[Federal Register Volume 59, Number 69 (Monday, April 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8550]
[[Page Unknown]]
[Federal Register: April 11, 1994]
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INTERSTATE COMMERCE COMMISSION
[Service Order No. 1516]
Dardenelle & Russellville Railroad Co.; Authorized To Operate
Lines of Arkansas Midland Railroad Co.
In 1992, the Arkansas Midland Railroad Company (AMR) acquired from
the Union Pacific Railroad Company (UP) as part of a 131-mile package,
four disconnected line segments. Each of the branch lines acquired by
AMR extend from the same North/South UP line in central Arkansas. Five
(5) active shippers (International Paper Company, Gifford-Hill &
Company, Barksdale Lumber Company, Bean Lumber Company, and G&S Roofing
Products Company, Inc.), and one inactive shipper (Cargill) are located
on the Norman Branch. The line extends approximately 52.9 miles from
its connection with UP at Gurdon, AR to Birds Mill, AR, which is the
end of the line.
Discussion
On December 3, 1993, a storm caused flooding, washouts, and
landslides that seriously affected the Norman Branch. On December 15,
1993, the AMR embargoed 31 miles of the line from Pikes Junction to
Birds Mill as a result of the storm damage. This embargo affected
Barksdale Lumber, Bean Lumber, and G&S Roofing. On February 22, 1994,
AMR embargoed approximately 17 additional miles of the line which
included service to Gifford Hill & Company located at Delight, AR.
On December 29, 1993, after the initial embargo was placed in
effect, a complaint was filed by G&S Roofing (G&S) indicating that
AMR's cessation of operations was depriving G&S of essential rail
service. On December 30, 1993, the Commission's Office of Compliance
and Consumer Assistance (OCCA) assigned a Special Agent to make an on-
site investigation of the Norman Branch situation. On the basis of its
inquiry, OCCA determined that a technical evaluation of the track
conditions by the Federal Railroad Administration (FRA) had not been
made since June of 1993 and that an updated FRA assessment of the
condition of the line was necessary. The Commission asked FRA to
inspect the line and provide a report. FRA's report, dated March 2,
1994, concluded that the line was in poor condition; that extensive
rehabilitation was necessary to bring the line up to Class I (10 mile
per hour) standard, and that operations over the line in its current
condition would likely result in derailments.
On March 18, 1994, as supplemented on March 22, 1994, attorneys for
the Dardanelle & Russellville Railroad Company (DRRC) and its newly
formed non-carrier subsidiary, the Caddo, Antoine, Little Missouri
Railroad Company (CALM) filed a request with the Commission requesting
directed service authority to operate approximately 49 miles of the AMR
line currently under embargo, and trackage rights over approximately 3
miles of the remaining portion of the Norman Branch that AMR continues
to operate. DRRC/CALM's filing also requests ``that it be entitled to
all other benefits set forth in 49 U.S.C. 11125''.
The Commission also received filings by affected shippers
indicating the urgency of the situation and the potential impact on
certain areas including points in Arkansas and Louisiana, if a shutdown
of their industries were to occur because of lack of service. In
addition, Gifford-Hill Company, Inc. indicated in its filing to the
Commission that it has a contract with the State of Louisiana to
deliver 640 cars of aggregate to be used in a current highway
construction project, and that it requires service by March 28, 1994.
The Commission also received a filing from the UP Railroad in support
of a directed service order by the Commission. UP's stated objective is
the immediate restoration of service.
On March, 25, 1994, AMR filed a reply to DRRC/CALM's request
indicating that it does not oppose an order by the Commission allowing
DRRC/CALM access to the embargoed portion of the line on the basis of a
proposed 120-day lease agreement, so long as DRRC/CALM agres to:
(1) Indemnify AMR for any liability that might occur as a result
of DRRC/CALM's operation of AMR's northern line segment;
(2) Assume sole responsibility for maintenance of the northern
line segment; and pursuant to authority granted by the Commission,
(3) Assume sole responsibility for all common carrier
obligations to shippers on the northern line segment; and
(4) Assure that operations comply with all applicable State and
Federal safety regulations.
During the 120-day period, and pursuant to Commission authority,
AMR would allow operations over the southern line segment to affect
interchange with the UP at Gurdon.
On March 28, 1994, DRRC/CALM filed a joint rebuttal statement to
AMR's March 25 comments. In its pleading, DRRC/CALM seeks to refute
statements made by AMR and addresses AMR's proposal for the 120-day use
of its line by DRRC/CALM.
