthority,” said John Whalley, the municipal planner. The staffis reviewing the proposal from the port authority this week,then it will go to council for decision in late April or the firsthalf of May. {ANR&P discussion 4.Apr.02}

PEOPLE

Bruce Jamieson, a construction manager for the MaineDepartment of Transportation, is retiring in April. TomStevens, who has worked with Jamieson in recent months, willsuccess him as the Rockland branch construction manager.

ATLANTIC NORTHEAST RAILS & PORTS87 Main Street Yarmouth, Maine 04096Vox (207) 846-3549 Fax (603) 215-4482Chalmers (Chop) Hardenbergh, publisher and editor [email protected] www.atlanticnortheast.com

CoverageThe newsletter covers the operating freight railroads and ports inNew England, Atlantic Canada, and eastern Québec, as well as thegovernment environment they function within. Coverage includespassenger rail and ships when relevant to freight operations.

Pricing

ANR&P appears twice a month, via post or e-mail. Subscriptionscost $375 for professionals, $95 per year for students, young andold. Introductory prices available.

Updates between issuesThe e-bulletin, sent by e-mail as needed between issues, is free ofcharge to all subscribers.

AdvertisingSubscribers may purchase half-page ads for $50 per issue. Non-subscribers, $100.

PurposeAtlantic Northeast Rails & Ports, née Maine RailWatch (1994-1997) and later Atlantic RailWatch (1998-1999), is dedicated to thepreservation and extension of the regional rail network. The editorbelieves that publishing news on railroads and ports spotlightsneeded action to preserve the rail network. The publication alsoimbues the region with a sense of an interdependent community,employing the network to move rail and port traffic. ‘No railroad isan island, entire onto itself.’

Copyright noticePLEASE DO NOT COPY THIS NEWSLETTER, or forward it in e-mail format, in whole or in part. You receive it as a payingsubscriber, or a potential subscriber. Passing it on without explicitpermission of the editor violates copyright law, and diminishes thelikelihood of our staying in business.


ATLANTIC NORTHEAST RAILS & PORTS87 Main Street Yarmouth, Maine 04096Vox (207) 846-3549 Fax (603) 215-4482Chalmers (Chop) Hardenbergh, publisher and editor [email protected] www.atlanticnortheast.com

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