Written by
Marybeth Luczak, Executive Editor
The Surface Transportation Board (STB) on March 16 asked merger partners Canadian Pacific (CP) and Kansas City Southern (KCS) to address an apparent “inconsistency in the calculation of traffic density figures” presented to STB and the STB Office by Environmental analysis on their proposed combination.
CP and KCS in September 2021 agreed to merge and form the Canadian Pacific Kansas City (CPKC), the first U.S.-Mexico-Canada rail network. STB in November 2021 accepted its request for consideration, and as part of the review process, the Office of Environmental Analysis assesses the potential effects of CPKC on the environment.
The STB stated in its decision of March 16 (Download below) that CP and KCS “submit traffic density charts in Exhibit 14 as required by 49 CFR § 1180.8 (a) (5). … Exhibit 14 shows CP and KCS lines handling one million or more gross tonne-miles per kilometer of road (GT / M) per year and respective density, divided by segments of such lines between major freight trains and terminals.The Beverber Exhibition 14 includes 2019 baseline in 2020 GT / M data for CP and KCS lines, as well as estimated GT / M levels at full integration of the CP-KCS networks, which are expected three years after the approval of the Board of Directors of the transaction.
“October 28, 2021, one day before the submission of [merger] Application, Canadian Pacific responds to a request for information from the Board’s Office of Environmental Analysis (OEA), and proposes materials developed in collaboration with KCS. … CP’s submission includes a ‘Master Segment Table’, which includes 2019 Baseline GT / M data for CP and KCS lines. … However, it appears that the 2019 Baseline GT / M data in the Master Segment Table submitted to OEA are different from the 2019 Baseline GT / M data in Exhibit 14 of the application.
CP and KCS must now “address the apparent inconsistency and indicate which of the two underlying data sets should be used to analyze the environmental and transport impacts of the transaction, and the reasons why this data should be used”, according to STB. This information is due March 21, 2022; Responses will be submitted no later than five days after the submission of the railway. STB reported that it has suspended the procedural schedule in the merger proceedings until further order.
CP issued the following statement in response to the STB decision:
“CP welcomes and expects a comprehensive regulatory and environmentally sound review of our application and shares STB’s desire for accurate, consistent information on all aspects of that review. Explain the data derived with its application and shared with the Board’s Office of Environmental Analysis in connection with its review of the application. We look forward to the STB’s procedural timetable for its review of the proposed CP-KCS transaction re-start after its review of the statement provided by the applicants.
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