Section 11123(a) of the Interstate Commerce Act authorizes the
Commission to take immediate action in situations where it finds that a
shortage of equipment, congestion of traffic, or other failure in
traffic movement exists which creates an emergency situation of such
magnitude as to have substantial adverse effects on rail service in the
United States or a substantial region of the United States (emphasis
added). Under these circumstances, the Commission can, for an initial
period of not more than 30 days,
(A) Suspend any car service rule or practice;
(B) Take action during the emergency to promote service in the
interest of the public and commerce, regardless of the ownership of
equipment, on terms of compensation the carriers establish between
themselves, subject to Section 11123(b)(2);
(C) Require joint or common use of facilities, on terms of
compensation the carriers establish between themselves, or as set by
the Commission in a later proceeding pursuant to Section 11123(b)(2)
when the carriers cannot agree.
Conclusions
We believe that the authority requested for operations over AMR is
not appropriate under 49 U.S.C. 11125. Under that statutory provision,
directed service may be ordered when a carrier cannot transport the
traffic offered to it because: it lacks the cash needed to continue
operations; a court has ordered cessation of operations; or it has
discontinued operations without requisite authority from the Commission
under 49 U.S.C. 10903. None of those conditions is present here. AMR
has not been determined, nor does it contend to be cashless. Also,
there is no court order requiring AMR to cease operations, and, while
operations on the line have ceased due to unsafe track conditions and
an embargo, the line in question has not been abandoned.
AMR retains the common carrier obligation to continue operations
unless and until it receives authority from the Commission to abandon
the line. However, there is an immediate need for rail service over the
AMR's Norman Branch, especially considering the urgency of aggregate
shipments to the State of Louisiana for a highway construction project.
AMR has indicated that it is willing to allow DRRC/CALM to operate the
Norman Branch line under specified proposed conditions and DRRC/CALM
has expressed a willingness to rehabilitate the line to the extent
necessary and to provide service to shippers. Based upon these
circumstances and the statutory requirements, an emergency service
order under 49 U.S.C. 11123 is appropriate, is responsive to the
shipper's service needs, and will allow overhead trackage rights by the
DRRC/CALM to interchange traffic with the UP.
In view of the need for continued rail service over AMR's Norman
Branch, and DRRC/CALM's willingness to provide this service and limited
track rehabilitation, this decision grants the requests of interested
parties for interim service authority to DRRC/CALM on the terms and
conditions noted below.
The emergency nature of the situation compels us to conclude that
advance public notice and hearings would be impractical and contrary to
the immediate public interest in assuring the immediate resumption of
essential rail transportation services. Accordingly, we exercise our
authority under 49 U.S.C. 11123(a)(1) to waive advance public notice in
the present circumstances.
Section 11123 permits us to authorize service for an initial period
of not more than 30 days, with an option to extend authority beyond 30
days after a hearing, if cause exists. We believe this authority to be
necessary here at least for an initial 30-day period. Any interested
party may file comments on this action during this period relating to
the necessity and appropriateness of continuing this order in effect
beyond the initial 30-day period by filing a statement in affidavit
form within 10 calendar days after service of this order. All filings
should be addressed to Bernard Gaillard, Director, Office of Compliance
and Consumer Assistance, Interstate Commerce Commission, Washington, DC
20423; and in the lower left hand corner of the envelope in large
letters should be printed, ``OCCA-4412.'' An original and 10 copies
should be filed of all statements. Interested parties wishing to review
the public docket file may do by calling 202-927-5538 for an
appointment at the Commission's Headquarters in Washington, DC.
Terms and Conditions
Effective Date
Service Order No. 1516 shall be effective at 12:01 a.m., March 29,
1994, but operations by DRRC/CALM may commence only upon consummation
of an agreement between DRRC/CALM and AMR on the terms and conditions
described herein and upon notice to the Commission by DRRC/CALM that
repairs have been made consistent with FRA standards to allow safe
operations to commence over pertinent portions of the Norman Branch.
Expiration Date
Unless otherwise modified by the Commission, Service Order No. 1516
will expire at 11:59 p.m., on April 27, 1994.
