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Verified Statement of Mr. Andy Daly

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Verified Statement of Mr. Andy Daly REDACTED - TO BE PLACED ON PUBLIC FILE BEFORE THE SURFACE TRANSPORTATION BOARD ___________________________ DOCKET NO. FD 36472 ___________________________ CSX CORPORATION AND CSX TRANSPORTATION, INC., ET AL. —CONTROL AND MERGER— PAN AM SYSTEMS, INC., PAN AM RAILWAYS, INC., BOSTON AND MAINE CORPORATION, MAINE CENTRAL RAILROAD COMPANY, NORTHERN RAILROAD, PAN AM SOUTHERN LLC, PORTLAND TERMINAL COMPANY, SPRINGFIELD TERMINAL RAILWAY COMPANY, STONY BROOK RAILROAD COMPANY, AND VERMONT & MASSACHUSETTS RAILROAD COMPANY ___________________________ EXHIBIT 13-C ___________________________ Verified Statement of Mr. Andy Daly APP-366 REDACTED - TO BE PLACED ON PUBLIC FILE VERIFIED STATEMENT OF ANDY DALY I. Introduction I am Andy Daly. I am Senior Director of Passenger Operations for CSX Transportation, Inc. (“CSXT”). My role as Senior Director of Passenger Operations includes overseeing the daily operations of passenger operations hosted by CSXT, as well as upholding CSXT’s contractual and statutory obligations with respect to passenger service. I have been involved in the analysis of CSX’s proposed acquisition of Pan Am Systems, Inc. (“Systems”) (the “Proposed Transaction”) since the bid process. Specifically, I have been involved in outreach, coordination, and planning for the integration of the current as well as the proposed passenger services on the PAR System1 and PAS Network. In connection with preparation of the Application submitted in this proceeding on February 25, 2021, and the Amended Application submitted in this proceeding on April 26, 2021, I oversaw the CSXT team that worked with the Systems team to prepare the passenger rail elements of the Operating Plan attached as Exhibits 13 to those filings. In order to highlight the importance that CSXT places on potential impacts to passenger rail resulting from the Proposed Transaction, I have prepared this Verified Statement to consolidate all discussion of passenger rail issues. In response to the Board’s Decision No. 3 in this proceeding, I have prepared this Verified Statement based on my review of the proposed operating and traffic pattern changes described in the revised Operating Plan sponsored by Jamie Boychuk, CSXT’s Executive Vice President of Operations, attached as Exhibit 13 to the Amended and Supplemented Application, along with my review of the revised Market Analysis, and the related impact analyses submitted 1 The acronyms and defined terms used in this Verified Statement are the same as those used in the Amended and Supplemented Application. 1 APP-367 REDACTED - TO BE PLACED ON PUBLIC FILE with the Amended and Supplemented Application, including the marketing plan presented in the Verified Statement of Mark K. Wallace, CSXT’s Executive Vice President. My conclusions regarding the lack of any negative impact on passenger trains operated on the lines that are part of these proceedings are based on the Operating Plan and these impact analyses. The Operating Plan describes the Proposed Transaction and Related Transactions in detail, including the NSR Settlement Agreement and the GWI Term Sheet Agreement. After consummation of the Proposed Transaction and the Related Transaction, CSXT will take over operations by Springfield Terminal as lessee of the PAR System’s lines, and B&E will take over operations by Springfield Terminal as contract operator of the PAS Network lines. With two small exceptions described fully in the Operating Plan resulting from the NSR Settlement Agreement, the Proposed Transaction and the Related Transactions will not produce significant changes to the existing routes, patterns, or types of service for the PAR System, PAS, or CSXT, or redirect existing traffic over those systems. Instead, CSXT will modernize and introduce efficiencies to the PAR System’s operations, emphasizing consistency, reliability, and careful data measurement and management. Operating efficiencies on the PAR System will come from decreased car cycles, fewer assets, and new synergies created from fewer handlings due to single-line service and capital improvements. As to PAS, B&E has agreed to replace Springfield Terminal as the contract operator of PAS, providing substantially all of the operating services that Springfield Terminal currently provides on behalf of PAS (other than implementation of capital projects, as detailed elsewhere in the Application). I manage a dedicated team of CSXT professionals that oversee the operation of passenger trains on the CSXT network. My Passenger Operations team proactively works with dispatchers to make sure that the passenger trains remain on schedule and that they are provided with the 2 APP-368 REDACTED - TO BE PLACED ON PUBLIC FILE required preference. My