SUNBURY – The SEDA-COG Joint Rail Authority was in court Wednesday defending itself against a lawsuit claiming it illegally competes with private enterprise. Reading, Blue Mountain & Northern Railroad (RBMN) of Port Clinton brought the suit after a failing to make it through the first round of the JRA’s bidding process to award a new operating contract.
The JRA, which owns 200 miles of rail lines in eight counties, contracts with a third party to operate, maintain and develop rail business. For more than 30 years, North Shore Railroad of Northumberland has been the JRA’s contracted operator.
In oral arguments before Northumberland County President Judge Charles Saylor, RBMN’s attorney, Frederick Fanelli said the JRA is a “ferocious competitor.” Fanelli said property development in Ranshaw directly competes with RBMN’s established anthracite business and the JRA applies for the same state grant money as private enterprise.
Further, RBMN asserts the JRA’s current Request for Proposal (RFP) process was “rigged” to exclude the railroad from advancing to the second round.
Attorneys for the authority argued that RBMN does not have standing to bring the case as they are not a taxpayer in Northumberland County. Also, the operating contract is, according to the JRA, essentially a lease, whereby the JRA allows the operator to use the lines and they pay a portion of their income back to the authority. This type of relationship is not a violation of state law.
Regarding the RFP process, the authority maintains its operating contract is a professional service agreement and is therefore, not required to submit to a competitive bid process.
Judge Saylor is expected to rule in August on whether to allow RBMN’s suit to continue or if the JRA’s preliminary objections are enough to dismiss it. (Jennifer Wakeman)