Compensation
DRRC/CALM's authority under Service Order No. 1516 is expressly
conditioned upon its agreeing to:
(1) indemnify AMR for any liability that might occur as a result
of DRRC/CALM's operation of AMR's northern line segment;
(2) its assumption of responsibility for maintenance of the
northern line segment;
No further compensation during the initial period of this order is
contemplated.
Track Safety
In accordance with the above, operations by DRRC/CALM may commence
only upon consummation of an agreement between DRRC/CALM and AMR on the
terms and conditions described herein and upon notice to the Commission
by DRRC/CALM that FRA's safety exceptions in its March 2, 1994 report,
are resolved to the extent necessary to allow safe operations to
commence over pertinent portions of the Norman Branch.
Cars and Operating Equipment
In operating AMR's line, DRRC/CALM shall use its own cars and
operating equipment, or cars of other AMR connections as agreed to by
those connections.
Employees
In providing service under this service order, DRRC/CALM shall
comply with the requirements of 49 U.S.C. 11123(a)(3) with respect to
AMR employees required for this operation.
Rates
Rates and charges shall be those applicable to the line and in
effect at the time DRRC/CALM commences operations. DRRC/CALM shall not
seek changes in AMR rates and charges during the initial period of this
order. All revenues from such charges shall accrue to the account of
DRRC/CALM during the effective period of this order, and shall not
constitute assets of AMR.
Liability for Expenses
Any rehabilitation, operational, or other costs related to the
authorized operations shall be the sole responsibility and liability of
DRRC/CALM. Any such costs or expenditures shall not be deemed an
obligation or liability of the United States Government. DRRC/CALM
shall hold the United States Government harmless from any claim arising
out of the authorized operations.
Operational Difficulties
Any operational difficulties associated with the authorized
operations shall be resolved by DRRC/CALM and any other affected party
through negotiated agreement, or, when the parties cannot reach
agreement, by the Commission.
We find: 1. DRRC/CALM has requested the Commission to permit it to
provide continued rail service over those portions of the AMR lines
included in the Norman Branch which it determines to be operationally
safe, and, accordingly, shall so notify the Commission.
2. To prevent transportation and economic disruptions in this area
of Arkansas, and to assure the immediate continued movement of
critically needed commodities to adjoining regions of the United States
including Louisiana, it is necessary for the Commission to authorize
DRRC/CALM to operate AMR's Norman Branch line under 49 U.S.C. 11123,
conditioned up-on a waiver of any compensation from the Federal
government and DRRC/CALM's agreement to hold the United States
Government harmless from any claim arising out of the authorized
operations.
This action will not significantly affect either the quality of the
human environment or energy conservation.
It is ordered: 1. Based upon its undertaking to do so upon the
terms and conditions noted above, DRRC/CALM is authorized under 49
U.S.C. 11123 to enter upon and operate AMR's Norman Branch pursuant to
the terms of this service order.
(a) Entry by DRRC/CALM on the lines of AMR may occur on the date
and time authorized in this decision provided it reaches an agreement
with AMR and gives appropriate notification to the Commission that the
lines to be operated have been made safe for that operation. Operations
by DRRC may continue no later than the thirtieth day from the effective
date of this decision.
2. Operations performed under authority of this order shall conform
to the directions and conditions prescribed above.
3. All submissions filed in this proceeding should refer to Service
Order No. 1516 and should be sent to the Commission's headquarters at
12th Street and Constitution Avenue, NW., Washington, DC 20423. As
noted above, an original and 10 copies should be submitted.
4. The provisions of this decision shall apply to intrastate,
interstate, and foreign commerce.
5. The Commission retains jurisdiction to modify, supplement, or
reconsider this decision at any time.
6. Notice to the general public of this decision shall be given by
publication in the Federal Register. The decision will be served on the
Federal Railroad Administration, the Association of American Railroads,
American Short Line Railroad Association, DRRC/CALM, AMR, and UP.
7. This decision and order shall become effective at 12:01 a.m., on
March 29, 1994.
8. Unless otherwise modified by the Commission, this order will
expire at 11:59 p.m., on April 27, 1994.
9. DRRC/CALM's request for directed service under 49 U.S.C. 11125
is hereby denied.
Decided: March 28, 1994.
By the Commission, Chairman McDonald, Vice Chairman Phillips,
Commissioners Simmons, and Philbin.
Sidney L. Strickland, Jr.,
Secretary.
[FR Doc. 94-8550 Filed 4-8-94; 8:45 am]
BILLING CODE 7035-01-P
