Watco to acquire first CSX Transportation line spinoffs in Illinois, Indiana

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WASHINGTON — Watco is the winning bidder for CSX Transportation’s Decatur and Danville Secondary subdivisions in Illinois and Indiana.

The Decatur & Eastern Illinois Railroad will be the new name for the 126.7 miles of track that Watco will acquire from CSX as the Class I railroad seeks to prune its network of lower-density, non-core routes.

On July 6, Watco notified unionized workers on the affected lines that it would have employment opportunities in Decatur and Paris, Ill., according to a regulatory filing with the Surface Transportation Board. Watco is seeking four conductors, five engineers, a locomotive laborer, a track inspector, two track laborers and two track foremen.

The labor notification is the first step in the acquisition process.

“We expect an STB notice seeking approval of this transaction to be filed in early August,” a CSX spokesman says, adding that employees on the lines have the option of remaining with CSX.

CSX put the Decatur Subdivision and the Danville Secondary on the block in January along with a route across the Florida Panhandle. No transaction has yet been made public regarding the Florida trackage.

The Decatur & Eastern will acquire the Decatur Sub between Montezuma, Ind., and Decatur, as well as the Danville Secondary between Terre Haute, Ind., and Olivet, Ill., plus the Paris Industrial Track in Paris, Ill.

“This decision is based on CSXT's broader initiative to enhance the efficiency of our core network and our confidence in DEIR's ability to safely provide continuity of service for the many valued customers on these lines,” the CSX spokesman says.

The terms of the proposed acquisition were not disclosed.

CSX is reviewing about 8,000 miles of its railroad as candidates for potential sale or lease. In June, the railroad sought bids for 650 miles of routes in New York, Kentucky, North Carolina, and West Virginia.

Watco, based in Pittsburg, Kan., currently operates 38 shortline railroads in the U.S., totalling 5,100 miles of track, as well as 31 industrial contract switching locations. Watco did not immediately return an email seeking comment.
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