Norfolk Southern request for new railway is denied

The Surface Transportation Board this week denied a request by Norfolk Southern Corp. and Watco Companies Inc. to jointly form Michigan Central Railway LLC, which would have operated freight trains along roughly 384 miles of track in Michigan and Indiana.

The board, the federal body overseeing railroad issues, said in its decision that the proposed arrangement gave Norfolk-based Norfolk Southern too much control over the Michigan Central. Norfolk Southern, for example, would be able to veto all major decisions and would be entitled to more than half of the new railroad's profit, according to the STB.

Norfolk Southern spokesman Rudy Husband called the STB ruling a "disappointment." The company will "thoroughly review" the decision before deciding its next step, he said.