The Interstate Commerce Commission yesterday voted to extend federally subsidized freight services by a group of railroads over the lines of the financially ailing Rock Island Railroad for another 90 days.
Service by the Kansas City Terminal Railway Co., a switching company jointly owned by a dozen Midwest railraods, was originally ordered by the ICC in late September for 60 days to assure transportation of the nation's bumper fall harvest.
The Rock Island, which normally moves between 10 and 15 percent of all Midwest grain over its 13-state system, has been shut down by two unions in late August and was found by the ICC to be cashless, making the government "directed-service" order possible.
Under the law, ICC directed-service orders can be imposed for up to 240 days.
Under the proposal adopted by the ICC yesterday service would continue over 6,259 miles, or 89 percent, of the Rock Island system. During the 90-day period, however, the extent of directed service might be modified either as a result of court-authorized grants of temporary operating authority to other railroads or by actions of the commission.
Under the Milwaukee Road Restructuring Act that was recently passed by Congress, the court overseeing the Rock Island's reorganization and the commission can authorize sales of Rock Island properties to other railroads. While the applications are being considered, the court may permit an applicant railroad to operate a sought after line on a temporary basis.
Besides the Kansas City Terminal Railway, three other railroads -- the Denver and Rio Grande Western Rairoad Co., Southern Pacific Transportation Co. and the Western Pacific Railroad Co., all with interests in some of the Rock Island properties -- have been authorized to participate on the management team running the Rock Island's directed services.
In a related development, a federal judge in Chicago allowed the ICC until Jan. 10 to give him a record of its work on the proposed abandonment of 24 Milwaukee Road lines. After he receives the records, U.S. District Judge Thomas McMillen can begin ruling on whether the lines should be abandoned if other plans to continue the service fail.
Meanwhile, shippers and employes of the Milwaukee Road are trying to join forces to buy the main line of the railroad between Louisville and Seattle. The board of directors for the new venture said shippers will pledge $5 million and the employes, with the aid of two government loans will put up $20 million to seal the purchase.
In another development, the Senate Commerce Committee approved a less extension version of the White House proposal to reduce sharply regulation of the nation's railroads by the ICC. The issue is still pending in the House Commerce Committee.
The Senate version would give railroads limited flexility to raise some rates without ICC interference and increase ICC scrutiny of the way railroads jointly set many rates, but does not go as far as the Administration would in giving railroads freedom from ICC regulation.