Locomotives and boxcars sit Sunday at the Waterville rail yard at 55 College Ave. Rich Abrahamson/Morning Sentinel Buy this Photo

WATERVILLE — The Waterville rail yard dates back to the now-defunct Maine Central Railroad, yet it — with its locomotive repair shop — remains integral to rail transportation in the Northeast.

Change could be coming to the sprawling yard, however, given the impending purchase of its parent company.

CSX Corp. is acquiring Massachusetts-based Pan Am Railways, which owns the Waterville rail yard, in a deal that has yet to finalized.

Pan Am, formerly known as Guilford Transportation Industries, bought Maine Central Railroad in 1983. Pan Am’s sale to CSX has statewide implications.

“The Waterville shops have a very strong reputation, and I think it would certainly be very positive for Waterville, and I think for the state of Maine, if they remained open,” said George O’Keefe, economic development director for the town of Rumford and a longtime follower of the locomotive industry. “We’re not in a place where we have too much of that. There’s enough and we can make it work.”

O’Keefe said he is a firm believer in rail supporting the local economy. He also said the CSX merger is a significant opportunity for Maine industry.

CSX has a large facility in Selkirk, New York, and some are concerned business could be sent there. O’Keefe, however, said he expected increased intermodal activity — the shipment of freight by more than one carrier, such as truck and rail — in Waterville.

In acquiring Billerica, Massachusetts-based Pan Am, CSX gets the largest regional Class II railroad in North America, which has more  than 1,700 miles of track in six states and Canada.

Jacksonville, Florida-based CSX has more than 21,000 miles of track across the Northeast. The Maine portion of Pan Am includes more than 300 miles of track.

CSX is a Class I railroad, meaning it is among the nation’s largest. There are eight Class I railroads in the United States, including Amtrak.

CSX’s purchase of Pan Am Railways is subject to approval by the U.S. Surface Transportation Board, and the company plans to complete its application soon, a CSX spokesperson wrote in an email. Pan Am Railways Executive Vice President Cynthia Scarano directed a reporter’s inquiries to CSX.

Nathan Moulton, director of the Maine Department of Transportation’s Rail Program, wrote in an email that the operational details remain murky until CSX takes over Pan Am. Moulton said the MDOT has a meeting planned with CSX officials to discuss operations.

Once the transaction is finalized, MDOT officials will have a better idea of the longer-term effects on Maine businesses. The transaction could take a while. One industry expert said CSX’s purchase of Pan Am will likely be fought by Norfolk Southern Railroad.

Moulton said he believed the direct service in Maine from CSX should provide more-efficient operations and transit times, and access to more markets. Maine is a new state for CSX, which will have subsidiaries in 23 states.

“We do need to ensure that good connections and interchanges with other rail carriers remain and are efficient so that all traffic moves efficiently, not just the traffic that continues on in the CSX system,” Moulton wrote. “If this does indeed happen, then, yes, freight rail usage and business in Maine should grow.”

A Pan Am Railways locomotive Sunday at the Waterville rail yard at 55 College Ave. Rich Abrahamson/Morning Sentinel Buy this Photo

Patrick Strauch, executive director of the Maine Forest Products Council, said transactions like the CSX-Pan Am deal bring potential to connect more quickly with major markets. The Maine Forest Products Council has many paper and pulp mills as members, such as Sappi Fine Paper North America in Skowhegan.

“If there are less links in the system and you’re part of a major line,” Strauch said, “that usually equates with less time to get to your destination.”

CSX said the acquisition of Pan Am will create more opportunities for the company’s existing customers and those of Pan Am. There are many large producers Pan Am serves across New England.

“We intend to bring CSX’s customer-centric operations and industry-leading reliability to shippers and industries served by Pan Am,” the CSX spokesperson wrote. “We look forward to integrating Pan Am and the rail-served industries of the Northeast into CSX and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond.”

Adrian Dowling, a South Portland resident and self-described New England railroad historian, said CSX’s acquisition of Pan Am could have positive and negative impacts on Maine. Dowling said if Pan Am’s dispatchers are moved from Massachusetts to Florida, there could be a problem with on-time passenger rail. Dowling also said the sale could positively benefit some of the state’s largest users of freight rail, including paper mills, but might not be as beneficial to smaller companies.

The CSX spokesperson also wrote the company’s model benefits passenger rail and shippers, such as Amtrak, which declined a request for comment.

The Amtrak Downeaster runs from Boston to Brunswick on nearly 80 miles of Pan Am track, and there is speculation on how the purchase could impact commuter rail service.

The Lake Shore Limited train, which is Amtrak’s Boston-to-Chicago service, was on time just 41% of the time in 2018 and runs on CSX tracks. The Amtrak’s Downeaster reported 57.3% end point and 74.7% customer on-time performance in November, according to a Northern New England Rail Passenger Authority report.

There have been safety concerns over the years involving CSX, such as when alleged safety lapses were blamed in 2018 for a fatal Amtrak collision in South Carolina and a derailment in Virginia.

“CSX has a long history of prioritizing their own freight trains ahead of the Amtrak trains and commuter trains that run on CSX tracks,” Dowling said. “That’s great for freight customers, but not so great for passengers.”

Potential disadvantages include the railroad not being based in New England, so CSX might not be as invested as Pan Am was in smaller New England customers. However, CSX could also bring improved service, according to those close to the rail industry.

An industry expert said CSX could sell assets north of Boston, which was allowed by the 1980 Staggers Rail Act.

Consequently, O’Keefe said CSX might invest in structural improvements to get through to the port of Saint John, New Brunswick, Canada. It could level the playing field for some Maine industries if rail service is improved to compete with bigger Canadian industries, especially in forest products. In forest products, Maine competes with Canadian National, which is a Class I rail line, like CSX.

“It’s already pretty good, but if they do make investments in New England, and Maine specifically, it really is significant to industry,” O’Keefe said. “There’s huge, huge demand for (Maine’s) forest products, lumber and food products. There’s a lot of potential there.”

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