team also performs “check rides” to assess operational performance and assure safety. We hold regular calls with passenger agencies to review performance and evaluate root cause data against agreed upon performance goals and identify operational efficiencies, capital investments, and/or policies and practices that address the identified operational issues and benefit passenger train performance and customer experience. We also work extensively with passenger agencies on station projects, including State of Good Repair, and bringing facilities into compliance with the Americans with Disabilities Act. The Passenger Operations team also works with CSX Engineering to proactively address slow orders, coordinate upcoming maintenance or construction on passenger routes to minimize delays. Springfield Terminal does not currently have these resources on the PAR System or the PAS Network. CSXT’s Executive Vice President Mark K. Wallace has sponsored a marketing plan submitted with this Amended and Supplemented Application concluding that CSXT does not expect that the Proposed Transaction will produce: (1) significant shifts in traffic flows or diversion of traffic from other rail carriers or trucks in the near term, or (2) major growth in traffic over the next three years. Mr. Wallace states that CSXT’s assumptions on organic growth suggest that the total carloads on the PAR System and PAS Network will grow roughly 1.5% per year from 2019 through 2024. Furthermore, Mr. Boychuk states that traffic on the CSXT network will grow approximately 1.5% per year from 2019 through 2024. Based on Mr. Wallace’s and Mr. Boychuk’s forecasts and the impact analyses submitted with the Amended and Supplemented Application, Mr. Boychuk concluded in the Operating Plan that he anticipated that the CSXT, PAR System, and PAS Network will accommodate the minimal forecasted traffic growth in existing train service. 3 APP-369 REDACTED - TO BE PLACED ON PUBLIC FILE Therefore, I conclude that the Proposed Transaction and Related Transactions will have no negative impact on passenger service operated on the rail lines that are affected by these proceedings. In particular, I do not anticipate any “delays which may be occasioned because a line is scheduled to handle increased traffic due to route consolidations.” 49 C.F.R. § 1180.8(b)(2). CSXT will maintain or improve existing passenger service. All rail users, including passenger service, will benefit from the more consistent and reliable network and the focus of a dedicated Passenger Operations team that will result from the Proposed Transaction and Related Transactions. I urge the Board to authorize and approve the Proposed Transaction. II. Current Passenger Rail Service Set forth below is a description of the existing passenger operations on the PAR System, the PAS Network, and on CSXT lines contiguous to the PAR System and PAS Network. The rail lines are described in further detail in the Operating Plan. A map depicting these passenger operations is included as Appendix 1 to this Verified Statement, and a map depicting dispatching responsibilities for passenger services in the Boston area is included as Appendix 2 to this Verified Statement. Further maps of the relevant lines are attached as Exhibit 1 to the Amended and Supplemented Application. A. Amtrak Amtrak operates the Vermonter service between Washington, DC and St. Albans, VT. This service includes the Knowledge Corridor between New Haven, CT and White River Junction, VT, over which PAS has operating rights. The line between New Haven, CT and Springfield, MA is owned, maintained, and dispatched by Amtrak, while the segment between Springfield, MA and East Northfield, MA is owned by MassDOT and dispatched and maintained by PAS/Springfield Terminal. As of June 22, 2021, the 2 daily trains (1 northbound and 1 4 APP-370 REDACTED - TO BE PLACED ON PUBLIC FILE southbound) operated by Amtrak have been temporarily suspended due to the COVID-19 pandemic. Amtrak operates the Valley Flyer service between New Haven, CT and Greenfield, MA, on the same Knowledge Corridor lines described above. Amtrak previously operated 4 round-trip trains per day. Amtrak currently operates a reduced schedule for the Valley Flyer with 2 daily trains (1 southbound and 1 northbound) between New Haven, CT and Greenfield, MA. Amtrak operates passenger service between Springfield, MA and New Haven, CT, over the same Knowledge Corridor lines described above. As of June 22, 2021, Amtrak operates 8 daily trains (4 northbound and 4 southbound; 5 northbound on Friday) on this line. The Connecticut Department of Transportation, in conjunction with CTrail and Amtrak, operates commuter service between Springfield, MA (or Hartford, CT) and New Haven, CT, over the same PAS Knowledge Corridor lines described above. As of January 14, 2021, CTrail
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