While in general I support governments securing RoWs and leasing them to operators, I have questions.
a) Does the Commonwealth have the power to forcibly split Pan Am's assets into desirables and not, as MA can't buy it's out of state trackage, and isnt going to buy the operating business?. . .
No, they do not. RR's being federally regulated means you have to prove some over-the-top negligence to initiate eminent domain, such as Amtrak taking Guilford/Pan Am to court in the 1980's over deplorable Conn River Line track conditions for the
Montrealer. They lost that one in front of the U.S. Supreme Court. Guaranteed that if 1985's Conn River Line ruination didn't rise to the standard, absolutely nothing on the 'okay'-condition Patriot Corridor would ever meet the standard for forced top-down action. The feds are resolute about that.
This is just like the B&A for East-West or NNEIRI/Inland Route. If they want it, they pay the fucking going rate to buy the private business's premier asset. Or simply cry moar if they think that asking price is too high.
b) If Pan Am structures their sale as a stock sale, and not an asset sale, I don't think the law cited applies, as the company remains extant as a subsidiary of whoever buys it and in control of its RoWs; only it's ownership change hands.
PAR is all-private, so there wouldn't be a stock sale. However, the Patriot Corridor is 50/50 PAR and Norfolk Southern, so is already an unwieldy beast for transactioning. But it's still moot, because the state can't force-initiate anything. If Norfolk Southern ends up buying out PAR's 50%, selling its 50% to whoever buys out PAR, or keeping a 50/50 with somebody else...it's same as before. Premier shipping lane = pay the premium asking price or GTFO. But the complications with the freight ownership stakes here means under no circumstances do they want to float any buy ideas until well AFTER the transaction. If one party--and possibly a Class I at that--ends up walking away with it all, public buy gets greatly simplified. PAR is trying to goose the asking price for its premier corporate asset; right now would be far and away the most
inflated the price will be.
PAS ownership includes the 5-mile Wachusett Extension, which is the only 'foreign' territory commuter rail currently runs in and the only portion of the Patriot Corridor lock/stock ownership that is any priority for MassDOT. Because the MBTA trackage rights deal for Fitchburg-Wachusett is
permanent and
irrevocable, the state incurs too little risk running under a nominal-fee landlord to have any legal force-fits. On these 5 miles as everywhere, it's a wholly business choice to pay the going rate. The T already indemnified itself with this unrevokable trackage rights agreement against the retaliatory shannanigans Guilford pulled 32 years ago evicting the agency from Gardner over spilt-milk from losing the CR operator's contract. Again...zero urgency for anyone except these marginal Legislature critters who want their pork now-now-now against all business logic.
c) does the State have the funding capacity to actually buy Pan Am's in state assets?
They have "funding" to magically buy any ROW if there's a serious viability threat to it. But no...this is an awfully low-value passenger prospect for the sky-high asking price, let alone as a pre- PAR sale rush job. This line, thanks to the PAS partnership, is in more secure shape than it's been in 35 years. It's not under any threat of being "Guilforded". And it's not like buying the B&A to upgrade it where that's going to enable 8 AMTK Inland round-trips, BOS-MTL, enhanced Springfield hubbage with ConnDOT, and East-West all in the coattails of one expensive buy while CSX gets satiated with "pimp my yard" quid pro quo's in West Springfield and 60 MPH freight running speeds to pad their profit margins. This North Adams "Flyer" thingy is an extremely marginal passenger proposal, and the only service pattern of any kind that would trawl past Wachusett. It's been poorly studied, and is likely going to have to fit into a very constrained space for farebox recovery because the line is geometrically so curvy and maintained to a much slower freight speed limit than would make any passenger trip tolerable.
