Sale of Cincinnati Southern Railway to Norfolk Southern Derailed by Lawmakers

House lawmakers could still push to include language relating to the sale.

click to enlarge A Norfolk Southern EMD SD60E rebuilt locomotive. - Photo: 4300streetcar/Wikimedia Commons
Photo: 4300streetcar/Wikimedia Commons
A Norfolk Southern EMD SD60E rebuilt locomotive.

A change to Ohio’s transportation budget has put the sale of the Cincinnati Southern Railway to Norfolk Southern on pause, for now.

Mayor Aftab Pureval announced Wednesday, March 15 that a language change to the Ferguson Act, the founding legislation for the Cincinnati Southern Railway, is being removed from the Ohio Legislature’s transportation budget, House Bill 23.

The language change would have shifted proceeds from the sale from paying off debts to funding the maintenance of existing infrastructure. The purchase agreement between the CSR board and Norfolk Southern makes the law change a requirement for the sale to advance to Cincinnati voters.

The language was removed from the Senate version of the transportation bill, but the House still could push for the language to be included. Pureval said he’s willing to work with lawmakers to get out of the “risky” rail industry.
“I’m committed to working alongside the General Assembly to pass the required legislation that allows the referendum for voters to decide,” Pureval said in a statment. “There has never been a more important time for our city to get out of the rail business. Selling now gives us local control over our assets in an investment trust for generations to come. No longer would our future be tied to the unpredictable and risky rail industry.”

The 19th century, 337-mile freight railway runs from Cincinnati to Chattanooga and is the only city-owned multi-state railway in the country.

Currently, the city receives $25 million annually to lease the railway to Norfolk Southern. Under the proposed sale, the city would receive $1.6 billion which would be fed into a trust fund known as the "Building Our Future" trust fund. The trust would dole out no less than $25 million to the city each year after the sale, but Pureval has said the annual payout could more than double during some years.

Pending the rule changes from Ohio's legislature, Cincinnati voters would be the ultimate deciders on whether or not to sell the railway in an election.

Since the announcement of the proposed sale, voters have watched as the citizens of East Palestine, Ohio deal with the fallout of a catastrophic train derailment that released toxic fumes into the village’s air and water.
Last month, Norfolk Southern assured Cincinnati City Council that the multi-billion dollar company would be able to move forward with the $1.6 billion sale, but a federal lawsuit filed on March 14 by the state makes the company’s financial future unknown.

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