NORTH ADAMS, MASS. — Pan Am Railways, which owns the Hoosac Tunnel and runs freight traffic through North Adams, west to Pownal, Vt., and then into New York is for sale, according to railway industry publications.
Pan Am, assembled in 1981 by majority shareholder Timothy Mellon's Guilford Transportation Industries, operates a 1,700-mile rail network between St. John, New Brunswick, and New York's Capital District.
That system passes through North Adams on its way through northern Berkshire County and provides freight service to several local businesses, including Specialty Minerals in Adams.
The company, rebranded as Pan Am Railways in 2006, is based in Billerica. It incorporates the former Boston & Maine and Maine Central railroads.
Mellon has appointed BMO Financial Group to assist with the sale, according to Freight News.
The Berkshire portion of the railway, which includes the Hoosac Tunnel and also runs through a portion of southwestern Vermont, is operated by Pam Am Southern, a joint venture between Pan Am and the Virginia-based Norfolk Southern Railroad, which maintains the section between Mechanicville, N.Y., and Ayer.
That section once was part of the main line of the former Boston & Maine Railroad, which Guilford Transportation bought out of bankruptcy in 1983.
In April, the Pan Am Southern joint venture reopened the 145-year-old Hoosac Tunnel, after it had been closed for seven weeks when a wall partially collapsed due to wear and tear.
Sale long rumored
Pan Am Railways has been rumored to be for sale for many years, according to people familiar with the railroad industry, and is considered a key piece of infrastructure in North Berkshire.
"It's a critical link to our history and makes us part of the industrial and transportation hub of New England," said North Adams Mayor Thomas Bernard, "and hopefully, it will be an asset for people who are looking to invest in the business."
Bernard said Pan Am did not tell the city that it planned to put the railway on the market.
"You don't know what those decisions really are and what motivates a company to make a move at the time they make it," he said.
The city has put property on the market before and hasn't sold it, Bernard said, and he believes that the railway might be doing something similar.
"Just because you put something up for sale doesn't mean you sell it," Bernard said. "The offer might not be there to make it feasible. We'll pay attention to this as it happens. I hope we have a corporate business and partner that is willing to work with the city."
Christopher Parker, associate editor of the trade publication Atlantic Northeast Rails & Ports, said Pan Am Railway has been close to a sale before.
"I've heard several company names in the past coming close to terms, and each time nothing has ended up happening," Parker said. "Timothy Mellon is in his upper 70s. He's getting to the age where it's time to put his affairs in order. I've heard secondhand reports that his heirs aren't particularly interested [in running the railroad]."
Pan Am bills itself as "North America's Largest Regional Rail Network." It has 750 employees and is the country's largest Class II rail carrier. Amtrak uses part of its network.
Pan Am also connects to all four of the eastern Class I rail networks and to 20 regular and short-term railroads. Railroads are classified in three categories by the Interstate Commerce Commission.
A railroad industry insider, who spoke to the trade publication Railway Age, said those connections could make the entire Pam Am Railway attractive to a slew of railroad lines in the United States and Canada, including the Canadian National and Canadian Pacific lines. Pieces of the network could be divvied up and sold to smaller companies like Vermont Rail.
"Most likely there's a number of possible suitors in the wings," Parker said. "The path forward would be different depending on what company took over and what their track record is in serving customers."
Tony Dobrowolski can be reached at email@example.com or 413-281-2755.