http://www.aberdeennews.com/mld/aberdeennews/news/11440389.htm
Compared to the Montana situation, South Dakota has more leverage, in that they originally purchased the Milwaukee tracks east of Miles City, and those tracks can connect to CP up north in North Dakota. While Montana depends on legislated tax manipulation to get it’s hoped for rate reductions, South Dakota can rely on market based solutions (rate reductions from railroads competing head to head) if they win these court cases.
And I’m pulling for the BNSF.
The agreement apparently allowed BNSF to eventually purchase the lines in question. If the state of South Dakota is having politically based second thoughts more than 20 years after the original agreement, why would anyone want to enter into another agreement with the state which could be repudiated later when it suited the state?
Fortunately, the open access issue will probably not be addressed since it involves interstate commerce, over which state courts have no jurisdiction.
Actually, the State has jurisdiction over interstate commerce and regulate it all of the time. They just can’t regulate inconsistently with federal rules or hamper interstate commerce.
Gabe
I’m not sure open access is even being addressed. From what I read, the State wants to allow DM&E and DMV&W access to the State owned tracks, and the State has decided it doesn’t want to well to BNSF after all. The State has retained ownership of the lines, and BNSF wants to force the State to sell the lines to them to prevent the aforementioned access by the two smaller players. If all goes as the State desires, there might be three railroad companies accessing the lines, but I don’t think any other new players would be allowed in, thus it isn’t open access.
There are two things that I am uncertain about. What type of legal caveat exists that forces an entity to sell assets to another entity, other than antitrust? Also, if the State made a hard core agreement to sell after a certain amount of time (and the State is apparently claiming that no such hard core agreement was in place), were there any caveats regarding current BNSF pricing practices relating to potential post sale rate setting practices that allow the State to employ an escape clause?