Calgary Alberta - The Canadian Pacific plans to close on its purchase of the Central Maine & Quebec (CMQ) on 20 Dec 2019, according to an application filed with the Surface Transportation Board this week.
 
On 17 Dec 2019 the CP filed an application with the STB to approve its acquisition of the 481 mile shortline connecting Quebec with northern New England.
 
CP announced it was buying the CMQ on 20 Nov 2019 for US$130 million.
 
The sale comes 25 years after the Class I railroad pulled out of the region when it sold its lines east of Montreal.
 
The application states that CMQ will be owned by the Soo Line Corporation, CP's American subsidiary, which owns and operates the Soo Line Railroad Company, Dakota Minnesota & Eastern Railroad Corporatin, and the Delaware & Hudson Railway Company.
 
Last month, CP officials told Trains News Wire that CMQ, "will continue to operate as a distinct and separate entity."
 
Because the acquisition is considered a minor transaction it is likely the STB will approve the deal with little hesitancy.
 
However, until the deal is approved by the federal regulator, CMQ will be placed into an independent voting trust and continue to operate as normal.
 
The application states that at first, little will change on CMQ, even after the STB gives its approval.
 
"Eventually, the integration of CP and CMQ train operations will facilitate train start rationalization, resulting in fewer but longer main line trains and fewer yard local assignments, and an increase in the frequency of selected trains and assignments from five-or-fewer days a week to up to seven days a week."
 
To aid in the operation of longer trains, CP plans on lengthening the yard tracks at Saint Jean sur Richelieu, Quebec, where CP and CMQ currently exchange traffic, so that it can handle trains in excess of 4,500 feet.
 
According to the application, CP plans on investing upwards of US$75 million into the CMQ system over the next three years to increase track speeds and capacity.
 
CP plans on upgrading much of the system to FRA Class 3 standards.
 
"CP anticipates that this capital plan will include extensive tie replacement, rail replacement, joint elimination, shoulder cleaning, and switch and grade crossing upgrades," railroad officials write.
 
CP officials write that initially, most CMQ employees will keep their jobs, particularly in maintenance and operations.
 
Over time, most management positions will be absorbed by its parent company.
 
CMQ currently handles 24,000 carloads annually.
 
CP hopes to increase traffic by 2 to 3 percent per year over the next three years, particularly to the ports of Searsport, Maine, and Saint John, New Brunswick.
 
The CMQ includes the former CP main line across eastern Quebec and western Maine to Brownville Junction, where it interchanges with the Eastern Maine Railway, owned by J.D. Irving.
 
The railroad also includes the former Bangor & Aroostook north to Millinocket and south to Northern Maine Junction, near Bangor, and Searsport.
 
CMQ is also contracted by the State of Maine to operate the former Maine Central Rockland Branch.
 
In 1995, CP sold its main line to the Maritimes to Iron Road Railways and J.D. Irving.
 
Iron Road merged its portion of the CP with the Bangor & Aroostook.
 
In 2002, Iron Road sold the railroad to Ed Burkhardt's Rail World Inc., which renamed it the Montreal Maine & Atlantic (MMA).
 
The MMA struggled through the 2000s, thanks in large part to the decline of Maine's paper industry.
 
In 2010, MMA sold a large chunk of the former Bangor & Aroostook to the State of Maine that in turn leased it to J.D. Irving.
 
In July 2013, an MMA oil train derailed and exploded in the small town of Lake Megantic leveling more than 30 buildings and killing 47 people.
 
The railroad filed for bankruptcy a month later and in 2014 it was sold to Fortress, which created CMQ.
 
Justin Franz.