One reason to wait? It's Norfolk Southern company policy that anything of intermodal mainline grade be upgraded to minimum Class 3: 40 MPH freight / 60 MPH passenger). Because they'll be coming up from Harrisburg and Binghamton to serve the big IM terminals at Mechanicville and Ayer. For Pan Am, however, Class 2 (25 MPH freight, 30 MPH passenger) is just fine within the regional context. Yeah, they're notorious--especially in Maine--for crap maintenance...but 25 MPH is adequate for them doing their daily showcase East Deerfield-Portland round-trip that conjoins the PAS and Portland districts of the system. Patriot Corridor, as with all of PAR, also got itself an extremely lucky exemption to the PTC mandate (you'd think Class I NS owning 50% would auto-trigger the mandate, but they somehow magnificent-bastarded themselves an FRA waiver). Why would the state be interested in buying a slow railroad when 1) the very act of leaving it alone gets somebody else building the faster one for their own profits, and 2)
any Class I buying it first puts them on the hook for the PTC installation. Who would rather have MassDOT buy it today...then get stuck with a $50M bill for installing the PTC for somebody else's mandate as well as needing to pay lion's share of the speed upgrades somebody else was willing to pay out of pocket? All because we just had to rush a title deed into state hands right this second. Yeah...didn't think so.
d) No clue on how it handles partial ownership, as with PAS. Basically, this law has a lot of unaccounted for nuances.
Norfolk Southern's 50% is all over the federal record, but PAR being Tim Mellon's wholly-private plaything...yep, thar be dragons. Until the sale is hashed out in agonizingly slow fashion in front of the Surface Transportation Board for purposes of transacting to the 99% likely publicly-traded buyer (be it a Class I RR or a capital/bank-backed partnership), we have no fucking idea what PAR is actually made of.
This matters the world on the Pat Corridor because of Hoosac Tunnel. It is rumored with *wide enough* attribution to be likely true that Boston & Maine never had insurance on the tunnel because of its longstanding geological challenges with groundwater intrusion and ceiling cave-ins. Or at least that's how it was accounted when bankrupt B&M had to pay out-of-pocket to repair a very bad 1973 cave-in. It's thought that since the PAR buy in '83 that nothing has changed; the Hoosac is still uninsurable at industry rates, and thus all upkeep is totally out-of-pocket. 2019's cave-in...the worst since '73...was rumored to also be a Mellon 'cut-dem-checks repair effort and may have been one of the events spurring him to get on with his retirement cash-out.
Does the state really want to poke around here when ^THAT^ is still a mostly off-books question mark? Let's first be clear: the Hoosac Tunnel is not at imminent risk of killing a bunch of North Adams Flyer passengers. 2019's cave-in was on some original-construction roof section 140 years old. They actually found out during inspections for that fix that the '73 'shotcrete' patch job B&M did was holding up splendidly to water-tight seal. This is just the going-rate price of operating a tunnel straight through a porous Berkshire water table that is always, always leaking somewhere on its 5-mile length. Does the state really want to take a gander at this before the books are opened to the full maint record & expenditures for the tunnel? Or before all that PAS self-paid enlargement for double-stacks gets done? Of course not...that's just inviting an unknown/uncontrolled expense on their ledgers for what...so a couple ants-in-pants Berkshire pols can make a last-minute donations push? Yeah, no. There won't be a single MassDOT Secretary ever who prematurely jumps at that.
e) this sale broke in July. The state is required to give a response to any offer within 90 days, or it is treated as an automatic refusal. . .
Timetable keeps getting pushed back. No offer has been "officially" made until it gets submitted to the Surface Transportation Board. Speculation still runs wild as ever, but in practicality this was always going to be a slow process. Latest rumor is that the hedge funds are more involved than before, but these are leaks from the same 'insiders' who were saying "Print it! It's Canadian National" 2 months ago. All that's proven is what we've known all along: Tim Mellon can/will do whatever the fuck he wants, for however as long as he personally needs it to take him. Even if something gets announced in Oct., the STB meat grinder is going to ensure that it'll be well into 2021 before we know who gets the (train) keys.
Given all that, what exactly does MassDOT have to act upon on 9/23/2020? Nothing. Just keep watching with interest like the rest of the world, then plan to meet the new owners where they are on any future coordination. Not only is there no queue-jumping potential, but given things like the Hoosac books' unknowns a panic public buy would quite possibly be the worst of all worlds. Patience is a virtue with this one.