Lunenburg, Massachusetts
    DIVISION 191 
  Brotherhood of Locomotive Engineers and Trainmen


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D&H selling Schenectady-Binghamton rail line

Posted on November 21, 2014 at 11:20 AM

Sometime next year, pending approval by federal regulators, Norfolk Southern will take over the 282-mile rail line connecting Schenectady with Binghamton and Pennsylvania.


The railroad said late Monday it has reached an agreement with the Delaware & Hudson Railway to buy the track, which stretches to Sunbury, Pa., for $217 million. Canadian Pacific, which acquired the D&H in 1991, will continue to own tracks from the Capital Region north to Montreal.


"Acquiring this portion of the D&H provides for more efficient rail transportation system by consolidating freight operations with a single carrier," said NS CEO Wick Moorman. "Aligning the D&H track with Norfolk Southern's 22-state network allows us to connect businesses in central Pennsylvania, upstate New York and New England with domestic and international markets while enhancing the region's competitive rail and surface transportation market."




Norfolk Southern is a partner in Pan Am Southern, a joint venture with Pan Am Railways, which operates a line from the Capital Region east to the Boston area. In recent years, Norfolk Southern had increased usage of the D&H line from Schenectady through Oneonta and Binghamton into Pennsylvania. Norfolk Southern already operates an east-west rail line through Binghamton that it acquired as part of a deal by it and CSX to purchase Conrail.


"As we have stated in recent months, we've been in the process of negotiating the final details for the potential sale of the southern portion of our D&H line," said CP CEO E. Hunter Harrison. "We are pleased to find a prospective buyer in Norfolk Southern."


The Times Union reported last month that Harrison had told analysts CP was close to a deal to sell the southern portion of the D&H system, but he didn't identify the potential purchaser.


But industry observers said that Norfolk Southern, which already operated the majority of the traffic over the line, was the likely purchaser.


Owning the line would give the railroad some advantages.


"NS is the majority user of the line, but we're subject to the dispatching, maintenance and capital priorities of another railroad," spokesman David Pidgeon said. "Our customers demand a high level of safety, reliability and efficiency, and we're in a great position to apply those principles to the D&H line, which will hopefully set the stage for future economic growth."


Norfolk Southern, which will also acquire a D&H car shop in Binghamton, is expected to upgrade the former D&H line.


The acquisition gives Norfolk Southern direct access from the Southeast and from Chicago to Albany.


The deal still needs the approval of the federal Surface Transportation Board. Norfolk Southern said it would offer jobs to about 150 D&H employees.


The deal is projected to close in the second quarter of 2015.


"This acquisition would preserve good-paying railroad jobs and set the stage for economic growth," said John Friedmann, NS vice president of strategic planning. "Absent this transaction and its efficiencies, we are concerned that rail service along much of New York's Southern Tier would be threatened with losing a crucial link to New England."


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