Central Maine & Quebec aims to regain lost traffic, start operations within a month

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BANGOR, Maine – The new Central Maine & Quebec Railway is hoping to regain traffic lost by the previous operator, the Montreal, Maine & Atlantic Railway, according to documents filed with the Surface Transportation Board. However it is unclear if that traffic will include oil, which had become an economic windfall for the MM&A.

The railroad is also seeking a waiver from the STB to shorten the period it must inform employees of the purchase from 60 days to 30 days, arguing that MM&A may not be able to operate the railroad for two more months.

The MM&A was sold at auction in January to Fortress Investment Group's Railroad Acquisition Holdings LLC, which also owns the Florida East Coast Railroad. The company got the 510-mile railroad, created in 2003 from the former Bangor and Aroostook System, for nearly $16 million. Fortress was the only bidder to seek the entire system that stretches from Quebec to northern Vermont and central Maine. Earlier this month, Fortress announced that it would call its new property the Central Maine & Quebec Railway, or CMQR.

According to STB filings, the new railroad states it “will seek to recapture traffic formerly transported by MM&A, which may have been diverted to motor carriage as a result of the interruption of MM&A service following the Lac-Mégantic disaster.” In an email to the Bangor Daily News, John Giles, a consultant for Fortress, said the railroad was unsure if it would also try and recapture crude oil traffic.

“We have to have a conversation with regulators, authorities or shippers about the possibility of carrying crude over the (railway). In fact we haven't satisfied ourselves that we are capable of carrying crude safely and efficiently. That would and should be a pre-condition to doing so,” he wrote.

The new railroad plans on hiring back many people who had been laid off by the MM&A last year, according to memos posted around the railroad and included with the STB filing. MM&A employees are encouraged to apply for new positions as soon as possible.

The Central Maine & Quebec is also seeking a waiver from the STB to shorten the period it must inform employees of the purchase from 60 days to 30 days. According to official documents, the railroad would like to commence operations on or after March 17 in order to preserve rail service in the region. The MM&A will be unable to operate after March 31 because its insurance is set to expire that day and the certificate of fitness from the Canadian Transportation Agency expires on April 1. On Feb. 20, David Bernhardt of the Maine Department of Transportation issued a letter encouraging the STB to issue the waiver, arguing if it didn't there could be disastrous impacts on the regional economy.

“Further delay is not warranted and could result in a disastrous gap in service,” Bernhardt wrote. “Maine DOT is concerned not only by the possibility that MM&A may not be able to operate in Canada beyond April 1, but also by the very real prospect that the trustee will lack the financial resources to continue operations in the United States beyond that date. Any cessation of service, however temporary, would create serious problems not only for shippers, connecting railroads and the state of Maine, who all rely on and benefit from continued and continuous rail service, but also for the very employees of MM&A that are supposed to be protected by the notice.”

NEWSWIRETrains News Wire

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