18.3.08

BRING BACK THE EUROPEAN AND NORTH AMERICAN. New name, same old Guilford.

Lawmakers in Maine are looking at a possible takeover of Pan Am Railroad operations in the state of Maine, according to the Blethen Newspapers of Maine.

“State lawmakers’ latest plan for improving freight rail service in Maine essentially comes down to this: engineering a hostile takeover of the rail lines owned by the state’s largest railroad,” wrote reporter Tom Bell. “A legislative committee believes the state could use an obscure federal statute to force Pan Am Railways to sell the company’s lines in Maine to the state. The action would put the state in the position of choosing another railroad company to operate trains on the lines.”

Shippers who have criticized the railroad, formerly known as Guilford Rail Systems and controlled by Timothy Mellon of the famed banking family, for poor service have been pressing for state intervention because of the rising costs of transportation, increased highway congestion, and the need to compete more effectively with other parts of the nation that have more extensive rail service.

“Legislators allege that the railroad fails to provide timely and consistent service to many of its manufacturing customers, particularly smaller companies,” wrote the Blethen paper. “There is no evidence that the railroad has improved service since the Legislature first began prodding it to do so three years ago,” the newspaper quoted Rep. Stacey Fitts (R-Pittsfield) as saying. His district includes Pan Am customers. “He said the railroad’s poor service is hurting the manufacturers’ ability to compete because they can’t meet their customers deadlines. In some cases manufactures are shipping heavy products by truck, which is not only more expensive but causes additional wear and tear on the state’s road system.

“We are putting them on notice,” the paper quoted him regarding Pan Am Railways. “If you don’t respond and treat us seriously, we will have to take serious action.” Maine manufactures are already operating at a competitive disadvantage because of high energy costs and distance from markets, said Sen. Philip Bartlett, D-Gorham, Co-chair of the Utilities and Energy Committee,” the paper reported. “Unless rail service is improved, some companies could leave the state,” he said.

Perhaps that statute is obscure for a reason. A state that condemns a railroad once can condemn the property again, which is likely to give pause to a bidder looking to pick up the franchise.

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