In its first merger decision since Congress amended federal rail merger laws in 1976, the Interstate Commerce Commission has approved the takeover of the Detroit, Toledo and Ironton Railroad by the Grand Trunk Western Railroad.
The DTI is a small railroad operating about 600 miles of track in the heart of the Michigan-Ohio industrial region, mainly between Detroit and Cincinnati. It is the principal carrier serving Ford Motor Co's complex in Dearborn and provides important connections with other railroads. The Grand Trunk operates 900 miles of track in Michigan, Indiana and Illinois, and is affiliated with Canadian National Railway.
The ICC's decision also will permit the Grand Trunk to control the Detroit, Toledo and Shore Line Railroad, a small rail with about 60 miles of track.
In approving the proposed merger, the agency rejected a competing proposal by the Baltimore and Ohio and Norfolk and Western Railroads, which the ICC said was anticompetitive and not in the public interest.
Yesterday's decision gives the Grand Trunk Western six months to negotiate a contract with the Pennsylvania Co., owner of DTI stock, which must also be submitted to the commission for review.
In another development, the ICC gave the Southern Pacific Transportation Co. temporary authority to operate over a portion of the bankrupt Rock Island Railroad but without the government subsidy with which the rest of the Rock Island is being operated.
The Southern Pacific, which has filed an application with the ICC to purchases the Rock Island's "Tucumcari Line," track from Santa Rosa, N.M. to St. Louis, said it wanted to maintain service over the line while the ICC considers its purchase request.
Last week, the ICC voted to extend federally subsidized freight services by the Kansas City Terminal Railway Co. over the lines of the Rock Island for another 90 days.
[Meanwhile, the Milwaukee Road railroad said yesterday it has reached agreement with the Union Pacific to sell it certain properties in Washington and Idaho, the Associated Press reported yesterday.]
[Terms of the sale must be negotiated, according to a spokeman, who noted the Union Pacific has offered $29 million for about 140 route-miles and associated real estate, AP said.]