Merger that will increase Iowa train traffic gets approval

The promise of a “robust rail network” led to federal approval of a train merger that is expected to deliver considerably more train traffic to several cities in Eastern Iowa.

The Surface Transportation Board, a federal regulatory authority, announced its decision Wednesday, clearing the way for the merger of Canadian Pacific and Kansas City Southern to create the first single-line freight rail network connecting Mexico, the United States and Canada.

The decision came as railroads are under intensifying scrutiny following a fiery crash that forced evacuations in Ohio last month.

This is the first major rail merger in 25 years, Chairman Martin Oberman said in a news conference Wednesday. The board determined combined rail lines would bring economic and environmental benefits to the country, which outweighed what he billed as minor local concerns.

“We found that this merger will enhance the creation of a robust rail network — ultimately one that will be safe and environmentally friendly,” Oberman said. “That is why we have approved it.”

The merger is expected to divert more than 64,000 truckloads from the roads to rail each year because of increased efficiencies of the single-line railway, which means train traffic is expected to gradually increase over several years along the route.

According to the companies, the biggest traffic increases will be between Sabula, Iowa, and Kansas City, Mo., adding 14.4 trains per day, from eight to roughly 22 by 2027.

The train tracks run along the riverfronts of several Mississippi River towns in Iowa, including Clinton, Camanche, Princeton, LeClaire, Bettendorf, Davenport and Muscatine.

Safety concerns

“The Board has carefully considered the full record, weighed the public benefits against potentially harmful impacts, and imposed appropriate conditions to mitigate those impacts in its approval of the merger,” a news release from the board states.

The railroad industry is under pressure to improve safety in the wake of last month’s Norfolk Southern derailment in East Palestine, Ohio, that created lingering health concerns. The major freight railroads have announced several steps they plan to take, but that may not be enough to satisfy regulators and members of Congress who are pushing for broad reforms.

Even after this merger, the new Canadian Pacific Kansas City railroad will be the smallest of the major freight railroads with about 20,000 miles of track.

In a news release, the board acknowledged an “elevated level of public concern” stemming from the Norfolk Southern derailment.

“The Board has carefully analyzed the proposed merger from a safety perspective,” the statement reads. “It is important to underscore that rail is by far the safest means of transporting any freight, including hazardous materials.”

Canadian Pacific has had just one hazardous release for 37 million miles traveled, according to the board.

Settlement payments to cities

Ten cities, including seven in Iowa, agreed to settlement payments from Canadian Pacific in exchange for not commenting publicly on the merger, including a $10 million payout to Davenport. Other cities that accepted agreements included Bettendorf, Muscatine, LeClaire, Clinton, Washington and Fruitland, according to the final decision.

The payments were contingent on the merger being approved, and the Surface Transportation Board set a requirement for the new rail company to fulfill those and any other agreements the railroad makes.

Detractors of the merger, including Camanche and Princeton officials, continued to voice concerns that increased rail traffic and lengthened trains would delay live-saving emergency vehicles from crossing the tracks, hamper access to public amenities, and significantly increase noise and safety risk for residents and businesses along the riverfront.

But in a news release, the board said average train lengths would decrease from an average of 9,551 feet if there was no merger to 7,726 feet under the merger, and there is a lower risk of hazardous spills than from truck traffic.

A final environmental impact study conducted by the Office of Environmental Analysis, housed within the Surface Transportation Board, found apart from noise, the impact of the merger would be minor or temporary. Scott County, in particular, has the most locations of any county on the route sensitive to added noise from the merger.

“Even with the noise mitigation recommended in the Final (Environmental Impact Statement), there will be adverse noise impacts in certain areas in Iowa,” the decision reads.

Seven-year monitoring

As a condition of the merger, the board plans to put Canadian Pacific under a seven-year monitoring period.

Oberman said the board will get regular reports on train traffic and length.

If concerns come to fruition, “the board stands ready and has the explicit statutory authority to hear those complaints and, if the facts are established, to enter further orders to make sure that these communities … are protected,” Oberman said.

In particular, detractors in the Quad Cities have expressed concern over access by emergency vehicles to residents and events along the riverfront. Thousands of people visit Modern Woodmen Park and LeClaire Park for baseball games and events.

“If first responders demonstrate problems to us, we will do everything under the sun” to help rectify the problem, Oberman said.

Under the General Code of Operating Rules, trains must avoid blocking public crossings longer than 10 minutes, the board noted in its decision.

In Camanche, a city with seven crossings, 1,200 people live between the railroad tracks and the river. City Administrator Andrew Kida has expressed repeated concern that a derailment or stopped train could block every route to those residents except via river.

“I’m not surprised at what they (the board) did,” Kida said. “I’m bothered by the fact that they go off of computer models when eyeballs in Camanche tell you a different story.”

Kida said Camanche is trying a new strategy to get state support to require the rail company to build an overpass using a statute in Iowa law that says cities can require railways to do so. Kida said Canadian Pacific officials have told Camanche that federal regulations supersede state laws governing rail.

Oberman said he expects the regular reports will be made public. Canadian Pacific’s board must meet with Surface Transportation Board staff within 60 days to work out the logistics of data reporting.

As part of the deal, the new rail company also must hire two community liaisons — one stationed in Chicago and another in Houston. There doesn’t appear to be one required in Iowa despite the state housing the greatest impacts from the merger.

One board member dissents

Oberman said the five-member board voted 4-1 Monday to approve the merger. One member, Robert Primus, issued a dissent.

Primus dissented because, in his view, the “detriments to the public interest outweigh the expected benefits,” he wrote.

Primus wrote that the merger would continue a trend of consolidation in the railroad industry. The decision also lacks guardrails against merger-related service disruptions and harms communities along the path of the new network, Primus wrote.

The Associated Press contributed to this report.

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