Reading & Northern sues regional rail authority over operator contract

The Reading, Blue Mountain & Northern Railroad (RBMN) on Friday filed a lawsuit seeking to stop a regional authority from proceeding with a "no-bid" contract for a rail service provider.

Filed in the Lackawanna County Common Pleas Court, the suit claims the Pennsylvania Northeast Regional Rail Authority has a fiduciary obligation to the taxpayers of Lackawanna and Monroe counties to obtain the best financial deal possible. The authority refused to even consider RBMN's request to submit a bid to become the operator, railroad officials said in a press release.

"Instead, without notice and with no opportunity for public comment, the authority decided to renew a contract with the existing operator for another five years," they said. "The authority took this action even though the existing contract does not expire for over 20 months."

The authority last sought bids for an operator in 1993. Since then, it has continually renewed the contract with the current operator without notice and without consideration of whether other operators could increase the value for taxpayers, RNMN officials said.

"We realize that given an open process with fair bidding that there may be others who win the right to operate," said RBMN President Wayne Michel. "However, we know taxpayers and shippers will be better off as a result of this process and we will have had a fair opportunity to participate."

Pennsylvania's largest privately owned railroad, RBMN has a direct physical connection with the authority's property and has extensive operations in the area today, railroad officials said. RBMN operates about 300 miles of track in nine eastern Pennsylvania counties.