ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, October 19, 1996 TAG: 9610210050
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: Knight-Ridder/Tribune
THE PROPOSED CONRAIL-CSX union will be studied in Congress in November.
The House Transportation and Infrastructure Committee next month will measure the commercial and legislative wallop of the proposed $8.4 billion merger of CSX Corp. and Conrail Inc.
Rep. Bud Shuster, R-Pa., whose district includes key Conrail facilities, set Nov. 19 as the first of multiple hearings.
``This is the latest in a series of mergers which has significantly increased concentration in the rail industry," he said in a statement. "We must be certain that, on balance, this merger will enhance competition, improve transportation services and protect the rights of employees.''
The Union Pacific and Southern Pacific merged earlier this year; Burlington Northern and the Atchison, Topeka and the Santa Fe merged in late 1995.
Tuesday's proposal would combine CSX Transportation, a major force in the Southeast and Midwest, with Conrail, which dominates the Northeast and has extensive Midwest trackage.
The resulting carrier's sales of $8.5 billion would represent 70 percent of Eastern rail revenue. Norfolk Southern Corp. moves virtually all other rail traffic east of the Mississippi.
Early reaction from NS, customer and employee groups indicates the merger will be controversial.
Shuster's central Pennsylvania district includes Conrail's freight car shops at Hollidaysburg and a locomotive shop. Conrail's east-west mainline between Pittsburgh and Philadelphia bisects the district, carrying 60 to 70 freight trains daily.
The underused Hollidaysburg shops have been the target of restructuring efforts, including a failed venture to bring an Oregon rail supplier into the facility.
The committee also will consider ``a recent legislative proposal'' to assure that two or more major carriers provide service over Conrail lines after a merger of that carrier with another railroad, he said.
That ``informal proposal'' was circulated on Capitol Hill late in 1995 during debate over the ICC Termination Act. Nothing came of the idea at that time.
Shuster noted that Conrail was created by the government with special circumstances. Those included expedited procedures to abandon unneeded track and a provision that allows Conrail freight service to continue if there is a commuter railroad strike on Conrail routes. No other railroad enjoys that privilege.
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