ICC Gets Into Debate Over Sale of Conrail : Agency’s Plan for Study May Delay Vote on Deal

The Interstate Commerce Commission has decided to interject itself into the heated debate over the sale of the government-owned Conrail line by agreeing to study how much traffic will be diverted from other railroads if Congress approves the sale.

The commission’s action, announced Friday in the Federal Register, is considered a boost to opponents of the proposed sale to Norfolk Southern. However, supporters of Norfolk Southern’s $1.2-billion offer for Conrail said they considered the study a delaying tactic.

The study, requested last March by Rep. James J. Florio (D-N.J.), chairman of the House Energy and Commerce subcommittee on commerce, transportation and tourism, is scheduled to be completed by Aug. 2.

Resources Not Available

The notice carried a dissent by Commission Vice Chairman Heather Gradison, who argued that the ICC does not have the legal authority to undertake such a study, saying it would be “duplicative, unnecessary and an ill-advised expenditure of scarce resources.”

Commissioner Andrew J. Strenio also opposed the panel’s action, taken May 3 on a 4-3 vote, saying that resources for such a complex investigation are not available because budget problems have caused agencywide furloughs.

But a House subcommittee staff member called the two commissioners’ arguments “a smoke screen to prevent people from doing a thorough job on the factual issues.”

“We’re only asking for technical information,” he said.

In voting to study the diversion issue, the ICC also will review the viability of several railroads that would get rail lines that Conrail and Norfolk Southern would be required to divest in order to alleviate the anti-competitive effects of the acquisition.

Objections to Study

The Senate Commerce Committee already has approved the proposed sale by the Transportation Department. In the House, the Energy and Commerce and Ways and Means committees must act before the full House votes.

Several powerful lawmakers already have registered objections to the study. Senate Commerce Committee Chairman John C. Danforth (R-Mo.) said recently that an ICC study would only delay--and ultimately thwart--the sale of Conrail.

On Friday, Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, and the panel’s ranking minority member, Rep. James T. Broyhill (R-Va.), urged ICC Chairman Reese Taylor to drop the study. In a letter, the lawmakers said a formal commission proceeding at this stage “is highly inappropriate.”