When embattled Alabama Gov. Robert Bentley resigned in April, some members of the Southern Rail Commission wondered whether the change in leadership would affect the effort to restore passenger rail service to the Gulf Coast. Instead, it was another hostile takeover that actually put the plan on a sidetrack.
Negotiations that had lowered the anticipated cost of the project from $2.3 billion to less than $800 million were rendered useless by the takeover, through a hedge fund, of CSX Railroad by former Canadian Pacific CEO Hunter Harrison.
SRC member Jerry Gehman of Atmore said the cost estimate had been whittled down through meetings held in Washington, D.C. among representatives of the Federal Rail Administration, Amtrak, the SRC and CSX in the wake of a congressionally commissioned report on the requirements for getting passenger rail service back on track along the Gulf Coast.
Then came the CSX ownership change, which brought a new and completely opposite corporate perspective.
“We were down to a little less than $800 million when the Federal Railroad Administration thought the number should be $117 million to get us back up and going,” Gehman said. “There was still a distance, but CSX has since undergone an ownership change. Hunter Harrison took over, and he is not amenable to our interests. Their position was fixed and firm. They said we should go back to the original estimate of $2.3 billion, that they would have no further negotiations, and they walked out of the meeting.”
Gehman agreed that the railroad’s posturing seemed to represent a setback, but said it didn’t derail the SRC’s initial intentions.
“We understand CSX’s position; unfortunately, it’s a hostile position, but they’ve made it very clear,” he said. “That hostile position is simply a negotiating tool.
We understand that and are ready to negotiate. The Rail Commission will continue negotiations in Washington. There are avenues we could get into, but we don’t want that kind of relationship. We’d rather have an honest, fair negotiation and come back to the table with a positive.”
That being said, Gehman admitted that projections of passenger rail service returning to the Gulf Coast by the end of 2017 were no longer valid.
“I would love to tell you we would have a train by December, but we have a new wrinkle in the track,” he said. “What I left the Rail Commission meeting (held June 9 in Wetumpka) with was frustration, aggravation and ‘how can I become a better negotiator.’ My frustration comes from seeing the possibility, not the perspective of the railroad. I would not say that I’m disheartened, but I’m certainly disappointed.”
Gehman added that he personally feels that a more aggressive posture on the part of the Rail Commission might be more beneficial.
“The Rail Commission’s position is one thing,” he said. “But my position is, I’d like to see a little bit more aggressiveness. I want the railroad to work with us, be a part of our communities. The railroad’s history is richly steeped in passenger service. For decades they supplied passenger service, freight, too, and they ran them on time. Don’t tell me they can’t do that now.”
According to Gehman, there should be a merger between the needs of the public and the corporation’s responsibility to its shareholders, even if it takes the Interstate Commerce Commission and the Surface Transportation Board to make it happen.
“Let’s be fair; let’s think the greater good instead of the bottom line,” he said. “They, too, can merge together. Certainly the corporate world has to have some obligation to the citizenry of the United States. We’re hoping the ICC and the STB will take a serious view and hopefully make CSX see our perspective.”
Until that happens, he pointed out that members of the public could express their displeasure at the holdup in restoring rail service.
“People can express their feelings on the CSX website,” he suggested. “CSX doesn’t like negative media, and they don’t like people picketing outside their offices in Jacksonville (Fla.). I would encourage people to express their feelings in a civil way so that they can let CSX leadership know they don’t appreciate (the railroad’s) position. I encourage that. My position is to let Hunter know we’re not happy about his position.”