US DOT says Union Pacific lines could be divested
WASHINGTON, Sept 18 (Reuters) - The federal government
Friday raised the possibility of forcing Union Pacific <UNP.N>
to divest some of its rail lines if service did not improve by
the end of the year.
In a submission to the Surface Transportation Board, the
Department of Transportation said it did not support allowing
the railroad an indefinite amount of time to restore service to
the levels seen prior to its 1996 merger with Southern Pacific.
The Department of Transportation (DOT) noted some
improvement in service, but expressed concern that Union
Pacific's performance would deteriorate in the coming months as
grain and other shipments increased.
"The STB should make clear that repeated service failures
or a reversal in the trend of improving service may warrant
corrective actions," DOT said in its submission.
An STB emergency order initiated last year against Union
Pacific, that allowed other railroads to compete for customers
on UP tracks, expired Thursday.
DOT said the lifting of that order, announced in July, was
possibly premature as many customers were still denied the
level of service to which they were entitled.
Two summers ago the 36,000-mile Union Pacific network
experienced huge delays as freight traffic became gridlocked
from Texas to the West Coast.
But in its own 1,000-page filing, Union Pacific called on
the Surface Transportation Board to reject forced changes in
the western rail network.
Railroad spokesman John Bromley said the emergency order
had run the full length allowable by law and service had
improved, particularly in the congested Houston area.
"Our operations on the Texas Gulf Coast are fluid and, in
some cases, are better than they have been historically,"
Bromley said.
(Reuters 06:09 PM ET 09/18/98) For the full text story, see
infobeat.com
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