Wednesday, May 05, 1999 (Washington, DC)

The Federal Railroad Administration (FRA) yesterday submitted to the Surface Transportation Board (STB) its first detailed assessment of safety concerning the pending acquisition of Conrail by CSX Transportation Incorporated (CSX) and Norfolk Southern Railway (NS).

"We have been working with CSX, NS and Conrail to prevent systemic safety problems from occurring. The American people deserve a smooth integration of these railroads without any disruption in service," said FRA Administrator Jolene M. Molitoris.

Molitoris said that the FRA will continue to closely monitor all safety-related aspects of the acquisition.

Under the assessment, the FRA finds no specific performance or safety conditions on Conrail which warrant STB action. The report, entitled Conrail Merger Surveillance: NS, CSX & CSAO: SIP/Safety Update, was prepared as a result of the May 19, 1998, memorandum of understanding (MOU) between the STB and FRA, and covers the period since the Conrail acquisition was approved in July 1998.

As provided in the MOU, the FRA is responsible for monitoring the implementation of the acquisition with respect to all safety matters. To that end, the FRA has established a 33-member team including headquarters staff, three regional deputies as team leaders and regional inspectors. The FRA’s team is working with railroad personnel to ensure that the 175 safety integration plan action item (SIP) commitments are carried out and that all federal safety standards are met. Upon the FRA’s recommendation in late 1997, the STB had required the acquiring railroads (CSX, NC, CSAO) to file SIPs in order to effectively and safely carry out their transaction.

The FRA report addresses the preparatory safety efforts of the railroads and specifically addresses their SIP actions for organizational structure, employee training, resource allocation, and labor agreements, as well the compatibility of computer systems. In addition, issues such as training and certification of employees, compliance with operating rules, and employee rest and quality of life issues have also been examined.

In December 1998, the FRA and STB issued a joint proposed rule which, if codified, will require railroads engaged in certain types of mergers, consolidations or acquisitions of control to file a SIP with both agencies for review and approval.

A SIP is a written document prepared by a railroad detailing its safety plans prior to and during implementation of the above cited transactions. A joint FRA/STB public hearing was held May 4, 1999 to discuss comments received from interested parties in response to the proposed rule.

Molitoris said that the FRA will continue its close surveillance of the Conrail acquisition and will report to the STB with its next regular biannual report or at any time that safety issues of major consequence arise.

Molitoris said that the FRA will continue its close surveillance of the Conrail acquisition and will report to the STB with its next regular biannual report or at any time that safety issues of major consequence arise.